The continuing peso devaluation and the spiraling cost of commodities have become hard facts of life nowadays.  And the worries are compounded by the ominous prospects of very unstable oil prices.  Thus, with the goal of rationalizing the oil scheme, Congress enacted Republic Act No. 8180, otherwise known as the Downstream Oil Deregulation Act of 1996, the policy of which is “to foster a truly competitive market which can better achieve the social policy objectives of fair prices and adequate, continuous supply of environmentally-clean and high quality petroleum products”.1   But if the noble and laudable objective of this enactment is not accomplished, as to date oil prices continue to rise, can this Court be called upon to declare the statute unconstitutional or must the Court desist from interfering in a matter which is best left to the other branch/es of government?


The apparent thrust of the consolidated petitions is to declare, not the entirety, but only some isolated portions of Republic Act No. 8180 unconstitutional.  This is clear from the grounds enumerated by the petitioners, to wit:


G. R. No. 124360


4.0.  Grounds:








G.R. No. 127867






And culled from petitioners’ arguments in support of the above grounds, the provisions of Republic Act No. 8180 which they now impugn are:


A.  Section 5 [b] on the imposition of tariff which provides:  “Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty shall be imposed and collected on imported crude oil at the rate of three percent (3%), and imported refined petroleum products at the rate of seven percent (7%), except fuel oil and LPG, the rate for which shall be the same as that for imported crude oil:  Provided, That beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall be the same:  Provided further, That this provision may be amended only by an Act of Congress.”  [Emphasis added].


B.  Section 6 on the minimum inventory requirement, thus:  “Security of Supply.  To ensure the security and continuity of petroleum crude and products supply, the DOE shall require the refiners and importers to maintain a minimum inventory equivalent to ten percent (10%) of their respective annual sales volume or forty (40) days of supply, whichever is lower.”


C.  Section 9 [b] on predatory pricing:  “Predatory pricing which means selling or offering to sell any product at a price unreasonably below the industry average cost so as to attract customers to the detriment of competitors.


Any person, including but not limited to the chief operating officer or chief executive officer of the corporation involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of imprisonment for three [3] years and fine ranging from Five hundred thousand pesos [P 500,000] to One million pesos [P 1,000,000].”


D.  Section 10 on the other prohibited acts which states:  “Other Prohibited Acts.  To ensure compliance with the provisions of this Act, the failure to comply with any of the following shall likewise be prohibited: 1) submission of any reportorial requirements; 2) maintenance of the minimum inventory; and, 3) use of clean and safe (environment and worker-benign) technologies.


“Any person, including but not limited to the chief operating officer or chief executive officer of the corporation involved, who is found guilty of any of the said prohibited acts shall suffer the penalty of imprisonment for two [2] years and fine ranging from Two hundred fifty thousand pesos [P 250,000] to Five hundred thousand pesos [P 500,000].”


E.  Section 15 on the implementation of full deregulation, thus:  Implementation of Full Deregulation.  Pursuant to Section 5 [e] of Republic Act No. 7638, the DOE shall, upon approval of the President, implement the full deregulation of the downstream oil industry not later than March, 1997.  As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable.  Upon the implementation of the full deregulation as provided herein, the transition phase is deemed terminated and the following laws are deemed repealed: [Emphasis added].


F. Section 20 on the imposition of administrative fine: “Administrative Fine.  The DOE may, after due notice and hearing impose a fine in the amount of not less than One hundred thousand pesos [P 100,000] but not more than One million pesos [P 1,000,000] upon any person or entity who violates any of its reportorial and minimum inventory requirements, without prejudice to criminal sanctions.”


Executive Order No. 392, entitled, “Declaring Full Deregulation Of The Downstream Oil Industry” which declared the full deregulation effective February 8, 1997, is also sought to be declared unconstitutional.


A careful scrutiny of the arguments proffered against the constitutionality of Republic Act No. 8180 betrays the petitioners’ underlying motive of calling upon this Court to determine the wisdom and efficacy of the enactment rather than its adherence to the Constitution.  Nevertheless, I shall address the issues raised if only to settle the alleged constitutional defects afflicting some provisions of Republic Act No. 8180.  To elaborate:


A.  On the imposition of tariff.  Petitioners argue that the existence of a tariff provision violated the “one subject-one title”4 rule under Article VI, Section 26 [1] as the imposition of tariff rates is “inconsistent with”5 and not at all germane to the deregulation of the oil industry.  They also stress that the variance between the seven percent (7%) duty on imported gasoline and other refined petroleum products and three percent (3%) duty on crude oil gives a “4% tariff protection in favor of Petron, Shell and Caltex which own and operate refineries here”.6  The provision, petitioners insist, “inhibits prospective oil players to do business here because it will unnecessarily increase their product cost by 4%.”7  In other words, the tariff rate “does not foster ‘a truly competitive market’.”8  Also petitioners claim that both Houses of Congress never envisioned imposing the seven percent (7%) and three percent (3%) tariff on refined and crude oil products as both Houses advocated, prior to the holding of the bicameral conference committee, a “zero differential”.   Moreover, petitioners insist that the tariff rates violate “the equal protection of the laws enshrined in Article III, Section 1 of the Constitution”9 since the rates and their classification are not relevant in attaining the avowed policy of the law, not based on substantial distinctions and limited to the existing condition.


The Constitution mandates that “every bill passed by Congress shall embrace only one subject which shall be expressed in the title thereof.”10 The object sought to be accomplished by this mandatory requirement has been explained by the Court in the vintage case of Central Capiz vs. Ramirez,11 thus:


The object sought to be accomplished and the mischief proposed to be remedied by this provision are well known.  Legislative assemblies, for the dispatch of business, often pass bills by their titles only without requiring them to be read.  A specious title sometimes covers legislation which, if its real character had been disclosed, would not have commanded assent.  To prevent surprise and fraud on the legislature is one of the purposes this provision was intended to accomplish.  Before the adoption of this provision the title of a statute was often no indication of its subject or contents.


An evil this constitutional requirement was intended to correct was the blending in one and the same statute of such things as were diverse in their nature, and were connected only to combine in favor of all the advocates of each, thus often securing the passage of several measures no one of which could have succeeded on its own merits.  Mr. Cooley thus sums up in his review of the authorities defining the objects of this provision:   “It may therefore be assumed as settled that the purpose of this provision was:  First, to prevent hodge-podge or log-rolling legislation; second, to prevent surprise or fraud upon the legislature by means of provisions in bills of which the titles gave no information, and which might therefore be overlooked and carelessly and unintentionally adopted; and, third, to fairly apprise the people, through such publication of legislative proceedings as is usually made, of the subjects of legislation that are being considered, in order that they may have opportunity of being heard thereon by petition or otherwise if they shall so desire.”  [Cooley’s Constitutional Limitations, p. 143].12


The interpretation of “one subject-one title” rule, however, is never intended to impede or stifle legislation.  The requirement is to be given a practical rather than a technical construction and it would be sufficient compliance if the title expresses the general subject and all the provisions of the enactment are germane and material to the general subject.13   Congress is not required to employ in the title of an enactment, language of such precision as to mirror, fully index or catalogue all the contents and the minute details therein.14   All that is required is that the title should not cover legislation incongruous in itself, and which by no fair intendment can be considered as having a necessary or proper connection.15 Hence, the title “An Act Amending Certain Sections of Republic Act Numbered One Thousand One Hundred Ninety-Nine, otherwise known as the Agricultural Tenancy Act of the Philippines” was declared by the Court sufficient to contain a provision empowering the Secretary of Justice, acting through a tenancy mediation division, to carry out a national enforcement program, including the mediation of tenancy disputes.16   The title “An Act Creating the Videogram Regulatory Board” was similarly declared valid and sufficient to embrace a regulatory tax provision, i.e., the imposition of a thirty percent (30%) tax on the purchase price or rental rate, as the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any motion picture or audiovisual program with fifty percent (50%) of the proceeds of the tax collected accruing to the province and the other fifty percent (50%) to the municipality where the tax is collected.17  Likewise, the title “An Act To Further Amend Commonwealth Act Numbered One Hundred Twenty, as amended by Republic Act Numbered Twenty Six Hundred and Forty One” was declared sufficient to cover a provision limiting the allowable margin of profit to not more than twelve percent (12%) annually of its investments plus two-month operating expenses for a franchise holder receiving at least fifty percent (50%) of its power from the National Power Corporation.18


In the case at bar, the title “An Act Deregulating The Downstream Oil Industry, And For Other Purposes” is adequate and comprehensive to cover the imposition of tariff rates.  The tariff provision under Section 5 [b] is one of the means of effecting deregulation.  It must be observed that even prior to the passage of Republic Act No. 8180 oil products have always been subject to tariff and surely Congress is cognizant of such fact.  The imposition of the seven percent (7%) and three percent (3%) duties on imported gasoline and refined petroleum products and on crude oil, respectively, are germane to the deregulation of the oil industry.  The title, in fact, even included the broad and all-encompassing phrase “And For Other Purposes” thereby indicating the legislative intent to cover anything that has some relation to or connection with the deregulation of the oil industry.  The tax provision is a mere tool and mechanism considered essential by Congress to fulfill Republic Act No. 8180’s objective of fostering a competitive market and achieving the social policy objectives of a fair prices.  To curtail any adverse impact which the tariff treatment may cause by its application, and perhaps in answer to petitioners’ apprehension Congress included under the assailed section a proviso that will effectively eradicate the tariff difference in the treatment of refined petroleum products and crude oil by stipulating “that beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum products shall be the same.”


The contention that tariff “does not foster a truly competitive market”19 and, therefore, restrains trade and does not help achieve the purpose of deregulation is an issue not within the power of the Court to resolve.   Nonetheless, the Courts pronouncement in Tio vs. Videogram Regulatory Board appears to be worth reiterating:  


Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive, confiscatory, and in restraint of trade.  However, it is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed.   The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercise it.   In imposing a tax, the legislature acts upon its constituents.  This is, in general, a sufficient security against erroneous and oppressive taxation.20 [Emphasis added]


Anent petitioners’ claim that both House Bill No. 5264 and Senate Bill No. 1253, [the precursor bills of Republic Act No. 8180], “did not impose any tariff rates but merely set the policy of ‘zero differential’ in the House version, and nothing in the Senate version”21 is inconsequential.  Suffice it to state that the bicameral conference committee report was approved by the conferees thereof only “after full and free conference” on the disagreeing provisions of Senate Bill No. 1253 and House Bill No. 5264.  Indeed, the “zero differential” on the tariff rates imposed in the House version was embodied in the law, save for a slight delay in its implementation to January 1, 2004.  Moreover, any objection on the validity of provisions inserted by the legislative bicameral conference committee has been passed upon by the Court in the recent case of Tolentino vs. Secretary of Finance,22 which, in my view, laid to rest any doubt as to the validity of the bill emerging out of a Conference Committee.  The Court in that case, speaking through Mr. Justice Mendoza, said:


As to the possibility of an entirely new bill emerging out of a Conference Committee, it has been explained:


Under congressional rules of procedure, conference committees are not expected to make any material change in the measure at issue, either by deleting provisions to which both houses have already agreed or by inserting new provisions.  But this is a difficult provision to enforce.  Note the problem when one house amends a proposal originating in either house by striking out everything following the enacting clause and substituting provisions which make it an entirely new bill.  The versions are now altogether different, permitting a conference committee to draft essentially a new bill.


The result is a third version, which is considered an “amendment in the nature of a substitute,” the only requirement for which being that the third version be germane to the subject of the House and Senate bills.


Indeed, this Court recently held that it is within the power of a conference committee to include in its report an entirely new provision that is not found either in the House bill or in the Senate bill.  If the committee can propose an amendment consisting of one or two provisions, there is no reason why it cannot propose several provisions, collectively considered as an “amendment in the nature of a substitute,” so long as such amendment is germane to the subject of the bills before the committee.  After all, its report was not final but needed the approval of both houses of Congress to become valid as an act of the legislative department.  The charge that in this case the Conference Committee acted as a third legislative chamber is thus without any basis.


xxx   xxx   xxx


To be sure, nothing in the Rules [of the Senate and the House of Representatives] limits a conference committee to a consideration of conflicting provisions.  But Rule XLVI, [Sec.] 112 of the Rules of the Senate is cited to the effect that “If there is no Rule applicable to a specific case the precedents of the Legislative Department of the Philippines shall be resorted to, and as a supplement of these, the Rules contained in Jefferson’s Manual.”


The following is then quoted from the Jefferson’s Manual:


The managers of a conference must confine themselves to the differences committed to them and may not include subjects not within disagreements, even though germane to a question in issue.


Note that, according to Rule XLIX, [Sec.] 112, in case there is no specific rule applicable, resort must be to the legislative practice.  The Jefferson’s Manual is resorted to only as supplement.  It is common place in Congress that conference committee reports include new matters which, though germane, have not been committed to the committee.  This practice was admitted by Senator Raul S. Roco, petitioner in G. R. No. 115543, during the oral argument in these cases.  Whatever, then, may be provided in the Jefferson’s Manual must be considered to have been modified by the legislative practice.  If a change is desired in the practice it must be sought in Congress since this question is not covered by any constitutional provision but is only an internal rule of each house.   Thus, Art. VI, [Sec.] 16 [3] of the Constitution provides that “Each House may determine the rules of its proceedings.”


This observation applies to the other contention that the Rules of the two chambers were likewise disregarded in the preparation of the Conference Committee Report because the Report did not contain a “detailed and sufficiently explicit statement of changes in, or amendments to, the subject measure.”  The Report used brackets and capital letters to indicate the changes.  This is a standard practice in bill-drafting.   We cannot say that in using these marks and symbols the Committee violated the Rules of the Senate and the House.  Moreover, this Court is not the proper forum for the enforcement of these internal Rules.  To the contrary, as we have already ruled, “parliamentary rules are merely procedural and with their observance the courts have no concern.”  Our concern is with the procedural requirements of the Constitution for the enactment of laws.  As far as these requirements are concerned, we are satisfied that they have been faithfully observed in these cases.23


The other contention of petitioners that Section 5 [b] “violates the equal protection of the laws enshrined in Article III, Section 1 of the Constitution”24 deserves a short shrift for the equal protection clause does not forbid reasonable classification based upon substantial distinctions where the classification is germane to the purpose of the law and applies equally to all the members of the class.  The imposition of three percent (3%) tariff on crude oil, which is four percent (4%) lower than those imposed on refined oil products, as persuasively argued by the Office of the Solicitor General, is based on the substantial distinction that importers of crude oil, by necessity, have to establish and maintain refinery plants to process and refine the crude oil thereby adding to their production costs.  To encourage these importers to set up refineries involving huge expenditures and investments which peddlers and importers of refined petroleum products do not shoulder, Congress deemed it appropriate to give a lower tariff rate to foster the entry of new “players” and investors in line with the law’s policy to create a competitive market.  The residual contention that there is no substantial distinction in the imposition of seven percent (7%) and three percent (3%) tariff since the law itself will level the tariff rates between the imported crude oil and refined petroleum products come January 1, 2004, to my mind, is addressed more to the legislative’s prerogative to provide for the duration and period of effectivity of the imposition.  If Congress, after consultation, analysis of material data and due deliberations, is convinced that by January 1, 2004, the investors and importers of crude oil would have already recovered their huge investments and expenditures in establishing refineries and plants then it is within its prerogative to lift the tariff differential. Such matter is well within the pale of legislative power which the Court may not fetter.  Besides, this again is in line with Republic Act No. 8180’s avowed policy to foster a truly competitive market which can achieve the social policy objectives of fair, if not lower, prices.


B.  On the minimum inventory requirement.  Petitioners’ attack on Section 6 is premised upon their belief that the inventory requirement is hostile and not conducive for new oil companies to operate here, and unduly favors Petron, Shell and Caltex, companies which according to them can easily hurdle the requirement. I fail to see any legal or constitutional issue here more so as it is not raised by a party with legal standing for petitioners do not claim to be the owners or operators of new oil companies affected by the requirement.   Whether or not the requirement is advantageous, disadvantageous or conducive for new oil companies hinges on presumptions and speculations which is not within the realm of judicial adjudication.  It may not be amiss to mention here that according to the Office of the Solicitor General “there are about thirty [30] new entrants in the downstream activities, fourteen [14] of which have started operation, eight [8] having commenced operation last March 1997, and the rest to operate between the second quarter of 1997 and the year 2000.”25  Petitioners did not controvert this averment which thereby cast serious doubt over their claim of “hostile” environment.


C.  On predatory pricing.  What petitioners bewail the most in Section 9 [b] is “the definition of ‘predatory pricing’ [which] is too broad in scope and indefinite in meaning”26 and the penal sanction imposed for its violation.  Petitioners maintain that it would be the new oil companies or “players” which would lower their prices to gain a foothold on the market and not Petron, Shell or Caltex, an occasion for these three big oil “companies” to control the prices by keeping their average cost at a level which will ensure their desired profit margin.27  Worse, the penal sanction, they add, deters new “players” from entering the oil market and the practice of lowering prices is now condemned as a criminal act.


Petitioners’ contentions are nebulous if not speculative.  In the absence of any concrete proof or evidence, the assertion that it will only be the new oil companies which will lower oil prices remains a mere guess or suspicion.  And then again petitioners are not the proper party to raise the issue.  The query on why lowering of prices should be penalized and the broad scope of predatory pricing is not for this Court to traverse the same being reserved for Congress.  The Court should not lose sight of the fact that its duty under Article 5 of the Revised Penal Code is not to determine, define and legislate what act or acts should be penalized, but simply to report to the Chief Executive the reasons why it believes an act should be penalized, as well as why it considers a penalty excessive, thus: 


ART. 5.    Duty of the court in connection with acts which should be repressed but which are nor covered by the law, and in cases of excessive penalties.  Whenever a court has knowledge of any act which it may deem proper to repress and which is not punishable by law, it shall render the proper decision, and shall report to the Chief Executive, through the Department of Justice, the reasons which induce the court to believe that said act should be made the subject of legislation.


In the same way the court shall submit to the Chief Executive, through the Department of Justice, such statement as may be deemed proper, without suspending the execution of the sentence, when a strict enforcement of the provisions of this Code would result in the imposition of a clearly excessive penalty, taking into consideration the degree of malice and the injury caused by the offense.


Furthermore, in the absence of an actual conviction for violation of Section 9 [b] and the appropriate appeal to this Court, I fail to see the need to discuss any longer the issue as it is not ripe for judicial adjudication.  Any pronouncement on the legality of the sanction will only be advisory.

D.  On other prohibited acts.  In discussing their objection to Section 10, together with Section 20, petitioners assert that these sanctions “even provide stiff criminal and administrative penalties for failure to maintain said minimum requirement and other regulations” and posed this query:  “Are these provisions consistent with the policy objective to level the playing [field] in a truly competitive answer?”28 A more circumspect analysis of petitioners’ grievance, however, does not present any legal controversy.  At best, their objection deals on policy considerations that can be more appropriately and effectively addressed not by this Court but by Congress itself.


E.   On the implementation of full deregulation under Section 15, and the validity of Executive Order No. 392. Petitioners stress that “Section 15 of Republic Act No. 8180 delegates to the Secretary of Energy and to the President of the Philippines the power to determine when to fully deregulate the downstream oil industry”29 without providing for any standards “to determine when the prices of crude oil in the world market are considered to be ‘declining’”30 and when may the exchange rate be considered “stable” for purposes of determining when it is “practicable” to declare full deregulation.31   In the absence of standards, Executive Order No. 392 which implemented Section 15 constitute “executive lawmaking,”32 hence the same should likewise be struck down as invalid. Petitioners additionally decry the brief seven [7] month transition period under Section 15 of Republic Act No. 8180.  The premature full deregulation declared in Executive Order No. 392 allowed Caltex, Petron, and Shell oil companies “to define the conditions under which any ‘new players’ will have to adhere to in order to become competitive in the new deregulated market even before such a market has been created.”33  Petitioners are emphatic that Section 15 and Executive Order No. 392 “have effectively legislated a cartel among respondent oil companies, directly violating the Constitutional prohibition against unfair trade practices and combinations in restraint of trade.”34


Section 15 of Republic Act No. 8180 provides for the implementation of full deregulation.  It states:


Section 15 on the implementation of full deregulation, thus:  Implementation of Full Deregulation.  Pursuant to Section 5(e) of Republic Act No. 7638, the DOE shall, upon approval of the President, implement the full deregulation of the downstream oil industry not later than March, 1997.  As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable.  Upon the implementation of the full deregulation as provided herein, the transition phase is deemed terminated and the following laws are deemed repealed:  [Emphasis added].


It appears from the foregoing that deregulation has to be implemented “not later than March 1997.”  The provision is unequivocal, i.e., deregulation must be implemented on or before March 1997.  The Secretary of Energy and the President is devoid of any discretion to move the date of full deregulation to any day later than March 1997.  The second sentence which provides that “[a]s far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable” did not modify or reset to any other date the full deregulation of downstream oil industry.  Not later than March 1997 is a complete and definite period for full deregulation.  What is conferred to the Department of Energy in the implementation of full deregulation, with the approval of the President, is not the power and discretion on what the law should be.  The provision of Section 15 gave the President the authority to proceed with deregulation on or before, but not after, March 1997, and if implementation is made before March, 1997, to execute the same, if possible, when the prices of crude oil and petroleum products in the world market are declining and the peso-dollar exchange rate is stable.  But if the implementation is made on March 1997, the President has no option but to implement the law regardless of the conditions of the prices of oil in the world market and the exchange rates.


The settled rule is that the legislative department may not delegate its power.  Any attempt to abdicate it is unconstitutional and void, based on the principle of potestas delegata non delegare potest.  In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to inquire whether the statute was complete in all its terms and provisions when it left the hands of the legislative so that nothing was left to the judgment of any other appointee or delegate of the legislature.35  An enactment is said to be incomplete and invalid if it does not lay down any rule or definite standard by which the administrative officer may be guided in the exercise of the discretionary powers delegated to it.36 In People vs. Vera,37 the Court laid down a guideline on how to distinguish which power may or may not be delegated by Congress, to wit:


“The true distinction”, says Judge Ranney, “is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law.  The first cannot done; to the latter no valid objection can be made.”  (Cincinnati, W. & Z.R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St., 77, 88 See also, Sutherland on Statutory Construction, sec. 68.)


Applying these parameters, I fail to see any taint of unconstitutionality that could vitiate the validity of Section 15.  The discretion to ascertain when may the prices of crude oil in the world market be deemed “declining” or when may the peso-dollar exchange rate be considered “stable” relates to the assessment and appreciation of facts.   There is nothing essentially legislative in ascertaining the existence of facts or conditions as the basis of the taking into effect of a law38 so as to make the provision an undue delegation of legislative power.  The alleged lack of definitions of the terms employed in the statute does not give rise to undue delegation either for the words of the statute, as a rule, must be given its literal meaning.39  Petitioners’ contentions are concerned with the details of execution by the executive officials tasked to implement deregulation.  No proviso in Section 15 may be construed as objectionable for the legislature has the latitude to provide that a law may take effect upon the happening of future specified contingencies leaving to some other person or body the power to determine when the specified contingency has arisen.40  The instant petition is similarly situated with the past cases, as summarized in the case of People vs. Vera, where the Court ruled for the validity of several assailed statutes, to wit:


To the same effect are decisions of this court in Municipality of Cardona vs. Municipality of Binangonan ([1917], 36 Phil. 547); Rubi vs. Provincial Board of Mindoro ([1919], 39 Phil. 660), and Cruz vs. Youngberg ([1931], 56 Phil. 234).  In the first of these cases, this court sustained the validity of a law conferring upon the Governor-General authority to adjust provincial and municipal boundaries.  In the second case, this court held it lawful for the legislature to direct non-Christian inhabitants to take up their habitation on unoccupied lands to be selected by the provincial governor and approved by the provincial board.  In the third case, it was held proper for the legislature to vest in the Governor-General authority to suspend or not, at his discretion, the prohibition of the importation of foreign cattle, such prohibition to be raised “if the conditions of the country make this advisable or if disease among foreign cattle has ceased to be a menace to the agriculture and livestock of the lands.”41


If the Governor-General in the case of Cruz v. Youngberg42 can “suspend or not, at his discretion, the prohibition of the importation of cattle, such prohibition to be raised ‘if the conditions of the country make this advisable or if disease among foreign cattle has ceased to be a menace to the agriculture and livestock of the lands” then with more reason that Section 15 of Republic Act No. 8180 can pass the constitutional challenge as it has mandatorily fixed the effectivity date of full deregulation to not later than March 1997, with or without the occurrence of stable peso-dollar exchange rate and declining oil prices.  Contrary to petitioners’ protestations, therefore, Section 15 is complete and contains the basic conditions and terms for its execution.


To restate, the policy of Republic Act No. 8180 is to deregulate the downstream oil industry and to foster a truly competitive market which could lead to fair prices and adequate supply of environmentally clean and high-quality petroleum products.  This is the guiding principle installed by Congress upon which the executive department of the government must conform.  Section 15 of Republic Act No. 8180 sufficiently supplied the metes and bounds for the execution of full deregulation.  In fact, a cursory reading of Executive Order No. 39243 which advanced deregulation to February 8, 1997 convincingly shows the determinable factors or standards, enumerated under Section 15, which were taken into account by the Chief Executive in declaring full deregulation.  I cannot see my way clear on how or why Executive Order No. 392, as professed by petitioners, may be declared unconstitutional for adding the “depletion of buffer fund” as one of the grounds for advancing the deregulation.   The enumeration of factors to be considered for full deregulation under Section 15 did not proscribe the Chief Executive from acknowledging other instances that can equally assuage deregulation.  What is important is that the Chief Executive complied with and met the minimum standards supplied by the law.  Executive Order No. 392 may not, therefore, be branded as unconstitutional.


Petitioners’ vehement objections on the short seven (7) month transition period under Section 15 and the alleged resultant de facto formation of cartel are matters which fundamentally strike at the wisdom of the law and the policy adopted by Congress.   These are outside the power of the courts to settle; thus I fail to see the need to digress any further.


F .  On the imposition of administrative fine.   The administrative fine under Section 20 is claimed to be inconsistent with deregulation.  The imposition of administrative fine for failure to meet the reportorial and minimum inventory requirements, far from petitioners’ submission, are geared towards accomplishing the noble purpose of the law.  The inventory requirement ensures the security and continuity of petroleum crude and products supply,44 while the reportorial requirement is a mere device for the Department of Energy to monitor compliance with the law.   In any event, the issue pertains to the efficacy of incorporating in the law the administrative sanctions which lies outside the Courts sphere and competence.


In fine, it seems to me that the petitions dwell on the insistent and recurrent arguments that the imposition of different tariff rates on imported crude oil and imported petroleum products is violative of the equal protection clause of the constitution; is not germane to the purpose of the law; does not foster a truly competitive market; extends undue advantage to the existing oil refineries or companies; and creates a cartel or a monopoly of sort among Shell, Caltex and Petron in clear contravention of the Constitutional proscription against unfair trade practices and combinations in restraint of trade.


Unfortunately, this Court, in my view, is not at liberty to tread upon or even begin to discuss the merits and demerits of petitioners’ stance if it is to be faithful to the time honored doctrine of separation of powers  the underlying principle of our republican state.45  Nothing is so fundamental in our system of government than its division into three distinct and independent branches, the executive, the legislative and the judiciary, each branch having exclusive cognizance of matters within its jurisdiction, and supreme within its own sphere.  It is true that there is sometimes an inevitable overlapping and interlacing of functions and duties between these departments.  But this elementary tenet remains:  the legislative is vested with the power to make law, the judiciary to apply and interpret it.  In cases like this, “the judicial branch of the government has only one duty-to lay the article of the Constitution which is invoked beside the statute which is challenged and to decide whether the letter squares with the former.”46   This having been done and finding no constitutional infirmity therein, the Court’s task is finished.  Now whether or not the law fails to achieve its avowed policy because Congress did not carefully evaluate the long term effects of some of its provisions is a matter clearly beyond this Court’s domain.


Perhaps it bears reiterating that the question of validity of every statute is first determined by the legislative department of the government, and the courts will resolve every presumption in favor of its validity.   The courts will assume that the validity of the statute was fully considered by the legislature when adopted.  The wisdom or advisability of a particular statute is not a question for the courts to determine.  If a particular statute is within the constitutional power of the legislature to enact, it should be sustained whether the courts agree or not in the wisdom of its enactment.47  This Court continues to recognize that in the determination of actual cases and controversies, it must reflect the wisdom and justice of the people as expressed through their representatives in the executive and legislative branches of government.  Thus, the presumption is always in favor of constitutionality for it is likewise always presumed that in the enactment of a law or the adoption of a policy it is the people who speak through their representatives.  This principle is one of caution and circumspection in the exercise of the grave and delicate function of judicial review.48   Explaining this principle, Thayer said:


It can only disregard the Act when those who have the right to make laws have not merely made a mistake, but have made a very clear one-so clear that it is not open to rational question.  That is the standard of duty to which the courts bring legislative acts; that is the test which they apply-not merely their own judgment as to constitutionality, but their conclusion as to what judgment is permissible to another department which the constitution has charged with the duty of making it.  This rule recognizes that, having to the great, complex, ever-unfolding exigencies of regard government, much will seem unconstitutional to one man, or body of men, may reasonably not seem so to another; that the constitution often admits of different interpretations; that there is often a range of choice and judgment; that in such cases the constitution does not impose upon the legislature any one specific opinion, but leaves open their range of choice; and that whatever choice is rational is constitutional.49


The petitions discuss rather extensively the adverse economic implications of Republic Act No. 8180.  They put forward more than anything else, an assertion that an error of policy has been committed.  Reviewing the wisdom of the policies adopted by the executive and legislative departments is not within the province of the Court.


It is safe to assume that the legislative branch of the government has taken into consideration and has carefully weighed all points pertinent to the law in question.   We cannot doubt that these matters have been the object of intensive research and study nor that they have been subject of comprehensive consultations with experts and debates in both houses of Congress.  Judicial review at this juncture will at best be limited and myopic.  For admittedly, this Court cannot ponder on the points raised in the petitions with the same technical competence as that of the economic experts who have contributed valuable hours of study and deliberation in the passage of this law.


I realize that to invoke the doctrine of separation of powers at this crucial time may be viewed by some as an act of shirking from our duty to uphold the Constitution at all cost.   Let it be remembered, however, that the doctrine of separation of powers is likewise enshrined in our Constitution and deserves the same degree of fealty.  In fact, it carries more significance now in the face of an onslaught of similar cases brought before this Court by the opponents of almost every enacted law of major importance.  It is true that this Court is the last bulwark of justice and it is our task to preserve the integrity of our fundamental law.  But we cannot become, wittingly or unwittingly, instruments of every aggrieved minority and losing legislator.   While the laudable objectives of the law are put on hold, this Court is faced with the unnecessary burden of disposing of issues merely contrived to fall within the ambit of judicial review.  All that is achieved is delay which is perhaps, sad to say, all that may have been intended in the first place.


Indeed, whether Republic Act No. 8180 or portions thereof are declared unconstitutional, oil prices may continue to rise, as they depend not on any law but on the volatile market and economic forces.  It is therefore the political departments of government that should address the issues raised herein for the discretion to allow a deregulated oil industry and to determine its viability is lodged with the people in their primary political capacity, which as things stand, has been delegated to Congress.


In the end, petitioners are not devoid of a remedy.  To paraphrase the words of Justice Padilla in Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas vs. Tan,50 if petitioners seriously believe that the adoption and continued application of Republic Act No. 8180 are prejudicial to the general welfare or the interests of the majority of the people, they should seek recourse and relief from the political branches of government, as they are now doing by moving for an amendment of the assailed provisions in the correct forum which is Congress or for the exercise of the people’s power of initiative on legislation.  The Court following the time honored doctrine of separation of powers, cannot substitute its judgment for that of the Congress as to the wisdom, justice and advisability of Republic Act No. 8180.51


        ACCORDINGLY, finding no merit in the instant petitions, I vote for their outright dismissal.




1Section 2, Republic Act No. 8180.


2Petition in G. R. No. 124360, p. 8.


3Supplement to the Petition in G. R. No. 127867, p. 2.


4Petition in G. R. No. 124360, p. 14.




6Supplement to the Petition in G. R. No. 127867, p. 6.






9Petition in G. R. No. 124360, p. 11.


10Article VI, Section 26 [1], Constitution.


1140 Phil. 883.


1240 Phil. at p. 891.


13Sumulong vs. Commission on Elections, 73 Phil. 288, 291.


14Lidasan vs. Commission on Elections, 21 SCRA 496, 501.


15Blair vs. Chicago, 26 S. Ct. 427, 201 U.S. 400, 50 L. Ed. 801.


16Cordero vs. Cabatuando, 6 SCRA 418.


17Tio vs. Videogram Regulatory Board, 151 SCRA 208.


18Alalayan vs. National Power Corp., 24 SCRA 172.


19Petition in G. R. No. 124360, p. 14.


20151 SCRA at 215.


21Petition in G. R. No. 124360, p. 15.


22235 SCRA 632.


23235 SCRA at pp. 667-671.


24Petition in G.R. No. 124360, p. 11.


25Comment of the Office of the Solicitor General in G. R. No. 127867, p. 33; Rollo, p. 191.


26Supplement to the Petition in G. R. No. 127867, p. 8.




28Supplement to the Petition in G. R. No. 127867, p. 7.


29Petition in G. R. No. 127867, p.8.






32Id., p. 10.

33Petition in G. R. No. 127867, p. 13.




35People v. Vera, 65 Phil. 56, 115, citing 6, R.C.L., p. 165.


36Id., at p. 116, citing Scheter vs. U.S., 295 U.S., 495; 79 L. Ed., 1570; 55 Supt. Ct. Rep. 837; 97 A.L.R. 947; People ex rel.; Rice vs. Wilson Oil Co., 364 III, 406; 4 N.E. [2d], 847; 107 A.L.R., 1500.


37Id., at p. 117.


38Id., at p. 118.


39Globe-Mackay Cable and Radio Corporation vs. NLRC, 206 SCRA 701, 711.


40People vs. Vera, supra, at pp. 119-120. 


41Id., at pp. 117-118.


4256 Phil. 234.


43Executive Order No. 392 provides in full as follows:





“WHEREAS, Republic Act No. 7638, otherwise known as the ‘Department of Energy Act of 1992,’ provides that, at the end of four years from its effectivity last December 1992, ‘the Department [of Energy] shall, upon approval of the President, institute the programs and timetable of deregulation of appropriate energy projects and activities of the energy sector;’

“WHEREAS, Section 15 of Republic Act No. 8180, otherwise known as the ‘Downstream Oil Industry Deregulation Act of 1996,’ provides that ‘the DOE shall, upon approval of the President, implement the full deregulation of the downstream oil industry not later than March, 1997. As far as practicable, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate of the peso in relation to the US dollar is stable;

“WHEREAS, pursuant to the recommendation of the Department of Energy, there is an imperative need to implement the full deregulation of the downstream oil industry because of the following recent developments; (i) depletion of the buffer fund on or about 7 February 1997 pursuant to the Energy Regulatory Board’s Order dated 16 January 1997; (ii) the prices of crude oil had been stable at $ 21  $ 23 per barrel since October 1996 while prices of petroleum products in the world market had been stable since mid-December of last year.  Moreover, crude oil prices are beginning to soften for the last few days while prices of some petroleum products had already declined; and (iii) the exchange rate of the peso in relation to the US dollar has been stable for the past twelve (12) months, averaging at around P 26.20 to one US dollar;


“WHEREAS, Executive Order No. 377 dated 31 October 1996 provides for an institutional framework for the administration of the deregulated industry by defining the functions and responsibilities of various government agencies;


“WHEREAS, pursuant to Republic Act No. 8180, the deregulation of the industry will foster a truly competitive market which can better achieve the social policy objectives of fair prices and adequate, continuous supply of environmentally-clean and high quality petroleum products;


“NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by the powers vested in me by law, do hereby declare the full deregulation, of the downstream oil industry.


 “This Executive Order shall take effect on 8 February 1997.


“DONE in the City of Manila, this 22nd day of January in the year of Our Lord, Nineteen Hundred and Ninety-Seven.




44Section 6, Republic Act No. 8180.

45Article II, Section 1, 1987 Constitution.


46United States vs. Butler, 297 U.S. 1.

 47Case vs. Board of Health, 24 Phil. 250, 276.


48The Lawyer’s Journal, January 31, 1949, p. 8.


49Id., citing Thayer, James B., “The Origin and Scope of the American Doctrine of Constitutional Law”, p. 9.


50163 SCRA 371.


51Id., at p. 385.


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