Journal Volume 33 no. 2 (2008) - the Integrated Bar of the ...

The IBP Journal
INTEGRATED BAR OF THE PHILIPPINES
Board of Editors
ROAN I. LIBARIOS
Editor-in-Chief
EDUARDO A. LABITAG
Managing Editor
DANILO L. CONCEPCION
FLORIN T. HILBAY
JAIME G. HOFILEÑA
MARIO C.V. JALANDONI
CONCEPCION L. JARDELEZA
NASSER A. MAROHOMSALIC
OSCAR G. RARO
CARMELO V. SISON
AMADO D. VALDEZ
OLIVER B. SAN ANTONIO
VINCENT PEPITO F. YAMBAO, JR.
Associate Editors
VIVIAN C. CAPIZNON VICMUND Q. CAMACHO
Staff Layout/Design
VOLUME 33 NUMBER 2 (SEPTEMBER 2008)

CONTENTS
A Framework for the Study of National Territory:
A Statement of the Problem
Merlin M. Magallona .....................................................................................1
The On-going National Territorial Debate:
Issues and Perspectives
Leo Tito L. Ausan, Jr. .................................................................................. 28
The Exploration, Development,
and Utilization of the Spratlys
Amado D. Valdez ......................................................................................... 57
The Legal Significance of the MOA
on the Bangsamoro Ancestral Domain
Vicente V. Mendoza ...................................................................................... 63
The Memorandum of Agreement
on Ancestral Domain: A Commentary
Nasser A. Marohomsalic, Musa I. Malayang,
Carim L. Panumpang and Rasol Y. Mitmug, Jr. .......................................71
Revisiting Charter Change
Through People’s Initiative
Froilan M. Bacungan .................................................................................100
The Purchased Power Adjustment (PPA)
Scheme and Its Derivatives: Deciphering
Cost Recovery Mechanisms and
Understanding Energy Distribution
Juan Arturo Iluminado C. de Castro ........................................................115
Survey of 2006 Supreme Court Decisions
on Property and Land Registration
Eduardo A. Labitag ...................................................................................159

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Synopsis
(The Articles in this Issue)
In this edition, the IBP Journal is dishing out another array of select legal
articles to keep lawyers and legal scholars abreast with timely, relevant, if not pressing,
legal issues of the day.
Taking center stage is the debate on the Philippine territorial integrity, which
hurtled to national limelight with the spate of controversial proposals involving
amendments to the existing Baseline Law, the “joint development” of the Spratlys,
and the Memorandum of Agreement (MOA) on the Bangsamoro Juridical Entity.
Merlin M. Magallona, an acknowledged expert in international law, opens
up the debate with an extensive presentation entitled “A Framework for the Study of the
National Territory.” While traversing the entire breadth of the Philippine territorial
claims, the article draws attention to two potential cataclysms that could submerge
our claims over Sabah and Spratlys, particularly the Kalayaan Islands Group (KIG).
First, the approval of pending House Bill No. 3216, which deliberately eliminates
Sec. 2 of R.A. 5446 (the Baseline Law) the “only legislative re-affirmation of Philippine
sovereignty over Sabah.” If enacted into law, the bill – which has breezed through
second reading – would “operate as a repeal of the Sabah provision of the present
Baseline law, resulting in the derogation of the other territories clause of the
Constitution. Second, the adoption of the “regime of islands” formula as proposed
by the Executive Branch in dealing with our claim over Spratlys. In its present form,
the formula would trash into pieces our sovereign claim over the regime of internal
waters around the Kalayaan Island Group of the province of Palawan, including the
seabed, subsoil and air space.
Infusing historical dimension to the current debate is the disquisition of Leo
Tito L. Ausan, Jr., an expert on International Maritime Law, entitled “The National
Territorial Debate: Issues and Perspectives.” The article traces the debate to the longstanding
dilemma facing the Philippine archipelago in delimiting its territorial baselines
– whether to stick it out with the UNCLOS or with the International Treaty Limits
(ITL). As to which legal approach to take, the Philippines has yet to make up its
mind. As a result, the national debate on territorial outer limits rages on with no
immediate denouement in sight.
Amado D. Valdez, another scholar in international law, shares his “Alternative
Perspectives on the Exploration, Development and Utilization of the Spratlys.” Citing the military
predominance of China which could scuttle the Philippine claim into a “waning and
whining rhetoric,” he takes a “conciliatory” position, proposing to resolve the impasse
based on a joint maritime approach, rather than cutting up the Spratlys islands like
a big piece of real estate. The primary consideration is not territorial integrity but
joint development with other claimant-states of the maritime zone teeming with rich
oil reserves.

From Spratlys in South China Sea, the debate on territorial integrity shifts to
a different dimension and arena where peaceful dialogues have taken the backseat
in favor of armed hostilities – the heartland of Muslim Mindanao.
In “The Legal Significance of the MOA on the Bangsamoro Ancestral Domain,”
Vicente V. Mendoza, a distinguished constitutionalist and a retired Justice of the
Supreme Court, dissects the document which envisions a Bangsamoro Juridical Entity
(BJE) in Southern Philippines. The MOA defies easy legal classifications as it cannot
be upheld without amending the Constitution. To save it from nullity, the MOA has
to be treated as a hybrid, “an instrument of recognition cum treaty for the recognition
and declaration of the independence of the BJE.” And that would spell a virtual sellout
of territorial integrity. But as raised by the author, are we prepared to pay that
stiff price in the name of peace in Mindanao?
Muslim scholars Nasser A. Marohomsalic, Musa Malayang, Carim L.
Panumpang and Rasol Y. Mitmug, Jr., in their “Memorandum of Agreement on
Ancestral Domain: A Commentary,” add to the BJE debate by arguing that the MOA is
constitutional. The authors present with much passion the historical and legal bases
for the creation of what they categorize as a “sub-state” within the Philippine
archipelago that fully realizes the aspirations for self-determination of the
Bangsamoro people.
In “Revisiting Charter Change through People’s Initiative,” Froilan M. Bacungan,
a former law dean and constitutionalist, shares his trenchant analysis on another
timely topic. The article presents the thesis that the existing RA 6735 is adequate to
cover the system of people’s initiative on amendments to the constitution but subject
to the procedural and legal requirements laid down in Lambino vs. Comelec (505 SCRA
218). This means that people’s initiative may only cover proposals for amendments,
not revisions, to the Constitution.
In “Purchased Power Adjustment (PPA) Scheme and Its Derivatives: Deciphering Cost
Recovery Mechanisms in the Distribution of Electric Power and Undertaking Government Policy
on Energy Distribution,” Juan Arturo Illuminado C. de Castro, a budding scholar
on the power industry, examines the mechanics behind the “passing on the systems
loss to consumers.” The issue surged to national prominence in the recent take-over
bid by GSIS over Meralco which was marred by a bribery scandal that jolted the
entire Court of Appeals.
To cap the edition, Eduardo A. Labitag, a veteran law professor and managing
editor of the IBP Law Journal, presents another annual harvest of jurisprudence to
enrich legal knowledge – “Survey of 2006 Supreme Court Decisions on Property and Land
Registration.”

A Framework for
the Study of National Territory:
A Statement of the Problem*
Merlin M. Magallona **
1. Constitutional Foundation
1.1. The present Constitution defines the National Territory in Article I as
follows:
The national territory comprises the Philippine archipelago, with all
the islands and waters embraced therein, and all other territories over
which the Philippines has sovereignty or jurisdiction, consisting of its
terrestrial, fluvial, and aerial domains, including its territorial sea, the
seabed, the subsoil, the insular shelves, and other submarine areas. The
waters around, between, and connecting the islands of the archipelago,
regardless of their breadth and dimensions, form part of the internal
waters of the Philippines.
Under this definition, the geomorphological and political base of the Philippine
State consist of the following components:
(a) the Philippine Archipelago, and
(b) “all other territories over which the Philippines has sovereignty or
jurisdiction.”
Based on the structure of this constitutional text, the appurtenances of these
components are identified, thus:
As to the main component, i.e., the Philippine Archipelago, it has the following
appurtenances:
(a) “all the islands and waters embraced therein;” and
(b) its internal waters consisting of the “waters around, between, and
connecting the islands of the archipelago, regardless of their breadth
and dimensions.”
* Presented during the symposium at the Malcolm Theater, U.P. College of Law on May 29, 2008 on the “Spratly
Islands: Impact of the UNCLOS on the Territorial Integrity of the Philippines and other Related Legal Issues.”
** Professorial Lecturer, former Dean and Professor of Law, College of Law, University of the Philippines.
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Merlin M. Magallona
These appurtenances serve to demonstrate that the Constitution embodies
the concept of an archipelago as a unity of land and water, which is integral to the
historico-cultural and political elements of the Philippine Archipelago.
There are appurtenances which the Constitution identifies as pertaining to
the entire national territory, i.e., to both components. These are:
(a) territorial sea;
(b) fluvial domain;
(c) aerial domain (air space);
(d) seabed and subsoil; and
(e) insular shelves and other submarine areas.
A. Constitutional History of the
Philippine Archipelago — The
Main Component of National Territory
1.2. By the Treaty of Paris of 10 December 1898, Spain ceded to the United
States the Philippine Islands. Article III of this Treaty reads in part:
Spain cedes to the United States the archipelago known as the Philippine
Islands lying within the following lines …. [drawing the International Treaty
Limits (ITL) in technical terms].
The Treaty of Paris is complemented by the Treaty between the Kingdom of
Spain and the United States of America for Cession of Outlying Islands of the
Philippines concluded on 7 November 1900, and by the Convention between the
United States and Great Britain Delimiting the Boundary between the Philippine
Archipelago and the State of North Borneo concluded on 2 January 1930.
Thus, the Philippine Archipelago as the main component of national territory
comprehends the Philippine Islands described as archipelago in Article III of the
Treaty of Paris, with the addition of the islands included by the two companion
treaties referred to above. The said Spain-US Treaty of 7 November 1900 considers
these additional islands as “belonging to the [Philippine] Archipelago” even as it
identifies them as “lying outside the lines described in Article III of [the Treaty of
Paris].” It affirms that “all such islands shall be comprehended in the cession of the
Archipelago as fully as if they had been expressly included within those lines.” These
islands include Cagayan, Sulu and Sibutu. Under the US-Great Britain Convention
of 2 January 1930, Turtle Islands and Mangsee Islands are acknowledged “as
comprised within the Philippine Archipelago.”
The US-Great Britain Treaty mentioned above describes the ITL as “the
boundary defined by the Treaty between the United States of America and Spain
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A Framework for the Study of National Territory: A Statement of the Problem
signed at Paris, December 10, 1898,” 1 to which is connected “the boundary between
the Philippine Archipelago … and the State of Borneo” it has established. 2
Insofar as they define the national territory, the relevant provisions of these
treaties, particularly the Treaty of Paris, have been constitutionalized, embodied in
Section 1, Article I of the 1935 Constitution in the following text:
The Philippines comprises all the territory ceded to the United States by
the Treaty of Paris concluded between the United States and Spain on
the tenth day of December eighteen hundred and ninety-eight, the limits of
which are set forth in Article III of said treaty, together with all the islands
embraced in the treaty concluded at Washington, between the United
States and Spain on the seventh day of November, nineteen hundred,
and in the treaty concluded between the United States and Great Britain
on the second day of January, nineteen hundred and thirty, and all territory
over which the present Government of the Philippine Islands exercises
jurisdiction. 3
In establishing the delimitation of national territory, this provision of the 1935
Constitution takes the lines described in Article III of the Treaty of Paris, referred
to above as the ITL, as the boundaries of the Philippines by prescribing that “the
limits of which are set forth in Article III of the said treaty.” These agreements are
not to be treated merely as bilateral treaties of interest to the states parties. They
have acquired constitutional status in the definition of national territory as elements
of the Philippine State.
This understanding is reflected in the proceedings of the 1934 Constitutional
Convention which framed the 1935 Constitution. For example, Committee Report
No. 7 of the Convention, submitted by the Committee on Territorial Delimitation
on 31 August 1934, refers to Article III of the Treaty of Paris as describing “the
boundaries of the Philippine Islands.”
1.3. With particular regard to the fact that the 1935 Constitution provides for
the ITL as the boundaries of the Philippines, it is significant to recall that the said
fundamental law was approved by the President of the United States pursuant to the
Tydings-McDuffie Law of 1934, “An Act [of the U.S. Congress] to provide for the
Complete Independence of the Philippine Islands, to provide for the Adoption of a
Constitution and a Form of Government for the Philippine Islands and for Other
Purposes”. As required by Section 3 of this Act, the President of the United States
certified that the 1935 Constitution conformed “substantially with the provisions of
this Act” and accordingly approved it, presumably with due regard to the definition
of national territory.
1 Article I. The US-Great Britain Convention is in 137 League of Nation Treaty Series 299. Emphasis added.
2 Preamble. Emphasis added.
3 Emphasis added.
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Merlin M. Magallona
Preparatory to Philippine Independence, the Tydings-McDuffie Law established
the Government of the Commonwealth of the Philippines. By authority of Section
1 of this law, that Government –
shall exercise jurisdiction over all territory ceded to the United States by
the treaty of peace concluded between the United States and Spain on the
10 th day of December, the boundaries of which are set forth in Article III of said
treaty, together with those islands embraced in the treaty between Spain
and the United States concluded at Washington on the 7 th day of November
1900. 4
Earlier, the United States Congress enacted the Philippine Autonomy Act, or
the Jones Law of 1916. It provides that –
The name “The Philippines” as used in this act shall apply to … the
Philippine Islands ceded to the United States by the treaty of peace
concluded between the Untied States and Spain on the tenth day of
December, eighteen hundred and ninety-eight, the boundaries of which are
set forth in Article III of the said treaty …. 5
1.4. Major legislative enactments of the Philippine Commission, the colonial
civil government in the Philippine Islands instituted by the US Congress under the
Philippine Bill of 1902 (Public Law No. 235), referred to the delimitation of ITL in
the exercise of powers of government. The Administrative Code of 1916 (Act No.
265) defines the “territorial jurisdiction and extent of powers of the Philippine
Government” by providing in Section 14 that –
The territory over which the Government of the Philippine Islands
exercises jurisdiction consists of the entire Philippine Archipelago and is
comprised in the limits defined by the treaties between the United States and Spain,
respectively signed in the City of Paris on the tenth day of December, eighteen hundred
and ninety-eight, and the city of Washington on the seventh day of November, one
thousand nine hundred. 6
The Fisheries Act of 1932 (Act No. 4003) defines “Philippine waters or
territorial waters of the Philippines” in Section 6 as including –
All waters pertaining to the Philippine Archipelago, as defined in the treaties
between the United States and Spain, dated respectively the tenth of December,
eighteen hundred and ninety-eight, and the seventh of November, nineteen
hundred. 7
4 Emphasis added.
5 Emphasis added.
6 Emphasis added.
7 Emphasis added.
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A Framework for the Study of National Territory: A Statement of the Problem
These enactments reconfirm the concrete application of governmental powers
within the scope of jurisdiction and sovereignty determined by the boundaries of
the Philippine Archipelago in Article III of the Treaty of Paris - in brief, the
determination of the ITL as such boundaries within which the powers of jurisdiction
and sovereignty have been exercised. They reflect the understanding that the waters
enclosed by the ITL are established by U.S. sovereignty as territorial waters of the
Philippine Archipelago and that the land and waters pertaining to the Philippine
Islands are in unity as an archipelago.
1.5. The necessary implications of constituting the ITL as the boundaries of
the Philippines, as explained above, are contained in the two diplomatic notes which
the Philippine Government transmitted to the Secretary-General of the United
Nations. The note of 12 December 1955 from the Philippine Department of Foreign
Affairs presents two points, thus:
[1] “The position of the Philippine Government … is that all waters around,
between and connecting the different islands belonging to the Philippine
Archipelago irrespective of their widths or dimensions, are necessary
appurtenances of its land territory, forming an integral part of the national
or inland waters, subject to the exclusive sovereignty of the Philippines.”
[2] “All other water areas embraced in the imaginary lines described in
the Treaty of Paris of December 10, 1898 … 8 [and the two companion
treaties] are considered as maritime territorial waters of the Philippines for the
purpose of protection of our fishing rights, conservation of our fishing
resources, enforcement of revenue and anti-smuggling laws, defense and
security, etc.” 9
In a note verbale of 20 January 1956, the Permanent Mission of the Philippines
to the United Nations responded to the invitation of the UN Secretary-General to
submit its observation on the drafts prepared by the International Law Commission
on the regime of the high seas and on the breadth of the territorial sea. The Philippine
note in reply reiterates the two points contained in the note of 12 December 1955
transmitted to the UN Secretary General, as set out above. It declares as follows:
[1] “[T]he Philippine Government assumes that high seas cannot exist
within the waters comprised by the territorial limits of the Philippines as
set down in the international treaties referred to above. In case of
archipelagos or territories composed of many islands like the Philippines,
which has many bodies of waters enclosed within the group of islands,
the State would find the continuity of jurisdiction within its own territory
disrupted, if certain bodies of water located between the islands composing
its territory were declared or considered as high seas.”
8 Referring to the International Treaty Limits (ITL).
9 Emphasis added.
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Merlin M. Magallona
[2] “The Philippine Government considers the limitations of its territorial
sea as referring to those waters within the recognized treaty limits, 10 and for this
reason it takes the view that the breadth of the territorial sea may extend
beyond twelve miles. It may therefore be necessary to make exceptions,
upon historical grounds, by means of treaties or conventions between
States ….”
Again, based on the boundaries drawn by the ITL, the Philippines presented
its position in the 1960 UN Conference on the Law of the Sea, as follows:
…[S]ince … the Treaty of Paris was ratified, and throughout all the time
that the Philippines was under the American flag and the United States was
exercising sovereign rights over all the land and sea territory embraced in that treaty,
there was no protest from anyone against the exercise of such sovereignty.
And since the Philippines became independent and continued to exercise
sovereignty and jurisdiction over the same territory, there has likewise
been no protest by any state. The title of the Philippines to a wider
extent than twelve miles of territorial sea, therefore, has both a legal and
historic basis. Such title cannot and should not be affected adversely by
any new rule on the breadth of the territorial sea that may be adopted in
this conference. A historic title is a generally recognized basis of acquired
or established rights.
The territorial sea of the Philippines, … over which my country exercises
sovereignty and jurisdiction by virtue of a legal and historic title, is, therefore,
comprised of all the waters beyond the outermost islands of the archipelago but within
the boundaries set by the Treaty of Paris. The case of the Philippines is sui
generis, and cannot be covered by a general rule that may be formulated
by the breadth of the territorial sea …. [W]e must state that it is
unthinkable and impossible for us to lend our support to any proposal
which may be interpreted, evenly remotely, as impairing any of our historic
rights, and which may be used as an excuse by foreign vessels and
fisherman to penetrate with impunity into the very heart of our
archipelago.” 11
1.6. The foregoing review, showing Article III of the Treaty of Paris 12 as
defining the boundaries of the Philippines represented by the ITL, is synthesized in
the present Baseline Law - Republic Act No. 3046 as amended by Republic Act No.
5446 - An Act Defining the Baselines of the Territorial Sea of the Philippines. It is
based on the premise that “all the waters within the limits sets forth in the abovementioned
treaties have always been regarded as part of the territory of the Philippine
Islands.”
10 Emphasis added. This means the waters within the ITL.
11 Emphasis added.
12 Together with the two companion treaties already identified above.
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A Framework for the Study of National Territory: A Statement of the Problem
This law defines the Philippine territorial sea as comprising “all the waters beyond
the outermost islands of the archipelago but within the limits of the boundaries set
forth in the aforementioned treaties.” The territorial sea therefore extends from
the baselines connecting the outermost islands of the Philippine Archipelago to the
ITL.
It also defines “all the waters around, between and connecting the various
islands of the Philippine archipelago … as necessary appurtenances of the land
territory, forming part of the inland or internal waters of the Philippines.” 13
Hence, when the Baseline Law provides that “all the waters within the limits
set forth in the abovementioned treaties have always been regarded as part of the
territory of the Philippine Islands,” these waters are of two categories, as pointed
out above, namely: (a) the territorial sea and (b) the internal waters, both being
regimes of sovereignty of the Philippines.
Again, the Philippine position provided in the present Baseline Law, outlined
above, was communicated to the international community. The Philippine delegation
to the UN Committee on the Peaceful Uses of the Sea-bed and the Ocean Floor
Beyond the Limits of National Jurisdiction delivered a statement on 16 August 1971,
which in part reads:
. . . [T]he only rule that would be consistent with the nature of an
archipelago as one State is that which would require and allow an
archipelago to draw a single baseline around the islands that constitute it
by joining appropriate points of the outermost islands of the archipelago
with straight lines. We have followed this rule, having defined and clarified
by legislation the baselines from which our territorial sea shall commence.
The waters within the baselines are internal waters; those outside proceeding seaward
within defined limits constitute our territorial sea. 14
B. Other Territories Under Philippine Sovereignty
or Jurisdiction – the Second Component of
National Territory
1.7. As formulated above, the other component of national territory is subsumed
under the clause “all other territories over which the Philippines has sovereignty or
jurisdiction” in Article I of the present Constitution, territories which by law or
historic right pertains to the Philippines.
13 Emphasis added.
14 Estelito P. Mendoza, The Base-Lines of the Philippines, 46 Philippine Law Journal 628, 633 (September 1971).
The Philippine statement was delivered in Sub-Committee II of this UN Committee by Prof. Estelito P.
Mendoza.
VOLUME 33 NUMBER 2 (SEPTEMBER 2008)
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Merlin M. Magallona
There are two legal enactments which are integrally connected to the otherterritories
clause of the Constitution. By virtue of this interconnectivity, this
constitutional clause has the effect of inhibiting their repeal or amendment adverse
to territorial sovereignty. These enactments were already in place when the 1987
Constitution came into effect, and on account of the other-territories clause they
have gained constitutional recognition.
These enactments are:
(1) The present Baseline Law – Republic Act No. 3046 of 1961, as amended
by Republic Act No. 5446. Section 2 of Republic Act No. 5446 provides:
The definition of the baselines of the territorial sea of the
Philippine Archipelago as provided in this Act is without
prejudice to the delineation of the baselines of the territorial
sea around the territory of Sabah, situated in North Borneo, over
which the Republic of the Philippines has acquired dominion and
sovereignty. 15
(2) Presidential Decree No. 1596 which took effect on 11 June 1978. It
declares that the Kalayaan Island Group (KIG) “shall belong and be subject
to the sovereignty of the Philippines”, together with the seabed, subsoil,
continental margin and air space. Under this Decree, the islands
comprehended by the KIG are regarded as one area and as such is
“constituted as a distinct and separate municipality of the Province of
Palawan and shall be known as Kalayaan.’”
1.8. Approved on second reading in the House of Representatives is House
Bill No. 3216, “An Act Defining the Archipelagic Baselines of the Philippine
Archipelago, Amending for the Purpose Republic Act No. 3046 as amended by
Republic Act No. 5446”. Apparently mindless of the interconnectivity between the
present Baseline Law and the other-territories clause of the Constitution, the bill
deliberately eliminates Section 2 of Republic Act No. 5446 which is the only legislative
affirmation of Philippine sovereignty over Sabah. If enacted into law, the bill would
operate as a repeal of the said Sabah provision of the present Baseline Law, resulting
in the derogation of the other-territories clause of the Constitution.
In place of the Sabah provision of Republic Act No. 5446, the bill installs a
“without prejudice clause” which reads:
The delineation of baselines as provided in this Act shall be without
prejudice to any claims to any contested portions of the national territory or maritime
zones and jurisdiction of the Philippines in accordance with international
law and under appropriate international dispute resolution mechanisms. 16
15 Emphasis added.
16 Emphasis added.
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A Framework for the Study of National Territory: A Statement of the Problem
The implication of the bill vis-à-vis Philippine sovereignty over Sabah is that it
would radically change the status of Sabah in Philippine law as recognized by the
Constitution, from an unequivocal pronouncement of Philippine sovereignty and
dominion under the present Baseline Law to a mere statement of claim to a contested
portion of the national territory to be settled “in accordance with international law
and under appropriate international dispute resolution mechanisms.”
But considering that in international law settlement of dispute is a matter
addressed not to the unilateral act of a party to the dispute but to the consent of
both parties, it follows that under Philippine law itself the status of Sabah is thereby
reduced to indeterminate claim that may remain unsettled indefinitely for the reason
that the other claimant may refuse any “dispute resolution mechanisms.” If the
authors of the bill have in mind the prospect of resort to the International Court of
Justice (ICJ), it is suggested that they deal with the following threshold problem.
In its declaration of 23 December 1971, the Philippines “recognizes as
compulsory ipso facto and without special agreement, in relation to any other State
accepting the same obligation, the jurisdiction of the International Court of Justice
[ICJ] in all legal disputes” as defined by the ICJ’s Statute. However, the Philippine
declaration is subject to reservations, among which it specifies that it shall not apply
to any dispute “Arising out of or concerning jurisdiction or rights claimed or exercised
by the Philippines …. [i]n respect of the territory of the Republic of the Philippines,
including its territorial seas and inland waters.”
The bill may thus be relying on a principal mechanism of dispute settlement in
international law under the ICJ Statute from which the Philippines has deliberately
excluded itself by formal reservation.
1.9. In the current public debate on the Spratly Islands, the same bill has
stirred controversy with respect to how the baselines should be drawn in the Kalayaan
Island Group (KIG). It appears that the solution preferred by the Executive
Department, apparently in avoidance of friction with other territorial claimants, is
to deal with KIG under the concept of “regime of islands” to be regulated by Article
121 of the United Nations Convention on the Law of the Sea (UNCLOS).
By this UNCLOS provision, the islands constituted as KIG under Presidential
Decree No. 1596 are to be regarded individually as “An island … naturally formed
area of land, surrounded by water, which is above water at high tide,” 17 each with its
own territorial sea, the contiguous zone, the exclusive economic zone and the
continental shelf. 18
The formula of “regime of islands” carries the risk of disintegrating effects on
KIG as a unified local government unit in that the intrusion of Article 121 of the
17 UNCLOS, Article 121 (1).
18 UNCLOS, Art. 121 (2).
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Merlin M. Magallona
UNCLOS may demand that the constituent areas of land and water formations
within the KIG be divided into categories of islands under paragraph 1 of Article
121 and of rocks under paragraph 2 of that provision, with the possible result in the
reduction of areas of sovereign rights and jurisdiction. Paragraph 2 provides that
“Rocks which cannot sustain human habitation or economic life of their own shall
have no exclusive economic zone or continental shelf.”
Constituted as a political unit, “as a distinct and separate municipality of the
Province of Palawan,” KIG has a regime of internal waters around, between and
connecting its constituent islands. It would appear as a result that the formula of
“regime of islands” may eliminate the regime of internal waters between, around
and separating the constituent islands of the KIG, and would have adverse effects
on the sovereignty over the affected sea-bed, subsoil as well as the air space.
Overall, on account of the constitutional recognition under the other-territories
clause, territorial sovereignty over the KIG under Presidential Decree No. 1596
should be beyond statutory alteration in order to prevent derogation of the national
territory as defined in Article I of the Constitution. Note that the said Presidential
Decree sets out in precise technical description the boundaries of the KIG, together
with the identification of the furthest points which, if connected by straight lines
would serve or become the baselines. Hence, not only that the changes to be
introduced by the bill would prove to be superfluous, but these would be as well
inimical to territorial sovereignty.
2. Reorganizing the National
Territory: Shift from The Treaty
of Paris to the UNCLOS
A. The Philippines as an Archipelago
2.1. By Article III of the Treaty of Paris, “Spain cedes to the United States the
archipelago known as the Philippine Islands.” 19 The term archipelago used as descriptive
of the Philippines pertains to a historically established entity organized into one
political unit. Sovereignty of the King of Spain was proclaimed over the whole
Archipelago with Manila declared as its capital, 20 and governed as such for more
than three centuries as a unity of land and water. Under a centralized administration
as a Spanish possession, the Philippines then consisted of thirty-three provinces,
from Luzon to Mindanao, inhabited by a population of about 5 million paying tribute
to the Spanish royal treasury. 21 Following the defeat of the Spanish forces in the
19 Emphasis added.
20 John Foreman, The Philippine Islands, 1906, p. 36.
21 See Jean Mallet, The Philippines: History, Geography, Custom, Agriculture, Industry and Commerce of the
Spanish Colonies in Oceania, 1994, trans. By Pura-Santillan-Castrence, Chap. V.
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battle of Manila by the US occupying forces, the terms of capitulation were signed
by the military authorities of both camps, the principal stipulation of which was the
surrender of the whole Philippine Archipelago. 22
Relinquishment of sovereignty to the United States over the Philippines as a
political unity covered all aspects of governmental powers, including the determination
of status of Spanish subjects and of the native population in the entire territory
ceded to the United States. 23 In transition from military government, the Instructions
of US President McKinley of 7 April 1900 strengthened the “utilization of the islands”
into an archipelagic unity considered as one juridical category this time to be
administered by a central civil government exercising legislative authority throughout
the entire archipelago, which included “the making of rules and orders having the
effect of law, … the raising of revenues by taxes, customs duties and imposts; the
appropriation and expenditure of public funds of the Islands; the establishment of
an education system to secure an efficient civil service; the organization of a system
of courts; the organization and establishment of municipal and departmental
governments”, and the institution of the English language as a common medium of
communication, “[i]n view of the great member of languages” spoken by the sectors
of population in various parts of the archipelago.
2.2. Thus, long before the international law of the sea has evolved the
archipelagic concept that is now crystallized in Article 46(1) of the UNCLOS, the
Philippines was already established as an archipelago in unity of land and water as
formalized in Article III of the Treaty of Paris, together with its authoritative
interpretation set out above.
It is instructive that a study on mid-ocean archipelagos that formed part of the
preparatory work of the 1958 UN Conference on the Law of the Sea reflects the
politico-geologic nature of the archipelago exemplified in the case of the Philippine
Islands. Prepared by Jens Evensen, it defines outlaying or mid-ocean archipelagos
as “groups of islands situated out in the ocean at such distance from the coasts of
firm lands as to be considered as an independent whole rather than forming part of or
outer coastline of the mainland.” 24 The study goes on to point out the geographical
and historical peculiarities of outlaying [or mid-ocean] archipelagos:
No hard-and-fast rule exists whereby a State is compelled to disregard the geographic,
historical (and economical) peculiarities of outlaying archipelagos. Frequently the
only natural and practical solution is to treat such outlaying archipelagos as a
whole for the delimitation of territorial waters by drawing straight baselines
from the outermost points of the archipelago - that is, from the outermost
points of the constituent islands, islets and rocks - and by drawing the
22 Foreman, op. cit., at 464-465.
23 See Treaty of Paris, Arts. VIII and IX.
24 Document A/CONF. 13/18. See UN Conference on the Law of the Sea, 1958, vol. I, p. 290. Emphasis added.
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Merlin M. Magallona
seaward limit of the belt of the marginal seas at a distance of x nautical
miles outside and parallel to such baselines. 25
It is against the background of clashing interests in the 1958 UN Conference
of the Sea that the Congress of the Philippines enacted the baseline law in Republic
Act No. 3046 in 1961. Supported by the Evensen study, it crystallizes into definitive
legislative pronouncement the position taken by the Philippine diplomatic notes
referred to above.
B. In Synthesis: The UNCLOS
in Relation to the Treaty of Paris
2.3. The application of the UNCLOS to the Philippine territorial regime has
the effect of eliminating the juridical function of the Treaty of Paris insofar as it
established the boundaries of the Philippine State. It nullifies the authoritative
interpretations of the Treaty of Paris to that effect, as reviewed above.
Since the Philippines has established under its law and practice that Article III
of the Treaty of Paris defines the boundaries of the Philippines, the breadth of its
territorial waters should extend from the baselines to the ITL. The vast expanse of
territorial waters within the boundaries set by the Treaty of Paris is spelled out by
the Committee on National Territory of the 1971 Constitutional Convention in its
Report No. 1, thus:
Now if we plot on a map the boundaries of the Archipelago as set forth in
the Treaty of Paris, a huge or giant rectangle will emerge, measuring
about 600 miles in width and over 1200 miles in length. Inside this rectangle
are the 7,100 islands comprising the Philippine Islands. From the east
coast of Luzon to the eastern boundary of this huge rectangle in the
Pacific Ocean, there is a distance of over 300 miles. From the west coast
of Luzon to the western boundary of this giant rectangle in the China
Sea, there is a distance of over 150 miles.
On the other hand, when these boundaries are set aside as a consequence of
the application of the UNCLOS, the territorial sea is reduced to a breadth not
extending twelve nautical miles from the baselines. The UNCLOS reduces the
territorial sea by 230,000 square miles, or almost by 50% – which means the collapse
of territorial sovereignty as extended to the territorial sea. If the limits set forth in
the Treaty of Paris are understood in the concept of boundaries, as they are, to be
applied in complement with the present Baseline Law, it is calculated that the area of
the country’s territorial sea would cover about 520,700 squares miles. 26
25 Ibid.
26 See estimate in “Primer on the United Nations Convention on the Law of the Sea”, published by the Department
of Foreign Affairs, Manila, May 1991, p. 15.
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C. The UNCLOS and the Constitution
(1) Boundaries of the National Territory
2.4. “Boundary” is defined in international law as a line “which determines the
limit of the territorial sphere of jurisdiction of States or other entities having an
international status.” 27 Necessarily, boundaries “are permanent lines of de jure
jurisdiction.” 28
Deriving its definition of national territory from the 1935 Constitution, the
present fundamental law takes the lines drawn in Article III of the Treaty of Paris,
together with the two companion treaties, as the boundaries of the Philippines. But
the implementation of the UNCLOS will have the effect of nullifying the legal status
or function of the said treaty limits. The operation of Articles 47 and 48 of the
UNCLOS in relation to its Article 3 will have that effect in a wholesale manner.
Under the Treaty of Paris, the boundaries of the Philippines as drawn in Article
III forms an integral part of its definition as an Archipelago and becomes an element
of its statehood which is built into its National Territory as described in Section 1,
Article I of the 1935 Constitution. The term archipelago in the definition of national
territory under the 1973 and the present Constitution perpetuates the geographical,
historical, political and legal context by which the 1935 fundamental law
constitutionalized the nature of the Philippines as an archipelago under the Treaty
of Paris.
If the Philippines is to be categorized as an archipelagic state under the
UNCLOS, the breadth of its territorial sea would be drawn from the “archipelagic
baselines”. It is from these baselines that the territorial sea would be measured.
Since under Article 3 of the UNCLOS the breadth of the territorial sea is limited to
12 nautical miles from the baselines, then accordingly the outer limit of territorial
sovereignty extends no more than 12 nautical miles from the same starting point.
2.5. The claim of the United States Government that the limits set forth in the
Treaty of Paris are not boundaries but merely represent “lines of allocation for the
islands only and do not necessarily include the waters within,” 29 is belied by the
enactments of the U.S. Congress indicating the Treaty of Paris limits the boundaries
of the Philippine Archipelago. It is an act of denying its own past in the establishment
and administration of Philippine Island as its colony and the legal consequences of
its own sovereign acts as a colonial power. Even if these are to be regarded as
unilateral acts of the United States, nevertheless they are acts of sovereignty and
27 M. Bothe, “Boundaries”, in R. Bernhardt (ed.), Encyclopedia of Public International Law, Vol. I, pp. 443, 447
(1992).
28 Id., at 444.
29 See Merlin M. Magallona, International Law Issues in Perspective, 1996, pp. 204-205.
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Merlin M. Magallona
they would assume validity for the reason that no rule of international law at the
time prohibited its assertion and that they enjoy the acquiescence of the international
community.
(2) Internal Waters Transformed into Archipelagic Waters:
the Watered-Down Sovereignty
2.6. In defining national territory, the present Constitution specifies that –
The waters around, between and connecting the islands of the archipelago,
regardless of breadth and dimensions, form part of the internal waters of
the Philippines. 30
The provision runs in continuity with the territorial principles of the 1935 and
the 1973 Constitutions. In a position communicated to the United Nations in 1955,
the Philippines emphasized the legal status of these waters, as follows:
The position of the Philippine Government in the matter is that all waters
around, between and connecting the different islands belonging to the
Philippine Archipelago irrespective of their width or dimensions, are
necessary appurtenance of its land territory, forming an integral part of the national
or inland waters, subject to the exclusive sovereignty of the Philippines ... 31
All the more is the sovereignty over these waters vital as a political consolidation
of a State whose material base is characterized by geographic fragmentation.
Waters properly characterized as “national waters” or “internal waters” are
closely linked to land territory by reason of the “vital interests of the territorial
sovereign concerning conditions of national and territorial integrity, of defense, or
commerce and of industry.” 32 Land territory and internal waters are one under the
sovereignty of a State. International law strikes a difference between territorial sea
and internal waters in that it permits right of innocent passage by foreign ships in
the former, but not through internal waters. 33 It is only upon prior permission of
the coastal State that submarine cable or pipelines may be laid in internal waters.
Moreover, in customary international law “there does not exist a ... right of access to
30 Emphasis added.
31 Emphasis added.
32 R. Lagoni, Internal Waters,” in Rudolf Bernhardt (ed.), Encyclopedia of Public International Law, vol. 11
(North Holland, 1989), p. 153.
33 See UNCLOS, Art. 17 and Convention on the Territorial Sea and Contiguous Zone, Art. 14(1). The only
exception to the exclusion of right of innocent passage through internal waters pertains to a case of what used
to be territorial waters, or parts of territorial sea, which has been enclosed by straight baselines as internal
waters.
34 Rainer Lagoni, Internal Waters, Seagoing Vessels”, in Rudolf Bernhardt (ed.), Encyclopedia of Public International
Law, vol 11, 1989, pp. 155-156.
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A Framework for the Study of National Territory: A Statement of the Problem
internal waters in general or to ports in particular,” 34 except in cases of distress.
Warships and government ships operated for non-commercial purposes may not
enter the internal waters of a State without its prior consent. A coastal State may
allow entry to internal waters and to its ports upon certain conditions, which right
may be withdrawn. 35
On the other hand, the UNCLOS will radically change the status of the
Philippine internal waters by transforming them into archipelagic waters. Under the
UNCLOS, what the 1987 Constitution refers to as “waters around, between, and
connecting the islands of the archipelago” are said to be subject to the sovereignty of
the Philippines as an archipelagic state, 36 but that sovereignty is watered down by
the following limitations:
(a) Ships of all states enjoy the right of innocent passage through archipelagic
waters. 37 This means that as a matter right foreign ships are allowed to navigate
through the Philippine waters “around, between, and connecting the islands of the
archipelago,” including stopping and anchoring incidental to ordinary navigation. 38
In direct danger and risk to national security and environmental integrity, this right
pertains to foreign submarines and “nuclear-powered ships and ships carrying nuclear
or other inherently dangerous or noxious substances.” 39 In making provision for
the innocent passage of submarines and nuclear powered ships, the UNCLOS does
not expressly exclude nuclear-armed ships and may imply they are allowed innocent
passage in the archipelagic waters. It contains rules regulating the right of innocent
passage for warships, clarifying all the more that this right pertains to this category of
ships. 40 Oil tankers too are among the beneficiaries of innocent passage through
these waters, posing potential environmental disasters. 41
(b) In archipelagic waters, the Philippines has the duty to “recognize traditional
fishing rights and other legitimate activities of the immediately neighboring States.” 42
(c) The Philippines must “respect existing submarine cables laid by other States
and passing through its waters without making a landfall” and shall allow the
“maintenance and replacement of such cables upon receiving due notice of their
location and the intention to repair or replace them.” 43
35 See R.R. Churchill and A.V. Lowe, The Law of the Sea, 1983, pp. 46-47.
36 See UNCLOS, Art. 49.
37 UNCLOS, Art. 52(1).
38 UNCLOS, Art. 57 in relation to Arts. 17 and 18.
39 UNCLOS, Art. 52(1) in relation to Arts. 20 and 23.
40 The right of innocent passage for warships, submarines, and nuclear-powered ships is applied to archipelagic
waters by reference to the rules applicable to these vessels in innocent passage in the territorial sea. See reference
to Part II, section 3 of the UNCLOS by Art. 52(1). See F. Ngantcha, The Right of Innocent Passage and the
Evolution of the International Law of the Sea, 1990, pp. 123-154.
41 See UNCLOS, Art. 22(2).
42 See UNCLOS, Art. 51(1).
43 UNCLOS, Art. 52(2).
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Merlin M. Magallona
Under the UNCLOS, the vast expanse of internal waters over which the
Philippines has full territorial sovereignty are radically reduced to small pockets of
waters enclosed by straight lines drawn across the mouth of rivers directly flowing
into the sea, waters in bays, and in permanent harbor works, including lagoons inside
reefs. 44
In the real sense, what are properly internal waters under our fundamental
law will cease to be part of the country’s territorial sovereignty by virtue of these
serious restrictions. UNCLOS has the effect of eliminating in a wholesale manner
these internal waters as an integral part of Philippine sovereignty.
Thus, the UNCLOS presents an anomaly in that it gives a new status to
Philippine internal waters, calling them “archipelagic waters,” and subjects them to more
restrictions than it does to the territorial sea. Consequently, the territorial sea surrounds a
regime of waters inside the country’s baselines burdened with more onerous duties
on the part of the Philippines than those in the territorial sea. The view of Churchill
and Lowe is of striking relevance to marine pollution from ships in their innocent
passage through waters interconnecting the Philippine islands:
... [T]he Convention [on the Law of the Sea] in its provisions on pollution
gives the coastal state additional enforcement jurisdiction in respect of
pollution over foreign vessels in its territorial sea .... This additional
jurisdiction does not apply in archipelagic waters. The result, therefore,
is that in its archipelagic waters an archipelagic State has less enforcement
jurisdiction over foreign vessels in matters of pollution than a nonarchipelagic
State in its territorial sea ... or than the archipelagic State
itself has in its own territorial sea lying beyond its archipelagic waters. 45
(3) Archipelagic Sea Lanes and Air Space - International
Highways Traversing Zones of Exclusive Economic Zone,
Territorial Sea, Internal Waters and Air Space
2.7. It is through the archipelagic sea lanes that the UNCLOS has the most
devastating impact on Philippine sovereignty. In addition to the right of innocent
passage of foreign vessels through the territorial sea and the archipelagic waters of
archipelagic states, the UNCLOS creates a new maritime regime, namely, the
archipelagic sea lane passage. The central feature of this new regime is the duty of the
Philippines as an archipelagic state to designate sea lanes and air routes “suitable
for the continuous and expeditious passage of foreign ships and aircraft through or
over” the archipelagic waters and the adjacent territorial sea. 46 Jayewardene interprets
44 UNCLOS, Arts. 50 in relation to Arts 9, 10 and 11. See H.W. Jayewardene, The Regime of Islands in International
Law, 1990, p. 98.
45 Churchill and Lowe, op. cit. supra, note 34 at 96-97.
46 UNCLOS, Art. 53(1).
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the UNCLOS as requiring that each archipelagic sea lane be 50 nautical miles wide. 47
Each archipelagic sea lane is to traverse the archipelagic waters and the territorial
sea in order to create “continuous, expeditious and unobstructed transit between
one part of the high seas or an exclusive economic zone and another part of the high
seas or an exclusive economic zone.” 48 The right of archipelagic sea lanes passage
consists of two components, namely: (1) the right of passage of all ships, and (2) the
right of overflight of all aircraft. Both components pertain to all States and the archipelagic
state cannot “discriminate in form or in fact among foreign ships,” 49 which should
apply as well to foreign aircraft. It shall not hamper nor suspend the archipelagic
sea lanes passage. 50
Archipelagic sea lanes are indeed in the nature of international highways cutting
across the territory of an archipelagic state and excluded from the exercise of its
sovereign authority, so that foreign ships and aircraft, particularly those of naval
powers, can maintain worldwide mobility. The proceedings of the Third UN
Conference on the Law of the Sea, which prepared the UNCLOS, reveal that the
special character of the archipelagic sea lanes passage lies primarily in the militarysecurity
demands of the US, which were accepted by the Conference in exchange for
compromises and concessions.
One major result of these compromises and concessions is synthesized by
Shigeru Oda, former judge of the International Court of Justice, as follows:
...the new regime on the passage through straits and archipelagic waters
was introduced not only for the navigation of commercial vessels, but, in
particular, to maintain uninterrupted navigation of warships - including submarines
and the free navigation of military aircraft.
[In the early 1970s] the United States declared that it would accept the
12-mile territorial sea limit on certain conditions, among others that the
free and uninterrupted passage for warships and military aircraft and
submarines through straits used for international navigation be guaranteed.
This was a basic point of the new regime of transit passage through straits.
The idea of the archipelagic sea lane passage developed in a similar
fashion…
Even this development [i.e., the proposal to define innocent passage
of vessels in the archipelagic waters, sponsored principally by the
47 This is an interpretation of Art. 53(3) which requires that the sea lanes and air routes shall be defined by “a series
of continuous axis lines from the entry points of passage routes to the exit points.” It provides that ships and
aircraft “shall not deviate more than 25 nautical miles to either side of such axis lines.”
48 UNCLOS, Art. 53(3).
49 See UNCLOS, Art. 42(2) in relation to Art. 54.
50 See UNCLOS, Art. 44 in relation to Art. 54.
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Merlin M. Magallona
Philippines and Indonesia] was unacceptable to the US Navy, because
under the innocent passage concept its submarines would not be able to
carry out underwater operations. The US Navy would only accept the
archipelagic concept on the condition that the undetected and uninterrupted
passage of submarines would be guaranteed throughout the archipelagic waters. Thus,
the concept of the archipelagic sea lanes passage was first introduced to permit naval
vessels including submarines and military aircraft to enjoy a free and uninterrupted
passage through the archipelagic waters…. 51
Article 53(1) and (2) of the UNCLOS now provides that “All ships and aircraft
enjoy the right of archipelagic sea lanes passage in such sea lanes and air routes,”
which archipelagic states are under duty to designate. 52
Kwiatkowska has a more concrete explanation as to the military-security
motivation of the right of archipelagic sea lanes passage, thus:
The right of innocent passage would be perfectly adequate for commercial
navigation and non-applicability of this right never hindered civil aviation.
But archipelagic sea lane passage was necessary to enable a submerged
navigation of submarines and maneuvering of a military aircraft which
are not permissible under the innocent passage regime. 53
As to submarines, an anomaly in the UNCLOS arises from the fact that it
requires submarines “to navigate on the surface in the territorial sea,” 54 whereas in
transit through the archipelagic sea lanes they are allowed passage in their submerged
state, or “in the normal mode.” 55 It can be generalized then that
The essential feature of archipelagic sea lanes passage is that the United
States, Soviet Union, Britain, France, and possibly others may send the
SSBNs [nuclear ballistic missile submarines] or attack submarines through
archipelagic waters in their normal mode of operation. This right of
archipelagic sea lane passage is especially important [to such naval powers]
in the Southwest Pacific archipelagos of the Philippines and Indonesia
for east-west transit to and from the Indian Ocean. 56
51 S. Oda, “The Passage of Warships Through Straits and Archipelagic Waters,” in J.M. Van Dyke, et als. (eds.),
International Navigation: Rocks and Shoals Ahead?, 1988, pp. 155-156. Emphasis added.
52 Emphasis added. Obviously, the world “all” intends to convey the meaning of the provision as including
military vessels and aircraft, without being explicit about their special character.
53 B. Kwiatkowska, An Evaluation of State Legislation on Archipelagic Waters, 6 World Bulletin 22, 23
(Nov. – Dec. 1990).
54 UNCLOS, Art. 20.
55 UNCLOS, Art. 53(3).
56 D.L. Larson, “Security Issues and the Law of the Sea: A General Framework”, 15 Ocean Dev. & Int’l L. 99, 118
(1985).
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As to overflight over the archipelagic sea lanes, Kwiatkowska further explains
the peculiar military nature of this right, thus:
The requirement that air routes must be above archipelagic sea lanes
was dictated not by need of civil air navigation but by the necessity to
provide maneuvering possibilities for military aircraft while the naval forces of a
particular fleet are passing through the sea lanes . . . .
It follows from the foregoing that, contrary to what is often maintained,
a general right of free overflight above archipelagic waters can - due to its
strict application to the air space above the archipelagic sea lanes - be
implemented in practice only by military aircraft. Civil aircraft could
clearly not fulfill the zigzagging above the archipelagic sea lanes and of
overflying archipelagic waters without passing above archipelagic land
(island) territory… 57
This security concern over the archipelagic sea lanes passage is qualitatively
magnified because of the expansion of sea-based nuclear weapons systems. As a
United Nations study shows,
The sea has now become the operational environment of ballistic missile
submarines, each of which has been estimated to be carrying the equivalent
of more explosive power than was used by all the combatants in the
Second World War. The combination of missile and warhead design,
nuclear propulsion power, highly accurate navigation and guidance systems
and sophisticated hull design and construction techniques has provided
the opportunity for the development of an entirely new naval capability
of awesome specific power. 58
Until lately, a great percentage of the ICBMs is sea-borne and more than 7,000
strategic nuclear warheads are carried by submarines of the five nuclear-weapon
states. 59 And yet with respect to passage through the archipelagic sea lanes, the
UNCLOS does not require prior authorization - or even just notification - for the
passage of submarines or warships carrying nuclear weapons or other dangerous or
noxious cargoes. 60
In this context, a more specific situation emerges in the case of the Philippines.
Under Article 53(4) of the UNCLOS the archipelagic sea lanes, together with the air
routes for overflight, “shall include all normal passage routes used as routes for
international navigation.” Under the UNCLOS, if the Philippines fails to designate
sea lanes or air routes, the right of archipelagic sea lanes may be exercised through
57 Op. cit. supra note 53, at 41-42.
58 UN Dept. of Disarmament Affairs, The Naval Arms Race (New York, 1986), p. 14.
59 Id. At p. 27.
60 See. H.W. H.W. Jayewardene, The Regime of Islands in International Law, 1990, pp. 170-171.
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Merlin M. Magallona
these normal routes of international navigation. 61 Taking into account existing normal
routes for international navigation, how many archipelagic sea lanes may traverse
the Philippine archipelago? On this basis, at least four of such “international
highways” each not less than 50 nautical miles wide, are likely to cut across its territory.
Between the Pacific Ocean and the South China Sea, the first route may pass through
Luzon Strait (which consists of the Bashi, Balintang, and Babuyan Channels) in
Batanes. The second may go through San Bernardino Strait and Verde Island Passage.
The third, through Surigao Strait, may connect the Pacific Ocean with Mindanao and
the Sulu Seas from which ships may go out into the South China Sea through the
Balabac Strait in southern Palawan. 62 Passing through Mindoro Strait, the fourth
route may connect the South China Sea with the Celebes Sea through Basilan Strait.
The other branch of this fourth route may go out through Balabac Strait into the
Indonesian route and on to the Singapore Strait or Malacca Strait. 63
Bear in mind that these archipelagic sea lanes are drawn across what the
Philippine Constitution characterizes as internal waters over which the Philippines
exercises sovereignty as well its territorial sea.
(4) Transit Passage
2.8. Among the straits used for international navigation which may be used
for archipelagic sea lane passage, eight are situated entirely within the archipelagic
waters of the Philippines, or what are its internal waters under the Philippine Constitution.
Under the UNCLOS, transit passage through straits used for international navigation
constitutes a separate legal regime established principally for the military interests
of the naval powers. In continuity with archipelagic sea lanes passage, all ships and
aircraft have the freedom of navigation and overflight through these straits.” 64 Again,
submarines are allowed passage in their “normal modes,” i.e., underwater, without
the obligation to surface. Where these straits do not form part of archipelagic sea
lanes, transit passage through them constitutes an additional restriction to Philippine
territorial sovereignty, quite apart from the archipelagic sea lanes and innocent
passage through connecting waters of the country’s islands.
2.9. On the whole, the UNCLOS raises fundamental questions which bear
directly on the security and integrity of the Philippine State. Why the Philippines
must pay such a heavy price in the interest of the military powers points to a review
of the Philippine position with respect to the UNCLOS.
61 Art. 53(12).
62 See B. Kwiatkowska, “An Assessment of Philippine Legislation on Archipelagic Waters,” 6 World Bulletin 28,
35-36 (Sept.-Oct. 1990).
63 Ibid.
64 See UNCLOS, Arts. 37 and 38.
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3. A Conditional Concurrence
of the UNCLOS by the Batasang Pambasa:
Is There Concurrence At All?
3.1. By Resolution No. 121, The Batasang Pambansa expressed its concurrence
in the UN Convention on the Law of the Sea on 27 February 1984. It reads:
Resolved by the Batasang Pambansa, To concur, as it hereby concurs, in
the United Nations Convention on the Law of the Sea entered into and
signed by the Representative of the Republic of the Philippine on
December 10, 1982 at Montego Bay, Jamaica, with the understanding embodied
in the Declaration filed on behalf of the Republic of the Philippines by
the head of the Philippine delegation when he signed the said Convention.
It is to be assumed that this Declaration, entitled “The Philippine Declaration
on the Signing of the Convention on the Law of the Sea,” has become an integral
part of the Concurrence Resolution. Its full meaning may be disclosed when its
content is correlated with the Declaration.
From the viewpoint of national law, the Declaration, having been made an
integral part of Resolution No. 121, is deemed an enactment of the Batasang Pambansa
within its constitutional authority. Its significance lies in its disclosure of a fuller
legislative intent as to the limitations that will control the operation of the UNCLOS.
It should be obvious that the “undertakings” contained in the Declaration are in the
nature of conditions, such as:
1. The signing of the Convention by the Government of the Republic of
the Philippines shall not in any manner impair or prejudice the sovereign rights of
the Republic of the Philippines under and arising from the Constitution of the
Philippines;
2. Such signing shall not in any manner affect the rights of the Republic of the
Philippines as successor of the United States of America, under and arising out of the
Treaty of Paris between Spain and the United States of America of December
10, 1898, and the Treaty of Washington between the United States of
America and Great Britain of January 2, 1930;
* * *
3. Such signing shall not diminish or in any manner impair or prejudice
the sovereign rights of the Republic of the Philippines over any territory
over which sovereign authority, such as the Kalayaan Islands, and the
waters appurtenant thereto;
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Oscar G. Raro
4. The Convention shall not be construed as amending in any manner any pertinent
laws and Presidential Decrees or Proclamations of the Republic of the
Philippines; …. 65
* * *
In the light of these conditions, the implementation of the UNCLOS with
respect to the Philippines would run against the grain of the Constitution and,
therefore, contrary to the intent of the Concurrence Resolution. The supremacy of
the Philippine Constitution and the laws over the UNCLOS as affirmed in the
Declaration would preclude the effectuation of UNCLOS in Philippine jurisdiction.
The understanding in paragraph 1 of the Declaration means that the rights of
sovereignty of the Philippines as embodied in the Constitution shall prevail over its
affected obligations under the UNCLOS, giving rise to a complete negation of the
UNCLOS as a treaty on the part of the Philippines. By reason of this paragraph, it
would not be legally possible for the UNCLOS to change the character of the internal
waters connecting the constituent islands of the Philippine Archipelago into
archipelagic waters. Neither would it be possible for such internal waters to be
traversed by archipelagic sea lanes on account of the UNCLOS.
Paragraph 2 of the Declaration reaffirms the legal status of the Treaty of
Paris. It asserts the rights of the Philippines arising from this Treaty, which should,
in the first place, pertain to territorial sovereignty as delimited by the ITL. In this
respect, the Declaration confirms the premise of the present Baseline Law that “all
the waters within the limits sets forth in the abovementioned treaties have always
been regarded as part of the territory of the Philippine Islands.” 66
Under paragraph 5 of the Declaration, it is impermissible for the UNCLOS to
effect changes in the present Baseline Law which will continue to be effective, in
particular with respect to the prescriptions contained in its preamble, among which
are:
1. “[A]ll the waters within the limits set forth in the abovementioned
treaties have always been regarded as part of the territory of the Philippine
Islands;”
2. “[A]ll the waters beyond the outermost islands of the archipelago but
within the limits of the boundaries set forth in the aforementioned treaties
comprise the territorial sea of the Philippines; . . .”
65 Emphasis added.
66 Referring to the Treaty of Paris and the two companion treaties.
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A Framework for the Study of National Territory: A Statement of the Problem
Pursuing the interpretation of the Declaration as part of the Concurrence
Resolution in the context of national law, it would be instructive to inquire into the
objections of other states parties to the UNCLOS against this Declaration. By these
means, the Declaration comes into clearer view as a statement of exceptions to, or
of modification of the legal effects of, the UNCLOS with respect to the Philippines.
The Declaration, according to the formal objection of the Union of Soviet
Socialist Republics (Russian Federation), is a statement made by the Philippines
upon signature “and then confirmed upon ratification.” It contains “exceptions to
the Convention” and is incompatible with Article 310 of the Convention, implying
that the Declaration contains statements purporting “to exclude or to modify the
legal effect of the provisions of this Convention” in their application to the Philippines.
The Russian Federation is of the view that the Declaration “emphasizes more than
once that, despite its ratification of the Convention, the Philippines will continue to
be guided in matters relating to the sea, not by the Convention and the obligation
under it, by its domestic law and by agreements it has already concluded which are
not in line with the Convention.” 67
To the same effect is the objection of Czechoslovakia. 68 It points out that the
Declaration “indicates that in spite of having ratified the Convention, the Philippines
intends to follow its national laws and previous agreements rather than the obligations
under the Convention, not only taking into account of whether those laws and
agreements are in harmony with the Convention but even, as proved in paragraph 6
and 7 of the Philippine understanding [or Declaration], deliberately contravening
the obligations set forth therein.” 69
Ukraine’s objection 70 pursues the same points, saying that “the statement of
the Government of the Republic of the Philippines has the purpose of establishing
unjustified exceptions for that State, and in fact of modifying the legal effect of
important provisions of the Convention as applied thereto.”
Australia’s position 71 states that “the Philippines does not consider that it is
obliged to harmonize its law with the provisions of the Convention… [and it] is seeking
to modify the legal effect of the Convention’s provisions.”
While made in the context of international law, the foregoing statements of
state parties to the UNCLOS, among others, indicates as well the interpretive
implications of the Declaration considered as part of national law. They have
synthesized the central point of the Declaration that it holds the Philippine
Constitution and the laws in supremacy over the UNCLOS, which is impermissible
67 E.D. Brown, The International Law of the Sea: Vol. II Documents, Cases and Tables, 1994, pp. 101-102.
68 Raphael Perpetuo M. Lotilla (ed.), The Philippine National Territory, 1995, pp. 542-543.
69 Ibid., pp. 544-545.
70 Ibid., 544-545.
71 Ibid., pp. 547-548.
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Merlin M. Magallona
under international law. However, from the viewpoint of national law, the
implementation of the UNCLOS in the Philippine jurisdiction entails derogation of
sovereignty and is in conflict with the Constitution. Consequently, the UNCLOS is
violative of the Declaration and of the Concurrence Resolution of which it is an
integral part.
4. Concluding Statement
4.1. Philippine sovereignty resides in its own homeland. The Philippine State
is a territorial entity and the protection of its integrity, its territorial sovereignty, is
the seat of fundamental principles in the legal system, international or national.
Philippine sovereignty is co-extensive with the nation’s territorial limits together
with its recognized extraterritorial implications. In this sense, the legal and political
function of those limits - or boundaries - is to determine to what extent the Philippines
has the competence to express its sovereign authority and to protect its independence.
Its boundaries are the frontier of its sovereignty.
4.2. As determined by legal, political and historical factors discussed above,
the territory of the Philippine State had been established and settled long before the
advent of the UNCLOS. For so long, it had been recognized by the United States,
Spain, Great Britain and, as pointed out in Philippine diplomatic representation to
the international community, “there was no protest from anyone against the exercise
of such sovereignty.” As an independent State, the Philippines “continued to exercise
sovereignty and jurisdiction over the same territory, [and] there has been likewise
no protest by any State.” The definition of national territory had thus enjoyed the
acquiescence of the international community.
Under the circumstances, national territory so established had already become
an embodiment of sovereignty of the Philippines as a State, an integral part of its
statehood. Any transformative change or reorganization of its territorial definition
as provided in its fundamental law becomes a derogation of sovereignty and an
outrage on its integrity as a State. For an international conference to be allowed to
impact on national territory with such consequences is impermissible and no full
powers of any legitimate plenitude granted to a diplomatic delegation for any stage
of treaty-making can override the demands of territorial sovereignty as embodied in
the Constitution.
It is beyond legal comprehension that the UNCLOS be implemented in the
face of fundamental objections arising from the sovereignty and integrity of the
Philippines as a State. The impact of the UNCLOS on the Philippines is nothing
short of reorganizing its entire territorial regime, including the revision of its political
boundaries, with the result that Philippines becomes unrecognizable as established
under its constitutional system.
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A Framework for the Study of National Territory: A Statement of the Problem
4.3. In regard to the Concurrence Resolution No. 121 pertaining to the
UNCLOS, together with the Declaration considered as its integral part, by virtue of
its conditional character it cannot be given effect under the treaty clause of the 1973
Constitution, the fundamental law at the time. The concurrence requirement under
the Constitution must be related to the act of ratification embodied in the Instrument
of Ratification signed by the President who transmitted it to the Batasang Pambansa
under the 1973 Constitution (or to the Senate under the present Constitution),
together with the treaty or convention in question, with the request for concurrence
of such treaty. If the Batasan or the Senate expresses concurrence subject to certain
conditions or reservations, then there is failure of ratification as requested by the
President set forth in the Instrument of Ratification. The conditions which the
Batasan or the Senate stipulates would be sent back to the President, together with
such treaty, as its response to the President’s request for concurrence in his act of
ratification.
These conditions would have the effect - if not explicitly specified by the Batasan
or the Senate - of a request to the President for him to renegotiate the treaty
pursuant to such conditions, assuming that he would persist in the ratification of the
treaty in compliance with the request of the Batasan or the Senate. If he does not
act on the conditions indicated by the Batasan or the Senate, his Instrument of
Ratification would have no legal effect. Hence, the Constitution provides no room
for conditional concurrence.
It would be a separate problem to consider whether the treaty in question
would satisfy the standard of constitutionality or validity set forth in the substantive
content of the conditions set forth in the Declaration. As an integral part of the
Concurrence Resolution, the Declaration sets these standards, by which the UNCLOS
is shown, as pointed out above, to be incompatible with the Constitution. Thus,
based on Resolution No. 121 of the Batasan to which the said Declaration is integrated,
there is failure of ratification of the UNCLOS by reason of the unfulfilled conditions
which the Resolution and the Declaration require.
Hence, Resolution No. 121 of the Batasan by its own terms cannot be binding
as an act of concurrence for the reason that the UNCLOS impairs the rights of
sovereignty of the Philippines under the Constitution and those under the Treaty of
Paris and that it effects amendments to Philippine laws, contrary to the mandates of
the Declaration as part of the said Resolution, which has the force of law in Philippine
jurisdiction.
4.4. Even on the assumption that as a treaty the UNCLOS becomes binding
law by virtue of ratification based on valid concurrence by the Batasan, its
implementation involving as it does the reorganization of Philippine territorial
sovereignty is open to question under the international law of treaties. The subjectmatter
of the UNCLOS implementation is the territorial status of the Philippines
which has been established and settled long before the negotiations for the UNCLOS
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Merlin M. Magallona
started in the Third UN Conference on the Law of the Sea and much longer before
the entry into force of the UNCLOS on 16 November 1994.
Thus, UNCLOS is to be accorded retroactive application, which customary
international law does not allow. As codified in the Vienna Convention on the Law
of treaties of which the Philippines is a party, the non-retroactivity rule provides
that –
Unless a different intention appears from the treaty or is otherwise
established, its provisions do not bind a party in relation to any act or
fact which took place or any situation which ceased to exist before the
date of the entry into force of the treaty with respect to that party. 72
Under the UNCLOS, there appears no intention to apply its provisions
retroactively. Article 308 of the UNCLOS stipulates that it “shall enter into force
12 months after the date of deposit of the sixtieth instrument of ratification or
accession,” which took place on 16 November 1994.
Article 310 of the UNCLOS allows a State party to make declarations or
statements with a view “to the harmonization of its laws and regulations with the
provisions of this Convention.” But this provision does not intend to define an
obligation; it pertains to a unilateral act or declaration of a state party which is left
to its discretion to make.
The UNCLOS also provides in Article 311(2) that –
This Convention shall not alter the rights and obligations of States Parties
which arise from other agreements compatible with this Convention and
which do not affect the enjoyment by other States Parties of their rights
or the performance of their obligations under this Convention.
This may imply that such rights and obligations arising from agreements other
than the UNCLOS may be subject to alteration if not compatible with the UNCLOS.
Under this provision may the definition of the national territory as embodied in the
Treaty of Paris, together with its companion international agreements, be altered to
align the territorial rights of the Philippines along the requirements of the UNCLOS?
Insofar as Article 311(2) of the UNCLOS, given above, purports to have
retroactive application of the UNCLOS, its operation is to be deemed controlled by
the non-retroactivity rule in Article 28 of the Vienna Convention on the Law of
Treaties (1969), which applies to the UNCLOS on account of the fact that the
72 Article 28.
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A Framework for the Study of National Territory: A Statement of the Problem
UNCLOS entered into force on the date after the entry into force of the said Vienna
Convention on 27 January 1980. 73
Above all, the UNCLOS cannot effectuate any alteration of international
agreements defining the territorial sovereignty without derogation of state
sovereignty. It is a basic principle of international law under the Charter of the
United Nations as affirmed in the UN Declaration on Principles of International
Law that all states enjoy sovereign equality. By this principle, each state has the duty
to respect the personality of other states; the territorial integrity of the state is
inviolable. 74
Having in mind this principle, any claim to an obligation under the UNCLOS
must be subject to the supremacy clause in Article 103 of the UN Charter which
reads that –
In the event of a conflict between the obligations of the Members of the
United Nations under the present Charter and their obligations under
any other international agreement, their obligations under the present
Charter shall prevail.
Reinforcing the protection of its territorial sovereignty and integrity, precluding
alteration of its territorial status by third-party settlement or intervention is the
effect of the Philippine reservation to its acceptance of the compulsory jurisdiction
of the International Court of Justice (ICJ), referred to above. To repeat, its
recognition of the ICJ’s jurisdiction does not apply to any dispute “Arising out of or
concerning jurisdiction or rights claimed or exercised by the Philippines . . . [i]n
respect of the territory of the Republic of the Philippines, including its territorial
seas and inland waters.”
73 As a general rule, Article 4 of the Vienna Convention on the Law of Treaties (1969) provides that this
Convention “applies only to treaties, which are concluded by States after the entry into force of the present
Convention with regard to such States.”
74 This Declaration was adopted by the UN General Assembly as Resolution 2625 (XXV) on 24 October 1970.
Its full title is Declaration on Principles of International Law Concerning Friendly Relations and Cooperation
Among States in Accordance with the Charter of the United Nations. It declares that the principles it embodies
“constitute the basic principles of international law.” For text of Declaration, see Merlin M. Magallona,
Fundamentals of Public International Law, 2005, pp. 843-858.
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Leo Tito L. Ausan, Jr.
The On-going National
Territorial Debate:
Issues and Perspectives*
Leo Tito L. Ausan, Jr.**
Introduction
The national territorial debate in the Philippines had its resurgence during
the first half of this year. While there could be loud disagreements on what could
have possibly triggered it, many would agree that the debate is simply a redux of
similar verbal and written tanglings on the subject in the past – like those that once
transpired in the halls where the country’s constitutions were crafted, in the chambers
of the legislature where bills were dissected and treaties were scrutinized, in meeting
rooms where negotiating positions were processed, in studies where speeches were
assembled and decrees were written, and in journals and other relevant publications
where issues and perspectives were expressed and clashed.
Today, as was in many occasions before, the debate remains as passionate and
as charged with patriotic fervor. For a subject as sensitive and as controversial as
national territory, this is both understandable and expected. However and again like
in the past, no early end looms. The issues remain complex and befuddled even as
their respective manifold perspectives are not being clearly set out. Hence, serious
and stoic analyses for the purpose of arriving at a desirable resolution that would
serve the country’s best interests are never undertaken. And the debate continues.
This is an attempt to present in brief the debate’s issues and perspectives.
This is done in the fervent hope that when presented in proper and accurate context,
they are made more percipient. Perhaps this could help in fermenting a collective
realization that the country could not ignore them much longer and must now act
and squarely address them in order to end the debate, once and for all.
* A lecture-presentation delivered during the IBP Journal Lecture Series on the “Spratly Islands: Impact of the
UNCLOS on the Territorial Integrity of the Philippines and other Related Legal Issues” at the Malcolm
Theater, U.P. College of Law, Diliman Quezon City, 29 May 2008.
** Atty. Leo Tito L. Ausan, Jr., LL.M. in International Maritime Law (International Maritime Organization-
International Maritime Law Institute, Malta) is a mid-level officer in the Philippine Foreign Service. He is
currently the Acting Executive Director of the Ocean Concerns Officers (OCO), Department of Foreign Affairs.
He wrote and delivered this lecture in his private capacity. The views expressed are his alone, unless due
attribution is made.
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The On-going National Territorial Debate: Issues & Perspectives
RP’s National Territory and its Peculiarities
The Philippines is a mid-ocean archipelago 1 that is geo-strategically located in
the heart of Southeast Asia. Its 7,107 islands are surrounded by the Pacific Ocean
on the East, the South China Sea on the West and North and the Celebes Sea on the
South. 62 of its 81 provinces have access to the sea and their aggregate coastline
stretches to 36,289 km. It is at the crossroads of major international navigational
routes. In fact, majority of the world’s tankers, super or otherwise, that pass through
the Straits of Malacca and Singapore and the Sunda and Lombok Straits of Indonesia,
proceed to the South China Sea at its westside and onwards. Domestically, it itself
plays host to five major straits ordinarily used for international navigation. 2
Exploratory geological activities abound in its southwestern waters, which possess a
high yield potential for oil and gas. Further, it is renowned as the “center of the
center of marine biodiversity” and is situated at the apex of the so-called “Coral
Triangle.”
The national territory of the Philippines, which prides itself of the aforesaid
unique geo-physical peculiarities, is defined in its 1987 Constitution as “comprises
the Philippine Archipelago” and “embraces islands, waters and all other territories
over which the Philippines has sovereignty or jurisdiction.” It further describes it as
“consisting of terrestrial (including the seabed, the subsoil, the insular shelves and
other submarine areas), fluvial (including the territorial sea) and aerial domains.” 3
Surveyors determine land and water areas on the basis of where they start and
end, which of course must be clearly identified and established. The determination
of the terrestrial domain (land area) of the Philippines at 296,340 sq. km. 4 was surely
done in this manner. Similar ease does not obtain, however, in the determination of
the fluvial and aerial areas of the country. While it is a fact that the measuring of the
expanse of the country’s waters starts where its lands end, it is uncertain where this
should end as the Philippines’ national territorial boundaries — the outer limits of
its territorial sea – is, to date, not definite. Consequently, measuring the aerial domain
upwards on the basis of the outer limits of the fluvial domain cannot be performed
accurately.
1 Geographically, archipelagos can be classified into two (2), namely: (a) continental or coastal; and (b) mid-ocean
or outlying archipelagos. Coastal or continental archipelagos are those situated so close to the mainland that
they may be reasonably considered to be part and parcel thereof, forming more or less an outer coast line. The
Norwegian Skjaergaard and the Canadian Arctic Archipelago are prominent examples of coastal archipelagos.
On the other hand, mid-ocean or outlying archipelagos are defined as groups of islands situated in the ocean at
such a distance from the coasts of the firm land as to be considered as an independent whole rather than forming
part of or outer coastline of the mainland. This type of archipelagos are further divided on the basis of political
status unto those forming the whole territory of states (i.e., archipelagic states) and mid-ocean archipelagos
belong to continental states. Philippines and Indonesia exemplify mid-ocean archipelagic states, while Faeroe
Islands typify a mid-ocean archipelago belonging to a continental state (Denmark). (Munavaar, Mohamed, cean
States: Archipelagic Regimes in the Law of the Sea, Martinus Nijhoff Publishers, 1993, at 15 & 17.
2 Those that traverse through Luzon Strait/Bashi/Balintang & Babuyan Channels; from the Verde Island Passage
to the San Bernardino Strait; Mindoro Strait-Basilan Pass/Sibutu Pass; Surigao Strait to Balabac Strait; and
through the Balut Channel.
3 Art. 1, Sec. 1, 1987 Constitution.
4 Represents the aggregate of all surfaces delimited by international boundaries and/or coastlines, excluding
inland water bodies (lakes, reservoirs, rivers) (CIA Factbook).
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Leo Tito L. Ausan, Jr.
Discernibly, the territorial boundaries of the Philippine archipelago are not
found in the national territory provision of the 1987 Constitution. While the provision
offers some kind of basis for its determination that is “over which the Philippines
exercises sovereignty or jurisdiction,” it does not clearly supply the particular
geographical limits of this exercise of “sovereignty or jurisdiction.” In fact, its
manifest non-self-executing formulation, constricted by the practice of avoiding details
(e.g., geographical limits of a State’s national territory) in crafting constitutions, yearns
for the satiating of this inadequacy by relevant implementing legislation.
Has the legal history of the 110-year old Philippine Republic produced
this legislation yet? Are these laws, if any, sufficient to fill the need for definite
national territorial boundaries? If they are sufficient, how come to date the Philippines
cannot still pinpoint with convincing accuracy and clarity its national territorial
boundaries? What issues and concerns stall the process of the Philippines’
establishment of territorial boundaries with exactitude? How should and could these
be addressed?
A careful survey of Philippine constitutional and statute law reveals that there
is indeed existing legislation on the basis of which the national territorial boundaries
of the Philippines could be determined. Regrettably, however, there are two (2) sets
of these laws, with the application and substance of one contradicting the other,
thereby, posing a question of precedence and preference in the context of law and
policy and their implementation. They are: (a) those that collectively posit that the
national territorial boundaries are the limits established by relevant international
treaties; and (b) those that collectively prescribe that the outer limits of the Philippine
national territory be determined after projecting the territorial sea in accordance
with the United Nations Convention on the Law of the Sea (UNCLOS) of 1982.
Legal Moorings: RP’s International Treaty Limits (ITL)
The Philippines has so-called “international treaty limits” that could serve as
the metes and bounds of the national territory. How did these come about? The
story straddles the entire length of the country’s history but is worth looking into
again, albeit quickly, if one is to comprehend why the national territorial debate
persists and remains perplexing.
On 10 December 1898, as a result of the Spanish-American War, the then
newly-emergent world power, the United States, and the vanquished, Spain, entered
into a treaty of peace, popularly known in the annals of Philippine history as the
“Treaty of Paris.” Article III of the treaty provided that for a sum of twenty million
dollars ($20,000,000.00), which the US will pay Spain “within three months after
the exchange of the ratifications,” “Spain cedes to the United States the archipelago
known as the Philippine Islands, and comprehending the islands lying”
within a specific set of lines (Map No. 1 provided at the end of the article), described
as follows:
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The On-going National Territorial Debate: Issues & Perspectives
A line running from west to east along or near the twentieth parallel of
north latitude, and through the middle of the navigable channel of Bachi,
from the one hundred and eighteenth (118 th ) to the one hundred and
twenty seventh (127 th ) degrees meridian of longitude east of Greenwich,
thence along, the one hundred and twenty seventh (127 th ) degree meridian
of longitude east of Greenwich to the parallel of four degree and forty
five minutes (4Ú45’) north latitude, thence along the parallel of four
degrees and forty five minutes (4Ú45’) north latitude to its intersection
with the meridian of longitude one hundred and nineteen degrees and
thirty five minutes (119Ú35’) east of Greenwich, thence along, the meridian
of longitude one hundred and nineteen degrees and thirty five minutes
(119Ú35’) east of Greenwich to the parallel of latitude seven degrees and
forty minutes (7Ú40’) north, thence along the parallel of latitude seven
degrees and forty minutes (7Ú40’) north to its intersection with the one
hundred and sixteenth (116 th ) degree meridian of longitude east of
Greenwich, thence by a direct line to the intersection of the tenth (10 th )
degree parallel of north latitude with the one hundred and eighteenth
(118 th ) degree meridian of longitude east of Greenwich, and thence along
the one hundred and eighteenth (118 th ) degree meridian of longitude east
of Greenwich to the point of beginning.”
Subsequently, on 7 November 1900, in the sole article of the US-Spain Treaty
of Cession of Outlying Islands of the Philippines, Spain relinquished to the United
States “all title and claim of title, which she may have had at the time of the conclusion
of the Treaty of Peace of Paris, to any and all islands belonging to the Philippine
Archipelago, lying outside the lines described in Article III of that Treaty
and particularly to the islands of Cagayan, Sulu & Sibutu and their dependencies,
and agrees that all such islands shall be comprehended in the cession of the
Archipelago as fully as if they had been expressly included within those lines.” For
this relinquishment, the United States paid Spain the sum of One Hundred Thousand
dollars ($100,000.00).
Thirty years later, in Article III of the US-UK Convention Delimiting the
Boundary Between the Philippine Archipelago & the State of North Borneo 1930,
the States parties agreed that “All the islands to the north & east” of an agreed and
declared line (described in Article I of the Convention) and “all islands and rocks
traversed by the said line, should there be any such, shall belong to the Philippine
Archipelago and all islands to the south and west of the said line shall belong to the
State of North Borneo.” The islands referred to here are the Turtle and Mangsee
Islands.
The aforementioned lines collectively referred to as ITL hereinafter
(Map No. 1), were accordingly embodied in the legislation of the period, as follows:
Sec.14. Territorial jurisdiction and extent of powers of Philippine
government. – The territory over which the Government of the Philippine
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Leo Tito L. Ausan, Jr.
Islands exercises jurisdiction consists of the entire Philippine Archipelago
and is comprised in the limits defined by the treaties between the
United States and Spain, respectively signed in the city of Paris on the
tenth day of December, eighteen hundred and ninety-eight; and in the
city of Washington on the seventh day of November, one thousand nine
hundred. 5 ; and
Sec. 16. Territorial jurisdiction and extent of powers of Philippine
government. - The territory over which the Government of the Philippine
Islands exercises jurisdiction consists of the entire Philippine Archipelago
and is comprised in the limits defined by the treaties between the
United States and Spain, respectively signed in the city of Paris on
the tenth day of December, eighteen hundred and ninety-eight; and in the
city of Washington on the seventh day of November, one thousand nine
hundred. 6
In the 1935 Constitution of the Philippine Commonwealth, the territory
comprised in the Philippines Islands was described as that which:
“comprises all the territory ceded to the United States by the Treaty of
Paris concluded between the United States and Spain on the tenth day of
December, eighteen hundred and ninety-eight, the limits which are set
forth in Article III of said treaty, together with all the islands embraced
in the treaty concluded at Washington between the United States and
Spain on the seventh day of November, nineteen hundred, and the treaty
concluded between the United States and Great Britain on the second
day of January, nineteen hundred and thirty, and all territory over which
the present Government of the Philippine Islands exercises jurisdiction.” 7
In 1961, the Congress enacted Republic Act No. 3046, which described the
national territory in its preamble as follows:
WHEREAS, the Constitution of the Philippines describes the national
territory as comprising all the territory ceded to the United States by the
Treaty of Paris concluded between the United States and Spain on
December 10, 1898, the limits of which are set forth in Article III of said
treaty, together with all the islands embraced in the treaty concluded at
Washington, between the United States and Spain on November 7, 1990,
and in the treaty concluded between the United States and Great Britain
on January 2, 1930 and all the territory over which the Government of
the Philippine Islands exercised jurisdiction at the time of the adoption
of the Constitution;
5 Art. IV, Act No. 2657 (Administrative Code of 1916).
6 Art. IV, Act No. 2711 (Revised Administrative Code of 1917).
7 Art. I (National Territory), Sec. 1.
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The On-going National Territorial Debate: Issues & Perspectives
WHEREAS, all the waters within the limits set forth in the abovementioned
treaties have always been regarded as part of the of the
territory of the Philippine Islands;
x x x
WHEREAS, all the waters beyond the outermost islands of the archipelago
but within the limits of the boundaries set forth in the aforementioned
treaties comprise the territorial sea of the Philippines.”
In the 1973 Constitution, the Philippines’ first constitution after it was granted
independent by the Americans in 1946, the national territory was described to
comprise “the Philippine archipelago, with all the islands and waters embraced therein,
and all the other territories belonging to the Philippines by historic or legal title, including
the territorial sea, the air space, the subsoil, the sea-bed, the insular shelves, and the
submarine areas over which the Philippines has sovereignty or jurisdiction. x x x.” 8
The phrase “by historic and legal title” embraced the three (3) treaties enumerated
in Article I, Section 1 of the 1935 Constitution.
Thereafter, the 1987 Constitution did away with the phrase “by historic and
legal title” and substituted it with “over which the Philippines has sovereignty or
jurisdiction,” to wit:
“The national territory comprises the Philippine archipelago, with all the
islands and waters embraced therein, and all other territories over which
the Philippines has sovereignty or jurisdiction, consisting of its terrestrial,
fluvial and aerial domains, including its territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas.” 9
Indirectly, however, the three (3) treaties remained encompassed in the later
phrase. The records of the proceedings of the Constitutional Commission that drafted
the 1987 Constitution would attest to this.
Legal Moorings: UNCLOS-based Territorial Limits (UTL)
On 10 December 1982, the UNCLOS was opened for signature in Montego
Bay, Jamaica and the Philippines was one of the first countries to sign it. Simultaneous
with its signing of the Convention, the Philippines submitted a Declaration, the
salient paragraphs of which are as follows:
The Government of the Republic of the Philippines hereby manifests that in
signing the 1982 United Nations Convention on the Law of the Sea, it does so with
8 Art. I (National Territory), Sec. 1.
9 Art. I (National Territory), Sec. 1.
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Leo Tito L. Ausan, Jr.
the understandings embodied in this declaration, made under the provisions of Article
10 of the Convention, to wit:
1. The signing of the Convention by the Government of the Republic of
the Philippines shall not in any manner impair or prejudice the
sovereign rights of the Republic of the Philippines under and arising
from the Constitution of the Philippines;
2. Such signing shall not in any manner affect the sovereign rights of the
Republic of the Philippines as successor of the United States of
America, under and arising out of the Treaty of Paris between Spain
and the United States of America of December 10, 1898 and the Treaty
of Washington between the United States of America and Great Britain
of January 2, 1930;
3. Such signing shall not diminish or in any manner affect the rights and
obligations of the contracting parties under the Mutual Defense Treaty
between the Philippines and the United States of America of August
30, 1951, and its related interpretative instrument; nor those under
any other pertinent bilateral or multilateral treaty or agreement to
which the Philippines is a party;
4. Such signing shall not in any manner impair or prejudice the
sovereignty of the Republic of the Philippines over any territory over
which it exercises sovereign authority, such as the Kalayaan Islands,
and the waters appurtenant thereto;
5. The Convention shall not be construed as amending in any manner
any pertinent laws and Presidential Decrees or Proclamations of the
Republic of the Philippines; the Government of the Republic of the
Philippines maintains and reserves the right and authority to make
any amendments to such laws, decrees or proclamations pursuant to
the provisions of the Philippine Constitution;
6. The provisions of the Convention on archipelagic passage through
sea lanes do not nullify or impair the sovereignty of the Philippines
as an archipelagic state over the sea lanes and do not deprive it of
authority to enact legislation to protect its sovereignty, independence,
and security;
7. The concept of archipelagic waters is similar to the concept of internal
waters under the Constitution of the Philippines, and removes straits
connecting these waters with the economic zone or high sea from the
rights of foreign vessels to transit passage for international navigation;
8. The agreement of the Republic of the Philippines to the submission
for peaceful resolution under any of the procedures provided in the
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Convention, of disputes under Article 298 shall not be considered as
a derogation of Philippine sovereignty.” 10
Subsequently, the Batasan Pambansa ratified the UNCLOS in Resolution No.
121 dated 27 February 1984, which was eventually submitted to and entered into
the records of the United Nations on 8 May 1984, to wit:
WHEREAS, pursuant to paragraph (1), Section 14, Article Viii of the
Constitution, the Convention on the Law of the Sea shall be valid and
effective if concurred in by a majority of all the Members of the Batasan
Pambansa: Now, therefore, be it –
Resolved by the Batasan Pambansa, to concur, as it hereby concurs, in
the United Nations Convention on the Law of the Sea entered into and
signed by the Representatives of the Republic of the Philippines on
December 10, 1982 at Montego Bay, Jamaica, with the understandings
embodied in the Declaration filed on behalf of the Republic of the
Philippines by the head of the Philippine delegation when he signed the
said Convention, copy of which is attached as “Annex A.” 11
The UNCLOS finally entered into force on 16 November 1994.
Significantly for the Philippines, the UNCLOS contained Part IV which provides
for a regime of “Archipelagic States”. This came after almost three (3) decades of
dogged campaign by the Philippines, together with other countries archipelago
like Indonesia, to have the so-called “archipelagic doctrine” recognized in international
law.
Under the UNCLOS, an archipelago is defined as “a group of islands, including
parts of islands, interconnecting waters and other natural features which are so
closely interrelated that such islands, waters and other natural features form an
intrinsic geographical, economic and political entity, or which historically have been
regarded as such.” 12 Correlatively, an archipelagic State is defined as “a State constituted
wholly by one or more archipelagos and may include other islands.” 13
As an archipelagic State, the Philippines may draw archipelagic baselines in
accordance with UNCLOS prescriptions, as follows:
1. An archipelagic State may draw straight archipelagic baselines joining
the outermost points of the outermost islands and drying reefs of the
10 Lotilla, R.P.M. (ed.), The Philippine National Territory: A Collection of Related Documents, Institute of
International Legal Studies at 510-511 citing as source ‘Focus: The Philippines and the Convention on the Law
of the Sea’, D-1, Philippine Y.B. Int’l. L, Volume. VII (1982).
11 Batas Pambansa, Acts & Resolutions, 6th Regular Session.
12 Art. 46, Part IV, UNCLOS.
13 Ibid.
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Leo Tito L. Ausan, Jr.
archipelago provided that within such baselines are included the main
islands and an area in which the ratio of the area of the water to
the area of the land, including atolls, is between 1 to 1 and
9 to 1.
2. The length of such baselines shall not exceed 100 nautical miles,
except that up to 3 per cent of the total number of baselines
enclosing any archipelago may exceed that length, up to a
maximum length of 125 nautical miles.
3. The drawing of such baselines shall not depart to any appreciable
extent from the general configuration of the archipelago.
4. Such baselines shall not be drawn to and from low-tide
elevations, unless lighthouses or similar installations which
are permanently above sea level have been built on them or
where a low-tide elevation is situated wholly or partly at a distance
not exceeding the breadth of the territorial sea from the nearest island.
5. The system of such baselines shall not be applied by an archipelagic
State in such a manner as to cut off from the high seas or the exclusive
economic zone the territorial sea of another State.
6. If a part of the archipelagic waters of an archipelagic State lies between
two parts of an immediately adjacent neighboring State, existing rights
and all other legitimate interests which the latter State has traditionally
exercised in such waters and all rights stipulated by agreement between
those States shall continue and be respected.
7. For the purpose of computing the ratio of water to land under
paragraph l, land areas may include waters lying within the fringing
reefs of islands and atolls, including that part of a steep-sided oceanic
plateau which is enclosed or nearly enclosed by a chain of limestone
islands and drying reefs lying on the perimeter of the plateau.
8. The baselines drawn in accordance with this article shall be shown on
charts of a scale or scales adequate for ascertaining their position.
Alternatively, lists of geographical coordinates of points, specifying the geodetic
datum, may be substituted. 14
From its archipelagic baselines, the Philippines is allowed to project its various
maritime zones such as the territorial sea, contiguous zone, exclusive economic zone
14 Art. 47, UNCLOS.
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(EEZ) and continental shelves in breadths allowed by the UNCLOS for coastal
states. 15 The territorial sea is up to a limit not exceeding 12 nautical miles. 16 The
contiguous zone may not extend beyond 24 nautical miles. 17 The EEZ may not extend
beyond 200 nautical miles. 18 The juridical/legal continental shelf is coextensive with
the EEZ or not exceeding 200 nautical miles, while the extended continental shelf
(ECS) could extend beyond 200 nautical miles but not more than 350 nautical miles
after the requirements of Art. 76 are met. 19
Thenceforth, the domestic airspace (subject to the right of overflight) could be
projected upwards over the country’s land territory, internal waters, archipelagic
waters (Art.49 (2)) and territorial sea (Art.2). The airspace over zones beyond the
territorial sea is international. (Map No. 2 at the end of the article)
Hence, pursuant to the UNCLOS, the territory of an archipelagic State would
embrace the following: (a) its land territory and internal waters; (b) its archipelagic
waters and territorial sea as well as their bed and subsoil; and (c) its domestic airspace.
The boundaries of this territory would be the outer limits of the territorial
sea projected from its archipelagic baselines 20 although maritime zones, like
the contiguous zone, EEZ and the continental shelves, extend beyond it. 21
(Map No. 3 at the end of the article)
15 Art. 48, UNCLOS.
16 Art. 3, UNCLOS.
17 Art. 33, UNCLOS. See also P.D. 1599 (1978) and Sec. 4, par. 18, R.A. 8550 (Philippine Fisheries Code of 1998).
18 Art. 57, UNCLOS.
19 Art. 76, UNCLOS.
20 Art. 4, UNCLOS.
21 It is worth adding that all waters of the Philippines or “Philippine waters” is now broadly defined as including
“all bodies of water within the Philippine territory such as lakes, rivers, streams, creeks, brooks, ponds, swamps,
lagoons, gulfs, bays and seas and other bodies of water now existing or which may hereafter exist in the
provinces, cities, municipalities, and barangays and the waters around, between and connecting the islands of
the archipelago regardless of their breadth and dimensions, the territorial sea, the sea beds, the insular shelves
and all other waters over which the Philippine has sovereignty and jurisdiction, including the 200-nautical miles
exclusive economic zone and the continental shelf.” (Sec. 4, RA No. 8550 (Philippine Fisheries Code of 1998)).
Previously, “Philippine waters” was limitedly defined in Art. II, Sec. 6, Act No. 4003 (Fish & Other Aquatic
Resources Act of the Philippine Islands of 1932) as including “all waters pertaining to the Philippine Archipelago,
as defined in the treaties between the United States and Spain, dated respectively the tenth of December,
eighteen hundred and ninety-eight, and the seventh of November, nineteen hundred” and in Sec. 3(r), P.D. No.
704 (Revised Fisheries Code of 1975) as including “all bodies of water within Philippine territory, such as rivers,
streams, creeks, brooks, ponds, swamps, lagoons, gulfs, bays, and seas and other bodies of water now existing,
or which may hereafter exist in the provinces, cities and municipalities, municipal districts, and barrios; and the
sea or fresh water around between and connecting each of the islands of the Philippine archipelago, irrespective
of its depth, breadth, length and dimension, and all other waters belonging to the Philippines by historic or legal
title including the territorial sea, the seabed, the insular shelves and other submarine areas over which the
Philippines has sovereignty or jurisdiction.”
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Leo Tito L. Ausan, Jr.
As a party to the UNCLOS, an archipelagic State is accorded specific rights
within each maritime zone projected from its baselines.
In the territorial sea, the archipelagic State exercises its full sovereignty. 22
This includes the right to enforce laws and exercise of police control and the right to
exercise criminal 23 and civil 24 jurisdiction among others.
In the contiguous zone, adjacent to the territorial sea, the archipelagic State
may exercise the control necessary to prevent or punish infringement of its customs,
fiscal, immigration or sanitary laws and regulations committed within its territory
or territorial sea. 25
Further, in the EEZ, the archipelagic State has sovereign rights for the purpose
of exploring and exploiting, conserving and managing the natural resources, whether
living or non-living, of the waters superjacent to the seabed and of the seabed and its
subsoil, 26 and with regard to other activities for the economic exploitation and
exploration of the zone, such as the production of energy from the water, currents
and winds. 27 And it has jurisdiction with regard to the establishment and use of
artificial islands, installations and structures; marine scientific research; and the
protection and preservation of the marine environment. 28
As regards both the contiguous zone and the EEZ, the Philippines has even
gone farther than the UNCLOS by declaring that:
All submerged lands within the contiguous zone and in the exclusive
economic zone of the Philippines are hereby declared to be mineral
reservations. 29
In the continental shelves, juridical or extended, the archipelagic State has
sovereign rights for the purpose of exploring and exploiting the mineral and other
non-living resources of the seabed and subsoil together with living organisms
22 Art. 2(1) & Art. 49, UNCLOS.
23 Art. 27, UNCLOS.
24 Art. 28, UNCLOS.
25 Art. 33, UNCLOS.
26 This (together with Art. 77, UNCLOS) provides legal basis for making the Philippine Fisheries Code of 1998
(RA 8550) enforceable in the EEZ and the continental shelf. (Sec. 3(a), RA 8550)
27 Art. 56, UNCLOS.
28 Art. 56, UNCLOS.
29 Sec. 5, R.A. No. 7942 (Philippine Mining Act of 1995). In the same law, “mineral reservations” would be those
areas that the President may establish when the national interest so requires, such as when there is a need to
preserve strategic raw materials for industries critical to national development, or certain minerals for scientific,
cultural or ecological value.
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belonging to sedentary species. 30 The rights are exclusive in the sense that if the
coastal State does not explore the continental shelf or exploit its natural resources,
no one may undertake these activities without the express consent of the coastal
State. The rights do not depend on occupation, effective or notional, or on any
express proclamation. 31
Correspondingly, an archipelagic State has the obligation to respect the rights
of ships belonging to third States to pass through its territorial sea, archipelagic and
internal waters in accordance with UNCLOS prescriptions (i.e., right of innocent
passage, 32 right of transit passage through straits normally used for international
navigation 33 and archipelagic sealanes passage, 34 as may be applicable). On the other
hand, its domestic airspace is subject to the right of overflight of other States. 35
In the exercise of its rights and in meeting its obligations, an archipelagic
State Party to the UNCLOS must necessarily meet certain expectations, one of
which, as succinctly put by the UN Secretary General in 1994, is the “development
of a comprehensive and coordinated national oceans policy” 36 and the other
being that:
“3. At the very minimum, all coastal States parties should by now have
established in accordance with the Convention the baselines
and the maritime zones they wish to claim and have deposited with
the Secretary-General of the United Nations charts or lists of geographical
coordinates showing the limits of maritime zones to which they are
entitled.” 37
RP’s UNCLOS Task List
Observably, almost a quarter of a century from its ratification of the UNCLOS
in 1984, the Philippines has yet to meet the expressed “minimum expectation” of
the Convention pronounced by the UN Secretary General. To this time, the country
still has to draw its archipelagic baselines and still has to accurately project and
30 Organisms which, at the harvestable stage, either are immobile on or under the seabed or are unable to move
except in constant physical contact with the seabed or the subsoil (Art. 77(4), UNCLOS).
31 Art. 77, UNCLOS.
32 Art. 52(1), subject to Art. 53 and without prejudice to Art. 50, UNCLOS (innocent passage through archipelagic
waters) in accordance with Part II, Sec. 3 (Arts. 17-21), UNCLOS (innocent passage in the territorial sea).
33 Art. 53(12), UNCLOS.
34 Art. 53 in relation to Arts. 39, 40, 42 & 44, UNCLOS.
35 Art. 53(2), (3) & (12) in relation to Arts. 39, 42 & 44, UNCLOS.
36 Report of the UN Secretary General, A/59/62, 04 March 2004, p.5.
37 Ibid, p.5.
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Leo Tito L. Ausan, Jr.
establish its seaward maritime zones from it. 38 In addition, it has yet to lay claim to
an ECS and is undecided on whether or not to adopt an archipelagic passage regime.
Furthermore, it still has to delimit its common maritime boundary with its
neighboring States, even as it has not considered opting for a mode of settling
UNCLOS disputes.
It does not matter whether or not the foregoing shortfalls in meeting UNCLOS
expectations, particularly the drawing of the baselines and the establishment of
maritime zones is attributable to either lack of political decisiveness or simply
unbridled indifference. What matters is for as long as the metes and bounds of the
national territory remain uncertain, the spectre of multifarious problems on national
sovereignty, territorial integrity and national security will persist on haunting the
country.
It is, thus, imperative to muster sufficient conviction to resolve this quandary.
In this regard, it is necessary that the following principal issues, which have emerged
from the national territorial debate, be categorically addressed: (a) Are RP’s ITL its
national territorial boundaries?; (b) Is RP an archipelagic State yet?; (c) Is there a
deadline for the Philippines to draw its archipelagic baselines?; (d) How should RP
treat its landward waters if the archipelagic baselines are eventually drawn?; (e) How
should RP treat its disputed territories when drawing its archipelagic baselines?;
and, finally, (f) What should be RP’s national territorial limits – the outer limits of
the territorial sea reckoned from UNCLOS-prescribed baselines or the ITL?
Are RP’s ITL its national territorial boundaries?
Those who offer a negative answer to this question explain that the ITL cannot
be the country’s national territorial boundaries because the three (3) treaties earlier
cited merely mentioned the ceding by Spain to the United States of “islands,” 39
“islands of Cagayan, Sulu & Sibutu” 40 and all “the islands to the north & east” and
38 (a) To date, the Philippines still has to enact legislation establishing a 12 nautical mile territorial sea;
(b) The country also does not have a law establishing a contiguous zone for the purposes enumerated in Article
33, UNCLOS although it has legislation that defines the “contiguous zone” as referring to water, sea bottom and
substratum measured twenty-four nautical miles (24 n.m.) seaward from the base line of the Philippine archipelago.
(Section 3. Definition of Terms, R.A. No. 7942 (Philippine Mining Act of 1995)); (c) It has “established a zone
to be known as the exclusive economic zone of the Philippines x x x (which) shall extend to a distance of two
hundred nautical miles beyond and from the baselines from which the territorial sea is measured x x x.” (Sec.
1, P.D. No. 1599 (1978)); (d) The country claims state ownership of, “All natural deposits or occurrences of
petroleum or natural gas in public and/or private lands in the Philippines, whether found in , on or under the
surface of dry lands, creeks, rivers, lakes, or other submerged lands within the territorial waters or on the
continental shelf or its analogue in an archipelago, seaward from the shores of the Philippines which are not
within the territories of other countries”. (R.A. No. 387 (Petroleum Act of 1949)) It has also declared as subject
to its jurisdiction and control all mineral and other natural resources in the continental shelf of the Philippines.
(Presidential Proclamation No. 370, 20 March 1968) Of the laws mentioned herein, only Proclamation No.
370 and P.D. No. 1599 had been reported to the United Nations in accordance with the UNCLOS.
39 Art. III, Treaty of Paris, 10 December 1898.
40 US-Spain Treaty of Cession of Outlying Islands of the Philippines, 7 November 1900.
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“all islands and rocks traversed” 41 and not of waters. To them the ITL simply
served as an identifier of the geographical space within which the mentioned “islands”
are located or could be found.
On the other hand, the proponents of an affirmative response aver that, while
it may be true that the treaties were so worded to the effect that the cessions being
made only involved “islands” and not the waters around, between and connecting
them, public laws enacted during the American colonial period and thereafter
categorically referred to the ITL as “boundaries”. To them the cessions contemplated
not only the islands but also the waters within the ITL. Hence, the ITL are
boundaries in a sense.
Indeed, one of the preambulatory paragraphs of the Philippine Autonomy
Act or the Jones Law (1916) provides that: “the name ‘The Philippines’ as used in
this Act shall apply to and include the Philippine Islands ceded to the United States
Government by the treaty of peace concluded between the United States and Spain
on the eleventh day of April, eighteen hundred and ninety-nine, the boundaries of
which are set forth in Article III of said treaty, together with those islands embraced in the
treaty between Spain and the United States concluded at Washington on the seventh
day of November, nineteen hundred.” 42
The Hare-Hawes Cutting Act (1933) followed suit by declaring that the
government of the Commonwealth of the Philippine Islands that was to be established
“x x x shall exercise jurisdiction over all territory ceded to the United States and
Spain on the 10 th day of December 1898, the boundaries of which are set forth in Article
III of said treaty, together with those islands embraced in the treaty between Spain
and the United States concluded at Washington on the 7 th day of November 1900.” 43
A year later, the Philippine Independence Act or the Tydings-McDuffie Act
(1934) contained a provision that echoed verbatim the provision in the Hare-Hawes
Cutting Act mentioned in the paragraph preceding. 44
It is noteworthy, however, that the United States has consistently opposed the
aforesaid view saying that:
41 Art. III, US-UK Convention Delimiting the Boundary between the Philippine Archipelago & the State of North
Borneo (1930).
42 Preamble, Chapter 416, Public Law No. 240 (An Act to Declare the purpose of the People of the United States
as to the Future Political Status of the People of the Philippine Islands, and to Provide a More Autonomous
Government for those Islands).
43 Sec.1, Public Law No. 311 (An Act to Enable the People of the Philippine Islands to Adopt a Constitution and
form a Government for the Philippine Islands, To Provide for the Independence of the same, and For Other
Purposes).
44 Sec. 1, Public Law No. 127 (An Act to Provide for the Complete Independence of the Philippine Islands, to
Provide for the Adoption of a Constitution and A Form of Government for the Philippine Islands, and for Other
Purposes).
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Leo Tito L. Ausan, Jr.
“The United States’ attitude x x x is that the lines referred to in bilateral
treaties between the United States and the United Kingdom and Spain
merely delimited the area within which the land areas belong to the
Philippines and that they were not intended as boundary lines.
The United States, in 1958, stated that it recognized only a 3-mile territorial
sea for each island.” 45
Objecting in seriatim to the various points raised in the Philippine’s Declaration
upon signing the UNCLOS on 10 December 1982, the United States, further, had
noted that:
“the understanding of the Government of the Republic of the Philippines
that its signing of the 1982 Law of the Sea Convention does not affect its
sovereign rights as successor of the United States to the Treaty of Paris
of 1898 and the Treaty of Washington of 1930, as the Government of the
Republic of the Philippines is aware, the Government of the United States
does not share its view concerning the proper interpretation of the
provisions of those treaties. As they relate to the rights of the Philippines
in the waters surrounding the Philippine Islands. The Government of the
United States continues to be of the opinion that neither those treaties
nor subsequent practice has conferred upon the United States, nor upon
the Republic of the Philippines as successor to the United States, greater
rights in the waters surrounding the Philippine Islands than are otherwise
recognized in customary international law. In this regard, the Government
of the United States wishes to point out that neither the Mutual Defense
Treaty between the Philippines and the United States of August 30, 1951,
nor any related instrument, constitutes recognition by the United States
of greater rights of the Philippines in such waters than are otherwise
recognized in customary international law.” 46
It is additionally significant that the 3 rd Conference on the Law of the Sea
(UNCLOS III), which reached agreement on the final version of the UNCLOS, has
categorically and definitively rejected the Philippine position to treat the waters
within its ITL as its historical territorial waters and an exception to the 12 nautical
mile rule on the territorial sea. This act of the UNCLOS III, in effect, turned down
Philippines’ proposition that its ITL be treated as its national territorial boundaries.
The best evidence of this rejection is the seething disappointment exuded in the
statement of Senator Arturo M. Tolentino, Head of the Philippine Delegation, during
the signing of the UNCLOS that:
“Mr. President, we are happy that we have reached the official conclusion
of our labors. In utmost candor, however, I must say that my government
45 Lotilla, no. 5 above at 274-275 citing (4 January 1958): 2nd Conference on LOS: Summary Record, 17 March-
26 April, 1960; A/CONF. 19/8 pp.22.
46 Ibid at 546.
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and my delegation are not fully satisfied with the text of the Convention
that we have approved. x x x we have some problem with the 12mile
breadth of the territorial sea provided in the Convention.
My government has studied the problem; it is a difficult one
for us. But this notwithstanding, my government nevertheless
decided that it shall sign the Convention.”
There are two diametrically opposing views to the long lingering issue of
whether or not RP’s ITL are its national territorial boundaries – that they are and
that they are not. The existence of these two views does not, however, resolve the
issue. The issue will only be resolved when a choice of one, over the other, is finally
made.
As to who should make the choice and how and when it should be made are
sub-issues that the Philippines must necessarily address. Government policy makers
may provide a solution. The issue’s delicate legal nature hovers as a primordial
factor to consider, however, hinting that, ultimately, a judicial determination could
be warranted. What remains a certainty is that until a solution is arrived at through
firm and grim determination, the issue is here to stay.
Is RP an archipelagic State yet?
The national territorial debate has also brought into focus the matter of the
Philippines’ archipelagic statehood, particularly, on whether or not it is already an
archipelagic State. What has led to the revival of this long deserved attention is the
notion that in as much as the Philippines has not thus far drawn its archipelagic
baselines, it may yet opt out from archipelagic statehood and go the way that other
States archipelagos, like the United Kingdom of Great Britain and Japan, have taken
– as if drawing the baselines is the operative act of archipelagic statehood.
A brief review of the milestones on Philippines’ advocacy of the “archipelagic
doctrine” would shed light on the issue.
Firstly, in response to a query of the UN Secretary General on the extent of the
Philippine maritime territory, the Philippines, through its Permanent Mission to the
United Nations in New York (NYPM), in a note verbale date 7 March 1955, officially
described its inland/internal waters as follows:
“1. All waters around, between and connecting different islands belonging
to the Philippine Archipelago, irrespective of their width or dimension,
are necessary appurtenances of its land territory, forming an integral
part of the national or inland waters, subject to the exclusive sovereignty
of the Philippines;”
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Leo Tito L. Ausan, Jr.
From the description, it may be gleaned that as early as 1955 the Philippines
has officially considered itself as “a unity of land and water,” basically, the very
concept of an archipelagic state. This position was re-enunciated in another NYPM
note verbale dated 20 January 1956 addressed to the International Law Commission
& to the UN Committee on Peaceful Uses of the Seabed and Ocean Floor Beyond
the Limits of National Jurisdiction.
Secondly, during UNCLOS I (1st UN Conference on the Law of the Sea), held
in 1958 47 and UNCLOS II (2 nd Conference on the Law of the Sea) held in 1960, 48 the
Philippines firmly maintained the same concept on its archipelagic nature.
Thirdly, it may be recalled that in 1961, R.A. No. 3046 in its preamble reaffirmed
the concept, to wit:
WHEREAS, all the waters around, between and connecting the various
islands of the Philippine archipelago, irrespective of their width or
dimensions, have always been considered as necessary appurtenances of
the land territory, forming part of the inland or internal waters of the
Philippines;
For the first time in Philippine legislation, the baselines as bases for determining
the territorial sea was mentioned in the Act by adding that:
WHEREAS, the baselines from which the territorial sea of the Philippines
is determined consist of straight lines joining appropriate of the outermost
islands of the archipelago; and
WHEREAS, the said baselines should be clarified and specifically defined
and described for the information of all concerned;
In fact, R.A. No. 3046 did not only demarcate the Philippines’ internal waters
from its territorial sea. It also established and firmed up the country’s state practice
on baselines as a means to signify the unity of a group of islands and the waters
around, between and connecting them.
Fourthly, the “unity of land and waters” concept later found its way in the 1973
Constitution which provided that:
“The national territory comprises the Philippine archipelago, with all the
islands and waters embraced therein, and all the other territories belonging
to the Philippines by historic or legal title, including the territorial sea,
47 Adopted four (4) conventions namely the Convention on the Territorial Sea and the Contiguous Zone,
Convention on the High Seas, Convention on Fishing and Convention of Living Resources of the High Seas,
none of which was signed by the Philippines.
48 Focused solely on reaching a possible agreement on the breadth of the territorial sea but failed.
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the air space, the subsoil, the sea-bed, the insular shelves, and the
submarine areas over which the Philippines has sovereignty or
jurisdiction.” 49
Fifthly, eventually, the Philippines’ “unity of land and waters” concept, now
referred to as the “archipelagic doctrine,” finally found acceptance in UNCLOS III
held in 1982 and was eventually enshrined in Part IV of the UNCLOS on
“Archipelagic States.” The inclusion of Part IV in UNCLOS is perceived as the
crowning glory of the Philippines’ unstinting advocacy of the “archipelagic doctrine”
and a recognition of its status as an “archipelagic State.” Evidently, taking pride in
this status, upon signing the UNCLOS the Philippines pronounced:
6. The provisions of the Convention on archipelagic passage through sea
lanes do not nullify or impair the sovereignty of the Philippines
as an archipelagic state over the sea lanes and do not deprive it of
authority to enact legislation to protect its sovereignty, independence,
and security; 50
Sixthly, in its present Constitution, the Philippines continues to adhere to the
archipelagic doctrine, thus:
The national territory comprises the Philippine archipelago, with all the
islands and waters embraced therein, and all other territories over which
the Philippines has sovereignty or jurisdiction, consisting of its terrestrial,
fluvial and aerial domains, including its territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas. 51
Lastly, in the same Constitution it has professed that it has “archipelagic waters,”
as follows:
The State shall protect the nation’s marine wealth in its archipelagic
waters, territorial sea, and exclusive economic zone, and reserve its use
and enjoyment exclusively to Filipino citizens, 52
49 Art. I (National Territory), Sec. 1. This definition is echoed in toto in Sec. 5, P.D. 1587 (Revised Administrative
Code of 1978).
50 Par. 6, Philippine Declaration upon signing the UNCLOS on 10 December 1982.
51 Art. I, Sec. 1, 1987 Constitution. This definition is embodied in toto in Sec. 3, E.O. 292 (Revised Administrative
Code of 1987).
52 Art XII, Sec 2, par. 2, 1987 Constitution. This has found application in the Second Regular Investment
Negative List issued pursuant to Executive Order No. 362, which took effect on 24 October 1996, List A:
Foreign Ownership is Limited by Mandate of the Constitution and Specific Laws. No Foreign Equity, No. 7.
Utilization of marine resources in archipelagic waters, territorial sea and exclusive economic zone. (Article XII,
Section 2, 1987 Constitution)
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Leo Tito L. Ausan, Jr.
Manifestly, this is a profession only an archipelagic State can make. 53
From the foregoing constitutional provisions, legislation, official issuances and
representations, it is indubitable that the Philippines has already firmly established
itself as an archipelagic State through its own unilateral and voluntary machinations.
International acceptance that the Philippines is one of the seventeen archipelagic
States in the world 54 has further boosted this reputation.
Consequently, the Philippines’ being a signatory and ratifier of the UNCLOS
should not now shirk from meeting the Convention’s rudimentary expectation to
establish its archipelagic baselines and maritime zones. While holding back for longer
or disavowing its archipelagic statehood due to difficulties encountered in the national
territorial debate are logical policy options for a sovereign State like the Philippines,
choosing either would greatly affect its respectability in the international community.
It could even be construed as conduct inconsistent with adherence to the principle
of pacta sunt servanda, more so because it would undo more than a quarter of a century
of its advocacy of the “archipelagic doctrine.”
Is there a deadline for the Philippines to draw its archipelagic
baselines?
In several instances in the past months, the national papers bannered reports
that the Philippines must draw its archipelagic baselines as soon as possible in order
to meet a United Nations imposed deadline and not lose parts of its territory, referring
to the Kalayaan Island Group (KIG) in the South China Sea. Regrettably, the reports
were erroneous.
There is no such deadline. Strictly speaking, the drawing of archipelagic baselines
is even optional to archipelagic States as may be deduced from the permissive
phraseology of the following relevant UNCLOS provision:
An archipelagic State may draw straight archipelagic baselines joining
the outermost points of the outermost islands and drying reefs of the
archipelago provided that within such baselines are included the main
islands and an area in which the ratio of the area of the water to the area
of the land, including atolls, is between 1 to 1 and 9 to 1. 55
53 It is interesting that the Philippine Mining Act of 1995 in attempting to define the term “offshore” has made
mention of the “archipelagic sea”, thus: “Offshore means the water, sea bottom and subsurface from the shore
or coastline reckoned from the mean low tide level up to the two hundred nautical miles (200 n.m.) exclusive
economic zone including the archipelagic sea and contiguous zone.” (Sec. 3(ai), R.A. No. 7942), which by itself
escapes definition (unless, it is construed as equivalent to the “territorial sea”) in the light of discussions that
have been done so far.
54 Churchill, R.R & Lowe, A.F., The Law of the Sea, Manchester University Press, 1999 at 121-122.
55 Art. 47 (1), UNCLOS.
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The On-going National Territorial Debate: Issues & Perspectives
It must be pointed out, however, that even absent a deadline, archipelagic
States like the Philippines must, nevertheless, still feel impelled to draw their
archipelagic baselines not only because it meets a minimum UNCLOS expectation
but by other equally compelling reasons like the following: (a) the need to definitively
establish the metes & bounds of its territory (particularly, its fluvial and aerial
domains), which is a fundamental element of statehood; (b) the importance of meeting
its treaty obligations as a State Party to a “popular” 56 international convention that
is reputed as the “Constitution of the Oceans”; (c) the importance of delimiting
maritime jurisdictions that meet UNCLOS requirements; (d) to be able to efficiently
and effectively exercise its prerogatives as a sovereign State vis-à-vis its concerns of
national sovereignty, territorial integrity and national security; (e) to be able to
efficiently and effectively exercise its sovereign rights and limited jurisdiction in
maritime zones beyond the territorial sea; and (f) to provide proper guidance by way
of definitive boundaries to common maritime boundary delimitation negotiations
with our immediate neighboring States in the near future.
Furthermore, by not drawing archipelagic baselines, the Philippines will not
lose the KIG or any other territory that it claims for that matter. In the same way
that such nonfeasance is not a ground to lose territory, drawing archipelagic baselines
is also not a way to acquire territory in international law.
Taking hint from the papers that the “deadline” is set for next year, the reports
could be referring to that deadline imposed on States Parties to the UNCLOS to file
with the UN Commission on the Limits of the Continental Shelf (CLCS) their
respective submissions of claims to extended continental shelves, 57 an entirely
different matter.
In the context of all the foregoing, the baselines already drawn pursuant to
R.A. No. 3046 as eventually amended by R.A. No. 5446 still serve some purpose.
Instead of drawing an entirely new network of baselines, the Philippines could opt
to adopt it after correcting portions (baselines) that do not comply with
UNCLOS prescriptions and making some adjustments to optimize the resulting water
areas. 58
56 As of this writing, 156 countries have either ratified or acceded to the UNCLOS.
57 Meeting of States Parties to the Law of the Sea, SPLOS/72, 29 May 2001.
58 Noticeably, it does not meet the requirement that the length of the baselines does “not exceed 100 nautical
miles” with the exception “that up to 3 per cent of the total number of baselines enclosing any archipelago may
exceed that length, up to a maximum length of 125 nautical miles” – a principal requirement under Article
47(2) of the UNCLOS. The existing Philippine 80 baselines delineated under RA 3046 (as amended by RA
5446) have a total length of 8,174.8974 miles. Three (3) of these 80 baselines or 3.75% of the total number of
baselines, exceed 100 miles in length. Moreover, one of these – the baseline to the southeast of Mindanao in the
Gulf of Moro is of 140.05 miles in length — is over 125 miles in length.
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Leo Tito L. Ausan, Jr.
How should RP treat its landward waters if the archipelagic
baselines are eventually drawn?
Since 1955, in NYPM’s note verbale of 7 March 1955, the waters around,
between and connecting the islands of the Philippine archipelago were denominated
as “internal (inland) waters.” This concept was retained in NYPM’s note verbale of
20 January 1956. 59
R.A. No. 3046 re-enunciated the concept in the 1 st paragraph of its Preamble,
to wit:
WHEREAS, all the waters around, between and connecting the various
islands of the Philippine archipelago, irrespective of their width or
dimensions, have always been considered as necessary appurtenances of
the land territory, forming part of the inland or internal waters of the
Philippines;
With baselines drawn in accordance with the Act, the Philippine concept of
“internal waters” has, in fact, acquired a modified meaning, that of being “all waters
around, between and connecting the islands within the baselines.”
Subsequently, the 1973 and 1987 Constitutions embraced the aforesaid
Philippine concept of “internal waters,” respectively, as follows:
“The waters around, between, and connecting the islands of the
archipelago, irrespective of their breadth and dimensions, form part of
the internal waters of the Philippines” 60 and
“The waters around, between, and connecting the islands of the
archipelago, regardless of their breadth and dimensions, form part of the
internal waters of the Philippines.” 61
59 The note also defined “territorial sea” and “subjacent waters”, respectively, in the following manner: “All other
water areas embraced within the lines described in the Treaty of Paris of 10 December 1898, the Treaty
concluded at Washington, D.C. between the United States and Spain on 7 November 1900, the Agreement
between the United States and the United Kingdom of 2 January 1930 and the Convention of 6 July 1932
between the United States and Great Britain, as reproduced in Section 6 of Commonwealth Act No. 4 0 0 3
and article I of the Philippine Constitution, are considered as maritime territorial waters of the Philippines for
purposes of protection of its fishing rights, conservation of its fishery resources, enforcement of its revenue and
anti-smuggling laws, defense and security, and protection of such other interests as the Philippines may deem
vital to its national welfare and security, without prejudice to the exercise by friendly vessels of the right of
innocent passage over these waters”. (TERRITORIAL WATERS); and “All natural deposits or resources of
petroleum or natural gas in public and/or private lands (or other submerged lands) within the territorial waters
or on the continental shelf, or its analogue in an archipelago, seaward from the shores of the Philippines which
are not within the territories of other countries, belong inalienably and imprescriptibility to the Philippines,
subject to the right of innocent passage of ships of friendly foreign States over these waters.”
(SUPERJACENTWATERS)
60 Art. I (National Territory), Sec. 1, 1973 Constitution.
61 Art. I (National Territory), Sec. 1, 1987 Constitution.
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The On-going National Territorial Debate: Issues & Perspectives
On the other hand, the drawing of archipelagic baselines by archipelagic States
in accordance with the UNCLOS will result into two kinds of landward waters namely:
(a) archipelagic waters; and (b) internal waters. Archipelagic waters are those enclosed
by the archipelagic baselines, regardless of their depth or distance from the coast. 62
On the other hand, internal waters include waters of rivers and bays delimited by
closing lines drawn in accordance with Articles 9 (Mouths of Rivers), 10 (Bays) and
11 (Ports), UNCLOS. 63
Under the UNCLOS, therefore, “internal waters” partake of a specific meaning
that is altogether different from its given meaning in Philippine law. Thus, when the
Philippines signed and ratified the UNCLOS, this divergence in meaning became
the root cause of the issue at hand. Should the Philippines continue to insist on its
concept that all waters inside the archipelagic baselines are “internal waters” or
should it apply the UNCLOS and go for “archipelagic waters” and “internal waters”
classification?
Faced again with a host of sub-issues – (a) Can the divergence be addressed
and cured by an enactment or amendment of the constitution or law?; (b) Which
should be accorded due supremacy, the Constitution or the UNCLOS?; (c) Which is
better in the light of the need to accommodate international navigation’s exercise of
rights of passage (i.e., right of innocent passage; archipelagic sealanes passage; and
passage through routes normally used for international navigation), the regime of
archipelagic waters or the regime of internal waters?; (d) Upon drawing archipelagic
baselines, should the archipelagic sealanes be established? Why or why not? Can the
Philippines delay the establishment of the sealanes?; (e) Was the ratification of the
UNCLOS a correct decision for the Philippines? Could the country still reverse the
situation and back track, if not withdraw from the UNCLOS?; and (f) Can a proper
action in court resolve the divergence? - the country again opts for indecision and
continues debating.
How should RP treat its disputed territories when drawing its
archipelagic baselines?
In drawing its archipelagic baselines, the Philippines has to contend with the
stark reality that it has territories (e.g., Sabah, the KIG and the Scarborough Shoal
(also known as the “Bajo de Masinloc”)) that are being disputed by other States. It,
thus, is constrained to decide if it must include or exclude these disputed territories
within the baselines.
A. Sabah
There is currently no legislation that establishes the metes and bounds of
Sabah as claimed by the Philippines to be part of its territory. There is, however, not
62 Art. 49(1), UNCLOS.
63 Art. 50, UNCLOS.
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Leo Tito L. Ausan, Jr.
much urgency to the drawing of baselines around it as there is already legislation
that has provided for doing so at some future time.
RA 5446 (1968), which was only supposed to amend the typographical mistakes
in Section 1 of RA 3046 as may be gleaned from its title, has surreptitiously introduced
a provision that addresses this matter as follows:
“Sec. 2. The definition of the baselines of the territorial sea of the
Philippine Archipelago as provided in this Act is without prejudice to the
delineation of the baselines of the territorial sea around the territory of
Sabah, situated in North Borneo, over which the Republic of the
Philippines has acquired dominion and sovereignty.”
As may be gleaned from the provision, the Philippines declares Sabah as its
territory, having acquired “dominion and sovereignty” over it. In the meantime,
however, the Philippines does not find it exigent to draw the “baselines of (its)
territorial sea.” This is worthy of note because this approach vis-à-vis a disputed
territory resembles that employed by China and Vietnam with respect to the Spratlys
Archipelago, of which the KIG is part. 64
China, while declaring its territory to include “the mainland and its offshore
islands, Taiwan and the various affiliated islands including Diaoyu Island, Penghu
Islands, Dongsha Islands, Xisha Islands, Nansha (Spratly) Islands and other islands
that belong to the People’s Republic of China,” 65 subsequently, pronounced that it
“will announce the remaining baselines of the territorial sea of the People’s Republic
of China at another time.” 66
For its part, Vietnam, which claims Hoang Sa and Troung Sa archipelagos
(Spratlys and Paracel Islands) as its territory has proclaimed that “(4) The baseline
for measuring the breadth of the territorial sea of the Hoang Sa and Truong Sa
Archipelagos will be determined in a coming instrument in conformity with paragraph
5 of the 12 May 1977 statement of the Government of the Socialist Republic of Viet
Nam.” 67
64 P.D. No. 1956 only lays claim to the KIG, or those islands and waters, etc. that fall within specific boundaries
(a six-sided polygon that abuts the ITL). It must be noted that the KIG does not include the Spratlys Island,
which is at this time occupied by Vietnam.
65 Art. 2, par. 2, China’s Law on the Territorial Sea and the Contiguous Zone of 25 February 1992.
66 Declaration of the Government of the People’s Republic of China on the baselines of the territorial sea, 15 May
1996, in which law it drew an incomplete straight baselines for its mainland and a complete set of baselines
around Xisha (Paracel) Islands.
67 Statement of 12 November 1982 by the Government of the Socialist Republic of Viet Nam on the Territorial
Sea Baseline of Viet Nam.
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The On-going National Territorial Debate: Issues & Perspectives
Notably, the same approach is available to the Philippines as regards the
Kalayaan Island Group (KIG) 68 and the Scarborough Shoal 69 .
B. The KIG & Scarborough Shoal
In 1978, then President Ferdinand Marcos issued P.D. No. 1596, which declared
the area within the following boundaries:
KALAYAAN ISLAND GROUP
From a point [on the Philippine Treaty Limits] at latitude 7°40' North
and longitude 116°00' East of Greenwich, thence due West along the
parallel of 7°40' N to its intersection with the meridian of longitude 112°10'
E, thence due north along the meridian of 112°10' E to its intersection
with the parallel of 9°00' N, thence northeastward to the intersection of
parallel of 12°00' N with the meridian of longitude 114°30' E, thence, due
East along the parallel of 12°00' N to its intersection with the meridian of
118°00' E, thence, due South along the meridian of longitude 118°00' E
to its intersection with the parallel of 10°00' N, thence Southwestwards
to the point of beginning at 7°40' N, latitude and 116°00' E longitude;
including the sea-bed, sub-soil, continental margin and space as belonging
and subject to the sovereignty of the Philippines. The decree also
constituted a distinct and separate municipality of the Province of Palawan
known as “Kalayaan.”
In the process of drafting its archipelagic baselines law, the Philippines has
taken the KIG and the Scarborough Shoal into consideration and many options had
been looked into on how they should be treated in the process.
Presently, House Bill No. 3216 (otherwise known as the Cuenco Bill), which is
pending for third reading in congress, proposes that the baselines enclose the main
archipelago, the KIG and the Scarborough Shoal. 70 On the other hand, a common
position of the Executive Branch (CEP) processed under the auspices of the
Commission on Maritime and Ocean Affairs (CMOA) proposes that the baselines
be drawn just around the main archipelago and the KIG and the Scarborough Shoal
should just be considered as a regime of islands under Part VIII of the UNCLOS,
which goes:
68 The Philippines has even gone further by drawing a six-sided polygon around KIG and establishing a local
government unit thereat through P.D. No. 1596 (1978).
69 Formerly known as “Bajo de Masinloc”, the Scarborough Shoal can be said to have already been declared by
the Philippines as part of its territory when in the Administrative Code of 1916 it enumerated Masinloc as a
municipality of Zambales, one of its provinces.
70 Of late, counterpart bills have been filed in the Senate.
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Leo Tito L. Ausan, Jr.
Article 121
Regime of islands
1. An island is a naturally formed area of land, surrounded by water,
which is above water at high tide.
2. Except as provided for in paragraph 3, the territorial sea, the contiguous
zone, the exclusive economic zone and the continental shelf of an island
are determined in accordance with the provisions of this Convention
applicable to other land territory.
3. Rocks which cannot sustain human habitation or economic life of their
own shall have no exclusive economic zone or continental shelf.
Expectedly, the proposal in the Cuenco Bill has gained the favor of nationalists
who principally argue that it will not only affirm and strengthen our territorial claim
over the KIG and the Scarborough Shoal but will also maximize the projection of
our maritime zones.
Those who advocate the CEP, however, point out that drawing the baselines
around the KIG will require the building of lighthouses on the Sabina and Iroquois
Shoals, and could be violative of the call for “status quo” contained in the ASEAN-
China Declaration of Conduct in the South China Sea. They also have expressed
concern on the possibility that drawing the baselines around the Scarborough Shoal
would be inconsistent with UNCLOS’ requirement that the baselines should “not
depart to any appreciable extent from the general configuration of the archipelago.” 71
They further underline that the CEP is less adversarial, less confrontational, less
controversial, less politically motivated and less likely to aggravate the South China
Sea (SCS) dispute over the KIG.
The difficulties pertinent to the instant issue are not only due to the
contradictions of options on how the archipelagic baselines should be drawn in relation
to disputed territories. They also emerge in the crafting of the bill itself, particularly,
as regards the CEP, and, specifically, on how to treat the KIG and Scarborough
Shoal as regime of islands therein.
Firstly, should there be a mention of the islands as belonging to the Philippines
or forming part of Philippine territory or this should just be presumed in the light of
P.D. No. 1596 and the Administrative Code of 1916? Should this reference be to the
islands as a group or to the individual islands? Secondly, how should the regime of
islands concept be presented in the bill? Should the islands be treated as a group of
islands occupying a certain portion of the South China Sea or as individual islands
with identifiable geographical coordinates? Thirdly, should the maritime zones of
each and every island already be reflected in the law based on a determination of
71 Art. 47(3), UNCLOS.
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The On-going National Territorial Debate: Issues & Perspectives
whether or not each of them is capable of sustaining human habitation or economic
life? What maritime zones should each and every island project? How would the
inhabitants of an existing municipality in the KIG react to a determination that
some, if not all, of the islands in the KIG are incapable of sustaining human habitation
or economic life? Fourthly, can’t the islands simply be covered by a non-prejudice
clause similar to that adopted in R.A. No. 5446 as regards Sabah? Can the Chinese/
Vietnamese approach on the Spratlys be adopted by the Philippines?
Again, it is observed that in the face of clashing multifaceted arguments and
sub-issues, the main issue on how to treat the KIG and Scarborough Shoal in the
process of drawing the baselines remains unsettled, the process itself of drawing the
baselines is stalled and the national territorial debate continues indefinitely.
What should be RP’s national territorial limits – the outer limits of the territorial
sea reckoned from UNCLOS-prescribed baselines or the ITL?
This undeniably is the mother of all the issues in the national territorial debate.
The country’s ultimate course of action that would finally settle all the other issues
primarily depends on a definitive and decisive decision on this one. If the Philippines
decides that its ITL are its territorial boundaries, then the establishment of its
maritime zones, the common maritime boundary delimitation talks, its exercise of
prerogatives as a sovereign, among others, could proceed accordingly with its
guidance. The same thing obtains if UNCLOS-based territorial limits are preferred.
Hence, what really matters is for this issue to be passed and decided upon once and
for all.
In trying to arrive at a decision on the issue, it should be recalled and considered
that the Philippines’ ITL position had already been taken up exhaustively and,
thereafter, rejected during UNCLOS III. Moreover, the Declaration upon signing
the UNCLOS that sought to qualify its legal effects on the Philippines is also viewed
as fundamentally flawed in the context of Art. 310, UNCLOS, taken in relation to
Art. 309.
Article 309
Reservations and exceptions
No reservations or exceptions may be made to this Convention
unless expressly permitted by other articles of this Convention.
Article 310
Declarations and statements
Article 309 does not preclude a State, when signing, ratifying or acceding to this
Convention, from making declarations or statements, however phrased or named,
with a view, inter alia, to the harmonization of its laws and regulations with the
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Leo Tito L. Ausan, Jr.
provisions of this Convention, provided that such declarations or statements
do not purport to exclude or to modify the legal effect of the provisions
of this Convention in their application to that State.
In fact, it had been vehemently opposed, if not rejected by Australia, Belarus,
Czechoslovakia, the Russian Federation (USSR), and Ukraine, among others. 72 Hence,
the prospect of obtaining international acceptance for the Philippines’ ITL seems
remote.
Projecting other maritime zones from the ITL is going to be a difficult
undertaking. Maritime zones are creations of the UNCLOS, thus, their establishment
should, logically, be on the basis of the rules it has prescribed. In this light, projecting
the contiguous zone, EEZ and the continental shelves from the outer limits of the
territorial waters or the ITL will be a “challenging” and controversial exercise,
especially because it will result in vast overlaps with the maritime zones and even
territories of neighboring States. In this respect, Philippine maritime zones may not
be acceptable to the international community. The anomaly that portions of the
Philippine “territorial sea” within the ITL fall outside the EEZ drawn in accordance
with P.D. No. 1599, underscores this concern. (Map Slide No. 4)
The observation that adherence to baselines drawn in accordance with the
UNCLOS will dramatically reduce the expanse of RP’s territorial sea is indeed a
valid concern. 73 But then a loss in the expanse of the territorial sea will be aptly and
sufficiently compensated by the expanse of the EEZ not to mention that the seaward
maritime zones of the country will now be anchored on formidable legal bases.
However, to temper the concern of territorial collapse, it may help to know
that many other countries like Albania, Argentina, Brazil, Cape Verde, Gabon, Ghana,
Guinea, Guinea-Bissau, Haiti, Madagascar, Maldives, Mauritania, Senegal, Tanzania
and Tonga had to roll back their territorial seas with the advent of the UNCLOS,
thereby losing substantial portions of the breadth of territorial seas they previously
claimed. 74
Lastly, the Philippines should not forget that in its response to the Australian
Protest in 1988, it has made a commitment to harmonize its domestic laws with the
UNCLOS. Its passage of an archipelagic baselines law could, thus, be deemed as an
act to fulfil the commitment even as it can be construed as abandonment of the ITL
position. It can also be appreciated as a categorical act on its part to meet longstanding
treaty obligations embodied in the UNCLOS.
72 For a more exhaustive discussion, please see, Nelson, L.D.M., Declarations, Statements and ‘Disguised
Reservations’ with Respect to the Convention on the Law of the Sea, (2001) 50 International & Comparative
Law Quarterly 767-786.
73 RP could lose approximately 826,000 sq. km. of its territorial sea as a result. Within the ITL, the total expanse
of RP’s territorial waters is almost 938,000 sq. km., while within the 12 nautical mile limit reckoned seawards
from the baselines it is only about 112,000 sq. km.
74 Ashley Roach, J and Smith, R.W., International Law Studies: Excessive Maritime Claims, V. 66, Naval War
College, 1994 at 96-97.
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Conclusion
The On-going National Territorial Debate: Issues & Perspectives
The principal issues in the on-going national territorial debate are clear and
distinct and their respective perspectives have already been brought to fore in a lot
of fora and media. A close scrutiny of recent developments reveals that, in fact, the
issues have long been joined and what remains to be done is to make a decision as to
which approach the Philippines should take. It is regrettable, however, that the
decision-making process in this regard, since the Philippines became a signatory to
the UNCLOS a quarter of a century ago, has all the while been agonizingly dragging.
If only it can proceed with a sense of national urgency coupled with bold readiness
to face the consequences of decisions taken, the debate can end earlier.
The present generation can do the next generation a favor by ending the debate
now. All it needs to do is to make up its mind, once and for all, on the issues involved.
After all, being decisive on a matter of great importance such as the national territory
is a hallmark of a country worth its statehood salt.
Map No. 1 - RP’s International Treaty Limits (ITL) and its territorial waters (territorial sea within the ITL +
internal waters within the baselines drawn in accordance with R.A. No. 3046, as amended by R.A. No. 5446).
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Leo Tito L. Ausan, Jr.
UNCLOS Maritime Zones
Extended CS
(350 nm)
Map No. 2 - Maritime zones projected two-dimensionally in accordance with pertinent provisions of the United
Nations Law of the Sea.
Philippines’ Projected Maritime Zones
Map No. 3 - Philippine maritime zones projected in accordance with pertinent UNCLOS provisions.
56 IBP JOURNAL

THE EXPLORATION, DEVELOPMENT,
AND UTILIZATION OF THE SPRATLYS*
Amado D. Valdez**
I. The Legal and Historical Context of the Spratlys
The Spratlys Islands is actually an archipelago traversing about 1,000 kilometers
from north to south, between latitude 4 o to 11 o 30N, and longitude 109 o 30 o E. In
relation to its claimants, it is 100 kilometers west of Palawan Island, Philippines,
160 kilometers from Malaysia’s Sarawak coast, 250 kilometers from the Sabah coast,
650 kilometers east of the Vietnamese coast, 750 kilometers south of the Paracels,
and 1,000 kilometers from China’s Hainan Island.
Like a persona, the Spratlys of volcanic origin and coral outcroppings seems
alive and in the process of growing. In fact, new unchartered islands have been
formed with the passing of years. When Tomas Cloma proclaimed ownership by
discovery and occupation of the Spratlys in 1956, he reported only thirty-three islands,
sand cays, sand bards and coral reefs. Twenty two years later in 1978, the Philippine
Coast and Geodetic Survey Office issued a new official map increasing the number
of islands, islets, reefs, shoals, cays, and rocks to about fifty-one to sixty, depending
on whether it is high or low tide.
To set the record straight, the Philippines claims only the western section of
the Spratlys, which is called the Kalayaan Island Group. Kalayaan was incorporated
as a municipality of the Province of Palawan under a 1971 Presidential Proclamation
and Presidential Decree No. 1594. It was made part of the 200-mile exclusive economic
zone (EEZ) of the Philippines under Presidential Decree No. 1599. It consists of a
territory of 360,000 square nautical miles. 1
International observers have identified it as another flashpoint of controversy
and armed confrontation due to conflicting claims from different countries. It is
ironic that the country-claimant who happens to be the farthest from the Spratly
archipelago is the “fondest” when it comes to asserting its claim. We recall the brief
naval battle between China and Vietnam on March 14, 1988 which ended with three
Vietnamese naval boats sunk and seventy-two Vietnamese soldiers killed but no
Chinese casualties reported.
* Delivered as a reaction to the main presentation of Prof. Merlin Magallona during the symposium at the
Malcolm Theater, UP College of Law on May 29, 2008 on the topic “Spratly Islands: Impact of the UNCLOS
on the Territorial Integrity of the Philippines and other Related Legal Issues.”
** Dean, Univeristy of the East.
1 Kalayaan is at least 350 nautical miles southeast of the Spratlys Island group, and from Pag-Asa island, only 220
nautical miles west northwest of Puerto Princesa, Palawan.
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Amado D. Valdez
The Philippines was not spared this unpleasant Chinese tactic coming 1,000
kilometers away from the Kalayaan Group of Islands. In January to mid-February
1995, Chinese soldiers arrested the Filipino crew of F/B Ana Lisa who were fishing
off the waters of Mischief Shoal (Panganiban Reef to Philippine authorities), which
is part of Cloma’s claim. In the same month of February, the Princess Seagull, another
Filipino fishing boat which experienced engine trouble and had Kalayaan Mayor Gil
Policarpio on board, was prevented by a Chinese blockade and was turned away
from entry into the Panganiban reef despite displaying distress signals. Much earlier,
in 1976, China warned the Philippines to stop oil exploration near the Reed Bank.
The Chinese provocative actions came after Chinese Foreign Minister Quian
Quichon had agreed to the ASEAN position with respect to the Spratlys issue made
on July 22, 1992 which called on all claimant countries “to exercise restraint with
the view to creating a positive climate for the resolution of all disputes” as well as to
“explore the possibility of cooperation relating to the safety of maritime navigation
and communication, protection against pollution of the marine environment,
coordination of search and rescue operations, combating piracy and armed robbery
as well as collaboration in the campaign against illicit trafficking of drugs.”
That China has an ally in the United States is gauged from the subsequent
attitude of American private enterprise. On May 8, 1992, or three months after
China passed a law in February 1992 asserting sovereignty over the entire Spratly
island chain, a US company, Creston Energy Corporation entered into a contract
with the China National Offshore Oil Corporation (CNOOC) to explore oil in a
25,155 square kilometer area in the Tu Chinh bank with assurances of protection
from the Chinese Navy against hostile forces.
This transaction only validates the United States government’s position that
the Mutual Defense Treaty does not cover the defense of the Spratlys because of
conflicting claims and that the Spratlys were not part of Philippine territory during
the forging of the treaty. Still, the Philippines looked to the United States for support
in early February 1995 after China refused to heed the Philippines’ request for it to
leave the Mischief Shoal.
With the present global economy’s reliance on oil, more US-Chinese partnership
in the area may be forthcoming considering how oil-dependent these two countries
are. According to Professor Teodoro Santos, formerly of the University of the
Philippines’ National Institute of Geological Sciences (NIGS), the Kalayaan Island
Group (KIG) is the “most promising with respect to petroleum and natural gas. The
Chinese have the highest estimate at 100 to 200 billion barrels, with Russian sources
estimating a low of seven billion barrels.” 2
2 Philippine Graphic, Vol. 18, No. 45, April 14, 2008, page 24.
58 IBP JOURNAL

THOUGHTS ON THE EXPLORATION, DEVELOPMENT, AND UTILIZATION OF THE SPRATLYS
II. Spratly as Part of the Philippine Territory and the U.N.
Convention On The Law Of The Sea
Prior to Cloma’s claim, the Kalayaan Island Group was largely uncharted in
international maps. Some had newly-arisen, and all of them were unoccupied and
uninhabited. They were considered terra nullius and could be claimed by discovery
and occupation. The UN Convention on the Law of the Sea (UNCLOS) could be
said as reinforcing such claim.
It is in this context that the Kalayaan Island Group is included as part of the
national territory in the 1973 Constitution, which definition is substantially adopted
in the 1987 Constitution. According to noted constitutionalist Fr. Joaquin Bernas,
the 1987 version “merely removed language possibly offensive to an ASEAN neighbor
and achieved a more logical sequencing of the elements that make up the territory
but preserved everything else found in the 1973 Constitution.” 3
The 1973 Constitution had left the territorial definition pliable to the expanding
breadth of territory which could be foreseen from the developing international accord
on the law of the sea where the official position of the Philippines found in Republic
Act No. 3046 (1961) and Republic Act No. 5446 (1968) adopted the “straight baseline
method” of fixing the territorial sea. This is a position upheld in the decision of the
International Court of Justice in the Anglo-Norwegian Fisheries case.
Then Constitutional Commission member and current Supreme Court
Associate Justice Adolfo Azcuna rephrased the 1973 version in 1987 with “its
terrestrial, fluvial, and aerial domains, including the territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas,” 4 in accordance with the
now existing 1982 UNCLOS.
Under the above Convention, the limits of Philippine responsibility are
reckoned from a so-called baseline. To establish the baseline, a country has to first
identify the outermost island, and then identify the outermost point which is the low
water mark. The low water mark is the point where the sea recedes in case of low
tide.
All maritime regimes or zones are reckoned from the baseline. The twelvemile
territorial sea is the area where the State enforces its laws and exploits its
resources. The twenty four-mile contiguous zone beyond the twelve-mile territorial
sea is the area where a State can exercise its sovereign right to pursue smugglers,
illegal fishers, illegal immigrants, and customs and tax evaders. The 200-mile exclusive
economic zone is where the State has the right to exploit and develop the resources
in the sea, all the way down to the seabed.
3 Bernas, The 1987 Constitution, A Commentary, p. 34.
4 Constitutional Commission Journal of July 2, 1986; I Record 305.
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Amado D. Valdez
Under the UNCLOS, the continental shelf 5 comprising up to 200 nautical miles
from the archipelagic baseline automatically belongs to a State and no proof of
claim is required.
The Convention, however, allows coastal States to claim jurisdiction over
territories 200 nautical miles, or 360 kilometers beyond their boundaries and extend
these by 150 miles or 270 kilometers by 2009. For the extension, a State must
conduct hydro-graphic and geo-scientific studies and submit the data to the UN
Commission on the Limits of the Continental Shelf (CLCS), a significant and critical
activity considering that parts of the Kalayaan Island Group are about 230 nautical
miles from Palawan.
Just what do we stand to lose in the event that the Philippines fails to meet the
2009 deadline in claiming the extension of the continental shelf beyond the 200
nautical mile boundary? Within the Kalayaan Island Group alone, the Chinese have
estimated around 100 to 200 billion barrels of oil reserve as against the Russian
estimate of a low of about seven billion barrels.
It has been pointed out, however, that the Law of the Sea Convention does
not treat questions of sovereignty over land territory. There is still a need to prove
sovereignty over the islands from where the baseline is drawn before a country
could claim its exclusive economic zone. In the case of the Kalayaan Island Group,
the issue is not one of overlapping continental shelves between adjacent or opposite
states but one of territorial dispute among different States claiming the said island
territories.
III. Exploration, Development, and Utilization of Natural
Resources in the Spratlys
May the Philippines enter into an arrangement with the other claimant States
for the exploration, development, and utilization of the natural resources in the
Spratlys, more particularly the Kalayaan Island Group?
By the strength of the UNCLOS alone the Philippines may explore, develop
and utilize the natural resources in the Spratlys. The problem is that China and
Vietnam are not signatories to the Convention.
Both countries claim rightful ownership over the islands on the basis of historic
title while the Philippines based its claim on discovery and occupation. If only the
two countries yield to propinquity as the basis of ownership and sovereignty, there
is no doubt that the Philippines is situated nearest to the island groups.
5 The seabed and subsoil of submarine areas where it either gradually descends or drops off into ocean floor.
Arbitration, (Netherlands/United States of America Intervening), Award of 4 April 1928.
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THOUGHTS ON THE EXPLORATION, DEVELOPMENT, AND UTILIZATION OF THE SPRATLYS
There is a slew of arbitral and international court decisions in favor of the preeminence
of actual and effective occupation over claims of historic title. The
Philippines then may enjoy a favorable position but China and Vietnam had, over
time, reinforced their respective claims likewise by occupation. The Palmas 6 and
Clipperton 7 decisions both required that an inchoate title to a discovered territory
must be perfected within a reasonable period, although in the later Eastern
Greenland 8 decision it was sufficient for the claimant-state to establish its title to the
territory in the period immediately prior to occupation. Once the historic claim is
abandoned the determination of sovereignty becomes a question occupation terra
nullius. It is not essential that a State immediately occupy the entire claimed territory
nor is it necessary that the occupying State establish a special administration for the
same.
Claimant-states are in stalemate for failure to agree on peaceful avenues
available under international customary laws and conventions. With its military
predominance, China will eventually gain an irreversible upper hand. Philippine
sovereignty or ownership of the Kalayaan Island Group may just become a waning
and whining rhetoric.
What is pumping fuel into the issue of sovereignty and jurisdiction is
the question of the intrinsic wealth of natural resources teeming in the area. A
control over the area is a control over the exploitation and utilization of these
resources.
Since nearly about only six percent of the disputed area is above sea water,
there is a growing consensus to develop a maritime approach and not cutting up the
South China Seas like a big piece of real estate. It was suggested during a conference
in 1995 9 than an International Spratlys Authority be established, leaving aside the
resolution of the issue of sovereignty, jurisdiction and territory to such entity, in
order to jointly develop the area.
There are precedents to this approach although admittedly they are not on all
fours to the Spratlys dilemma. There is the Antarctica model in 1959 which was
established subject to the precondition that all claims would be suspended. Another
model is the condominium regime prescribed by the International Court of Justice
in the Gulf of Fonseca decision which concerned the status of islands and maritime
spaces in the gulf shared by El Salvador, Honduras, and Nicaragua. 10
It is argued that the hands of the Philippine government are tied by the selfimposed
limitations of exclusivity in the exploration, exploitation, and development
7 Clipperton Islands Arbitration, (France/Mexico Intervening), Award of 28 January 1931.
8 Legal Status of Eastern Greenland Arbitration, (Denmark/Norway Intervening), 5 April 1933.
9 Round Table Discussion on the Spratly Islands Dispute, UP Law Centeron 27 January, 1993.
10 Case Concerning Land, Island and Maritime Frontier Dispute (El Salvador/Honduras: Nicaragua Intervening),
Judgment of 11 September 1992.
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Amado D. Valdez
of the natural resources in the Kalayaan Island Group, particularly Section 2, Article
XII of the 1987 Constitution, to wit:
“All lands of the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, fisheries, forest or timber,
wildlife, flora and fauna, and other natural resources are owned by the
State. With the exception of agricultural lands, all other natural resources
shall not be alienated. The exploration, development, and utilization of
natural resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it may enter
into co-production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per centum
of whose capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more than
twenty five years. xxx”
The State shall protect the nation’s marine wealth in its archipelagic waters,
territorial sea, and exclusive economic zone, and reserve its use and enjoyment
exclusively to Filipino citizens.”
It is the author’s position that this limitation would apply only to natural
resources in which our sovereignty, or even our mere ownership over these resources
is unchallenged by other countries. Since this area is an economic zone and is part of
the high seas, the general principles of international law on resolution of disputes
have to be taken into consideration. 11 This conciliatory intent is attuned to the spirit
of the 1987 Constitution on the national territory.
The fundamental consideration of our policy planners as well as the judiciary
must be to interpret these provision not in the framework of territorial sovereignty
but in consideration of such equally critical state interests as uplifting the well-being
of the people within the framework of international law.
The Philippines will definitely benefit from the development of the oil reserves
in the Spratlys.
11 Bernas, The 1987 Constitution, A Commentary, p. 1140.
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The Memorandum 0f Agreement on Ancestral Domain: A Commentary
The Legal Significance
of the MOA on the Bangsamoro
Ancestral Domain *
Vicente V. Mendoza**
No other official document perhaps has excited as intensely or as emotionally
as many people as the MOA on the Bangsamoro Ancestral Domain. Some thought
it is a sell out of a portion of the Philippine territory, others a move on the sly to
open the door for charter change, including extension of the President’s term, while
still others thought it is part of America’s strategic planning in the face of China’s
growing influence in the region. Those advocating signing of the MOA, on the other
hand, say it is nothing but a piece of paper requiring approval in a plebiscite of the
affected areas in Southern Philippines (Mindanao, Palawan, and Sulu) and until signed
and submitted for approval should not alarm or unduly concern anyone.
Much Ado About Nothing?
Depending on their perception and perspective, the MOA is either a proposed
treaty, a proposed amendment to the law 1 creating the Autonomous Region in Muslim
Mindanao, or a proposed amendment to the Constitution, or an attempt on the part
of a foreign power to strengthen its position in Southeast Asian geopolitics.
Whatever it is, if it is any of these, the MOA certainly cannot just be ignored
as a piece of paper containing a list of what the parties intend to do. I cannot imagine
any person, much less the government, to agree to take part in an idle ceremony of
signing a mere list of things wished for, to be done with all the solemnity of signing
a treaty in a foreign country with the attendance of the Secretary of Foreign Affairs
of the Philippines and the Minister of Foreign Affairs of Malaysia, the host country.
The fact is that the MOA is a contract. One does not make a contract, even one that
needs the ratification of one’s principal for it to be binding and effective, if one has
no intention to be bound by it. In other words, the MOA is something, and excitement
about it is not about nothing but about something, something that is important.
First, if the MOA is a proposed treaty, the question is, is the government
negotiating a treaty with an independent state? Is the “Bangsamoro nation,” called
* Lecture delivered at the U.P. Law Center MCLE Program held on August 28, 2008.
** Supreme Court Associate Justice (Retired).
1 R.A. No. 6734, as amended by R.A. No. 9054.
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Vicente V. Mendoza
the Bangsamoro Juridical Entity in the MOA, being recognized as a body politic
possessing the attributes of a sovereign state? If so, then the assumption is that the
BJE is a state, which is perhaps semi-independent, and therefore the MOA, as any
other treaty, must be ratified by the President of the Philippines and concurred in
by 2/3 vote of all the members of the Senate in accordance with the Constitution. 2
The problem is that this is not provided in the MOA. What the MOA provides is
that our “legal framework,” assuming the term means the Constitution, should be
amended instead to make it conform to the provisions of the MOA and the
Constitution or organic act of the BJE, called the “Comprehensive Compact.”
Second, if the MOA is a proposed amendment to the Organic Act for the
ARMM, it must be enacted into law after appropriate consultation with the local
government units and be approved by a majority of the constituent units in accordance
with the Constitution. 3 However, this is not provided either in the MOA. In fact the
Constitution is not even mentioned in the MOA.
Third, if the MOA is an agreement to submit a proposed amendment or revision
of the Constitution either to Congress, acting as a constituent assembly, or to a
constitutional convention called by Congress, and then submit the proposed
amendment to a plebiscite held throughout the country and not only in the constituent
local government units, again, this is not provided in the MOA.
The irony is that while the government panel is talking of a document that is
incomplete and not effective for both sides until ratified or approved in accordance
with its constitutional processes, the MILF panel is talking of a completed document
that is already effective once signed although still to be ratified in accordance with
the “internal processes” of the government. It seems the two panels are talking on
totally different wavelengths, thus preventing a meeting of their minds!
So what do I think the MOA is?
The MOA is an instrument of recognition cum treaty
The MOA is an instrument of recognition and a proposed treaty. As an
instrument of recognition of the Bangsamoro as a semi-independent state, the MOA
has instant effect once signed by the parties, although arguably the initials of the
chairmen of the two panels, representing the two parties, might be considered as
fully effective as their full signatures. The state recognized may be likened to the
Philippines under the Commonwealth regime, which belonged to the United States
of America as an unincorporated territory and so was subject to its sovereignty and
control although allowed limited freedom to enter into relations with other counties.
2 Art. VII, § 21.
3 Art. X, § 18.
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The Legal Significance of the MOA on the Bangsamoro Ancestral Domain
The BJE is contemplated, at least for now, to be part of the Philippine territory,
entitled as such to the protection of the Philippine government. In that sense, what
Stanley Karnow said to describe Philippine autonomy during the Commonwealth
era applies to the BJE’s independence: “dependent independence.” 4 Or the
Bangsamoro may be likened to its claim to what its former status was, as a state
under the suzerainty of the sultanates which were “nation-states in the modern sense,”
according to the MOA.
The premise of the MOA is that the BJE is a semi-independent state. That is
the reason the MOA does not purport to be made in accord with the Constitution or
the Organic Act for the ARMM. Any contrariety between the Constitution and the
MOA – and there are many — must be removed by amending the Constitution and
the laws to bring them in conformity with the MOA. Talk of the Constitution – that
does not apply to this document. This view is reinforced by the fact that the MOA
was set for the signing “in the presence of” the Secretary of Foreign Affairs and the
Minister of foreign Affairs of Malaysia where the ceremony was to be held on August
5, 2008, attended by representatives of other countries.
Let me now consider the provisions of the MOA.
Salient features of the MOA
The MOA deals with three subjects: territory, resources, and governance. I
will discuss the salient provisions concerning each and their underlying “Concepts
and Principles.”
1. The Moros and indigenous peoples, who are natives or original inhabitants
of Mindanao, Palawan, and Sulu at the time of the Spanish conquest and their
descendants, constitute a distinct group known as the Bangsamoros 5
2. Their territory embraces the regions of Mindanao, Sulu, and Palawan and
is composed of the local government units listed in Annexes A and B of the MOA.
Its “core” is the geographic area of the ARMM. This territory consists of ancestral,
communal and customary lands, maritime, fluvial and alluvial domains, the aerial
domain, the air space above and the natural resources. 6
3. This territory is the homeland of the Bangsamoro people. Ownership is
“vested exclusively” in them “by virtue of their prior rights of occupation . . . since
time immemorial” as the “first politically dominant occupants.” 7 The territory “does
4 In Our Image 323 (1989).
5 MEMORANDUM OF AGREEMENT ON THE ANCESTRAL DOMAIN ASPECT OF THE GRP-MILF
TRIPOLI AGREEMENT ON PEACE OF 2001 (MOA), Concepts and Principles par. 1.
6 MOA, Territory par. 1; Concepts and Principles par. 13.
7 Concepts and Principles par. 2.
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Vicente V. Mendoza
not [therefore] form part of the public domain” of the Philippines under Art. XII,
Sec. 2 of the Constitution 8 which belongs to the Philippines in accordance with the
Regalian doctrine.
4. As owners of the ancestral domain, the Bangsamoro people, organized as
the Bangsamoro Juridical Entity, have jurisdiction over the development, utilization,
and disposition of all natural resources of the internal waters which extend from the
coastline of the BJE up to 15 kilometers of the baselines of the Philippines. With
regard to the mineral resources of the territorial sea, which extends beyond the
baselines, the jurisdiction and authority of the BJE is concurrent or joint with that
of the Philippine government. 9 The profit split from production shall be shared
between the government and the BJE, on the basis 75:25 percent in favor of the BJE
“as the party having control within its territorial jurisdiction.” 10
5. The government undertakes “to conduct and deliver, using all possible legal
measures,” a plebiscite in the Bangsamoro territory within 12 months after the signing
of the MOA for the approval of an enlarged territory consisting of the present
ARMM and the additional local government units listed in Annexes A and B of the
MOA. 11 This is very vague, if not obfuscating, but it seems to mean in clear language
that the government obliges itself to amend the organic act of the ARMM and, if
necessary, the Constitution, to suit the MOA.
6. The Bangsamoro people have a right to “self governance” based on ancestral
territoriality, exercised by them as protectorates of the sultanates and the “Pat a
Pagampong ku Ranaw” which had the attributes of modern nation-states. 12
7. As a juridical entity, the Bansangmoro nation has a right to enter into
economic cooperation and trade relations with foreign countries, establish trade
missions in such countries, and participate in international meetings and events,
such as the ASEAN and the specialized agencies of the United Nations. 13 For its
part, the government will take steps to ensure the effective exercise of this power of
the BJE in foreign trade and economic relations.
8. The BJE can organize its own institutions, including the civil service, electoral,
financial, banking, education, legislation, legal, economic, and police internal security
force, judicial system and correctional institution. 14
8 Id. pars. 3-4; Territory par. 1.
9 Territory par. 2 (f)-(g).
10 Resources pars. 5-6.
11 Territory par. 2 (d).
12 Concepts and Principles par. 4.
13 Resources par. 4.
14 Governance par. 8.
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The Legal Significance of the MOA on the Bangsamoro Ancestral Domain
The BJE as a semi-independent state
As I stated before, the MOA is an instrument of recognition of a semiindependent
state “the ultimate objective [of] which] is to secure the identity and
posterity of [the Bangsamoros], to protect their property rights and resources as
well as to establish a system of governance suitable and acceptable to them as a
distinct dominant people 15 in order to realize their humanitarian and economic needs
as well as their political aspirations.” 16
The entity so recognized is a body politic organized by common consent for
mutual defense and mutual safety and to promote the general welfare. The picture
presented by the MOA fits into the accepted definition of a state as “a nation, its
people occupying a definite territory, politically organized, exercising by means of
its government will over the individuals within its territory and maintaining a separate
international identity.” 17 At the risk of descending into pedantry, it may be said that
there is in the Bangsamoro Juridical Entity, or BJE, all the elements of a state,
namely, people, territory, sovereignty, and government. 18
It is indeed true that the BJE is not fully independent or sovereign and indeed
it is dependent on the Philippine government for its external defense and only lacks
foreign recognition, at least at the present time. Nonetheless it is a state as the
Philippines was a state during the Commonwealth period, which was not a part of
the territory of the United States although subject to its sovereignty. As a state, it
was a signatory to several treaties and international agreements, such as the Charter
of the United Nations of January 1, 1942, and a participant in several conferences
such as that held in Bretton Woods, New Hampshire, on July 1-22, 1944, on the
GATT. As the U.S. Supreme Court noted in Hooven & Allison Co. vs. Evatt, 19 the
adoption of the 1935 Constitution prepared the way for the complete independence
of the Philippines and the government organized under it had been given, in many
aspects, by the United States “the status of an independent government which has
been reflected in its relation as such with the outside world.” Similarly, the Supreme
Court of the Philippines held in Laurel vs. Misa that “the Commonwealth of the
Philippines was a sovereign government although not absolute.” 20
15 Concepts and Principles par. 4; Governance par. 7.
16 Concepts and Principles par. 2.
17 Collector of Internal Revenue vs. Campos Rueda, 42 SCRA 23 (1971).
18 See, e.g., Vicente G. Sinco, Philippine Political Law 4 (1962); Enrique M. Fernando, Constitution of the
Philippines 54 (1978); Isagani Cruz, Philippine Political Law 14-18 (1993).
19 324 U.S. 652, 676 (1945).
20 77 Phil. 856, 863 (1947).
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Vicente V. Mendoza
Given this description of the BJE as a dominant group with a distinct culture,
socio-economic structure, and religion, pursuing their own political aspirations, and
occupying a definite territory over which they have exclusive dominion, possessing a
government with its own financial, monetary and banking systems, and carrying on
foreign trade relations, the signing of the MOA by the Philippine government could
constitute an act of recognition of an independent state. 21 Such recognition would be
beyond the power of review of the courts. The MOA, in short, could be the instrument
of recognition of the BJE under international law.
The MOA as a treaty
This is the reason why unlike the 1976 Tripoli Agreement with the MNLF and
the Tripoli Agreement of 1996 and various other peace agreements with the MILF,
the MOA makes no pretense at being in accord with the Philippine Constitution. It
stands in sharp contrast to the 1976 agreement which provides for the establishment
of autonomy in Southern Philippines “within the realm of the sovereignty and
territorial integrity of the Republic of the Philippines.” The MOA also stands in
sharp contrast to the 1998 peace agreement with the MILF, which provides that
“any conflict in the interpretation of this Agreement shall be resolved in the light of
the Philippine Constitution and existing laws.”
In contrast, under the MOA, it is the Philippine government which is required
to make the necessary changes in its “legal framework” to make it conform to the
MOA. The MOA seems to be saying that, as far as the MILF is concerned, everything
is done (a “done deal”), and it is all up to the Philippine government to change its
Constitution and laws to make them conform to the provisions of the MOA and the
Comprehensive Compact on the structure of the government of the BJE.
The MOA, a negation of the supremacy of the Constitution
Speaking of the constitutionality of the MOA, definitely it is unconstitutional
even if approved as an amendment to the Organic Act of the ARMM. 22 Mention has
been made of the fact that under the MOA the BJE is given jurisdiction (control)
over the utilization and disposition of the natural resources 23 of the land and the
natural resources of the internal waters which extend from the coastline of the BJE
up 15 kilometers, and “joint jurisdiction” with the government over the utilization
and disposition of the natural resources of the territorial waters which extend from
the outer limits of the internal waters up to the baselines of the Philippines. That is
definitely contrary to Article XII, Sec. 2 of the Constitution, which provides that all
21 Sinco, supra note 18 at 298-300; Jovito R. Salonga & Pedro L. Yap, Public International Law 94-96 (1958).
22 R.A. No. 6734, as amended by R.A. No. 9054.
23 Resources pars. 1-2.
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The Legal Significance of the MOA on the Bangsamoro Ancestral Domain
lands of the public domain, the waters, minerals, coal, petroleum, and other mineral
oils, forces of potential energy, fisheries, timber, wild life, flora and fauna and other
natural resources and the right to explore, develop, or use them belong to State.
But that is just the point. Under the MOA the government acknowledges that
ancestral domains and ancestral lands belong exclusively to the BJE. In one case, 24
six justices expressed the view that while the State has sovereignty over the territory
of the Philippines, it does not have dominion over all the lands embraced within the
territory because ancestral domains and ancestral lands do not form part of the
public domain but belong instead to the indigenous people by virtue of native title.
The view of the six justices of course lacked the concurrence of two more Justices to
constitute the majority opinion in that case. Now, by declaring that the ancestral
domain and ancestral lands of the Bangsamoro people do not form part of the public
domain, the MOA settles the meaning of the Constitution by fiat.
More significantly, under Article I of the Constitution, the Philippines has
sovereignty over the entire territory defined in that Article. That is the absolute
power to govern persons and things within its territory, including private lands.
Under the MOA, the sovereignty of the State is compromised by declaring that with
respect to the Bangsamoro ancestral domain and ancestral lands, the “relationship
between the Central Government and the BJE shall be associative, characterized by
shared authority and responsibility.” 25 That, in international law, is the condominium
of two states (the Philippines and the Bangsamoro Juridical Entity) over a territory
(the ancestral domain and ancestral lands). Both attributes of the Philippines statehood
– its dominium (or ownership) and its imperium (or authority) — are thus qualified in
the MOA.
The first thing a student learns in law school is that the Constitution is the
supreme law, anything contrary to it being void. This is the principle of the supremacy
of the Constitution over official action. Its rationale was explained early in 1803 in
Marbury vs. Madison 26 by the U.S. Supreme Court, through the Chief Justice, thus:
Certainly, all those who have framed constitutions contemplate them as
forming the fundamental and paramount law of the nation, and
consequently, the theory of every such government must be that
an act of the legislature, repugnant to the constitution, is void.
But, under its terms, the MOA cannot be void for being contrary to the
Constitution. It is in fact irrelevant to ask whether the MOA is not unconstitutional.
So that it will not be unconstitutional, it requires that the Constitution be amended
so as to harmonize with the MOA. Adjust the Constitution to accommodate the
24 Cruz vs. Secretary of Environment and Natural Resources, 347 SCRA 18 (2000).
25 Governance par. 4.
26 1 Cranch (5 U.S.) 137 (1803).
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Vicente V. Mendoza
MOA, not the MOA to make it accord with the Constitution. Even the ancient
sophists could not have concocted such a theory to go around the doctrine of the
supremacy of the Constitution.
The significance of recognizing the BJE as a semi-independent
state
The only way to save the MOA from invalidity is to consider it an instrument
for the recognition and declaration of the independence of the BJE. But are we
willing or minded to do that, in the name of peace in Mindanao? Once signed, the
MOA, will immediately be effective, for under our system of government the
recognition of a state is the sole prerogative of the President. Its exercise is a political
question, which is beyond the power of judicial review. Insistence on review by the
courts of the act of the President can only result in a reprise of Javellana vs. Executive
Secretary, 27 in which it was held that whether or not the 1973 Constitution had been
effectively ratified by the people in so-called citizens assemblies was a political
question, giving the Court no alternative but to dismiss petitions raising this question
and, consequently, leaving “no further judicial obstacle” in considering the
Constitution in force and effect.
27 50 SCRA 30 (1973).
70 IBP JOURNAL

The Memorandum 0f Agreement on Ancestral Domain: A Commentary
The Memorandum of Agreement
on Ancestral Domain:
A Commentary
Nasser A. Marohomsalic*
Musa I. Malayang**
Carim L. Panumpang**
Rasol Y. Mitmug, Jr.**
VOLUME 33 NUMBER 2 (SEPTEMBER 2008)
A civilization can be judged
by the way it treats its minorities.
- Mahatma Gandhi***
On 27 July 2008 and after eleven (11) years of negotiation, often marked, nay,
marred with interregna occasioned by disagreement over nomenclatures 1 and
outbreaks of hostilities, the Government of the Republic of the Philippines
(GRP, for brevity) and the Moro Islamic Liberation Front (MILF, for brevity)
* Marohomsalic is the Chairman of the Muslim Legal Assistant Foundation (MUSLAF) that intervened in G.R.
Nos. 183591 and 183752 where petitioners assailed the constitutionality and validity of the MOA-AD, a
Member of the Executive Committee of the Legal Network for Truthful Elections (LENTE), a Co-Convenor
and Fellow of the Philippine Council for Islam and Democracy (PCID), a Presidential Assistant on Muslim
Affairs of the Integrated Bar of the Philippines (IBP), a founding Member of the Counsels for the Defense of
Liberties (CODAL), a former Commissioner of the Human Rights Commission, a former Commissioner of the
Regional Consultative Commission for Muslim Mindanao (RCCMM), and author of “Aristocrats of the Malay
Race: A History of the Bangsa Moro Muslims in the Philippines” and “Towards Peace, Autonomy and Human
Rights.”
** The rest of the authors are also executive officers of the MUSLAF.
*** WHITEKAR, BEN, ed. 1973. The Fourth World: Victims of Group Oppression—Eight Reports from the
Fieldwork of the Minority Rights Groups. New York: Schocken Books cited in Vijapur, Abdulrahim P.,
International Protection of Minority Rights, International Studies 2006, 43, 367 (2006)
1 In a meeting on 07 July 2008 at the Office of the Presidential Adviser for Peace Process (OPAPP) at Pasig City,
Secretary and Peace Adviser Esperon briefed Atty. Nasser Marohomsalic, former Secretary Amina Rasul, Atty.
Carim Panumpang, former Senator Santanina Rasul and Mr. Yusoph Ledesma that the GRP Peace Panel and
the MILF Peace Panel had a long lay-off over their disagreement on the use of certain words and phrases in the
MOA-AD. Government, he said, was aversed to the word “freedom” and the phrase the “right to selfdetermination”,
which are mantras to the MILF. On the other hand, the MILF objected to the phrase
“constitutional process.” In the MOA-AD, the word “freedom” and the phrase “right to self-determination”
didn’t appear, and so was the phrase “constitutional process.” In an interview with the media, Justice Secretary
Raul Gonzales disclosed that it was President Macapagal who deleted the word “freedom” from the draft MOA-
AD, the President thinking that “any mention of the word… might give the Muslim the idea that they could
secede [from the Philippines].” In the September 30, 2008 issue of the Philippine Daily Inquirer, p. A5.
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Marohomsalic, Malayang, Panumpang and Mitmug
concluded and initialed a framework agreement 2 known as the Memorandum of
Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement
of Peace of 2001 (MOA-AD, for brevity).
In the Agreement, the territorial boundary of the Bangsa Moro homeland is
classified as a “territory under compact” (daru-ul ma’hada) or “territory under peace
agreement” (dar-ul-sulh), 3 which shall be entrenched with further territories or areas 4 ,
which modality is a relative recent invention in treaty-making. 5 These geographic
areas constituted also the ancestral domain and ancestral lands of the Bangsamoro
over which the “Bangsamoro Juridical Entity (BJE for brevity) shall have authority
and jurisdiction,” particularly exercising “proprietary or patrimonial and political
sovereignty” and sharing powers with the Central Government according to some
terms and over some areas thereof including its territorial waters and seabed. 6
On the face of the Agreement is a recognition by the GRP and the MILF of
the need, nay, obligation to negotiate and conclude a Comprehensive Compact where
“the mechanisms and modalities for the actual implementation of this MOA-AD
shall be spelt out…” 7 including the “structure of governance” for the BJE and the
relationship between the Central Government and the BJE. 8
The MOA-AD was scheduled for ceremonial signing on 05 August 2008 in
Kuala Lumpur, Malaysia, between the representatives of the MILF and the GRP.
Mohagher Iqbal, the Minister of Information of the MILF and Head of its
Peace Panel, was set to sign the Agreement for the Liberation Front. For the
Government of the Republic of the Philippines, Secretary Rodolfo Garcia, the Chair
of the GRP Peace Panel, was tasked to sign it. To stand as witness-signatory for the
MOA-AD was Datuk Othman Bin Abd Razak, the Special Adviser to the Prime
Minister of Malaysia. Dr. Alberto G. Romulo, Secretary of Foreign Affairs of the
Republic of the Philippines and Dato Seri Utama Dr. Rais Bin Yatim, Minister of
Foreign Affairs of Malaysia, were named in the Agreement too as signatories –
witnesses. Also, the MOA-AD named Ambassador Sayed Elmasry, Adviser to
Organization of the Islamic Conference (OIC) Secretary General and Special Envoy
for Peace Process in Southern Philippines, as an endorser of the said Agreement
and was tasked to sign it as such.
Dignitaries and diplomats were invited to witness the occasion. Among those
who arrived in Malaysia included the U.S. Ambassador to the Philippines, the
2 See Atty. Michael O. Mastura, Brief Commentary on MOA-AD, at www.luwaran.com.
3 Paragraph 8 on Terms of Reference, MOA-AD.
4 Paragraph 2(c)(d)(e) on Territory, MOA-AD.
5 Mastura, supra.
6 Paragraph 6 on Concepts and Principles, MOA-AD and pars. 3, 5 and 6on Territory, MOA-AD.
7 Paragraph 7 on Governance, MOA-AD.
8 Paragraphs. 2, 4 and 8, id.
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Japanese Ambassador to the Philippines, the Australian Ambassador to the
Philippines, the Libyan Minister Counselor to the Philippines, Presidential Adviser
on the Peace Process Secretary Esperon, Jr. and Moro leaders including former
Secretary Amina Rasul, among others.
But the ceremonial signing did not happen. In the afternoon of 04 August
2008 and when everybody was in Malaysia for the purpose, the Supreme Court
issued a Temporary Restraining Order enjoining Secretary Rodolfo Garcia and the
GRP Peace Panel not to sign the MOA-AD pursuant to a number of petitions lodged
against the Agreement. 9
Opposition
Individually or collectively, the petitions scored the Agreement for its illegal
and unconstitutional provisions, the failure of government to render them a copy
thereof in violation of their constitutional right to public information and the lack of
transparency or lack of consultation during the negotiation of the MOA-AD.
Particularly, they raised alarums over the alleged creation in the MOA-AD of a
Bangsamoro Juridical Entity as a separate independent state and the dismemberment
of the country thereby.
In the media, petitioners drummed up their advocacy, denouncing the Executive
Department and the Presidency for arbitrarily ceding a piece of Philippine
territory in the south to the MILF to establish an independent Bangsamoro State
named Bangsamoro Juridical Entity. The negative coverage of the media of, and the
undue reaction of Christian leaders of influence to, the MOA-AD, muffled and
drowned the Muslim perspective on the Agreement.
But what is the MOA-AD all about? Why the furor? Is it a political furnace
that spews out toxins on the national fabric of the country?
MOA-AD is an Interim Agreement
The MOA-AD is a work in progress. A lawyer-member of the MILF Peace
Panel Atty. Michael Mastura, so described it, thus:
It is a framework agreement for entrenching later, and more detailed,
comprehensive compact (and legal measures) which elaborate the principles
declared in this Agreement. 10
9 The petitions are docketed as G.R. Nos. 183591 and 183752 and still pending with the Supreme Court as of this
writing.
10 Mastura, supra..
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Marohomsalic, Malayang, Panumpang and Mitmug
Attorney Musib Buat, another lawyer-member of the MILF Peace Panel,
described it as an Interim Agreement, its provisions needing further elaboration
and entrenchment for the Comprehensive Compact, which agreement comes at the
conclusion of the negotiation. 11
The MOA-AD said as much of its nature and characteristics. In paragraph 7
on Governance, the MOA-AD provides, thus:
The Parties agree that the mechanisms and modalities for the actual
implementation of this MOA-AD shall be spelt out in the Comprehensive
Compact to mutually take such steps to enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing
legal framework shall come into force upon signing of a Comprehensive
Compact and upon effecting the necessary changes to the legal framework
with due regard to non-derogation of prior agreements and within the
stipulated timeframe to be contained in the Comprehensive Compact.
The Bangsamoro Juridical Entity is the political structure that is a component
of mechanisms and modalities that will operationalize the whole concepts, principles
and measures of self-determination defined in the MOA-AD including the associative
relationship between the Central Government and the BJE. As it is, the BJE and
the latter’s fundamental structures (i.e., executive, legislative, judicial and
administrative) have yet to be negotiated and agreed upon for consideration into the
Comprehensive Compact. 12 Paragraph 8 of the MOA-AD under the same Title
specified the institutions that shall be devolved to the BJE but its details are made
subject to future discussion. These institutions are, namely, civil service, electoral,
financial and banking, education, legislation, legal, economic, and police and internal
security force, judicial system and correctional institutions. Other matters concerning
the details of the agreed consensus points on governance not covered under the
MOA-AD including the modalities for the governance intended to settle the
outstanding negotiated political issues are deferred to future negotiations of the
Comprehensive Compact. 13
Also, according to the MOA-AD, the details for the management of the
territorial waters of the BJE are going to be provided in an agreement to be entered
into by the Parties. 14
11 This is the sense of Atty. Musib Buat who spoke at a Public Forum on the MOA-AD at the Malcolm Theater,
U.P. College of Law, Diliman, Quezon City, 19 August 2008.
12 Paragraph 4 on Governance, MOA-AD.
13 Paragraphs 6 and 10, id.
14 Paragraph. 2(g) on Territory, MOA-AD.
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Requirement for the Enactment
of the BJE Basic Law and the Amendment/
Revision of the Constitution
It must be emphasized that the MOA-AD does not even consider the execution
of a Comprehensive Compact as the curtains of the peace talks.
Paragraph 6 of the MOA-AD under the Title on Governance provides that
“The Parties shall faithfully comply with their commitment to the associative
arrangements upon entry into force of the Comprehensive Compact” but the same
section provides for the proviso, albeit not in the usual legal form, that the
“institutions for governance in a Comprehensive Compact, together with its modalities
during the transition period, shall be fully entrenched and established in the basic
law of the BJE.” This means that the Comprehensive Compact has to go through
the legislative mill for its enactment into law.
Paragraph 7 of the same Title described the process more clearly, thus:
Any provisions of the MOA-AD requiring amendments to the existing
legal framework shall come into force upon signing of a Comprehensive
Compact and upon effecting the necessary changes to the legal framework
with due regard to non-derogation of prior agreements and within the
stipulated timeframe to be contained in the Comprehensive Compact.
By any language, the “legal framework” referred to here would mean the
Philippine Constitutional System and its statutory components.
In brief, the MOA-AD, in the above-named provision, calls for an enactment
of a Basic Law for the BJE, which power belongs to the Legislature and the Executive
Department, including the amendment or revision of the Constitution when necessary.
Our submission jives with the appreciation of the GRP Peace Panel that the
MOA-AD is “subject to further discussions as to the details of its provisions.” 15
Thus:
Once the details are discussed and agreed to, these will be incorporated,
among others, into the Comprehensive Compact document. 16
To implement provisions of the Agreement, the Executive branch will
undertake the necessary processes, where needed, to effect changes to
the existing legal framework. This will range from the passage of the
necessary executive issuances (Executive Order), national laws (Republic
15 Item No. 10 of the Primer on the Memorandum of Agreement on Ancestral Domain, prepared by OPAPP.
16 Id.
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Marohomsalic, Malayang, Panumpang and Mitmug
Acts), and perhaps Constitutional amendment (via Constituent Assembly
or Constitutional Convention) to legally entrench our arrangement on
the BJE. 17
The MILF is not oblivious to the political and legal predicament of the
Government of the Republic of the Philippines. In his article entitled The Constitutional
Dilemma: Impact and Implications on the GRP and MILF Peace Process, Atty. Buat wrote
enough of the sense of the liberation front on the constitutional track of the
government. Thus:
The MILF as we understand is not necessarily adverse to the use of the
phrase “constitutional process” but this should be meant as taking
appropriate legal steps including the revision or amendment of the
Philippine Constitution or the passage of a legislation by Congress, after
both Parties have signed and entered into a comprehensive peace compact,
during the transition period of the proposed Bangsamoro Juridical Entity
(BJE) in order to give meaning and effect the act of entrenching the latter
entity while the same undergoes institution and capacity building while
being devolved with appropriate powers and authority towards effective
self-governance preparatory to the determination of its political status
via popular consultation leading to a referendum. This is in essence is
along the track of the emerging approach of “earned sovereignty” the
elements of which are found in several international peace agreements,
such as that of the resolution of sovereignty-based disputes in South Sudan,
Bougainville, Western Sahara, Kosovo and Northern Ireland. 18
However, the process of revising or amending the Philippine Constitution
or the enactment of a legislative act by Congress is internal to the Central
Government and the MILF do not wish to participate in said political
exercise being consistent on its position in not recognizing the Constitution
as a framework of the peace negotiations but that of international law. It
is the duty and obligation of the government as a Party to the GRP-MILF
Peace Talks to take appropriate legal steps or “constitutional processes”
whenever appropriate to see to it that the Peace Accord reached and
entered into by the contracting Parties are implemented and complied
with by both sides. 19
In his Brief Commentary on MOA-AD, Atty. Mastura expressed enough his mind
on the MOA-AD as a treaty or one evolving into a treaty 20 and noted how government
exercises or forges international relation by way of an Executive Agreement, which
mode bypasses Congress, and by way of a Treaty, which requires concurrence by the
17 Id.
18 At www.luwaran.com, 19 Dec. 2007.
19 Id.
20 Paragraph. 8, Mastura, supra.
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The Memorandum 0f Agreement on Ancestral Domain: A Commentary
Senate. 21 Atty. Mastura concedes that the government may do its part and go through
either approach in obeisance to its constitutional traditions, explaining that –
For the MILF, that is a matter internal to the Government side as a
shared competence. 22
He cautioned though and wrote that “procedural legitimacy obliges both GRP
and MILF peace negotiating panels not only to adhere to the principle of nonderogation
of agreed terms/texts but more importantly to sustain closure.” 23
As it is, government has repudiated the MOA-AD, publicly announcing that it
will not sign it in its present form or in any other form. Even under normal
circumstances, nobody could be adequately competent enough to foretell what will
become of the MOA-AD in the negotiation for the Comprehensive Compact.
A House of Haze
In the canvas of the MOA-AD and as now stand things , indeed we see a
“political house,” the BJE, as a grandiose caravansary hulked in some yonder oasis
but blurry under the noonday heat of the desert, so to speak. It could turn out to be
some mirage and, indeed, it can become it, a picture in the mind, where government
chooses to take its political caravan astray, which it already did, reneging on its
commitment to journey by the path of peace and reverting to the course of war.
Indeed, the MOA-AD is an Interim Agreement.
MOA-AD is an International Agreement
Even if the MOA-AD is considered as an Interim Agreement, it is our
submission that it can stand alone, it being a Pactum de Contrahendo and an International
Agreement in the category of the Tripoli Agreement of 1976.
In Abbas vs. Comelec, 24 the Court rendered its estimation of the Tripoli
Agreement as binding International Agreement in this wise, thus:
Assuming for the sake of argument that the Tripoli Agreement is a binding
treaty or international agreement, it will fall in the same class as an act of
Congress like R.A. 6737.
21 Paragraph. 12, id.
22 Id.
23 Atty. Michael O. Mastura, Misdirection of the Muslim Moro Agenda in Constitutionalism Commentary, at
www.luwaran.com.
24 179 SCRA 287, 1989.
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Marohomsalic, Malayang, Panumpang and Mitmug
This ruling explained that as such law, Republic Act 6737 or the Organic Act
of the Autonomous Region in Muslim Mindanao has supplanted it, it being a
subsequent law. 25 But this jurisprudence has been qualified in Bayan vs. Executive
Secretary, which underscores the fact that “international law continues to make no
distinction between treaties and executive agreements; they are equally binding
obligations among nations.” 26 The Court amplifies, thus:
As an integral part of the community of nations, we are responsible to
assure that our government, Constitution and laws will carry out our
international obligation. Hence, we cannot readily plead the Constitution
as a convenient excuse for non-compliance with our obligations, duties
and responsibilities under international law. 27
Beyond this, Article 13 of the Declaration of Rights and Duties of States
adopted by the International Law Commission in 1948 provides: “Every
State has the duty to carry out in good faith it obligations arising from
treaties and other sources of international law and it may not invoke
provisions in its Constitution or its laws as an excuse for failure to perform
its duty. 28
Equally important is Article 26 of the Convention which provides that
“Every Treaty in force is binding upon the parties to it and must be
performed by them in good faith.” This is known as the principle of pacta
sunt servanda which preserves the sanctity of treaties and has been one of
the most fundamental principles of positive international law, supported
by the Jurisprudence of international tribunals. 29
The MILF has International Personality
to Enter into International Agreements
The Tripoli Agreement was signed by Nur Misuari, Chair of the MNLF, and
Undersecretary of National Defense for Civilian Relations Carmelo Barbero for the
Government of the Republic of the Philippines. Signed in Tripoli, Libya, on 23
December 2006, it was facilitated by the Libyan Arab Republic and its signing was
witnessed by the Minister of State for Foreign Affairs of the Libyan Arab Republic
and the Secretary General of the Organization of the Islamic Conference. Like the
Tripoli Agreement, the MOA-AD was facilitated by the Malaysian Government and
initialed for signing by the representatives of the Government and the Republic of
the Philippines and was supposed to be witnessed by the Special Adviser to the
25 Id.
26 342 SCRA 489, 2002.
27 Id., p. 493.
28 Id.
29 Id. Citation omitted.
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Prime Minister of Malaysia, the Secretary of Foreign Affairs of the Philippines, the
Minister of Foreign Affairs of Malaysia, and the Adviser to the Organization of
Islamic Conference (OIC) Secretary General, and the Special Envoy for the Peace
Process in Southern Philippines, among others. The botched signing was of no
moment, since for all intents and purposes the Agreement was authenticated by the
parties, hence, agreed upon and the signing, if it happened, would therefore be only
a mere formality. 30 Secondly, many of the provisions in the MOA-AD are a
reinstatement of provisions of previous documents including the GRP-MILF Tripoli
Agreement of Peace in 2001, the mother agreement of the MOA-AD.
Like the Moro National Liberation Front, the MILF is a liberation front and
to date has surpassed the MNLF in terms of strength. It has engaged the Philippine
military in a fierce conventional warfare for six (6) months in 2000 and held at bay
the military in many battles despite the latter’s great superiority in number and
equipment.
In the General Framework of Agreement of Intent Between the Government
of the Republic of the Philippines (GRP) and the Moro Islamic Liberation Front
(MILF), dated 27 August 1998, the government saw fit to sign the Agreement with
its counterparts from the MILF that included witnesses from its hierarchy including
Sheik Abukhalil Yayha, Chairman of the Majlis Al-Shura (the MILF Parliament) and
Sheik Ali Ismail, the Chairman of the MILF Supreme Court.
Clearly, then, the MILF has earned an international personality akin to a State,
or lesser to a State but impressed with its characteristics in substantive terms, granting
it competence to enter into treaties or agreements pursuant to international law.
Article 3 of the Vienna Convention on the Law of Treaties recognizes that
under customary international law, entities other than States may have international
personality necessary to allow them to enter into treaties. 31 The constituent
instruments of certain international organizations authorized them to enter into
treaties. 32 The United Nations Charter specifically authorizes the organization to
conclude agreements with member States and with Specialized Agencies. 33
[Certainly, the MILF can come within the definition of an entity with
international personality, to which the Government of the Republic of the Philippines
has to concede in obeisance to its commitment under the International Covenant on
Civil and Political Rights that promotes the right to self-determination of peoples,
and for which the U.N. Human Rights Committee has urged “all State parties [like
30 During the oral arguments before the Supreme Court, Atty. Agabin, counsel for petitioner Senator Roxas,
argued for this position as grounded in international law.
31 Miriam Santiago and Jorge Coquia, International Law and World Organizations. 2005: Central Book Supply,
p. 370.
32 Id.
33 Id., Articles 43 and 63.
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Marohomsalic, Malayang, Panumpang and Mitmug
the Philippines] …to take positive action to facilitate realization of and respect for
the right of peoples to self-determination.” 34
At this point, the question may be posed: To what extent is the Government
of the Republic of the Philippine bound to implement the MOA-AD? Or, what
provisions of the MOA-AD bind the Government of the Republic of the Philippines
may be bound to observe and implement?
It is necessarily apposite to discuss the kind of peace process that governed
the negotiation and the treatment both parties accorded to interim agreements or
past agreements in every phase of the peace process.
Interim Agreements in Every Phase
or Strand of the Peace Process
are Implemented
The negotiation between the MILF and the Government of the Republic of
the Philippines went by strands or agenda.
In the Agreement on Peace Between the Government of the Republic of the
Philippines and the Moro Islamic Liberation Front, they agreed to go by the peace
process progressively, dividing the agenda into separate timeframes, first, the Security
Aspect, second, the Rehabilitation Aspect, and third, the Ancestral Domain Aspect. 35
They addressed another issue later on for its fourth strand, the Political Governance
Aspect.
In this Peace Agreement, both Parties committed to implement all past
agreements. 36
In every strand, indeed, they have executed agreements. For the Security
Aspect, they executed the following major agreements and implemented them,
namely: Agreement for General Cessation of Hostilities, 21 July 1997; Agreement
on the Gradual Repositioning of GRP Forces in Rajamuda and its Environs and the
Return of Evacuees, 03 September 1997; Agreement to Sustain the Quest for Peace,
06 February 1998, which provided for the creation of Quick Reaction Teams (QRT)
to immediately address alleged violations of the Agreement on the General Cessation
of Hostilities, among others; Agreement to Reaffirm the Pursuit of Peace, 10 February
1999, which activated the GRP-MILF Coordinating Committees on Cessation of
Hostilities (CCCH); various agreements on the acknowledgment of MILF camps to
34 General Comment 12 (21), par. 6, Ai39140(1984), p. 143, cited in McCorquodale, Self-Determination Human
Rights Approach, The International Comparative Quarterly, Vol. 43, No. 4 (Oct. 4, 1994, pp. 857-885).
35 Said Agreement was signed on 22 June 2001 in the presence of the representative of Gaddafy International
Foundation for Charitable Associations, the Government of Malaysia and the Government of Indonesia.
36 Paragraph. A, id.
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be covered by the cessation of hostilities for the duration of peace talks; Joint
Communiqué on the isolation and interdiction of all criminal syndicates and kidnapfor-ransom
groups and the creation of an Ad Hoc Joint Action Group for the purpose,
18 October 2001; the Agreement on the General Framework for the Resumption of
Peace Talks Between the Government of the Republic of the Philippines and the
Moro Islamic Liberation Front, 24 March 2001, where both Parties suspended
offensive military operations; a Joint Statement, dated 02 December 2003, where
the MILF committed support to the campaign of government against the terrorist
Jemaah Al-Islamiyah.
Both Parties requested Malaysia to fast track the deployment of its
International Monitoring Team (IMT), which arrived in early October 2004. 37 The
Team was led by Malaysia 38 with a substantial contingent from Brunei and Libya. 39
Local Monitoring Team in every strategic area in the region was also organized.
The presence of the IMT drastically reduced ceasefire violations from 500 ceasefire
violations between 2002 and 2005 to only 37 mostly minor ceasefire violations. 40
On the rehabilitation and development strand of the peace process, the Parties
entered into many agreements including ones creating the Bangsamoro Development
Agency tasked to manage foreign funding for rehabilitation of the victims of war
and the building of infrastructure and the establishment of the Multi-Donor Trust
Fund led by the World Bank. 41 Under the auspices of the Government of Malaysia
and other donor countries from the developed world, Moro professionals were sent
to the Asian Institute of Management for leadership and competence training, while
others were sent to the United States and Australia. The strategy was designed to
build a manpower pool of competent Moro professionals where the BJE may draw
its personnel needs.
The third strand of the peace talks, the Ancestral Domain Aspect, produced
the MOA-AD, which is now much maligned in the national debate and reeking of the
fulminations from its detractors.
Nevertheless, as noted in the said Peace Agreement, the negotiation by strands
described the “incremental characteristics of the peace process” and, with every
agreement in every phase of the peace process implemented, the “progressive
resolution of the Bangsamoro problem …” 42 rolls on.
37 See Joint Statement between GRP and the MILF, 04 October 2004.
38 See Joint Statement between the GRP and the MILF, o4 May 2005.
39 See Joint Statement between the GRP and the MILF, o3 June 2006.
40 Joint Statement between the GRP and the MILF, 11 September 2005.
41 Statement of Understanding between the GRP and the MILF, 06 April 2004.
42 Paragraph A(1), Agreement on Peace Between the Government of the Republic of the Philippines and the Moro
Islamic Liberation Front, 22 August 2001.
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Illegal and Unconstitutional Provisions
are Excluded from Implementation
Admittedly, there are illegal and unconstitutional provisions in the MOA-AD.
The devolution to the BJE of the institutions of election, civil service, police
and internal security under paragraph 8 of the MOA-AD on Governance, runs afoul
with the Constitution which provides for their independence and fiscal autonomy
under their respective governing Commissions. 43
The 75-25 term of sharing in favor of the BJE of income derived from strategic
minerals including oil, fossil fuel and the like 44 collides with the 50-50 split provided
for in Section 5(b), Article XII of Rep. Act No. 9054, the Organic Act for the
Autonomous Region in Muslim Mindanao.
In the Organic Act, the control and supervision over the exploration, utilization,
development and protection of strategic minerals such as uranium, petroleum and
other fossil fuels, mineral oils, all resources of potential energy, as well as national
reserves and aquatic parks, forest and watershed reservations are vested in the
national government. 45 In the MOA-AD, however, jurisdiction and control over,
and the right of exploring for, exploiting, producing and obtaining all potential sources
of energy, petroleum in situ, fossil fuel, mineral oil and natural gas, whether onshore
or offshore, is vested in the BJE, except in times of emergency, when public interest
so requires, when the central government may, during the emergency, for a fixed
period and under reasonable terms as may be agreed by both Parties, temporarily
assume or direct the operations of such strategic resources. 46
“By constitutional fiat and by the intrinsic nature of his office,” the Court
ruled in Bayan vs. Zamora, “the President, as head of State, is the sole organ and
authority in the external affairs of the country. In many ways, the President is the
chief architect of the nation’s foreign policy; his “dominance in the field of foreign
relations is (then) conceded.” Wielding vast powers and influence, his conduct in the
external affairs of the nation, as Jefferson describes, is “executive altogether.” 47 In
the MOA-AD, however, lesser powers of diplomacy are granted to the BJE such as
the sending of trade missions to foreign countries with which it has economic
cooperation agreements, 48 participation in international meetings and events and in
official Philippine missions and delegations in the negotiation of border agreements
or protocols for environmental protection, equitable sharing of incomes and revenues
43 See Article IX and Section 6, Article XVI, 1987 Philippine Constitution.
44 Paragraph 6 on Resources, MOA-AD.
45 Section 5, Article XII, 1987 Philippine Constitution.
46 Paragraph 5 on Resources, MOA-AD.
47 Bayan vs. Zamora, 342 SCRA 494, 2000. Citation omitted.
48 Paragraph 3(a) on Resources, MOA-AD.
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in the areas of sea, seabed and inland seas or bodies of water adjacent to or between
islands forming part of the ancestral domain, in addition to those pertaining to
fishing rights. 49
But these illegal and unconstitutional provisions in the MOA-AD are not selfexecuting,
the disregard of which cannot give rise to a cause of action in the courts; 50
they are not intended to be implemented immediately. The MOA-AD itself
proscribed it, providing conditionalities for their efficacy. Thus:
Any provision of the MOA-AD requiring amendments to the existing
legal framework shall come into force upon signing of a Comprehensive
Compact and upon effecting the necessary changes to the legal framework
with due regard to non-derogation of prior agreements and within the
stipulated timeframe to be contained in the Comprehensive Compact. 51
The MOA-AD is Pactum de Contrahendo
The Government of the Republic of the Philippines, however, is duty bound
to implement the MOA-AD as it pertains to its commitment to pursue the peace
process and implement this framework agreement on territory. This obligation on
the part of government is set out in Paragraph 2(a) on Territory of the Agreement,
thus:
The GRP and MILF as the Parties to this Agreement commit themselves
to the full and mutual implementation of this framework agreement on
territory with the aim of resolving outstanding issues that emanate from
the consensus points on Ancestral Domain.
In the MOA-AD, the territorial core of the BJE would consist of the present
Autonomous Region in Muslim Mindanao including the municipalities of Baloi,
Munai, Nunungan, Pantar, Tagloan and Tangkal in the province of Lanao del Norte
that voted for inclusion in the ARMM during the 2001 plebiscite. 52 Without
derogating from the requirements of prior agreements, the Government stipulates
to conduct and deliver, using all possible legal measures, within twelve (12) months
following the signing of the MOA-AD, a plebiscite covering the areas as enumerated
in the Annex 53 The Annex constitutes an integral part of this framework agreement.
Towards this end, the Parties would endeavor to complete negotiations and resolve
all outstanding issues on the Comprehensive Compact within fifteen (15) months
49 Paragraph 4(b), id.
50 Kilosbayan vs. Morato, 246 SCRA 564, 1995.
51 Paragraph 6 on Governance, MOA-AD.
52 Paragraph. 2(c) on Territory, MOA-AD.
53 Paragraph. 2(d), id.
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from the signing of the MOA-AD. 54 Government also committed to render special
socio-economic and cultural affirmative actions pending the conduct of a plebiscite
which was slated not earlier than 25 years from the signing of the Comprehensive
Compact to determine the question of their accession to the BJE. 55
The Parties agree that the mechanisms and modalities for the actual
implementation of this MOA-AD shall be spelt out in the Comprehensive Compact
to mutually take such steps to enable it to occur effectively. 56
On the whole the MOA-AD contains measures and principles both parties
have committed to incorporate into the Comprehensive Compact, which obligation
makes for the MOA-AD as a Pactum de Contrahendo, an agreement by a State to
conclude a later and final agreement. 57
It must be emphasized that the MOA-AD is not the only agreement where
both Parties committed to pursue the quest for peace.
In the General Framework of Agreement of Intent Between the Government
of the Republic of the Philippines (GRP) and the Moro Islamic Liberation Front
(MILF) executed as early as 1998, “The Parties committed to pursue the peace
negotiations on the substantive issues and soon as possible, and resolutely continue
the negotiations until the Parties reach a negotiated political settlement.” 58 This
agreement assumes legal significance with the signature of certain witnesses from
the MILF side, namely, Sheikh Abukhalil Yayha, the Chairman of the Majlis Al-
Shura (the MILF Parliament), and Sheikh Ali Ismail, the Chairman of the MILF
Supreme Court.
On 24 March 2001, the Parties entered into the Agreement on the General
Framework for the Resumption of Peace Talks Between the Government of the
Republic of the Philippines and the Moro Islamic Liberation Front where “the Parties
commit to honor, respect and implement all past agreements and other supplementary
agreements signed by them” 59 and “to resume the stalled peace negotiations
immediately after the signing of this Agreement, and continue the same where it
had stopped before April 27, 2000 until they shall have reached a negotiated political
settlement of the Bangsamoro problem.” 60
54 Id.
55 Paragraph. 2(c), id.
56 Paragraph 7 on Governance, MOA-AD.
57 Santiago and Coquia, supra, p. 367.
58 Article 1, General Framework of Agreement of Intent Between the Government of the Republic of the
Philippines and the Moro Islamic Liberation Front, 1998.
59 Article IV, id.
60 Article 1, id.
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The point is, the Parties have laid out the path towards a political negotiated
settlement of the so-called Moro Problem, and they have in fact trodden the track
too far ahead to make a turn-around and make one excuse after another. The rule
of pacta sunt servanda requires that both the Government of the Republic of the
Philippines and the Moro Islamic Liberation Front beat the path of peace and continue
with the negotiation for the execution of the Comprehensive Compact pursuant to
the Pactum de Contrahendo they both signed, which is the MOA-AD.
A Case for Statecraft and Parens Patriae
As discussed, the impaired provisions of the MOA-AD are not self-executing
and they find expressions in the MOA-AD in keeping with a new paradigm in the
resolution of ethno-political conflicts brought about by the emergence of liberation
movements asserting their right to self-determination against the State. And the
government kept to this approach in its negotiation with the MILF. 61
Earned-Sovereignty Approach
This paradigm does not do violence to the constitution but seeks to resolve
the tension between the claim of national sovereignty by insurgent ethnic communities
flowing from their right to self-determination and the assertion of government of its
State sovereignty with the view of making adjustments to the legal frameworks for
the resolution of ethno-political conflicts. It does not perceive “sovereignty” to be a
unitary right, but rather a bundle of authority and functions which may at times be
shared by the state and sub-state entities as well as international institutions. 62
Earned-sovereignty encompasses six (6) elements – three (3) core elements
and three (3) optional elements. 63
The first core element is shared sovereignty. In each case of earned
sovereignty the state and sub-state entity may both exercise sovereign
authority and functions over a defined territory. In some instances,
international institutions may also exercise sovereign authority and
functions in addition to or in lieu of the parent state. In rare cases, the
international community may exercise shared-sovereignty with an
internationally recognized state. 64
61 Paul William, Earned Sovereignty: The Road to Resolving the Conflict Over Kosovo’s Final Status, Denv. J.
Int’l L. Pol’y, Vol. 31: 3, p. 390.
62 Karen D. Hey mann, Earned Sovereignty for Kashmir: The Legal Methodology to Avoiding a Nuclear
Holocaust, 19 A.M. Int’l L. Rev. (forthcoming Fall 2003. In James Hooper and Paul Williams, Earned
Sovereignty: The Political Dimension, Renv. L. Int’l & Pol’y, Vol. 31: 3, 2003, p. 357.
63 Hooper and William, supra, pp. 356.
64 Id.
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The second core element is institutional building. This element is
utilized during the period of shared sovereignty prior to the determination
of final status. Here the sub-state entity, frequently with the assistance of
the international community, undertakes to construct institutions for selfgovernment
and to build institutions capable of exercising increasing
sovereign authority and functions. 65
The third core element is the eventual determination of the final
status of the sub-state entity and its relationship to the state. In many
instances the status will be determined by a referendum, while in others
it may involve a negotiated settlement between the state and sub-state
entity, often with international mediation. Invariably the determination
of final status for the sub-state entity involves the consent of the
international community in the form of international recognition. 66
The first optional element is phased sovereignty. Phased sovereignty
entails the accumulation by the sub-state entity of increasing sovereign
authority and functions over a specified period of time prior to the
determination of final status. 67
The second optional element is conditional sovereignty.
Conditionality may be applied to the accumulation of increasing sovereign
authority and functions by the sub-state entity, or it may be applied to the
determination of the sub-state entity’s final status. In either case the substate
is required to meet certain benchmarks before it may acquire
increased sovereignty. These benchmarks may include conditions such
as protecting human and minority rights, developing democratic
institutions, instituting the rule of law, and promoting regional stability. 68
The third optional element, constrained sovereignty, involves
continued limitations on the sovereign authority and functions of the
new state, such as continued international administrative and/or military
presence, and limits on the right of the state to undertake territorial
association with other states. 69
This approach to conflict-resolution was used to resolve the conflict in Northern
Ireland which resulted in the execution of the Good Friday Accord that granted the
Irish Catholics in Northern Ireland the freedom to elect independence from the
United Kingdom in a referendum, or join the Republic of Ireland after seven years;
the insurgency of the Christian minority Machakos of Southern Sudan who eked
65 Id.
66 Id.
67 Id.
68 Id., p. 356-357.
69 Id., p. 357.
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out the Machakos Protocol that granted them autonomy and the right to secede
after six (6) years should they choose to; the ethno-political conflict in Kosovo which
brought about the independence of Kosovo; and the insurgency of the Christian
East Timorese with phased sovereignty that led to full independence. 70
Belfast Agreement
or the Good Friday Accord
Particularly, the Good Friday Accord is one model that the MOA-AD is hewing
very closely to. The negotiation between the Republic of Ireland, the United Kingdom
and the Sin Fein, the political arm of the Irish Catholics in Northern Ireland, went
by in three (3) strands. Among others, the Agreement provides for the repeal of
laws and the amendment of the Constitution of the Republic of Ireland to adjust to
the Accord. Government has taken note of the significance of this model, thus:
Peace process models in other parts of the world (Sin Fein in Northern
Ireland, Gam in Aceh, Fretelin in Timor Leste, etc.) have successfully
showcased that in a post peace settlement scenario, it is possible for
revolutionary group to later on shift their arena of struggle – from armed
(rebel group) to parliamentary (political party) – where they are free to
advance their political programs and compete for political power through
the electoral system. 71
A Hard Ball
The negotiation for the MOA-AD was the most difficult phase in the peace
process. The Parties had gone through five (5) Exploratory Talks from 20 April
2005 through 04 May 2006, without forging any final draft. In the 13 th Exploratory
Talks on 02 October 2007, the Parties broke the impasse. 72 But in the Exploratory
Talks on 15-16 December 2007, the MILF Peace Panel walked out on the GRP
Peace Panel at Kuala Lumpur, Malaysia, when the latter submitted its own version
of a Memorandum of Agreement that did away with the consensus points on Ancestral
Domain. 73
Obviously, government did not speak with one voice on the issue of Moro selfdetermination.
On June 17, 2007, Prof. Rudy Rodil of the GRP Peace Panel announced
in a public forum sponsored by the United States Institute of Peace at the Asian
Institute of Management at Makati City that the government has offered to recognize
70 See Paul William, supra, p. 390; also Hooper and William, supra, pp. 359-375.
71 Item No. 19, Primer on the Memorandum of Agreement on Ancestral Domain, prepared by OPAPP.
72 At www. mindanews.com, 20 December 2007. In Atty. Buat’s The Constitutional Dillema…, supra, at
www.luwaran.com, 19 December 2007.
73 Atty. Buat, id.
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the Moro right to self-determination, except on matters of national defense, foreign
affairs, monetary system and postal system. 74
Finally, on July 26, 2008, the MOA-AD was concluded and initialed. And as
they say, the rest is history.
But we do not wish history on the MOA-AD to be a rendition of its detractors.
Government has Bounden Duty
to Promote Right to Self-Determination
of the Bangsamoro
The GRP Peace Panel has not committed any grave abuse of discretion
amounting to lack or excess of jurisdiction when it concluded and executed or initialed
the MOA-AD. The act is in keeping with the right to self-determination of the
Bangsamoro that’s enshrined in our Constitution. Thus:
The State recognizes and promotes the rights of indigenous cultural
communities within the framework of national unity and development. 75
Section 2, Article X of the Constitution provides for a limited autonomy for
Muslim Mindanao, enumerating the powers therein devolved to the autonomous
government. But at the end of the list is a “catch all” provision that authorizes
Congress to legislate such “other matters as may be authorized by law for the
promotion of the people of the region.” 76 This is re-enforced by Section 1, Article
XIII of the Constitution, thus:
The Congress shall give highest priority to the enactment of measures
that protect and enhance the right of all the people to human dignity,
reduce social, economic and political inequalities and remove cultural
inequities by equitably diffusing wealth and political power for the common
good.
x x x x
By its plenary power, therefore, Congress can initiate and enact laws to expand
the powers and jurisdiction of the autonomous government or cause the amendment
or revision of the Constitution to accommodate the aspirations of the Bangsamoro.
Obviously, this is what the GRP Peace Panel had in mind when it drafted the MOA-
74 Rudy Rodil, Finding New Paths to Peace: Ancestral Domain and Moro Self-Determination. In Autonomy and
Peace Review, Vol. 3:3, July-September 2007, p.7.
75 Section 2, Article II, 1987 Philippine Constitution.
76 Section 9, Article X, 1987 Philippine Constitution.
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AD and provided for the constitutional requirement for the enactment of a Basic
Law for the BJE and the need for the amendment or revision of the constitution, as
the case may be, to make effective the MOA-AD or the Comprehensive Compact.
In a manner of speaking, the GRP Peace Panel, by negotiating with the MILF
and concluding the MOA-AD with them, was acting like it were a consultative body
making expert opinion on the Moro problem and its resolution at the end of the
day. But they were not just any agency sui generis; they’re representatives of the
Executive Department and carried the magistracy of the Office of the President,
which branch of government participates in law-making by its certification of bills as
a priority policy of government and its exercise of veto power.
Indeed, we cannot extrapolate from their actuation any malice or despotism
as would indict them for grave abuse of discretion when they took to the Earned-
Sovereignty Approach in their negotiation with the MILF and concluded the MOA-
AD. What they did in fact was creative enough to address the aspirations of the
Bangsamoro and their contemporary rebellion that has remained a sore in the body
politic for almost 40 years.
MOA-AD is within the Framework
of the Constitution
To emphasize, the GRP Peace Panel, in dealing with the MILF and introducing
into the MOA-AD so-called “questionable” provisions and agreeing to the adjustment
of the Philippine Constitution to the MOA-AD where necessary, has not deviated
from our constitutional framework, with the Constitution providing, in the first
place, for mechanisms for its amendment or revision. 77
The Constitution is not a tablet of granite or diamond of eons. “As any human
production,” ruled Justice Laurel in the 1936 case of Angara vs. Electoral Commission,
“our Constitution is of course lacking in perfection and perfectibility…” 78
The MOA-AD is one measure too to respond to the treaty obligations of the
Government of the Republic of the Philippines under the International Covenant
on Civil and Political Rights, the International Covenant on Social, Economic and
Cultural Rights and the Universal Declaration of Human Rights that all promote
self-determination of all peoples.
In its General Comment on Article 1 of the International Covenant on Civil
and Political Rights, the Human Rights Committee of the United Nations urged as
early as 1984 “all State parties to the Covenant… to take positive action to facilitate
77 See Article XVII, id.
78 63 Phil. 157, 1936.
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realization of and respect for the right of peoples to self-determination.” 79 The U.N.
General Assembly issued a Friendly Relations Declaration which provides that all
peoples have the right freely to determine, without external influence, their political
status and that a people choosing to live as a State has the perfect right to do so and,
in such case, every State has the duty to respect this right. 80
A Redress for Historical Injustice
At this juncture, it must be stated that the MOA-AD offers less than the
suzerainty of the Bangsamoro of the olden days, which was diminished through the
years owing to colonial intrusion and the complicity of the Filipino Christian majority.
In Southeast Asia, in their Sultanic System the Bangsamoro attained the highest
stage of civilization unaided. 81
In the 15 th century and when most of the country was a scattered, disparate
barangay, the south flourished with the Sultanate of Sulu. 82 Then came the Rajahship
of Buayan. The Sultanate of Maguindanao came around the second decade of the
16 th century and began its zenith during the reign of Sultan Kudarat in the 17 th
century. 83 The Sultanate of Butig developed alongside Maguindanao, striding to
prominence and challenging Spanish presence elsewhere and beyond its suzerainty
early in the 18 th century. 84 In the opening decade of the 18 th century, Maguindanao
spun out a part of its jurisdiction to become the Sultanate of Kabuntalan. 85 By the
third of the 18 th century, nigeris in Lanao grew more independent from Butig, 17 of
which were ruled by potentates called Rajah and 16 by principales bearing the title of
Sultan. 86 In the fight against Spain, they confederated into what is now called the
Pat a Pangampong a Ranao or the Four Principalities of Lanao. 87
These sultanates forged diadic and political alliances among themselves. In
the fight over the throne of Brunei between two cousins in the opening decade of the
18 th century, the Bangsamoro harkened to the call of the Sultan of Sulu and organized
79 General Comment 12(1) par. 6, AI39140, (1984), p. 143. Cited in Robert McCorquodale, supra, pp. 857-88.
80 U.N. G.A. Res. 2614 (XXV) 24 Oct. 1970. The relevant part of the resolution (“The principle of equal rights
and self-determination of peoples”) provides that “in pursuit of their right to self-determination, peoples are
entitled to seek and receive support in accordance with the purposes and principles of the Charter,” cited in
Koskenniemi, Martti, National Self-Determination Today: Problems of Legal Theory and Practice, The
International and Comparative Law Quarterly, Vol. 43, No. 2 (Apr. 1994), pp. 241-269.
81 Nasser A. Marohomsalic, Aristocrats of the Malay Race: A History of the Bangsa Moro in the Philippines. 2001:
Quezon City, p. 14
82 Id., p. 37.
83 Id., pp. 35, 55-58.
84 Id., pp. 35, 58, 65 and 66.
85 Id., p. 59.
86 Id., pp. 84-85.
87 Id., pp. 81-82.
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and sent an expeditionary army to quell the regional conflict in favor of Sultan
Muaddin. 88 Against Spain, they roved the Eastern Seas and raided its tributaries
and citadels in the archipelago. 89 Moro corsairs were usual sights in the domain of
the Dutch and the English in the East Indies, assisting their Malay brethren in their
resistance against these European powers. 90
The Sultanates carried on diplomatic relation with foreign powers and concluded
treaties with them. 91 In the age of colonization, the capital of the Sulu Sultanate was
the emporium of the East. European maritime fleets including men of war also
frequented the port of Sultan Kudarat of Maguindanao by the Pulangi River and the
Tubok tributary of the Illana Bay in the domain of the Iranuns. 92
Spain coveted Moroland for vassalage and waged war against its sultanates for
more than 300 years. Until its departure from its forlorn enclaves in Mindanao in
1898, the Bangsamoro potentates flew their flags, proud and free, unconquered and
unbowed. Spain ceded the country including Moroland to America in the Treaty of
Paris following the defeat of its flotilla off Manila Bay to American gunboats on
May 1, 1898.
Against America, the Bangsa Moro were vanquished militarily, but they
remained in the ways of their ancestors even as they kept faith in Islam. Writes Tan,
the “Muslim submission to American rule was essentially a surrender of an inferior
weapon system to a superior one. The Muslim leaders and their followers never
recognized that their fighting qualities were inferior or that their surrender to the
American authorities was a negation of their military tradition. Given the same
sophistication in military technology, the Muslim armed struggle would have thwarted
American rule at least in Mindanao and Sulu.” 93 The American colonialists created
the Moro Province under its military in Mindanao for a time as a protectorate.
They entered into treaties with the Sultanates of Sulu where they recognized the
religious and judicial authority over the realm, among others. 94 Generally, the military
government did not intervene in the communal affairs of the Bangsamoro as long as
these didn’t disturb the peace and its pacification campaign. 95 American Justice
George Malcolm of the Philippine Supreme Court summed up American policy
towards the Moro, thus:
88 Id., pp. 23-24, 82.
89 Chapter 2, id. Also pp. 55-58, id.
90 Id., pp. 14. 15, 24-25, 27, 67 and 69.
91 Id., pp. 27-28, 70-71 and 109.
92 Id., pp. 16, 17, 21 and 83-84.
93 Samuel K. Tan, The Filipino Muslim Armed Struggle – 1900-1972, 1977: Filipinos Foundation, pp. 36-37.
94 Marohomsalic, supra, pp. 27-28.
95 Id., p. 28.
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One cardinal point in the policy towards Moros has consistency been not
interfere with their religion. This policy has meant tacit recognition of
polygamy and even slavery but this could not be helped… To emphasize
the desire for unity, self-government has been partially accorded the
Moros. The datus and sultans have not been molested when they have
settled the disputes of their followers. 96
In the grant of Philippine independence in 1946 and despite their opposition
and open rebellion, America made Moroland a part of the new Republic whose
northern population migrated in great numbers to their homeland through the years.
In the early 1900s, the Bangsamoro accounted for majority of the population of
Mindanao. By the close of the 20 th century, they have been reduced to a minority.
Today, they roughly constituted 20% to 25% of the population.
Dislocated and marginalized by war and government policy, their region has
become the poorest in the country. ARMM is the only region in the country that
still has a poverty incidence level above 50% as of 2003. 97 In the Philippine Human
Development Report of 2005, four of the five ARMM provinces occupy the last
four slots among the bottom ten provinces in the Human Development Index
Ranking. 98 In the Summary of the Poorest of the Poor in 2003 by the National Anti-
Poverty Commission, 23 out of the 40 municipalities are from Muslim Mindanao.
The region had the poorest health situation in terms of life expectancy, infant mortality
and access to public health services. 99 Its simple literacy rate is 70.2%, significantly
lower than the national average of 93.4%. 100
Despite the introduction of electoral democracy and the “political integration”
of the Bangsamoro into the larger body politic, the Bangsamoro kept faith with their
past, abiding by the spirit of freedom of their ancestors, the revolutionaries among
them including the MNLF and the MILF which engage in open rebellion against
government.
Twice, the government experimented with autonomy, albeit a limited one. First,
under Marcos and then another after him with the 1986 Esda Revolution, but all
failed. And so did all appeasement programs including the creation of the Office on
Muslim Affairs and the appointment of Moro officials into policy-making positions
in the central agencies of government.
96 See M.A. J. Tamano, The Government Policy of Integration Needed: Total Commitment, September 7, 1968.
Included in the book by the aid author which is a collection of his speeches and writings entitled, Autonomy:
To Keep This Nation Intact. 1986: Foreign Service Institute, Manila, p. 9. Cited in Marohomsalic, supra, p. 28.
97 In Amina Rasul’s Broken Peace? Assessing the 1996 GRP-MNLP Final Peace Agreement, 2007, p. 82.
98 Id.
99 Id., p. 85.
100 Id., p. 90.
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The MNLF struck an agreement with government in 1996, but government
did not implement many of its provisions. 101
In 1997, the MILF and the government began peace negotiations. Sporadic
armed hostilities always flared up even during interregna in the peace talks. Until
the botched signing of the MOA-AD during the first week of August, friendly relation
between the MILF and the government were unrealized. Now, the contemporary
rebellion has gone for almost 40 years and is still raging.
A great majority of the Bangsamoro people pinned high hopes on the MOA-
AD for their liberation from the prevailing throttlehold of the political system. The
relationship of the Bangsamoro with the Christian Filipino majority has been one of
domination and discrimination against the former. They owned no symbol in the
Philippine flag. The eight (8) rays of the sun the first eight (8) Christian provinces
that rose up against Spain. They have no name of eminence as Rizal, Bonifacio and
General Luna in the long list of proclaimed Filipino heroes.
In 1987, Emmanuel Pelaez, Chair of the GRP Peace Panel, apologized for the
historical injustices committed by the Christian Filipino majority against the
Bangsamoro. Thus:
In all frankness, it is high time that the Christian Filipino majority
should rectify more vigorously its serious mistakes in regarding the Muslim
minority as being somehow inferior in their faith, culture and way of life.
For this attitude and prejudice stem from our ignorance of Islam and of
the great achievements of Islamic civilization and its contributions to the
world as a whole. Moreover, until now many Filipinos do not appreciate
the reality that poverty and underdevelopment in the Moro lands are
traceable in part to the Moro’s historic and nationalistic resistance to
Western Imperialist powers, to defend their freedom and to keep their
faith and way of life as a distinctive ethno-religious minority. Similarly,
after independence they expended great time and resources to fend the
continuance of the universalistic policies of political integration, cultural
assimilation and national development that were applied without due
regard to the distinctive characteristics of the Islamic and Moro cultures
in Mindanao. 102
The abandonment by the Presidency of the peace process and the MOA-AD
has alienated the Moro public against government even as it draws a groundswell of
sympathy from them for the revolutionary struggle. But all is not lost as yet between
the Moro and the Filipino, and it is not a grave abuse of discretion and it’s never too
late on the part of government to pick up the olive branch.
101 Id., pp. 36-41.
102 Marohomsalic, supra., p.293.
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In law, government is idealized as a sort of a parent or guardian for the
disadvantaged sectors of society. 103
Obviously, there’s no better champion. And there’s no better argument but
the lowly lot of the Bangsamoro and no better lean-on but the structure of government.
“For three hundred and fifty years,” wrote an American Colonel who served
as Governor of the District of Zamboanga of the Moro Province for ten years, “[the
Moro] has stood at bay, defending his religion and home [against Spain]. He had no
time for improvement, no chance to take on the amenities of civilization. Everything
has gone before the ruthless hand of the destroyer, except the one thing, that to a
Mohammedan is dearer than life, his religion. In this connection, it is well to
remember that any solution of the Moro problem, by the American, or any other
government, must count upon the element of his life, as the largest factor in the
equation. In this constant struggle the Moro has retrogressed; certainly, who of us
is strong enough to withstand such influences? It is a well recognized fact, that after
the American people had come through the Civil War, there was a lower standard of
morals and an undercurrent of brutality through the whole nation, that took years
of peace to overcome. We had fought four years; multiply that by a hundred and
where would our boasted civilization be today?” 104
Nevertheless, the Americans failed to appreciate the Moro and his religion 105
and made war against him for his subjugation. So did the Christian Filipino majority.
His insurgency was used for the declaration of Martial Law in 1972 which resulted
in the death of about 120,000 people who are mostly innocent Moro civilians and
the massive displacement of the Moro race starting off their Diaspora and their
further minoritization in Mindanao.
We raised these social arguments in all their poignancy to call attention to the
MOA-AD as an equalizing instrument to get the Bangsamoro up to their rightful
place in society. Certainly and contrary to the assumptions of the oppositors of the
Agreement, the GRP Peace Panel has not committed grave abuse of discretion
amounting to lack or excess of jurisdiction in concluding or executing or initialing
the MOA-AD with the MILF that is designed as it is to render equity and justice in
their favor.
103 See Government of P.I. vs. Monte de Piedad, 35 Phil. 747-748, 1916; Vasco vs. C.A., 81 SCRA, 766, 1978. Other
citations omitted.
104 John P. Finley, The Mohammedan Problem in the Philippines, The Journal of Race Development, 15 April
1915, Vol., 5, No. 4, pp. 356-357.
105 Id., p. 360.
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The Bangsamoro Juridical Entity
is not a separate state but a sub-state
Fears were expressed that the BJE comprises of geographic areas delineated
and parceled out from the country as a gift to the MILF. As ownership of the
Bangsamoro homeland is vested exclusively in the Bangsamoro by virtue of their
prior right of occupation 106 and is going to be constituted as a political unit with a
system of governance suitable and acceptable to them, 107 some people are led to
believe that the MOA-AD creates an independent Bangsa Moro State named BJE.
It is our submission that the MOA-AD is replete with provisions that make for
the knowledge that the territorial domain of the Bangsamoro are within the territorial
integrity and political map of the Philippines and that the BJE is only a sub-state.
For example, first, its external defense is the duty and obligation of the Central
Government; 108 second, both parties have to forge an economic cooperation
agreement or arrangement over the income and revenues that are derived from the
exploration, exploitation, use and development of any resources for the benefit of
the Bangsamoro; 109 third, royalties, bonuses, taxes, charges, custom, duties or imposts
on natural resources have to be shared by the Parties on a percentage ratio of 75-25
in favor of the Bangsamoro Juridical Entity; 110 fourth, in times of national emergency,
when public interest so requires, the Central Government may, during the emergency,
for a fixed period and under reasonable terms as may be agreed by both parties,
temporarily assume or direct the operations of such strategic resources which include
all potential sources of energy, petroleum, in situ, fossil fuel, mineral oil and natural
gas, whether onshore or offshore; 111 fifth, the BJE may establish and open
Bangsamoro trade missions in foreign countries, 112 not embassies; sixth, the Central
Government is to take necessary steps to ensure the BJE’s participation in
international meetings and events and its participation in Philippine official missions
and delegations in negotiations of border agreements or protocols for environmental
protection, equitable sharing of incomes and revenues in the areas of sea, seabed
and inland seas or bodies of water adjacent to or between islands forming part of
the ancestral domain, in addition to those of fishing rights; 113 seven, beyond the
fifteen (15) kilometers internal waters, the Central Government and the BJE shall
exercise joint jurisdiction, authority and management over areas and all natural
resources living and non-living contained therein. 114
106 Paragraph 2 on Concepts and Principles, MOA-AD.
107 Paragraph 4, id.
108 Paragraph 4 on Resources, MOA-AD.
109 Paragraph 3, id.
110 Paragraph 6, id.
111 Paragraph 5, id.
112 Paragraph 4(a), id.
113 Paragraph 4(b), id.
114 Paragraph 2(g) on Territory, id.
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BJE is a Sub-State
Marohomsalic, Malayang, Panumpang and Mitmug
In fine, the BJE would come as a sub-state within the Philippine State, exercising
many functions of a state and sharing competence with the parent state on matters
of foreign trade and as member of any Philippine delegation and mission including
those organized to tackle matters concerning natural resources within the BJE’s
territorial waters and seabed.
Indeed, this BJE, touted as a geographical area nicked out from the country is,
to quote Senator Joker Arroyo, a hush-hush, nay, a formless political bugaboo in the
minds of those who lack understanding of, and sympathy for, the cause of the
Bangsamoro and the ideals of peace.
The BJE is born and so named only in the MOA-AD for convenience and
practical purpose. Like a baby boy or a baby girl just born and given a name-tag to
distinguish it as such baby boy or baby girl. And, as in this case, a baby child of the
Executive Department and the MILF.
It may not even crawl or toddle its way through, crippled this early with
deadweights used in the dungeons of the past.
Both Parties are aware of the transience of the name “BJE,” and it’s only after
the ordinance of government is defined in the Comprehensive Compact will its true
name and political complexion comes by. For the time being, and by definition of
the MOA-AD, the BJE is a sub-state.
A Freedom House for the Indigenes
Contrary to the presumptions of detractors, the MOA-AD does not derogate
against the protection afforded by the State to the ancestral domain and the ancestral
lands of the other indigenous people or Lumads under Republic Act 8371 or the
Indigenous People’s Right Act of 1997. Also, it will not violate the Torrens System
obtaining in the country. Paragraph 7 on Concepts and Principles of the MOA-AD
sees to that, thus:
Vested property rights upon the entrenchment of the BJE shall be
recognized and respected subject to paragraph 9 of the strand on
Recourses.
Paragraph 9 on Resources of the MOA-AD provides that “Forest concessions,
timber licenses, contracts or agreements, mining concessions, Mineral Production
and Sharing Agreements (MPSA), and other land tenure instruments of any kind or
nature whatsoever granted by the Philippine Government including those issued by
the present Autonomous Region in Muslim by the present Autonomous Region in
Muslim Mindanao (ARMM) shall continue to operate from the date of formal
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The Memorandum 0f Agreement on Ancestral Domain: A Commentary
entrenchment of Bangsamoro juridical entity unless otherwise expired reviewed,
modified and/or cancelled by the latter.”
This provision extends protection to concessions and the like within the
Bangsamoro homeland, and it is not meant to derogate against the ownership by the
Lumads of their ancestral lands and ancestral domain.
POSTCRIPT: A Requiem to Adversarial Politics
and a Hossana to Pollyanna Politics
Oppositors of the MOA-AD from the political opposition scored against the
lack of transparency on the part of government and the failure to consult them in
the negotiations with the MILF. Offhand, we can emphatize with their predicament.
But what we cannot understand are the behavioral tendencies of some political
leaders who easily panic and fire up people with venomous rhetoric that will
transmogrify them into their bestial ancestry. Ordinary minds may quack in
trepidation or growl in anger under the strain, but leaders are leaders need to control
and manage their emotions, and they are expected to exhibit grace even under difficult
circumstances. Particularly, they denounced the members of the GRP Peace Panel
in the media for alleged incompetence and for selling the country for a song to the
MILF.
One former Senator, who is one of the petitioners against the MOA-AD, made
his accusation that the GRP Peace Panel committed acts of treason for their assent
to the MOA-AD. Now, who’s guilty of treason? Unwittingly and overly carried by
his emotion, he forgot his law and ascribed to the MILF the status of a foreign state.
In our jurisdiction, a citizen may commit treason by giving aid and comfort to an
enemy (i.e., a foreign State against which the country is at war). 115
The City Mayor of Iligan threatened to declare a member of the GRP Peace
Panel, who is a resident of the City, as persona non grata, which is strange for a local
executive who now petitioned the Supreme Court to grant him his human rights
including the right to public information. According to Rodil, he had appeared twice
before the Iligan City Sanggunian and clarified matters in connection with the peace
talks between the MILF and the GRP. 116
115 Article 114, Revised Penal Code
116 Rodil and Atty. Marohomsalic personally talked on the occasion of a Public Forum on MOA-AD at the
Malcolm Theatre, U.P. College of Law, Dililam, Q.C., where he spoke. He shared the information with Atty.
Marohomsalic.
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Marohomsalic, Malayang, Panumpang and Mitmug
Cotabato Vice-Governor Piñol, another petitioner, was most hostile to the
MOA-AD. By the look of things, he is aware of developments on the peace process.
In a ceremony on September 2005 for the outgoing Head of Mission of the Maysianled
International Monitoring Team, MGen Dato’ Zulkifeli bin Moh’d Zin, petitioner
Piñol, who was then Governor of Cotabato, was the guest of honor and, in his
speech, he “impressed his support to the on-going GRP-MILF peace talks,” explaining
“that several planting seasons were missed in the past because of the fight.” He
called for a respite from fighting, to give way for children’s education, and to help
achieve and maintain peace. 117
In a public consultation in Zamboanga City, according to the Chair of the
MILF Secretariat and Technical Committee Al Camlian, petitioner Zamboanga City
Mayor Labregat was the guest of honor. But he didn’t attend the affair, instead sent
his representative to deliver his speech. Again, for the second time, Camlian’s party
came to Zamboanga City and conducted public consultations but Mayor Lobregat
snubbed it. 118
Since 2001, the GRP Peace Panel has been providing regular updates on the
peace process to strategic audiences, and in the process provides views and insights
from the ground. 119 The Office of the Presidential Adviser on the Peace process has
kept a record of consultations and dialogues with stakeholders. Atty. Sedfrey
Candelaria, Chief Legal Consultant of the GRP Peace Panel for Talks with the MILF,
wrote a summary thereof, thus:
[The MOA-AD] is the result of more than a hundred consultative dialogues
with various stakeholders conducted by the GRP Penal spread to about
3-5 years, inclusive of the periodic technical working group meetings here
and abroad between the Parties. Joint Statements are released to the
public on key issues tackled after every exploratory task. The GRP Panel
is also in receipt of local government resolutions, statements and
memoranda expressing their sentiments on the key issues (for example,
opposition to inclusion in Bangsamoro Homeland and the need for
consultations, adding representatives to the Panel, etc… 120
117 Joint Statement between the MNLF and the MILF, 11 September 2005.
118 Al Camlian was a Reactor in a Public Forum on MOA-AD at the Malcolm Theatre, U.P. College of Law,
Diliman, Q.C., 20 August 2008. He shared the information to Atty. Marohomsalic who was in the Forum.
119 Item No. 5, primer on the Memorandum of Agreement on Ancestral Domain, prepared by the Office of
Presidential Adviser on the Peace Process.
120 Sedfrey Candelaria, Silencing Peace: The Story of MOA-AD. Unpublished.
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The Memorandum 0f Agreement on Ancestral Domain: A Commentary
Politics of Polarity
Finally, it may be asked: Why the brouhaha over the MOA-AD? Why did
oppositors to the MOA-AD show overly negative gravitas in the propagation of
their outlook? Do we see again the politics of polarity that pervades our political
history?
We remember, in the quest for Philippine independence President Quezon
was handed the Tydings-McDuffie Law by Washington. But Senators Osmeña and
Roxas rejected it and they combined and went to Washington to lobby for a better
deal. They came home with the Hares-Hawes Cutting Act. But the two (2) documents
spoke of the same banana, both granting the country a ten-year transition period to
independence.
Our ancestors experienced the worst national leadership in our political history
with their forced incorporation to the Philippine body politic, among others. And
the present generation of Bangsamoros did experience it too in the abrogation of
the MOA-AD, not to mention the oppressive policy of government.
Pollyanna Politics
But it is well to remember here that the Bangsamoro have hungered long enough
for peace and comfort. The Bangsamoro cannot now quit from their pursuit of their
right to self-determination without forfeiting their heritage of freedom and tampering
with the heroism of their forebears and the legacy of their contemporary champions.
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FROILAN M. BACUNGAN
Revisiting Charter Change
Through People’s Initiative*
Froilan M. Bacungan**
Introduction
Our Constitution is a good Constitution. It could be the basis for the
achievement of the ideals of democracy and justice if our public officers and employees
show their allegiance to the State and the Constitution at all times. But it seems that
for a very long time now, this is not the case.
Thus, there is need to introduce into our Constitution certain provisions to
ensure greater accountability of our public officers and this could be done by using
People’s Initiative as the mode of amending our Constitution.
But people’s initiative a possible mode for changing our Constitution, given
the decisions of the Supreme Court in the cases of Santiago vs. Commission on Elections,
270 SCRA 106; PIRMA vs. Commission on Elections, G.R. No. 129754, September 23,
1997, and Lambino vs. Commission on Elections, 505 SCRA 218?
It is our position that inspite of the very negative rulings of the majority of the
Supreme Court members in the above-mentioned cases, people’s initiative is a
possible mode for changing our Constitution to ensure – it is repeated – greater
accountability of our public officers.
Analyzing Santiago vs. Comelec
Antecendent Facts of the Case as Stated in the Decision
On 6 December 1996, an Atty. Jesus S. Delfin filed with Commission on
Elections (COMELEC), a “Petition to Amend the Constitution, to Lift Term Limits
of Elective Officials, by People’s Initiative.” Delfin asked the COMELEC for an
order:
1. Fixing the time and dates for signature gathering all over the country;
2. Causing the necessary publications of said Order and the attached “Petition
for Initiative on the 1987 Constitution, in newspapers of general and local
circulation;
* Lecture delivered at the U.P. Law Center MCLE Program held on August 28, 2008.
** Former Dean, College of Law, University of the Philippines.
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3. Instructing Municipal Election Registrars in all Regions of the Philippines
to assist Petitioners and volunteers in establishing signing stations at the
time and on the dates designated for the purpose.
Delfin alleged in his petition that he is a founding member of the Movement
for People’s Initiative, a group of citizens desirous to avail of the system intended to
institutionalize people power, that he and the members of the Movement and other
volunteers intend to exercise the power to directly propose amendments to the
Constitution granted under Section 2, Article XVII of the Constitution; that the
exercise of that power shall be conducted in proceedings under the control and
supervision of the COMELEC; that, as required in COMELEC Resolution No.
2300, signature stations shall be established all over the country, with the assistance
of municipal election registrars, who shall verify the signatures affixed by individual
signatories; that before the Movement and other volunteers can gather signatures,
it is necessary that the time and dates to be designated for the purpose be first fixed
in an order issued by the COMELEC; and that to adequately inform the people of
the electoral process involved, it is likewise necessary that the said order, as well as
the Petition on which the signatures shall be affixed, be published in newspapers of
general and local circulation, under the control and supervision of the COMELEC.
Delfin in his Petition further alleged that the provisions sought to be amended
are Sections 4 and 7 of Article VI, Section 4 of Article VII, and Section 8 of Article
X of the Constitution. Attached to the petition was a copy of a Petition for Initiative
on the 1987 Constitution embodying the proposed amendments which consist in
the deletion from the aforecited sections of the provisions concerning term limits,
and with the following proposition: “Do you approve of lifting the term limits of all
elective government officials, amending for the purpose Section 4 and 7 of Article
VI, Section 4 of Article VII, and Section 8 of Article X of the 1987 Philippine
Constitution?”
According to Delfin, the said Petition for Initiative will first be submitted to
the people, and after it is signed by at least twelve per cent of the total number of
registered voters in the country, it will be formally filed with the COMELEC.
Upon the filing of the Delfin Petition, which was forthwith given the number
UND 96-037 (Initiative), the COMELEC, through its Chairman, issued an Order
(a) directing Delfin “to cause the publication of the petition, together with the attached
Petition for Initiative on the 1987 Constitution (including the proposal, proposed
constitutional amendment, and the signature form), and the notice of hearing in
three (3) daily newspapers of general circulation at his own expense” not later than
9 December 1996; and (b) setting the case for hearing on 12 December 1996. At the
hearing, the following appeared: Delfin and Atty. Pete Q. Quadra; representatives of
the People’s Initiative for Reforms, Modernization and Action (PIRMA); intervenoroppositor
Senator Raul S. Roco, together with his two other lawyers and
representatives of, or counsel for, the Integrated Bar of the Philippines (IBP),
Demockrasya-Ipagtangol and Konstitusyon (DIK), Public Interest Law Center, and
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FROILAN M. BACUNGAN
Laban ng Demokratikong Pilipino (LABAN). Senator Roco, on that same day, filed
a Motion to Dismiss the Delfin Petition on the ground that it is not the initiatory
petition properly cognizable by the COMELEC.
After hearing their arguments, the COMELEC directed Delfin and the
oppositors to file their “memoranda and/or oppositions/memoranda” within five
days.
But on 18 December 1996, Senator Miriam Defensor Santiago, Alexander
Padilla, and Maria Isabel Ongpin filed a special civil action for prohibition which is
the subject of the decision of the Supreme Court in Santiago vs. Commission on Elections,
Santiago raised the following arguments:
(1) The constitutional provision on people’s initiative to amend the
Constitution can only be implemented by law to be passed by Congress.
No such law has been passed; in fact, Senate Bill No. 1290 entitled An Act
Prescribing and Regulating Constitutional Amendments by People’s
Initiative, which petitioner Senator Santiago filed on 24 November 1995,
was still pending before the Senate Committee on Constitutional
Amendments.
(2) It is true that R.A. No. 6735 provides for three systems of initiative, namely,
initiative on the Constitution, on Statutes, and on local legislation.
However, it failed to provide any subtitle initiative on the Constitution,
unlike in the other modes of initiative, which are specifically provided for
in Subtitle II and Subtitle III. This deliberate omission indicates that the
matter of people’s initiative to amend the Constitution was left to some
future law. Former Senator Arturo Tolentino stressed this deficiency in
the law in his privilege speech delivered before the Senate in 1994: “There
is not a single word in that law which can be considered as implementing
[the provision on constitutional initiative]. Such implementing provisions
have been obviously left to a separate law.”
(3) Republic Act No. 6735 provides for the effectivity of the law after
publication in print media. This indicates that the Act covers only laws
and not constitutional amendments because the latter take effect only upon
ratification and not after publication.
(4) COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern
“the conduct of initiative on the Constitution and initiative and referendum
on national and local laws, is ultra vires insofar as initiative on amendments
to the Constitution is concerned, since the COMELEC has no power to
provide rules and regulations for the exercise of the right of initiative to
amend the Constitution. Only Congress is authorized by the Constitution
to pass the implementing law.
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(5) The people’s initiative is limited to amendments to the Constitution, not
to revision thereof. Extending or lifting of term limits constitutes a revision
and is, therefore, outside the power of the people’s initiative.
(6) Finally, Congress has not appropriated funds for people’s initiative; neither
the COMELEC nor any other government department, agency, or office
has realigned funds for the purpose.
To justify their recourse to the Supreme Court via the special civil action for
prohibition, Senator Santiago and her co-petitioners alleged that in the event the
COMELEC grants the Delfin Petition, the people’s initiative spearheaded by PIRMA
would entail expenses to the national treasury for general re-registration of voters
amounting to at least P180 million, not to mention the millions of additional pesos
in expenses which would be incurred in the conduct of the initiative itself. Hence,
the transcendental importance to the public and the nation of the issues raised
demands that this petition for prohibition be settled promptly and definitely, brushing
aside technicalities of procedure and calling for the admission of a taxpayer’s and
legislator’s suit. Besides, there is no other plain, speedy, and adequate remedy in
the ordinary course of law.
On 19 December 1996, the Supreme Court (a) required Delfin and other private
respondents to comment on the Santiago petition within a non-extendible period of
ten days from notice. The Supreme Court also issued a temporary restraining order,
effective immediately and continuing until further orders, enjoining the COMELEC
from proceeding with the Delfin Petition, and private respondents Alberto and
Carmen Pedrosa from conducting a signature drive for people’s initiative to amend
the Constitution.
On 2 January 1997, Delfin and the other private respondents, through Atty.
Quadra, filed their Comment submitting the following counter arguments:
(1) It is not true that it would entail expenses to the national treasury for
general registration of voters amounting to at least pesos: One Hundred
Eighty Million (P180,000,000.00) if the COMELEC grants the petition
filed by respondent Delfin before the COMELEC.
(2) Not a single centavo would be spent by the national government if the
COMELEC grants the petition of respondent Delfin. All expenses in the
signature gathering are all for the account of respondent Delfin and his
volunteers per their program of activities and expenditures submitted to
the COMELEC. The estimated cost of the daily per diem of the supervising
school teachers in the signature gathering to be deposited and to be paid
by Delfin and his volunteers is P2,571,200.00.
(3) The pending petition before the COMELEC is only on the signature
gathering which by law COMELEC is duty bound to supervise closely
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FROILAN M. BACUNGAN
pursuant to its “initiatory jurisdiction” upheld by the Honorable Court in
its recent September 26, 1996 Decision in the case of Subic Bay Metropolitan
Authority vs. COMELEC, et al., G.R. No. 125416.
(4) Republic Act No. 6735 approved on August 4, 1989 is the enabling law
implementing the power of people’s initiative to propose amendments to
the Constitution. Senator Defensor-Santiago’s Senate Bill No. 1290 is a
duplication of what is already provided in Republic Act No. 6735.
(5) COMELEC Resolution No. 2300 promulgated on January 16, 1991
pursuant to Republic Act No. 6735 was upheld by the Honorable Court in
the recent September 26, 1996 Decision in case of Subic Bay Metropolitan
Authority vs. COMELEC, et al., G.R. No. 125416 where the Honorable Court
said: “The Commission on Elections can do no less by seasonably and
judiciously promulgating guidelines and rules for both national and local
use, in implementing of these laws.”
(6) Even Senator Defensor-Santiago’s Senate Bill No. 1290 contains a provision
delegating to the COMELEC the power to “promulgate such rules and
regulations as may be necessary to carry out the purposes of this Act.”
(Sec. 12, S.B. No. 1290)
(7) The lifting of the limitation on the term of office of elective officials provided
under the 1987 Constitution is not a “revision” of the Constitution. It is
only an amendment. “Amendment envisages an alteration of one or a few
specific provisions of the Constitution. Revision contemplates a reexamination
of the entire document to determine how and to what extent
it should be altered.”
Considering the arguments for and against the Santiago petition, Justice Hilario
G. Davide, Jr. as ponente, made the following categorical rulings:-
Ruling No. 1
The Instant Petition (of Senator Santiago, et. al)
is Viable Despite the Pendency in the Comelec
of Delfin Petition.
In support of the above ruling, the Davide ponencia states:
(1) The COMELEC has no jurisdiction to take cognizance of the petition
filed by private respondent Delfin. This being so, it becomes imperative
to stop the COMELEC from proceeding any further, and under the Rules
of Court, Rules 65, Section 2, a petition for prohibition is the proper
remedy.
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(2) The writ of prohibition is an extraordinary judicial writ issuing out of a
court of superior jurisdiction and directed to an inferior court, for the
purpose of preventing the inferior tribunal from usurping a jurisdiction
with which it is not legally vested. (People vs. Vera, supra.) In this case the
writ is an urgent necessity, in view of the highly divisive and adverse
environmental consequences on the body politic of the questioned
COMELEC order. The consequent climate of legal confusion and political
instability begs for judicial statesmanship.
Ruling No. 2
R.A. No. 6735 Intended to Include the System of Initiative
on Amendments to the Constitution, But is, Unfortunately,
Inadequate to Cover that System
In support of the above ruling, the Davide ponencia quotes extensively from
the proceedings of the 1986 Constitutional Commission after which it carefully
scrutinizes word for word R.A. 6735 which is being cited as that enabling law of
people’s initiative.
Among others, the Davide ponencia states:
(1) While the Act provides subtitles for National Initiative and Referendum
(Subtitle II) and for Local Initiative and Referendum (Subtitle III), no
subtitle is provided for initiative on the Constitution. This conspicuous
silence as to the latter simply means that the main thrust of the Act is
initiative and referendum on national and local laws. If Congress intended
R.A. No. 6735 to fully provide for the implementation of the initiative on
amendments to the Constitution, it could have provided for a subtitle
therefor, considering that in the order of things, the primacy of interest,
or hierarchy of values, the right of the people to directly propose
amendment, to the Constitution is far more important than the initiative
on national and local laws.
(2) We cannot accept the argument that the initiative on amendments to the
Constitution is subsumed under the subtitle on National Initiative and
Referendum because it is national in scope. Our reading of Subtitle II
(National Initiative and Referendum) and Subtitle III (Local Initiative and
Referendum) leaves no room for doubt that the classification is not based
on the scope of the initiative involved, but on its nature and character. It
is “national initiative” if what is proposed to be adopted or enacted is a
national law, or a law which only Congress can pass. It is “local initiative”
if what is proposed to be adopted or enacted is a law, ordinance, or
resolution which only the legislative bodies of the governments of the
autonomous regions, provinces, cities, municipalities, and barangays can
pass.
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Hence, to complete the classification under the subtitle, there should have
been a subtitle on initiative on amendments to the Constitution.
Ruling No. 3
Comelec Resolution No. 2300, Insofar as it Prescribed Rules
and Regulations on the Conduct of Initiative on Amendments
to the Constitution, is Void
In support of the above ruling, the Davide ponencia states:
It logically follows that the COMELEC cannot validly promulgate rules and
regulations to implement the exercise of the right of the people to directly propose
amendments to the Constitution through the system of initiative. It does not have
that power under R.A. No. 6735. Reliance on the COMELEC’s power under
Section 2 (1) of Article IX-C of the Constitution is misplaced, for the laws and
regulations referred to therein are those promulgated by the COMELEC under
(a) Section 3 of Article IX-C of the Constitution, or (b) a law where subordinate
legislation is authorized and which satisfies the “completeness” and the “sufficient
standard” tests.
Ruling No. 4
Comelec Acted Without Jurisdiction or with Grave Abuse
of Discretion in Entertaining the Delfin Petition.
In support of the above ruling, the Davide ponencia states:
Even if it be conceded ex gratia that R.A. 6735 is a full compliance with the
power of Congress to implement the right to initiate constitutional amendments,
or that it has validly vested upon the COMELEC the power of subordinate
legislation and that COMELEC Resolution 2300 is valid, the COMELEC acted
without jurisdiction or with grave abuse of discretion in entertaining the Delfin
Petition.
Under Section 2 of Article XVII of the Constitution and Section 5(b) of
R.A. No. 6735, a petition for initiative on the Constitution must be signed by at
least 12% of the total number of registered voters of which every legislative district
is represented by at least 3% of the registered voters therein. The Delfin Petition
does not contain signatures of the required number of voters. Delfin himself admits
that he has not yet gathered signatures and that the purpose of his petition is primarily
to obtain assistance in his drive to gather signatures. Without the required signatures,
the petition cannot be deemed validly initiated.
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On the basis of the above four Rulings, the Davide decision among others –
a) Declared R.A. No. 6735 inadequate to cover the system of initiative on
amendments to the Constitution, and it failed to provide sufficient standard for
subordinate legislation; and
b) Declared void those parts of Resolution No. 2300 of the Commission on
Elections prescribing rules and regulations on the conduct of initiative or amendments
to the Constitution.
Rulings in PIRMA vs. COMELEC
In this case, the Supreme Court ruled, first, by a unanimous vote, that no
grave abuse of discretion could be attributed to the COMELEC in dismissing the
petition filed by PIRMA, it appearing that it (meaning COMELEC) only complied
with the dispositions in the Decision of the Supreme Court in Santiago vs. Commission
on Elections.
The majority of members of the Supreme Court, namely, the Chief Justice
Narvasa and Justices Regalado, Davide, Romero, Bellosillo, Kapunan and Torres
voted that there was no need to re-examine their ruling that R.A. 6735 cannot be
considered as the enabling law for people’s initiative.
In the PIRMA case, there is also this angry opinion of Justice Davide:
“With much more vigor do I reiterate my view that this case must be
summarily dismissed and should not be allowed to stay a moment longer
before this Court. It is undeniable and inescapable that this Court already
decreed, with finality, the inadequacy and insufficiency of R.A. No. 6735
in implementing the right of the people to directly propose amendments
to the Constitution through the system of initiative. The petition then
makes a mockery of the judicial process and breaches the principle which
bars relitigation of issues between parties and doctrines related thereto;
moreover, it is a brazen insult to the intelligence of the Members of this
Court.”
Analyzing Lambino vs. COMELEC
Antecedent Facts of the Case as Stated in the Decision
On 15 February 2006, Raul L. Lambino and Erico B. Aumentado (“Lambino
Group”) with other groups and individuals, commenced gathering signatures for an
initiative petition to change the 1987 Constitution. On 25 August 2006, the Lambino
Group filed a petition with the COMELEC to hold a plebiscite that will ratify their
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FROILAN M. BACUNGAN
initiative petition under Section 5(b) and (c) and Section 7 of Republic Act No. 6735
or the Initiative and Referendum Act.
The Lambino Group alleged that their petition had the support of 6,327,952
individuals constituting at least twelve percent (12%) of all registered voters, with
each legislative district represented by at least three per centum (3%) of its registered
voters. The Lambino Group also claimed that COMELEC election registrars had
verified the signatures of the 6.3 million individuals.
The Lambino Group’s initiative petition changes the 1987 Constitution by
modifying Section 1-7 of Article VI (Legislative Department) and Section 1-4 of
Article VII (Executive Department) and by adding Article XVIII entitled “Transitory
Provisions.” These proposed changes will shift the present Bicameral-Presidential
system to a Unicameral-Parliamentary form of government. The Lambino Group
prayed that after due publication of their petition, the COMELEC should submit
the following proposition in a plebiscite for the voters’ ratification:
DO YOU APPROVE THE AMENDMENT OF ARTICLES VI AND
VII OF THE 1987 CONSTITUTION, CHANGING THE FORM OF
GOVERNMENT FROM THE PRESENT BICAMERAL-
PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY
SYSTEM, AND PROVIDING ARTICLE XVIII AS TRANSITORY
PROVISIONS FOR THE ORDERLY SHIFT FROM ONE SYSTEM
TO THE OTHER?
On 30 August 2006, the Lambino Group filed an Amendment Petition with
the COMELEC indicating modifications in the proposed Article XVIII (Transitory
Provisions) of their initiative.
The Ruling of the COMELEC
On 31 August 2006, the COMELEC issued its Resolution denying due course
to the Lambino Group’s petition for lack of an enabling law governing initiative
petitions to amend the Constitution. The COMELEC invoked this Court’s ruling
in Santiago vs. Commission on Elections declaring R.A. 6735 inadequate to implement
the initiative clause on proposals to amend the Constitution.
In G.R. No. 174153, the Lambino Group prayed for the issuance of the writs
of certiorari and mandamus to set aside the COMELEC Resolution of 31 August
2006 and to compel the COMELEC to give due course to their initiative petition.
The Lambino Group contends that the COMELEC committed grave abuse of
discretion in denying due course to their petition since Santiago is not a binding
precedent. Alternatively, the Lambino Group claims that Santiago binds only the
parties to that case, and their petition deserves cognizance as an expression of the
“will of the sovereign people.”
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In his Comment to the Lambino Group’s petition, the Solicitor General joined
causes with the petitioners, urging the Court to grant the petition despite the Santiago
ruling. The Solicitor General proposed that the Court treat R.A. 6735 and its
implementing rules “as temporary devises to implement the system of initiative.”
Various groups and individuals sought intervention, filing pleadings supporting
or opposing the Lambino Group’s petition. The supporting intervenors uniformly
held the view that the COMELEC committed grave abuse of discretion in relying
on Santiago. On the other hand, the opposing intervenors held the contrary view
and maintain that Santiago is a binding precedent. The opposing intervenors also
challenged (1) the Lambino Group’s standing to file the petition; (2) the Lambino
Group’s compliance with the minimum requirement for the percentage of voters
supporting an initiative petition under Section 2, Article XVII of the 1987
Constitution; (3) the nature of the proposed changes as revisions and not mere
amendments as provided under Section 2, Article XVII of the 1987 Constitution;
and (4) the Lambino Group’s compliance with the requirement in Section 10(a) of
RA 6735 limiting initiative petitions to only one subject.
The Issues
To the Supreme Court, the petitions raised the following issues:
1. Whether the Lambino Group’s initiative petition complies with Section
2, Article XVII of the Constitution on amendments to the
Constitution through a people’s initiative;
2. Whether this Court should revisit its ruling in Santiago declaring RA
6735 “incomplete, inadequate or wanting in essential terms and
conditions” to implement the initiative clause on proposals to amend
the Constitution; and
3. Whether the COMELEC committed grave abuse of discretion in
denying due course to the Lambino Group’s petition.
The Rulings of the Supreme Court
To the Supreme Court, Justice Carpio and a majority of the Justices ruled that
there was no merit to the petition of the Lambino Group. The Carpio ponencia
stated.
The Lambino Groups miserably failed to comply with the basic requirements
of the Constitution for conducting a people’s initiative. Thus, there is even no need
to revisit Santiago, as the present petition warrants dismissal based alone on the
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Lambino Group’s glaring failure to comply with the basic requirements of the
Constitution. The Carpio ponencia emphatically stated: no grave abuse of discretion
is attributable to the Commission on Elections.
The Davide Ponencia Compared to the Carpio Ponencia
The PIRMA people’s initiative petition was not given due course because the
Davide ponencia emphasized that there was no enabling law for people’s initiative as
a mode for amending the 1987 Constitution. R.A. 6735 cannot be considered to be
the required enabling law.
In the Lambino case, the Carpio ponencia focused on these two categorical
findings:
1. The Initiative Petition Does Not Comply with Section 2,
Article XVII of the Constitution on Direct Proposal by the
People
2. The Initiative Violates Section 2, Article XVII of the
Constitution Disallowing Revision through Initiatives
The Carpio ponencia on the first categorical findings states: “clearly, the framers
of the Constitution intended that the “draft of the proposed constitutional
amendments” should be “ready and shown” to the people “before” they sign such
proposal. The framers plainly stated that “before they sign there is already a draft
shown to them.” The framers also “envisioned” that the people should sign on the
proposal itself because the proponents must “prepare that proposal and pass it
around for signature.”
The essence of amendments “directly proposed by the people through initiative
upon a petition” is that the entire proposal on its face is a petition by the people.
This means two essential elements must be present. First, the people must author
and thus sign the entire proposal. No agent or representative can sign on their
behalf. Second, as an initiative upon a petition, the proposal must be embodied in
a petition.
These essential elements are present only if the full text of the proposed
amendments is first shown to the people who express their assent by signing such
complete proposal in a petition. Thus, an amendment is “directly proposed by the
people through initiative upon a petition” only if the people sign on a petition that
contains the full text of the proposed amendments.
The full text of the proposed amendments may be either written on the face
of the petition, or attached to it. If so attached, the petition must state the fact of
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such attachment. This is an assurance that every one of the several millions of
signatories to the petition had seen the full text of the proposed amendments before
signing. Otherwise, it is physically impossible, given the time constraint, to prove
that every one of the millions of signatories had seen the full text of the proposed
amendments before signing.
In the Carpio ponencia the second categorical finding states: “There can be no
mistake about it. The framers of the Constitution intended, and wrote, a clear
distinction between “amendment” and “revision” of the Constitution. The framers
intended, and wrote, that only Congress or a constitutional convention may propose
revisions to the Constitution. The framers intended, and wrote, that a people’s
initiative may propose only amendments to the Constitution. Where the intent and
language of the Constitution clearly withheld from the people the power to propose
revisions to the Constitution, the people cannot propose revisions even as they are
empowered to propose amendments.”
A change in the structure of government is a revision of the Constitution, as
when the three great co-equal branches of government in the present Constitution
are reduced into two. This alters the separation of powers in the Constitution. A
shift from the present Bicameral-Presidential system to a Unicameral-Parliamentary
system is a revision of the Constitution. Merging the legislative and executive
branches is a radical change in the structure of government.
The abolition alone of the Office of the President as the locus of Executive
Power alters the separation of powers and thus constitutes a revision of the
Constitution. Likewise, the abolition alone of one chamber of Congress alters the
system of check-and-balances within the legislature and constitutes a revision of the
Constitution.
By any legal test and under any jurisdiction, the shift from a Bicameral-
Presidential to a Unicameral-Parliamentary system, involving the abolition of the
Office of the President and the abolition of one chamber of Congress, is beyond
doubt a revision, not a mere amendment. On the face alone of the Lambino Group’s
proposed changes, it is readily apparent that the changes will radically alter the
framework of government as set forth in the Constitution.
Concluding Statements of Justice Carpio in his ponencia
The Constitution, as the fundamental law of the land, deserves the utmost
respect and obedience of all the citizens of this nation. No one can trivialize the
Constitution by cavalierly amending or revising it in blatant violation of the clearly
specified modes of amendment and revision laid down in the Constitution itself.
To allow such change in the fundamental law is to set adrift the Constitution
in unchartered waters, to be tossed and turned by every dominant political group of
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FROILAN M. BACUNGAN
the day. If this Court allows today a cavalier change in the Constitution outside the
constitutionally prescribed modes, tomorrow the new dominant political group that
comes will demand its own set of changes in the same cavalier and unconstitutional
fashion. A revolving-door constitution does not augur well for the rule of law in this
country.
An overwhelming majority – 16,622,111 voters comprising of 76.3 percent of
the total votes cast – approved our Constitution in a national plebiscite held on 11
February 1987. That approval is the unmistakable voice of the people, the full
expression of the people’s sovereign will. That approval included the prescribed
modes for amending or revising the Constitution.
No amount of signatures, not even the 6,327,952 million signatures gathered
by the Lambino Group, can change our Constitution contrary to the specific modes
that the people, in their sovereign capacity, prescribed when they ratified the
Constitution. The alternative is an extra-constitutional change, which means
subverting the people’s sovereign will and discarding the Constitution. This is one
act the Court cannot and should never do. As the ultimate guardian of the
Constitution, this Court is sworn to perform its solemn duty to defend and protect
the Constitution, which embodies the real sovereign will of the people.
Incantations of “people’s voice,” “people’s sovereign will,” or “let the people
decide” cannot override the specific modes of changing the Constitution as prescribed
in the Constitution itself. Otherwise, the Constitution – the people’s fundamental
covenant that provides enduring stability to our society – becomes easily susceptible
to manipulative changes by political groups gathering signatures through false
promises. Then, the Constitution ceases to be the bedrock of the nation’s stability.
The Lambino Group claims that their initiative is the “people’s voice.” However,
the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in the
verification of their petition with the COMELEC, that “ULAP maintains its
unqualified support to the agenda of Her Excellency President Gloria Macapagal-
Arroyo for constitutional reforms.” The Lambino Group thus admits that their
“people’s” initiative is an “unqualified support to the agenda” of the incumbent
President to change the Constitution. This forewarns the Court to be wary of
incantations of “people’s voice” or “sovereign will” in the present initiative.
This Court cannot betray its primordial duty to defend and protect the
Constitution. The Constitution, which embodies the people’s sovereign will, is the
bible of this Court. This Court exists to defend and protect the Constitution. To
allow this constitutionally infirm initiative, propelled by deceptively gathered
signatures, to alter basic principles in the Constitution is to allow a desecration of
the Constitution. To allow such alteration and desecration is to lose this Court’s
raison d’etre.
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The Future of People’s Initiative
On the basis of the above presentations practically just of excerpts of the
Davide ponencia and the Carpio ponencia the following observations could be made:
1. The Davide ponencia emphasizes that R.A. No. 6735 intended to include
the system of initiative on amendments to the Constitution, and is
unfortunately, inadequate to cover that system.
2. The Carpio ponencia emphasizes two findings: (1) a People’s Initiative
Petition should Comply with Section 2, Article XVII of the Constitution
on Direct Proposal by the People; and (2) the Initiative should also
comply with Section 2, Article XVII of the Constitution there can not be
a revision, only an amendment through initiative.
People’s initiative could yet be the mode for amending our Constitution to
ensure – it is repeated – greater accountability of our public officers.
To achieve the above, let us hope that the Supreme Court will agree to revisit
its majority decision in Santiago vs. Commission on Elections particularly its ruling that
R.A. No. 6735 is inadequate to cover the system of initiative on amendments to the
Constitution, and adopt the opinion of then Justice, now Chief Justice Reynaldo
Puno who believes that R.A. No. 6735 sufficiently implements the right of the people
to initiate amendments to the Constitution through initiative. Our effort to discover
the meaning of R.A. No. 6735 should start with the search for the intent of our
lawmakers. A knowledge of this intent is critical, for the intent of the legislature is
the controlling factor in its interpretation. Stated otherwise, intent is the essence of
the law, the spirit which gives life to its enactment.
Then, those who will use people’s initiative as a mode for amending the
Constitution should follow the advice stated in the Carpio ponencia, namely - that the
‘draft of the proposed constitutional amendments’ should be “ready and shown” to
the people before they sign such proposal. The framers plainly stated that “before
they sign there is already a draft shown to them.” The framers also “envisioned”
that the people should sign on the proposal itself because the proponents must
“prepare that proposal and pass it around for signature.”
Those interested in utilizing people’s initiative as a mode of amending our
Constitution should use the provision on Barangay Assemblies in the Local
Government Code, which provides:
“Sec. 397. Composition; Meetings. – (a) There shall be a barangay assembly
composed of all persons who are actual residents of the barangay for at
least six (6) months, fifteen (15) years of age or over, citizens of the
Philippines, and duly registered in the list of barangay assembly members.
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FROILAN M. BACUNGAN
(b) The barangay assembly shall meet at least twice a year to hear and
discuss the semestral report of the Sangguniang Barangay concerning its
activities and finances as well as problems affecting the barangay. Its
meeting shall be held upon call of the punong barangay or of at least
four (4) members of the sangguniang barangay, or upon written petition of
at least five percent (5%) of the assembly members.
Organizations like the Integrated Bar of the Philippines and the Philippine
Constitution Association should study how the present provisions in transparency
can be re-worded to provide greater if not complete transparency of information on
expenses of public funds. The present provision which reads:
“(a) Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions
involving public interest. (Sec. 28, Article II)
(b) The right of the people to information on matters of public concern
shall be recognized. Access to official records, and to documents, and
papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be
afforded the citizens, subject to such limitations as may be provided by
law.” (Sec. 7, Article III)
The above provisions of our Constitution should be amended to provide for
full transparency re: expenditure of public funds except expenditure on national
security.
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The Purchased Power Adjustment
(PPA) Scheme and Its Derivatives:
Deciphering Cost Recovery
Mechanisms and Understanding
Energy Distribution
Juan Arturo Iluminado C. de Castro*
Introduction
The electric power industry is indispensable to the national interest. It affects
the lives of every Filipino, rich and poor alike, as it has become a necessity in daily
life. As the Supreme Court stated in MERALCO vs. Court of Appeals 1 :
“One can not deny the vital role which a public utility such as MERALCO,
having a monopoly of the supply of electrical power in Metro Manila and
some nearby municipalities, plays in the life of people living in such areas.
Electricity has become a necessity to most people in these areas, justifying
the exercise by the State of its regulatory power over the business of
supplying electrical service to the public, in which petitioner MERALCO
is engaged. Thus, the State may regulate, as it has done through Section
97 of the Revised Order No. 1 of the Public Service Commission, the
conditions under which and the manner by which a public utility such as
MERALCO may effect a disconnection of service to a delinquent
customer.”
Given its nature and function, the electric power industry cannot be left to
free market forces and has to be highly regulated. The factors necessary for laissezfaire
to work are not present as domestic competition is very limited, if not totally
absent.
Firstly, the generation, transmission and distribution of electricity necessarily
entails economies of scale. The electric power industry is highly capital-intensive
* Ll. M. Student, University of California, Berkeley (2008-2009); also admitted to the University of Michigan Law
School (2008-2009); junior partner, De Castro & Cagampang Law Offices; Associate Solicitor, Office of the
Solicitor General (2007-2008); Ll.B. (2006,UP College of Law, opf); Co-editor, Philippine Law Journal vol. 78;
B.A. Political Science (UP) cum laude. The author would like to thank Mr. Wilbert S. Balilia of the Energy
Regulatory Commission for his assistance in the preparation of this paper.
1 157 SCRA 243, 247-248 [1988], G.R. No. L-39019, January 22, 1988.
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Juan Arturo Iluminado C. de Castro
and as such operates as a natural monopoly. 2 Industrial inputs like coal or fuel must
be purchased in large amounts to keep up with the demand for energy. Investments
in power plants to generate electric power, whether it be coal, geothermal,
hydroelectric or otherwise are huge and can only be undertaken by a chosen few. For
distribution of electricity, an investor would have to install the necessary infrastructure
such as electric posts and electric lines along public roads and highways or rights of
way acquired from private parties upon payment of just compensation within the
vicinity to be supplied with electricity, including control stations.
Secondly, generation of electricity involves the utilization of natural resources
such as water, and all sources of potential energy, which are owned by the State. 3
Private enterprises cannot engage in electric power generation without State
intervention. Although most of the fuels that are used to generate electricity in the
powerplants are imported and privately-owned, still, there are other reasons
necessitating State intervention.
Thirdly, the electric power industry has a captive market because consumption
of electricity is on a take-it-or-leave it basis. Generally, households cannot choose the
supplier of their electricity as each supplier or distributor of electricity or distributing
utility has its own specific assigned locality as determined by the contract with the
government. Indeed, without State intervention, consumers would be left at the
mercy of profiteering electric power producer and distributor whose principal motive
would be to make profits with no or little consideration for public necessity and
public service.
Statement of Objectives
Any individual who has seen an electric bill has been puzzled at one time or
another by the entry “PPA” which adds several percentages more to the regular
charges. The question arises: “Why am I paying more when in fact I already paid for
the amount of electricity I used per kilowatt hour?”
In Manila Electric Co. vs. CA, 4 the Supreme Court recognized the right of a
consumer to be informed of the items in his electric bill. In that case, private
respondent requested MERALCO to itemize the purchased power adjustment, which
the latter refused prompting the filing of an injunction case to restrain Manila Electric
from disconnecting private respondent’s electricity. In ruling for private respondent,
the Supreme Court held:
2 430 SCRA 389 [2004], G.R. No. 152569, May 31, 2004.
3 Const. (1987) Art. XII, Section 2.
4 271 SCRA 417 [1997], G.R. No. 103595, April 18, 1997.
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The Purchased Power Adjustment (PPA) Scheme and Its Derivatives:
Deciphering Cost Recovery Mechanisms and Understanding Energy Distribution
The right of (private respondent) CCM Gas to be informed
concerning an item in its electric bill is undoubted. Revised Order No. 1,
§4, which was issued by the then Public Service Commission provides:
Information and assistance to customers. — Each public
service shall, upon request, give its customers or users, all
information and assistance pertaining to his service in order
that they may secure proper, efficient and economical service.
In the 2004 elections, a senator vowed to eliminate the PPA as part of his
campaign slogan. This may have gotten him several thousand votes, but is this feasible
and wise?
This article seeks to answer these questions, by examining the nature and
function of the PPA and other adjustment mechanisms in the electric bill charges.
An evaluation will be made as to its necessity and usefulness, as well as how each
consumer can help minimize billings and charges.
The PPA or Purchased Power Adjustment is an automatic cost adjustment
mechanism that allows the Distributing Utilities (hereafter, DUs) to recover the
actual cost of electricity vis-à-vis their approved basic rates. Admittedly however, the
PPA has already been superseded by other adjustment mechanisms like the
Generation Rate Adjustment Mechanism (GRAM), Automatic Generation Rate
Adjustment (AGRA), System Loss Rate Adjustment (SLRA), and the Transmission
Rate Adjustment (TRA) brought about by the requirements of the EPIRA.
Regardless, it is the PPA which consumers are most familiar with. For this reason,
the author will focus on the PPA and relate it to the other adjustment mechanisms.
Besides, these new adjustment mechanisms operate on the same principles and appear
merely to be the unbundled forms of the PPA.
To have better understanding of the PPA, it is necessary to deal with the
aspects of the electric power industry and briefly examine how the State regulates
electric charges. This paper will also trace the history of the computation of electric
charges, taking into consideration the generation and distribution aspects of the
electric power industry but concentrating on such matters only in relation to Electric
Cooperatives (hereafter, ECs) rather than the privately-owned distribution utilities.
Note that the principles and development of the adjustment mechanisms for both
sectors are similar.
This article will focus on the ECs because they account for a majority of the
distribution of electricity in the country as the providers of electricity in rural areas.
Given their wide geographical reach, they affect a vast portion of the country’s
population. After laying the background on the history and development of electric
charges in relation to ECs, the PPA’s nature and function will be discussed and
evaluated.
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Juan Arturo Iluminado C. de Castro
The Electric Power Industry in a Nutshell
The electric power industry currently consists mainly of three aspects –
generation, transmission, distribution – although the new Electric Power Reform
Act of 2001, popularly known as the EPIRA divided the energy sector into four 5 by
adding the “supply” sector. The first three aspects are considered as the traditional
sectors of the electric power industry which are highly capital-intensive and as such
operate as natural monopolies. 6 However, the fourth supply sector in the EPIRA is
not yet operational and existing.
The inclusion of the supply sector in the EPIRA gives private investors the
opportunity to participate in the electric industry by purchasing electric power from
electric power generators and then selling this electricity to big end-users. The idea
is to open the industry to the private sector and allow the market forces to work but
still subject to state regulation. The supply sector however, will have to await open
access 7 to give the current players in the industry time to prepare for competition.
A. Generation Aspect
The generation aspect involves the various power plants that produce or
generate electricity, including those powered by coal, wind, water and geothermal
energy. Upon generation, electricity is then transported to the various DUs by
transmission lines. The DUs then distribute electricity to the consumers and endusers.
Prior to the EPIRA, 8 the generation and transmission aspects of the electric
power industry were both handled by the National Power Corporation. Currently,
generation is still handled by the NPC with the addition of various independent
power producers (hereafter, IPPs). The transmission aspect is now handled separately.
B. Transmission Aspect
The EPIRA created the National Transmission Corporation (NTC) or Transco, 9
a government-owned and controlled corporation, which assumed the NPC’s electrical
transmission functions, including the planning, construction and centralized operation
and maintenance of high-voltage transmission facilities, grid interconnections and
ancillary services. It has been operating separately from the NPC since March 1,
2003, with the unique and crucial role of linking power plants owned by the NPC
5 Rep. Act No. 9136, sec. 5. Organization. – The electric power industry shall be divided into four (4) sectors,
namely: generation, transmission, distribution and supply.
6 Milwaukee Industries Corp. vs. Pampanga III Electric Cooperative, Inc. 430 SCRA 389 [2004], G.R. No.
152569, May 31, 2004.
7 See Rep. Act No. 9136, sec. 31.
8 Rep. Act No. 9136 [2001]..
9 Rep. Act No. 9136, sec. 8 [2001].
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The Purchased Power Adjustment (PPA) Scheme and Its Derivatives:
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and IPPs to the nineteen (19) privately-owned distribution utilities and 120 electric
cooperatives 10 which in turn deliver electricity to end-users. 11
The Power Sector Assets and Liabilities Management Corporation (PSALM)
manages the sale, disposition, and privatization of these transmission assets based
on terms and conditions which shall optimize the assets’ value and sale prices.
C. Distribution Aspect
The distribution aspect involves setting up of power lines and allotment of
electricity to the various end-users, including households and businesses. The
distribution utilities are either privately-owned enterprises or electric cooperatives.
The privately-owned enterprises are generally business enterprises that operate in
urban areas, while the ECs operate primarily in rural areas. 12
The formation of electric cooperatives was patterned after the National Rural
Electric Cooperative Association (NRECA) of the United States, which took charge
of electrifying rural areas which were unattractive ventures for private business
entities. 13 However, there are also government-owned utilities and existing local
government units 14 which have exclusive franchises to operate a distribution system
in accordance with the EPIRA. 15
The electric power industry can be illustrated, as follows:
Generation Transmission Distribution
10 As of November 2007.
11 http://www.transco.ph/aboutus.asp
12 http://www.nea.gov.ph/home.htm
13 Ibid.
14 e.g., Public Utility Department (PUD) of Olongapo City
15 See Guidelines for AGRA and SLR, infra. and Guidelines for Transmission Rates, infra.
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State Regulation of the Electric Power Industry
It is a settled principle that the electric power industry, which necessarily
involves public utilities, is imbibed with national interest, and therefore, subject to
regulation by the State. This was the pronouncement in Republic vs. MERALCO, 16
where the Supreme Court through Chief Justice Puno stated:
The business and operations of a public utility are imbued with public
interest. In a very real sense, a public utility is engaged in public service
providing basic commodities and services indispensable to the interest of
the general public. For this reason, a public utility submits to the regulation
of government authorities and surrenders certain business prerogatives,
including the amount of rates that may be charged by it. It is the imperative
duty of the State to interpose its protective power whenever too much
profits become the priority of public utilities.
The EPIRA
On the same premise of “national interest,” Philippine Congress passed the
Electric Power Industry Reform Act of 2001 (EPIRA). The EPIRA aims to reform
the power industry and boost power delivery services to customers by privatizing
the electric industry allowing market forces to maintain a feasible supply subject to
state regulation.
The Energy Regulatory Commission (ERC)
Under the EPIRA, the Energy Regulatory Commission (ERC) 17 was created. It
is an independent quasi-judicial regulatory body and an administrative agency vested
with broad regulatory and monitoring functions over the Philippine electric industry.
It aims to restructure and modernize the said industry while promoting consumer
interest. 18
The ERC mandate is found in Section 43 of the EPIRA:
Section 43. Functions of the ERC. – The ERC shall promote competition,
encourage market development, ensure customer choice and penalize
abuse of market power in the restructured electricity industry. In
appropriate cases, the ERC is authorized to issue cease and desist order
after due notice and hearing. x x x
16 401 SCRA 130, 141 [2003], G.R. No. 141314, April 9, 2003.
17 Rep. Act No. 9136 [2001], Sec. 38.
18 Rep. Act No. 9136, Whereas Clauses.
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The Purchased Power Adjustment (PPA) Scheme and Its Derivatives:
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When the EPIRA took effect on June 26, 2001, the ERC replaced and succeeded
the Energy Regulatory Board (ERB), which was created in 1987 by Executive Order
No. 172. Prior to the ERB, the regulation of rates for privately owned entities was
made by Board of Power and Waterworks, 19 and the Board of Energy. 20 The ERC
inherited the functions 21 of its predecessor. With the inherited powers from the
ERB, the ERC likewise inherited the cases and other matters from the ERB, including
the pending verification and confirmation of the PPA charges and oversight of electric
cooperatives.
For ECs, regulation was made first by Congress which regulated them through
the issuance of franchises. 22 Former President Marcos then transferred this authority
to the National Electrification Administration (NEA). 23 Later on, the power to set
the rates of ECs was transferred to the ERB under the Department of Energy Act of
1993. 24 The EPIRA Law subsequently transferred such responsibility to the ERC. 25
The ERC has the following powers and functions relevant to the imposition of
the Purchased Power Adjustment charges which are passed on to consumers:
Section 43. x x x Towards this end, it (ERC) shall be responsible for the
following key functions in the restructured industry.
xxx
(f) In the public interest, establish and enforce a methodology for setting
transmission and distribution wheeling rates and retail rates for the captive
market of a distribution utility, taking into account all relevant
considerations, including the efficiency or inefficiency of the regulated
entities. The rates must be such as to allow the recovery of just and
reasonable costs and a reasonable return on rate base (RORB) to enable
the entity to operate viably. The ERC may adopt alternative forms of
internationally-accepted rate-setting methodology as it may deem
appropriate. The rate-setting methodology so adopted and applied must
ensure a reasonable price of electricity. The rates prescribed shall be
non-discriminatory. To achieve this objective and to ensure the complete
removal of cross subsidies, the cap on the recoverable rate of system
losses prescribed in Section 10 of Republic Act No. 7832, is hereby
19 Pres. Dec. 269, sec. 3(l) [1973].
20 Pres. Dec. 1206, sec. 9 [1980].
21 Rep. Act No. 9136, Sec. 44 [2001].
22 http://www.nea.gov.ph/home.htm.
23 P.D. No. 269; see Milwaukee Industries vs. Pampanga III Electric Cooperative, 430 SCRA 389 [2004], G.R. No.
152569, May 31, 2004.
24 R.A. No. 7638 [1993].
25 See NASECORE vs. ERC, 481 SCRA 480 [2006], G.R. No. 163936, February 2, 2006, and Motion for
Reconsideration 499 SCRA 103 [2006], G.R. No. 16395, August 16, 2006.
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Juan Arturo Iluminado C. de Castro
amended and shall be replaced by caps which shall be determined by the
ERC based on load density, sales mix, cost of service, delivery voltage
and other technical considerations it may promulgate. The ERC shall
determine such form or rate-setting methodology, which shall promote
efficiency. In case the rate setting methodology used is RORB, it shall be
subject to the following guidelines:
(i) For purposes of determining the rate base, the TRANSCO or
any distribution utility may be allowed to revalue its eligible assets
not more than once every three (3) years by an independent appraisal
company: Provided, however, That ERC may give an exemption in
case of unusual devaluation: Provided, further, That the ERC shall
exert efforts to minimize price shocks in order to protect the
consumers;
(ii) Interest expenses are not allowable deductions from permissible
return on rate base;
(iii) In determining eligible cost of services that will be passed on to
the end-users, the ERC shall establish minimum efficiency
performance standards for the TRANSCO and distribution utilities
including systems losses, interruption frequency rates, and collection
efficiency;
(iv) Further, in determining rate base, the TRANSCO or any
distribution utility shall not be allowed to include management
inefficiencies like cost of project delays not excused by force majeure,
penalties and related interest during construction applicable to these
unexcused delays; and
(v) Any significant operating costs or project investments of the
TRANSCO and distribution utilities which shall become part of
the rate base shall be subject to verification by the ERC to ensure
that the contracting and procurement of the equipment, assets and
services have been subjected to transparent and accepted industry
procurement and purchasing practices to protect the public interest.
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xxx
(h) Review and approve any changes on the terms and conditions of
service of the TRANSCO or any distribution utility;
xxx
(k) Monitor and take measures in accordance with this Act to penalize
abuse of market power, cartelization, and anti-competitive or

The Purchased Power Adjustment (PPA) Scheme and Its Derivatives:
Deciphering Cost Recovery Mechanisms and Understanding Energy Distribution
discriminatory behavior by any electric power industry participant;
(l) Impose fines or penalties for any non-compliance with or breach
of this Act, the IRR of this Act and the rules and regulations which
it promulgates or administers;
xxx
(r) In the exercise of its investigative and quasi-judicial powers, act
against any participant or player in the energy sector for violations
of any law, rule and regulation governing the same, including the
rules on cross-ownership, anti-competitive practices, abuse of market
positions and similar or related acts by any participant in the energy
sector or by any person, as may be provided by law, and require
any person or entity to submit any report or data relative to any
investigation or hearing conducted pursuant to this Act; (emphasis
supplied)
Judicial Treatment of “Specialized Technical Agency”
Applicable to the ERC
The regulatory bodies of the electric power industry, the NEA, the ERB and
the ERC, are specialized administrative agencies which have acquired expertise and
technical know-how. The doctrine in Beautifont, Inc., vs. Court of Appeals 26 , applies
to them as follows:
“There is moreover so strong a presumption respecting the correctness
of the acts and determinations of administrative agencies x x x that the
policy has been adopted for courts not to interfere therewith unless there
is a clear showing of arbitrary action or palpable and serious error. The
legal presumption is that the official duty has been duly performed; and
it is ‘particularly strong as regards administrative agencies x x x vested
with powers set to be quasi-judicial in nature, in connection with the
enforcement of laws, affecting particular fields of activity, the proper
regulations and/or promotion of which requires a technical or special
training, aside from a good knowledge and grasp of the over-all conditions,
relevant to said field, obtaining in the nation (Pangasinan Transportation
vs. Public Utilities Commission, 70 Phil. 221). The consequent policy and
practice underlying our Administrative Law is that court of justice should
respect the findings of fact of said administrative agencies, unless there is
absolutely no evidence in support thereof or such evidence is clearly,
manifestly and patently insubstantial (Heacock vs. NLU, 95 Phil. 553).
26 157 SCRA 481 [1988], G.R. No. 50141, January 29, 1988.
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Hence, ‘(c)ourts of justice will not generally interfere with purely
administrative matters which are addressed to the sound discretion of
government agencies unless there is a clear showing that the latter acted
arbitrarily or with grave abuse of discretion or when they have acted in a
capricious and whimsical manner such that their action may amount to
an excess or lack of jurisdiction.’”
This was reiterated by the Supreme Court in Republic vs. Manila Electric
Company 27 and MERALCO vs. Lualhati 28 taking into consideration the highly
technical aspect of rate fixing and regulation of the electric power industry:
We again stress the long established doctrine that findings of
administrative or regulatory agencies on matters which are within their
technical area of expertise are generally accorded not only respect but
finality if such findings and conclusions are supported by substantial
evidence. Rate fixing calls for a technical examination and a specialized
review of specific details which the courts are ill-equipped to enter, hence,
such matters are primarily entrusted to the administrative or regulating
authority.
Rate Fixing
Pursuant to the EPIRA, the ERC now has the authority to review, verify, and
confirm whether the basic power cost and system loss as estimated by the Purchased
Power Adjustment (PPA) formula were the same as the actual basic power cost and
system loss. This is the methodology it adopted for public interest in setting
transmission and distribution wheeling rates and retail rates for the captive market
of a distribution utility, taking intro account all relevant considerations.
The ERC regulates the retail rates of electric distribution utilities, both
privately-owned and the ECs, for the supply of electricity to their customers based
on the principle of full recovery of prudent and reasonable economic costs incurred,
or such other principles that promote efficiency.
As mandated by Section 43 of the EPIRA, the rates which are set by the
EPIRA must be such as to allow the recovery of just and reasonable costs and a
reasonable return on rate base (RORB) to enable the entity to operate viably, while
ensuring a reasonable price of electricity. In the interest of the consuming public,
any over-recovery by DUs and ECs must be refunded to its captive market.
27 401 SCRA 130, [ 2003 ], G.R. No. 141369, April 9, 2003.
28 510 SCRA 455 [2006], G.R. No. 166769, December 6, 2006.
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Fixing Rates of the PPA and its Derivatives: GRAM and AGRA
The Purchased Power Adjustment (PPA) and its derivative adjustment
mechanisms such as the Generation Rate Adjustment Mechanism (GRAM), and
subsequently, the Automatic Adjustment of Generation Rates (AGRA), the System
Loss Rate Adjustment (SLRA) and the Transmission Rate Adjustment (TRA), are
part of the power charges that are billed to the consumer. It is actually an innovative
mechanism allowing DUs to recover their costs and maintain their business while
protecting public interest against profiteering.
As the Supreme Court succinctly puts it:
Rate regulation calls for a careful consideration of the totality of facts
and circumstances material to each application for an upward rate revision.
Rate regulators should strain to strike a balance between the clashing
interests of the public utility and the consuming public and the balance
must assure a reasonable rate of return to public utilities without being
unreasonable to the consuming public. 29
An Examination of Rate Fixing Methodology
of Electric Cooperatives
To better understand the PPA and other cost adjusting mechanisms, tracing
the history and background on rate fixing is indispensable. The electric cooperatives
first used the cash based methodology, then the multiplier scheme and ultimately
the PPA. On the other hand, privately-owned DUs utilized the Return on Rate Base
methodology and other mechanisms aside from the multiplier scheme. The difference
in origin and nature of these DUs explains the difference in the adjustment schemes
they used.
The Anti-Electricity and Electric Transmission
Line/Materials Pilferage Act of 1994
On January 15, 1995, the Anti-Electricity and Electric Transmission Line/
Materials Pilferage Act of 1994 or Republic Act No. 7832 went into effectivity. It
aimed to gradually phase out pilferage losses as a component of the DUs’ recoverable
system losses.
The manner of rate fixing has been greatly affected by the Anti-Electricity and
Electric Transmission Line/Materials Pilferage Act of 1994 30 which instituted caps
on the systems losses and which overhauled the manner of fixing rates by encouraging
29 Republic vs. MERALCO, 401 SCRA 130, G.R. No. 141314 &141369, April 9, 2003.
30 Rep. Act No. 7832 [1994]. 5% Reinvestment Fund, taken from the Gross Revenue, is money allocated by a DU
for use in financing the rehabilitation of its distribution system and other capital programs, after covering
operation expenses, debt service and increases in working capital. The fund allows preparation for future
contingencies as regards their equipment.
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DUs and ECs to be efficient in minimizing the losses. Previous to the institution of
caps, DUs had no incentive to minimize the losses because they were able to pass the
entire burden of the losses to the consumers as all the losses it incurred were built in
the power rates. Under R.A. 7832, the amount of losses which a DU can input in the
charges to the consumers was limited by a cap, thus encouraging these utilities to
minimize losses within the limit which they can pass on to consumers.
Power rates prior to the passage of “Anti-Electricity
and Electric Transmission Line/Materials
Pilferage Act of 1994”
A. Cash Based Methodology
The core business of DUs consists of putting up and maintaining the distribution
network to be able to distribute to its customers as the end-users, the electricity
that it purchases from the National Power Corporation or the generation companies,
or both.
Previously, the transmission sector of the electric industry was dependent on
and integral to the generation cost because the NPC owned both the generation and
transmission lines. This can be illustrated, as follows:
Generation Transmission Distribution
Generation Cost Distribution Cost
The monthly electric bill that the DUs issue to its electricity consumers accounts
for both the generation costs and distribution costs it incurred in providing the
service. The components of generation costs include the cost of the power purchased
from NPC (or other generation companies, if this is the case, as well as from its own
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generation, if it has a generation plant) and the cost for using the transmission system.
The distribution cost accounts for the costs of the DUs in putting up, operating, and
maintaining the distribution network, which made the delivery of the electricity to
the end-user possible.
National Electrification Administration (NEA)
Rate Fixing Policies
Prior to the ERB and ERC’s assumption of rate fixing functions, the task
pertained to the National Electrification Administration (NEA). Under the NEA,
the basic monthly rates that an EC can charge its customers for their electricity
consumption are set using the Cash Based Methodology. This methodology allows
an EC to recover from its customers only its actual and allowable cash expenses.
There is no return on the assets it puts up. The cost data of an EC, or the cost
components that NEA allows an EC to recover consist primarily of two items:
(a) generation cost and (b) distribution cost.
The generation cost and distribution cost are embodied in the cost components
of the cost data, which comprises the basic rates that DUs are allowed to charge
consisting of the following: (a) basic cost; (b) allowance for system loss; (c) non-power
cost; (d) debt service or amortization cost; and (e) five percent (5%) reinvestment
fund. 31
Under the Cash Based Methodology system of setting power rates, there arises
the issue of inflexibility of the rate set because it is not sensitive to the changes in
basic power cost and variation in system losses. Variable costs in power generation,
like the cost of fuel, lead to changes in the basic power cost on a regular basis.
Higher prices for fuel mean higher basic power costs because the power producers
impute such increases to the price of power transmitted to ECs. As regards variations
in system losses, these depend on the rampancy of pilferage, weather, and age of
equipment used in transmission.
31 a. Basic Power Cost;
Basic Power Cost refers to costs incurred by a DU for the purchase of power from its power suppliers, which is
mainly the NPC. Some have their own generation.
b. Allowance for System Loss;
Allowance for System Loss is the loss ratio that an EC is allowed to recover. System Loss refers to electricity
purchased from power suppliers, which the DU is not able to sell to its end-users because these electrons are lost
as they pass through the wires, whether caused naturally or through pilferage.
c. Non-power Cost;
Non-power Cost pertains to operation, maintenance, administrative and customer-related expenses which an
EC incurs in performing its responsibility of providing electricity to its consumers.
d. Debt Service or Amortization Cost; and
Debt Service or Amortization Cost relates to cost which an EC bears in amortizing the loans it had availed,
usually from the NEA.
e. Five Percent (5%) Reinvestment Fund.
5% Reinvestment Fund, taken from the Gross Revenue, is money allocated by a DU for use in financing the
rehabilitation of its distribution system and other capital programs, after covering operation expenses, debt
service and increases in working capital. The fund allows preparation for future contingencies as regards
their equipment.
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The inflexibility of the power rates poses great risk to the feasibility of
operations of ECs. Even if the EC’s actual generation cost inflates because of the
rise in basic power costs and systems losses, the power rates approved remains the
same. The EC cannot unilaterally adjust the rates to recover incremental costs without
dealing with the NEA. It would be too tedious and impractical to petition for revision
of cost data to increase the allowable rates charged every time there is a change in
generation cost as the DU concerned would have to file for increase of power rates
almost every month.
To address the issue, the NEA issued Resolution No. 1 sometime in January
1994, which was later superseded by NEA Memorandum No. 1-A, which allowed
DUs to use a multiplier scheme.
B. Multiplier Scheme
The multiplier scheme allows the recovery of incremental costs in the power
purchased from the NPC and consequent system losses that are not included in the
EC’s approved basic rates. This mechanism relieves the EC from the burden of
filing rate applications with the NEA every time there are increases in its generation
costs. With the use of the multiplier, an EC is allowed to automatically adjust its
rates when the cost of power purchased from the NPC changes.
Under this multiplier scheme, the ECs can use multipliers ranging from 1.2 to
1.4, depending on their actual system losses, as follows:
1.2 Multiplier - For ECs with system loss of 15% and below;
1.3 Multiplier - For ECs with system loss ranging from 16% to 22%;
1.4 Multiplier - For ECs with system loss ranging from 23% and above. 32
To illustrate how the multiplier scheme works, assume for example that a DU
has the following NEA-approved basic rate effective January 1991:
Cost Data
Particulars PhP/kWh
Power Cost 1.00
System Loss (20%) 0.20
Non-power Cost (ex. Payroll, Operation and Maintenance) 1.00
Amortization Cost 1.00
5% Reinvestment Cost 0.48
Total Basic Rate 3.68
32 NEA Memorandum No. 1-A [1994].
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Considering its system loss to be at 20%, the multiplier that applies to such EC
is 1.3. If the NPC increased its rates by Php 0.25/kWh in December 1991, applying
the multiplier scheme to the incremental increase of PhP0.25/kWh in NPC’s rates,
the EC’s Basic Rate is adjusted by three centavos, thus:
Loss Levy Charge
Cost Data
Particulars PhP/kWh
Power Cost 1.00
System Loss (20%) 0.20
Non-power Cost (ex. Payroll, Operation and Maintenance) 1.00
Amortization Cost 1.00
5% Reinvestment Cost 0.48
Add:
1. NPC Increase (December 1991) (PhP0.025 x 1.3) 0.03
Total Basic Rate 3.71
Another pricing mechanism implemented by the NEA is the loss levy charge.
ECs are non-stock and non-profit entities which source their financial requirements
mostly from the government or from other finance institutions, including the Asian
Development Bank (ADB).
As part of the loan covenant, the ECs that avail of loans from the ADB, for
instance, agree to have their recoverable system loss limited to 15%. To allow these
ECs to recover their system loss in excess of 15%, the NEA has approved the inclusion
in the basic rates of a separate item for loss levy charge. In short, the excess systems
loss was imputed into the basic rate in another form.
When the ERB took over the NEA’s rate-setting function over the ECs, it
adopted and continued the implementation of the above procedures and policies for
setting and adjusting the ECs’ rates.
Power rates under the “Anti-Electricity
and Electric Transmission Line/Materials
Pilferage Act of 1994”
Institution of System Loss Caps
The Anti-Electricity and Electric Transmission Line/Materials Pilferage Act
of 1994 (Republic Act No. 7832), which became effective in 1995, gradually phased
out pilferage losses as a component of the DUs’ recoverable system losses by instituting
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system loss caps. With the imposition of these caps, it was no longer possible to use
the Multiplier Scheme because system losses which DUs could pass on to the
consumers were already limited. It was no longer possible to use the approved
multiplier to the corresponding systems losses which were beyond the caps.
C. Purchase Power Adjustment (PPA)
The Guide Formula
Since the multiplier scheme was no longer feasible, the problem of inflexibility
and incapability to adjust to changes would resurface. Thus, the ERB came out with
a guide formula 33 for the DUs. The guide formula allows them to implement
adjustments in their rates to recover the incremental costs in generation and the
associated system losses, subject to the applicable system loss cap under the law.
This would be the basis for the Purchased Power Adjustment (PPA) formula as
utilized by DUs. The guide formula reads: 34
Section 2. Automatic Cost Adjustment Formula. – Each and every utility
shall file with the ERB, on or before September 30, 1995, an application
for approval of an amended Generation Charge or Power Cost Adjustment
formula that would reflect the new system loss cap to be included in its
schedule of rates.
The automatic cost adjustment clause of every utility shall be guided
by the following formula:
Generation Charge
Subsidizing consumption shall be charged a generation charge per
kWh equal to:
Where:
A 1
x - E
B – (C+D) 1-FT
A = Cost of electricity purchased and generated for the previous month
less revenue from subsidized kWh on generation charge applicable
B = Total kiloWatt Hours (kWh) purchased and generated for the previous
month
33 Implementing Rules and Regulations (IRR) of R.A. No. 7832.
34 R.A. 7832, Implementing Rules and Regulations, Rule IX, Sec. 2.
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C = The actual system loss but not to exceed the maximum recoverable
rate of system loss in kWh plus actual company use in kWh but not
to exceed 1% of total kWh purchased and generated
D = kWh consumed by subsidized consumers
E = applicable base cost of the amount incorporated into their basic rate
per kWh
FT =Franchise tax rate
The PPA is an automatic cost adjustment mechanism that allows the DUs to
recover the actual cost of electricity vis-à-vis their approved basic rates. DUs are not
supposed to earn additional revenue but only recover their actual costs to keep their
operations financially feasible.
The above guide formula 35 became basis for the Purchased Power Adjustment
PPA formula which the DUs submitted to the ERC for approval. As directed in the
Implementing Rules and Regulations of R.A. No. 7832, the ECs filed with the ERB
their applications for approval of their PPA or their proposed formula to recover
adjustments in the power costs subject to the system loss cap under the law. Their
proposed formula for PPA was similar to the guide formula provided in the IRR of
R.A. No. 7832.
Instead of filing individual applications, the Regional Electric Cooperatives
Associations in Luzon, Visayas, and Mindanao to which each of the ECs belonged
filed their respective consolidated applications on behalf of all their member-ECs.
This reflected a similarity of their situation given their geographical proximity. 36
35 as prescribed under the Implementing Rules and Regulations of R.A. 7832, Rule IX, Sec. 2 Western Visayas
Electric Cooperatives Association (WEVECA), Central Visayas Electric Cooperatives Association (CEVECA)
and Leyte Samar Electric Cooperatives Association (LESECA) filed ERB Case No. 96-43 which was redocketed
as ERC Case No. 2001-341. c. For Mindanao, Association Of Mindanao Rural Electric Cooperatives (AMRECO)
filed ERB Case No. 96-49 which was redocketed as ERC Case No. 2001-343. gg) Zamboanga del Sur I Electric
Cooperative, Inc. (ZAMSURECO I); hh) Bukidnon II Electric Cooperative, Inc. (BUSECO); ii) Camiguin
Electric Cooperative, Inc. (CAMELCO); jj) Dinagat Island Electric Cooperative, Inc. (DIELCO); kk) First
Bukidnon Electric Cooperative, Inc. (FIBECO); and ll) Davao Oriental Electric Cooperative, Inc. (DORECO).
36 a. For Luzon, There were three applications: a. the Association of Southern Tagalog Electric Cooperatives
(ASTEC) and Bicol Electric Cooperatives Association (BECA) filed ERB Case No. 96-35 redocketed as ERC
Case No. 2001-338; b. North Western Luzon Electric Cooperatives Association (NWELECA) and North
Eastern Luzon Electric Cooperatives Association (NLECA) were the applicants in ERC Case No. 2001-339
(formerly ERB Case No. 96-36); c. Central Luzon Electric Cooperatives Association (CLECA) initiated ERB
Case No. 96-37 which was redocketed as ERC Case No. 2001-340.
b. For the Visayas, Western Visayas Electric Cooperatives Association (WEVECA), Central Visayas Electric
Cooperatives Association (CEVECA) and Leyte Samar Electric Cooperatives Association (LESECA) filed
ERB Case No. 96-43 which was redocketed as ERC Case No. 2001-341.
c. For Mindanao, Association Of Mindanao Rural Electric Cooperatives (AMRECO) filed ERB Case No.
96-49 which was redocketed as ERC Case No. 2001-343.
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On February 19, 1997, in an Order issued in ERB Cases Nos. 96-35, 96-36, 96-
43, and 96-49, the ERB provisionally authorized the ECs to use and implement the
PPA formula. For ERB Case No. 96-37, the ERB provisionally authorized the ECs
of the Central Luzon Electric Cooperatives Association (CLECA) to implement the
PPA formula in its Order dated April 25, 1997.
The authority granted to the ECs was provisional. The adjustments to be
implemented by the ECs using the PPA formula were conditional and subject to the
review, verification, and confirmation of the ERB and later on, the ERC. There is a
need to verify whether the projected power cost as estimated by the PPA formula is
equal to the actual power cost.
For example, if the PPA Formula yields the amount of PhP 2.25/kWh,
there is a need to verify whether the actual power cost is indeed PhP2.25/kWh as
allowed and computed in accordance with the formula. If it turned out during the
confirmation process that this should only be PhP2.15/kWh, the correct PPA
should only have been PhP0.15/kWh and not PhP0.25/kWh as earlier implemented
by the EC. Considering this over-recovery, the EC should refund to its customers
PhP0.10/kWh, otherwise it would be earning or recovering more than what was
allowed.
In the same order, the ERB and later on, the ERC, required the ECs to submit
on or before the 20 th day of the month their implementation of the PPA formula in
the previous month for purposes of review, verification, and confirmation. The
adjustments implemented by the ECs using the PPA formula were not final, until
they were subsequently reviewed, verified, and confirmed.
By reason of the provisional authority granted to ECs in the ERB’s order
dated February 19, 1997 in ERB Cases Nos. 96-35, 96-36, 96-43 and 96-49, and in its
order dated April 25, 1997 in ERB Case No. 96-37, the ECs started collecting the
PPA charge from the customers.
To monitor that the DUs’ and ECs’ implementation of the PPA was
profit-neutral as well as to guard against profiteering, the ERB reviewed,
verified and confirmed the PPA charged and collected by the respective DUs and
ECs. By its nature, the PPA was just an estimate of the incremental costs. Thus it
was necessary to confirm and verify whether the incremental cost as estimated by
the PPA would approximate, if not equal its actual cost when the data was already
available.
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On various dates from 1999 to 2001, the ERB verified and confirmed the PPA
charges of thirty-eight (38) ECs. 37
In confirming the PPA implementation, the ERB considered most of the costs
included by the ECs in their computation of their actual power cost/allowable kWh.
The following factors were considered:
(a) the previous month’s data (and not the current month’s data) for
determining the killowatts purchased;
(b) corresponding cost;
(c) 12 months’ average System Loss; and
(d) coop use – consequently, while most of the confirmation orders issued by
the ERB found the ECs to have over-recovered, the amounts of these
over-recoveries were only minimal.
37 a ) Abra Electric Cooperative, Inc. (ABRECO);
b) Benguet Electric Cooperative, Inc. (BENECO);
c) Ilocos Sur Electric Cooperative, Inc. (ISECO);
d) Mountain Province Electric Cooperative, Inc. (MOPRECO);
e) Pangasinan I Electric Cooperative, Inc. (PANELCO I);
f) Central Pangasinan Electric Cooperative, Inc. (CENPELCO);
g) Pangasinan III Electric Cooperative, Inc. (PANELCO III);
h) Pampanga I Electric Cooperative, Inc. (PELCO I);
i) Batangas II Electric Cooperative, Inc. (BATELEC II);
j) Quezon I Electric Cooperative, Inc. (QUEZELCO I);
k) Quezon II Electric Cooperative, Inc. (QUEZELCO II);
l) Oriental Mindoro Electric Cooperative, Inc. (ORMECO);
m) Albay Electric Cooperative, Inc. (ALECO);
n) Camarines Sur I Electric Cooperative, Inc. (CASURECO I);
o) Camarines Sur II Electric Cooperative, Inc. (CASURECO II);
p) Camarines Sur III Electric Cooperative, Inc. (CASURECO III);
q) Camarines Sur IV Electric Cooperative, Inc. (CASURECO IV);
r) First Catanduanes Electric Cooperative, Inc. (FICELCO)
s) Masbate Electric Cooperative, Inc. (MASELCO);
t) Sorsogon I Electric Cooperative, Inc. (SORECO I);
u) Ticao Island Electric Cooperative, Inc. (TISELCO);
v) Biliran Electric Cooperative, Inc. (BILECO);
w) Eastern Samar Electric Cooperative, Inc. (ESAMELCO);
x) Northern Samar Electric Cooperative, Inc. (NORSAMELCO);
y) Samar I Electric Cooperative, Inc. (SAMELCO I);
z) Samar II Electric Cooperative, Inc. (SAMELCO II);
aa) Southern Leyte Electric Cooperative, Inc. (SOLECO);
bb) Leyte I Electric Cooperative, Inc. (LEYECO I);
cc) Leyte II Electric Cooperative, Inc. (LEYECO II);
dd) Leyte III Electric Cooperative, Inc. (LEYECO III);
ee) Leyte IV Electric Cooperative, Inc. (LEYECO IV);
ff) Leyte V Electric Cooperative, Inc. (LEYECO V);
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When the EPIRA took effect in 2001, the ERC took over the review, verification
and confirmation of the PPA implementation from the ERB. Before proceeding with
the verification and confirmation of the ECs’ PPA charges, the ERC reviewed the
ERB’s procedures and policies. To protect public interest, the ERC adopted its own
policies which were to be applied to its verification and confirmation of the PPA.
This ensured that the application of the PPA formula would not result to any gain
or loss to the ECs and that the PPA implementation would be purely cost-recovery
and revenue-neutral for the ECs.
The ERC thereafter issued the Orders dated June 17, 2003 and January 14,
2005, to embody and clarify its procedure and policies for the verification and
confirmation of the DUs’ PPA charges.
Cost of electricity purchased and/or generated-
“Net” of discounts not “Gross”
In the June 17, 2003 Order, the ERC noted that the PPA formula was silent on
whether or not the calculation of the cost of electricity purchased and/or generated
(variable “A”) should be “gross” or “net” of the discounts. Although the ERB in the
past used “gross”, the ERC resolved to use “net” of discounts, as this was more in
keeping with the policy that the PPA is profit-neutral and DUs should not gain from
the PPA implementation, but only recover their actual costs.
Note that the variable “A” is a “dividend” in the formula, and thus, there is
direct proportion. If “A” is greater, then the allowable PPA would also be greater. If
on the other hand “A” is smaller, then the PPA would also lessen. Necessarily, the
cost of electricity purchased and/or generated gross of discounts is greater than cost
of electricity net of discounts as the latter has to be deducted from the amount of
discounts. Thus, it was more in the nature of the PPA to consider net of discounts to
keep it profit neutral. Otherwise, the DUs would be able to take the discounts given
to them by the power producers as profits since they are passing on to consumers
more than the actual costs of the power purchased and/or generated.
In the January 14, 2005 Order, the ERC clarified its policies in the verification
and confirmation of the ECs’ unconfirmed PPAs, as follows:
a) The computation and confirmation of the PPA prior to the Commission’s
Order dated June 17, 2003 shall be based on the approved PPA formula;
b) The computation and confirmation of PPA after the Commission’s Order
dated June 17, 2003 shall be based on the power cost “net” of discount;
and
c) If the approved PPA formula is silent in terms of discount, the computation
and confirmation of the PPA shall be based on the power cost at “gross”
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reduced by the amount of discounts extended to customers, subject to the
submission of proof that said discounts are being extended to customers.
The ERC then proceeded with the review, verification, and confirmation of
the ECs’ charges. The ERC requested each of the DUs to submit additional data
and information necessary to establish and determine their actual costs, and to
compare such data and information with the actual PPA charges. These data and
information became basis to determine the accuracy of the DUs’ charges.
After requesting additional data and information in support of the PPA, the
ERC conducted exit conferences with the ECs to give them the additional opportunity
to comment on the preliminary figures arrived at by staff and to submit additional
data, clarifications, and requests for recalculation. Clearly, the ECs are given every
opportunity to justify their PPA charges and implementation, all in the interest of
due process.
Refund To Customers of Over-recoveries or
Collect Under-recoveries from Customers.
As a result of the review, verification and confirmation, the ERC issued a PPA
Confirmation Order for each DU. The Confirmation Order contained its findings
whether there was over-recovery or under-recovery in the respective DU’s PPA
implementation. If there was over-recovery, the ERC’s Confirmation Order directed
the DU to issue a refund. Otherwise, the ERC authorized the electric cooperatives
to collect the deficiency. The respective DUs were also allowed to ask for the
reconsideration of their PPA Confirmation Order. In some instances, the ERC granted
partial reconsideration and conducted a recalculation based on the submissions of
the EC.
It is in this factual and historical milieu that the PPA and its successor adjustment
mechanisms will be examined.
PPA Implementation
Review / Verification, and Confirmation Process
Since the approved PPA formula was implemented without the ERB or ERC’s
prior supervision and approval, the ERB and subsequently, the ERC reviewed, verified
and confirmed such implementation to ensure that the PPA would only be to the
extent necessary for the DU to recover its incremental generation costs and system
loss subject to the systems loss cap under R.A. 7832.
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The review, verification, and confirmation process is necessitated further by
an inherent limitation in the use of the PPA formula. The resulting PPA is actually
a mere estimate of the actual incremental costs incurred by the DU for the current
month. This is so because at the time the DU computes the PPA for the current
month, the actual billings of the DU’s power suppliers for the current month are not
yet available. As a proxy for this figure, the DU is allowed under the formula to use
the previous month’s data or information.
As necessarily implied by its nature, the PPA is revenue-neutral and only covers
its actual costs for purchasing power. The respective DUs should not incur any overor
under-recoveries in its PPA implementation. To ensure this, the DU’s PPA is
subject to the regulator’s review, verification, and confirmation. If the confirmation
results in a finding of over recovery, the DU is obliged to return to its customers the
excess by implementing a reduction in its rates.
As regards the system loss and coop use, the proper implementation of the
PPA formula used the running average of the previous twelve months in the
computation of the current billing month’s PPA. This neutralizes the impact of system
losses on the PPA considering that system losses abruptly fluctuate every month.
Both the system loss and the coop use are subject to caps. System loss is capped to
encourage DUs to minimize their incurred losses. The coop use is capped to discourage
the DUs from inflating their non-power costs including operations, administrative
and maintenance of their equipment and personnel.
Considering the PPA to be a mere estimate, using historical data of the DU’s
incremental costs at the time of actual implementation, the confirmation process
considers all the needed actual data. It is noted that these data and information were
not available at the time of implementation because the power producers have not
billed them for power costs at that time. Such data were available only during the
confirmation process when the basic power costs have already been charged by the
power producers to the DU involved. As regards the systems losses and coop use,
the DU would already have such actual data at the confirmation process even if
these were merely estimated at the time of its implementation. Thus, the confirmation
process serves as the true value of the incremental costs in the purchase of basic
power cost using data on the actual costs incurred by the DU and not just mere
estimates.
Provisional Rate Increases
The system of allowing provisional rate increases prior to ERC approval was
recognized by the Supreme Court in MERALCO vs. Lualhati 38 as follows:
38 510 SCRA 455 [2006], G.R. Nos. 166769 & 166818, December 6, 2006.
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The established rule in this jurisdiction is that findings of administrative
or regulatory agencies on matters within their technical area of expertise
are generally accorded not only respect but finality if such findings are
supported by substantial evidence. Rate-fixing calls for a technical
examination and a specialized review of specific details which the courts
are ill-equipped to enter; hence, such matters are primarily entrusted to
the administrative or regulating authority. Thus, this Court finds no
reversible error on the part of ERC in rendering its assailed decision and
order.
However, while ruling in said manner, this Court is cognizant that such
ruling has far-reaching effects and is of utmost significance to the public,
especially to the poor, who face the threat of deeper wallowing in the
quagmire of financial distress once the burden of electricity rate increases
is passed on to them. Better judgment, therefore, calls for this Court to
temper the rigidity of its decision.
Although affirming the decision and the order of the ERC approving the
rate increases for electricity, this Court is not closing its eyes to the
fundamental principle of social justice so emphatically expressed by the
late President Magsaysay in his statement: “He who has less in life should
have more in law.”
The concern for the poor is recognized as a public duty, and the protection
of the rights of those marginalized members of society have always
dutifully been pursued by the Court as a sacred mission. Consistent with
this duty and mission, the Court deems it proper to approve the rate
increases applied for by MERALCO provisionally, i.e., MERALCO to
impose provisional rate increases while directing the ERC, at the same
time, to seek the assistance of COA in conducting a complete audit on
the books, records and accounts of MERALCO to see to it that the rate
increases that MERALCO has asked for are reasonable and justified.
Stated otherwise, the provisional rate increases will continue to be subject
to its being reasonable and just until after the ERC has taken the
appropriate action on the COA Report.
How the PPA Formula Works
Applying the PPA Formula
As an automatic cost adjustment mechanism the PPA allows the DUs to recover
the actual cost of electricity vis-à-vis their approved basic rates but does not allow
DUs to earn additional revenue. DUs should only recover their actual costs to keep
their operations financially feasible.
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The PPA Formula that was provisionally authorized to be used and implement
on February 19, 1997, in an Order issued in ERB Cases Nos. 96-35, 96-36, 96-43,
and 96-49, and on April 25, 1997 in an Order issued in ERB Case No. 96-37, is as
follows:
Where:
PPA = A - E
B – (C + C1 + D)
“A” = represents the cost of power purchased and generated for the
previous month less amount recovered from pilferages if any.
“B” = represents the total monthly kilowatt hours (kWhrs) of electricity
purchased and generated for the previous month.
“C” = represents the actual system loss but not to exceed the maximum
recoverable rate of system loss in kWh
“C1” = represents the actual company use in kWhrs but not to exceed 1%
of total kWhrs purchased and generated.
“D” = represents the kWh consumed by subsidized consumers.
“E” = represents the base cost of power equal to the amount incorporated
into their basic rate per kWh.
To summarize, the PPA is just the difference between the EC’s actual power
cost (translated into a PhP/kWh rate) and its basic power cost such that if for example
the EC’s actual power is PhP2.25/kWh and its basic power cost is PhP2.00/kWh,
the PPA it can implement is PhP0.25/kWh.
Variables
There are five (5) variables in the PPA formula:
PPA = A - E
B – (C + C1 + D)
(Actual power cost/allowable kWh) less (basic power rate)
The variable “A” in the formula represents the actual monthly cost
which the DUs incur in purchasing electricity from their power suppliers
(NPC and other IPPs) and cost of generation for those with own generation
capacity. Pilferage recoveries and collections from those caught pilfering
electricity are deducted from this variable.
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The variable “B” in the formula is the corresponding monthly
kilowatthours (kWh) of electricity which the DUs purchased from their
power suppliers for distribution to their consumers.
The variable “C” in the formula is the system loss 39 that the ECs
may recover subject to the caps mandated by R.A. No. 7832. The
recoverable system loss is the mandated caps or the actual system loss,
whichever is lower. The variable “C1” in the formula refers to Coop Use
or the kWh consumption of the DUs which they are allowed to recover.
This is also subject to a cap to promote efficiency.
The variable “D” pertains to discounts or subsidized kWhs which
the DUs were mandated to make available to their consumers. Normally,
these subsidies are provided to marginalized consumers.
The variable “E” pertains to the basic power cost component of the
ECs that are integrated into their restructured basic rates. This variable
in the PPA formula is fixed by the ERC. This can only be changed once a
new basic rate is approved for the DU.
Given the caps on recoverable system loss under R.A. No. 7832, the ERB
restructured the basic rates of the DUs as previously approved by the NEA to
implement the caps, while maintaining the ECs’ existing rate levels.
The PPA rate per kWh that is determined using the PPA formula aims to
capture the incremental cost in purchased and generated electricity plus recoverable
system loss in excess of what had already been included as the power cost component
in the ECs’ basic rates.
As can be seen, the PPA is just the difference between the approved recoverable
power cost and system loss pegged at a certain rate, which are incorporated in the
DUs’ approved basic rates, and the prevailing purchased power cost incurred by the
DUs and their allowable system loss for a particular billing month, as estimated
using the previous month’s data. This would then be subject to review, verification,
and confirmation by the ERC.
39 System loss is equal to the KWh purchased less kWh sales and coop Use. The percent (%) system loss is
determined by getting the quotient of the kWh system loss and the kWh Purchased multiplied by 100. Using the
above data and assuming that the kWh sales is 84,500, the system loss will be computed as follows:
SL(kWh) = 100,000
– 84,500
– 500
SL(kWh) = 15,000
SL(%) = (15,000/100,000) x 100
SL(%) = 15%
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For example, assume that an EC computes its PPA charge using the May 2000
power supplier’s bill for the billing month of June 2000, and previous 12 months’
average system loss and coop use, as follows:
Particulars Data PPA Formula
Purchased Cost @ P2.50/kWh PhP 250,000 “A”
kWh Purchased kWh 100,000 “B”
Actual Average System Loss (@ 15%) kWh 15,000 “C”
System Loss @ 14% cap kWh 14,000
Actual Average Coop Use kWh 500 “C1”
Coop Use @ 1% cap kWh 1,000
Subsidized Consumption kWh 0 “D”
Basic Power Cost Component PhP/kWh 2.00 “E”
The PPA charge to be implemented by the EC, on top of its PhP2.00/kWh
Basic Power Cost Component, is computed, as follows:
PPA = PhP 250,000 - PhP2.00/kWh
100,000 kWh – (14,000 kWh+ 500 kWh+0)
PPA = PhP2.92/kWh – PhP2.00/kWh
PPA = PhP0.92/kWh
The system loss recovery is governed by caps, which R.A. No. 7832 mandated.
In applying the PPA formula, the principle observed in considering system losses is
the actual system loss or the caps, whichever is lower. This is also observed in coop
use, which is capped at 1% of kWh purchased for a particular billing month. In the
example above, the actual system loss incurred by the DU is 15%, which is in excess
of the recoverable cap of 14%. Given this, the system loss cap of 14% or the equivalent
kWh of 14,000 was adopted in the computation. In the case of coop use, the actual
data is less than the set cap of 1% of kWh purchased, hence the actual coop use was
considered and used in the computation.
The Rule on Caps
There are two caps relevant to the PPA formula: The systems loss cap (variable
“C”) and the coop use cap (variable “C-1”). Both of them seek to promote efficiency
and avoid electric wastage for the benefit of the consuming public by limiting the
systems loss and non-power costs which cooperatives can pass on to the consumers.
A. System Loss Caps
Systems losses are part of the costs of DUs, both privately-owned and ECs.
They constitute the difference between the amount of electricity it bought from the
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power producers, and the amount of electricity it actually delivers to its end-users.
The loss is due to electricity lost as they pass through the wires, either through
natural causes or pilferage.
The law allows this loss to be passed on to consumers as part of their monthly
bill. Under the NEA and sometime under the ERB, the entire system losses, regardless
of amount, could be imputed in the basic rate and passed on to the consumers. In
1994, the Anti-Electricity and Electric Transmission Line/Materials Pilferage Act of
1994 instituted a cap to the amount of system losses which a DU or EC can pass on
to its consumers. Note the diminishing rates as time passes clearly indicating the
gradual phasing out of the system loss as an item in the power charges.
Under R.A. 7832, the system loss caps are as follows:
a. For private electric utilities:
(i) Fourteen and a half percent (14 1/2 %) at the end of the first year
following the effectivity of R.A. 7832;
(ii) Thirteen and one-fourth percent (13 1/4%) at the end of the
second year following the effectivity of R.A. 7832;
(iii) Eleven and three-fourths percent (11 3/4%) at the end of the
third year following the effectivity of R.A. 7832; and
(iv) Nine and a half percent (9 1/2%) at the end of the fourth year
following the effectivity of R.A. 7832. 40
Thus, for privately-owned cooperatives the rates were as follows: Fourteen
and Half percent (14.5%) effective on February 1996 billing; Thirteen and Half percent
(13.5%) effective on February 1997 billing; Eleven and Three-Fourths (11.75%) effective
on February 1998 billing; Nine and a half (9.5%) effective on February 1999 billing. 41
After the fourth year, the ERB determines whether the cap should be reduced further
in no case lower than 9%.
In the calculation of the system loss for private electric utilities, direct sales of
electricity shall be excluded. Direct sales are electricity sold within the following
conditions: (1) the point of metering by the NPC or any other utility is less than one
thousand (1,000) meters from the consumer; or (2) the consumer’s electric
consumption is three percent (3%) or more of the total load consumption of all the
customers of the utility; or (3) there is no other consumer connected to the distribution
40 Rep. Act. No. 7832 [1994], sec. 10 (a).
41 IRR of R.A. 7832, Rule IX, sec. 1.
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line of the utility which connects to the NPC or any other utility point of metering to
the consumer meter. 42
b. For rural electric cooperatives:
(i) Twenty-two percent (22%) at the end of the first year following
the effectivity of R.A. 7832;
(ii) Twenty percent (20%) at the end of the second year following the
effectivity of R.A. 7832;
(iii) Eighteen percent (18%) at the end of the third year following the
effectivity of R.A. 7832;
(iv) Sixteen percent (16%) at the end at the fourth year following the
effectivity of R.A. 7832; and
(v) Fourteen percent (14%) at the end of the fifth year following the
effectivity of R.A. 7832. 43
Thus, for rural cooperatives the rates were as follows: Twenty-two percent
(22%) effective on February 1996 billing; Twenty percent (20%) effective on February
1997 billing; Eighteen percent (18%) effective on February 1998 billing; Sixteen percent
(16%) effective on February 1999 billing; and Fourteen percent (14%) effective on
February 2000 billing.” 44
Under the EPIRA, the ERC has sufficient leeway and discretion to set the caps
based on the load density, sales mix, cost of service, delivery voltage and other
technical considerations as well as the efficiency or inefficiency of the regulated
entities. The rates must be such as to allow the recovery of just and reasonable costs
and a reasonable return on rate base (RORB) to enable the entity to operate viably. 45
In exercising its discretion, the ERC may adopt alternative forms of
internationally-accepted rate-setting methodology as it may deem appropriate to
ensure a reasonable price of electricity. The rates prescribed must also be nondiscriminatory
and must promote efficiency. 46
42 Rep. Act. No. 7832, sec. 10 (a), para. 2.
43 Rep. Act No. 7832, sec. 10 (b).
44 IRR of R.A. 7832, Rule IX, sec. 4.
45 Rep. Act No. 9136 [2001], Section 43 (f).
46 Rep. Act No. 9136 [2001], Section 43 (f).
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B. Coop use
The coop use is the electricity used for operations, administration, and
maintenance of the cooperatives’ equipment and personnel. These reflect the nonpower
cost of operating an electric cooperative. For coop use, there was always a 1%
cap instituted by the ERB and the ERC to avoid any possible abuse and carelessness
in incurring operating expenses. Thus, a DU can only pass on a maximum of 1% of
its own usage to the public. This discourages a DU from incurring and using electricity
beyond 1% as it would then have to bear its own costs.
How the Caps work
Both the systems loss cap and the coop use cap are limits to systems loss and
coop use which a DU could pass on to its consumers. By necessary implication, DUs
can only recover its actual system loss/coop use or the applicable cap whichever is
lower. This method of implementing the caps for system losses and coop use is in
accord with the nature, function and ratio of the said caps as instituted by law.
Their respective “caps” set the limit for the DUs recoverable rate of system
losses and coop use. The cap did not replace the actual data which a DU incurred as
system loss or coop use. Thus, an EC can only recover its actual system loss or coop
use subject only to the cap or limit. If the actual system loss or coop use is lower,
then the actual loss should be the percentage considered as part of the PPA. If the
cap is lower, then the cap is the input used in the PPA formula.
As regards systems losses, the interpretation that the DU can only recover its
actual loss or the cap whichever is lower is in accord with the spirit behind Section
10 of R.A. 7832 which aims to promote a more efficient distribution of electricity by
phasing out pilferage losses as part of the charges to the consumers. The cap
discourages DUs to incur more system losses by limiting what it could pass on to its
consumers, thus promoting a more efficient distribution of electricity since any excess
in system losses will be borne by the DUs, encouraging it to minimize system losses.
Moreover, allowing a DU to recover only its actual system loss or the cap
whichever is lower is consonant with the policy that DUs can only be allowed
reasonable rate of return by being purely cost-recovery and revenue-neutral for the
DUs. If the cap is used when the actual loss is lower, there would result a surplus on
what the DU can recover from the public.
As regards the coop use cap, DUs are not allowed to impute their own use of
electricity to the consumers indiscriminately. Any electricity a DU uses in excess of
1% will have to be borne directly by such DU without the possibility of transferring
such burden to the public. Thus, DUs would be more conscious in minimizing their
own use of electricity and are encouraged to utilize cost cutting measures to maximize
the 1% electricity allowed for their own consumption which can be imputed in the
power charges to the consuming public.
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1. The Generation Rate Adjustment Mechanism (GRAM)
On February 24, 2007, the ERC recognized the problems of the PPA
mechanism. While R.A. 9136 requires the unbundling of rates, the continuation of
the then current PPA process would result in generation, transmission and certain
distribution costs to be bundled. The goals of any automatic adjustment mechanism
should balance the need for timely recoveries of costs by the utilities with the
commission’s need to review reasonableness and prudence of such costs. 47 Thus,
the ERC observed:
“The Commission believes it difficult to assure the public that the current
PPA process meets this goal for several reasons. First, the current PPA
process is not implemented uniformly due to the use of different formulas
by different distribution utilities. Second, the confirmation process is
conducted long after the costs have already been recovered from customers.
Third, rates are changed without an Order from the Commission. Lastly,
the rates established by the formulas may not generate the appropriate
level of recovery given the use of estimates in the use of calculations. In
order to address these concerns the commission developed an alternative
recovery process.” 48
The alternative formula was devised and called the “Generation Rate
Adjustment Mechanism” (GRAM). In the same order, the ERB adopted the
Incremental Currency Exchange Recovery Adjustment (ICERA) which aims to cope
with changes in the valuation and devaluation of the peso.
The GRAM had the same objective as the PPA in the ultimate goal of passing
costs of generation to the consumers. They differ only as to how the passing of costs
is done, as follows:
a. Under the GRAM, the costs must be reviewed by the ERC prior to
the levying of such costs on the consumers; whereas under the PPA,
costs were reviewed by the ERC only after the same has already been
imposed on the consumers.
b. As regards the change in rates, DUs could only change rates quarterly
under the GRAM, unlike under the PPA when they were allowed to
change rates monthly.
c. Unlike the PPA, the change in recovery of fixed costs of generation
was no longer automatic under the GRAM. This change is possible
47 See Order in ERC Case No. 2003-44 dated February 24, 2003 (hereinafter referred to as GRAM Order)
48 GRAM Order
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only through a petition to adjust generation rate subject to approval
by the ERC within a maximum period of forty-five days (45) days.
d. Since the problem with the PPA was that it was unbundled in so many
respects, the GRAM excludes Transmission Component, System Loss,
and Franchise Tax.
e. The PPA had no carrying cost while the GRAM had carrying costs. 49
To summarize, the GRAM has the following salient features:
a. This excludes stranded costs under Section 32 and 33 of the EPIRA.
Stranded costs are the excess of the contracted cost of electricity
under eligible contracts over the actual selling price of such contracts
in the market. These costs are recoverable only at the start of open
access or the moment the market is in place. On the other hand, the
GRAM will be implemented after the unbundling of a distribution
utility’s rates and continues indefinitely.
b. GRAM is applicable only to DUs which have a composite or mixed
source of power, i.e., DUs which source power from the NPC and the
IPPs.
c. The system loss rate was fixed during GRAM’s implementation
without regard for its volatility.
The GRAM mechanism was adopted in light of the fact that generation costs
are also charged by IPPs to the DUs which they supply. The ERC only approves
contracts between the IPPs and DUs but it does not fix the rates or prices of electricity.
The formula for adjustments and other terms and conditions of engagement between
the IPP and DU are governed by the contract between them. ERC’s regulation of
rates comes in only when the DU charges the end-users and consumers.
Unlike the NPC, the power rates for IPPs are not preapproved. Thus, this
generation cost is volatile and subject to change as the ERC does not fix the rates
which IPPs charge the DUs for the electricity supplied to them. This volatility in
generation cost is not present for DUs sourcing their electricity solely from NPC at
a pre-approved rate. Note however that the GRAM was also applicable to NPC
because it sources some of its electricity from the IPPs at a volatile rate.
The GRAM entailed the calculation of Adjustments for Generation Rate at
the following formula:
49 Ibid.
GR = BR + FC period I + PP period i + DAA
kWh sales period i
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GR = Generation rate for test period i
BR = Base Rate per Grid based on CY2000 costs
FC = Fuel Costs (if applicable) as approved by the ERC subject to heat
rate cap.
PP = Purchased Power costs as approved by the ERC
DAA = Deferred accounting adjustment.
In turn, the Deferred Accounting Adjustment is computed as follows:
Where:
DAA =
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DB
DAA = Deferred Accounting Adjustment
DB = The balance in the deferred generation cost account as of the end of
the test period
T = The total estimated sales for the recovery period.
The GRAM was the crux of the controversy in NASECORE vs. ERC, 50
where the Supreme Court declared the ERC order approving MERALCO’s
generation charge from PhP 3.1886 per kiloWatthour (kWh) to Php 3.3213 (kWh) as
void for violating the publication requirements of Section 4(e) of the Implementing
Rules of the EPIRA. While recognizing ERC’s jurisdiction to promulgate rules,
guidelines or methodologies such as the GRAM for the recovery by the distribution
utilities of their fuel and purchased power costs, the Supreme Court held that “these
rules, guidelines or methodologies so adopted should conform to requirements of
pertinent laws, including Section 4(e), Rule 3 of the IRR of the EPIRA” 51 which
required publication for all applications for rate changes without any distinction.
In that case, the ERC pointed out the logistical nightmare of the ruling of the
Supreme Court that publication is required for all applications for rate adjustment,
including those which are volatile such as the distribution utilities’ applications to
recover purchased power or fuel costs, to wit:
50 481 SCRA 480 [2006], G.R. No. 163936, February 2, 2006, and Motion for Reconsideration 499 SCRA 103
[2006], G.R. No. 16395, August 16, 2006.
51 499 SCRA 103, 25 [2006], G.R. No. 16395, August 16, 2006.
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The Purchased Power Adjustment (PPA) Scheme and Its Derivatives:
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Among others, it (ERC) envisioned a scenario where, in a given year, it
would allegedly be required to travel to and conduct 1,680 hearings in
various localities all over the country for cost recovery filings alone. It
would allegedly take the ERC 4 1/2 years to decide the 1,680 cost recovery
filings made in just a year even if it would render decisions on Saturdays
and Sundays. By the Court’s declaration that applications of distribution
utilities for adjustments to recover their purchased power or fuel
adjustment costs are covered by Section 4(e), Rule 3 of the EPIRA IRR,
according to the ERC, it is being required to enforce something that
cannot be accomplished, given the insurmountable time, budgetary and
other logistical constraints it faces. In such a case, it would allegedly be
impossible for the ERC to attend to its other equally important
responsibilities and functions under the EPIRA, i.e., to ensure the
successful restructuring of the electric power industry.
Since the reason for invalidity was the Implementing Rules and Regulations of
the EPIRA, which can be amended by the President through then Energy Secretary
Raphael Lotilla promulgated amendments to Section 4(e) of the Implementing Rules
and Regulations of the EPIRA. 52 The said section now expressly excludes several
automatic adjustment mechanisms including the GRAM from the requirements of
such provision. Thus, unlike in the NASECORE case, lack of publication is no longer
a ground to annul adjustments of rates involving volatile costs like the GRAM. This
amendment by the Secretary of Energy does not contravene EPIRA and is in
accordance with the fact that the ERC is given wide latitude in performing its duties
and functions.
2. AGRA
On October 13, 2004, the ERC promulgated the Guidelines for the Automatic
Adjustment of Generation Rates (AGRA) and System Loss Rates (SLR) by DUs
superseding the GRAM. The GRAM was replaced for two reasons:
a. It was inflexible and burdensome for DUs because it had to bridge
finance costs. The manner of adjusting rates lagged behind the volatility
of the generation costs. DUs had to bear the burden of having to pay
electricity supply costs pending the approval of the new rate by the
ERC.
b. It did not provide for the adjustment of System Loss Rates
disregarding the volatility of such costs. System Loss varies on account
of the weather, rampancy of pilferage, and other causes beyond the
control of the DUs. For example, data shows that pilferage is higher
52 Amendments to Sec. 4 (e) of Rule 3 and Section 7 of Rule 18 of the Implementing Rules and Regulations (IRR)
of Republic Act No. 9136, otherwise known as EPIRA promulgated on June 21, 2007.
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Juan Arturo Iluminado C. de Castro
in December and lower in January. Perhaps, this is caused by the
Christmas season. It would not be feasible for DUs to operate when
it could pass on the consumers only a fixed system loss rate insensitive
to its volatility.
To address these problems in the GRAM, the ERC promulgated the Guidelines
for the Automatic Adjustment of Generation Rates and System Loss Rates by
Distribution Utilities 53 (hereinafter AGRA and SLR Guidelines). For the adjustment
mechanism of transmission costs, there is the Guidelines for the Adjustment of
Transmission Rates by Distribution Utilities. 54 The itemization of the adjustment
mechanisms for generation under the AGRA, system loss under SLR, and transmission
rates are in consonance with the mandate of the EPIRA to unbundled the rates. 55
Thus, adjustments in generation cost, system loss, and transmission rates are now
independently computed, whereas before they were all imputed and considered in
the PPA.
Note, however, that the GRAM is still used as adjustments for the NPC which
is differently situated from the DUs. Although the NPC also sources power from
the IPPs, the former passes the same power or electricity to DU’s at a pre-approved
rate. The mechanics governing the supply of power by the IPPs to the NPC is different
than that supplied by IPPs to the DUs.
1. Adjustment for Generation Rates
The adjustment for generation rates is allowed through the AGRA using the
following formula: 56
On or before the tenth day of each calendar month 57 , distribution utilities
shall calculate new generation rates based on the following formula:
Where:
GR = AGC + OGA
GR = Generation Rate to be charged per kWh
53 Promulgated by the ERC on October 13, 2007 as amended by Resolution No. 10-01 (October 20, 2007) and
Resolution No. 10-04 (October 27, 2007), Series of 2004.
54 ERC Resolution No. 19, Series of 2005 (September 28, 2005) in relation to ERC Case No. 2005-06 RM.
55 Rep. Act No. 9136 [2001], Sec. 36.
56 Guidelines for AGRA and SLRA, Art. III, Sec. 1.
57 ERC, Reso. No. 10-01, Series of 2004, October 20, 2007 amending the Guidelines for AGRA and SLR.
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AGC = Adjusted Generation Cost, automatically computed without need of
prior ERC verification and Confirmation as follows:
AGC =
Where:
VOLUME 33 NUMBER 2 (SEPTEMBER 2008)
[ (GCi +GCii+ ….+GCn) – (PPD*50%)
TP
GC i to n = The Generation Cost in Pesos from source of
power 1 through source of power n for the previous
month, excluding power sourced from self-generating
facilities.
PPD = Prompt Payment Discounts availed by the
Distribution Utility, net of the Prompt Payment
Discounts passed on to the end customers relative to
the previous month’s generation cost.
TP = Total Purchase in kWh for the previous month
OGA = Other Generation Rate Adjustments, which refer to adjustments
deemed necessary by the Commission after prior verification and
confirmation, which shall include, but shall not be limited to,
under(over)-recoveries in generation costs and recoveries from
violation of contracts and other pilferages. The OGA shall not be
subject to any carrying charge.
2. Adjustment for System Loss Rates
For system loss rates, the Guidelines for AGRA and SLRA 58 have already
been amended only two weeks after its promulgation. 59 Presently, the formula reads:
On or before the tenth (10 th ) day of each calendar month, Distribution
Utilities shall calculate new System Loss Rates based on the following
formula:
Where:
SLR = ( GR * U ) + ( ATR * U )
SLR = System Loss Rate
58 Promulgated on October 13, 2007.
59 ERC Resolution No. 10-04, Series of 2004, October 27, 2007.
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Juan Arturo Iluminado C. de Castro
GR = Generation Rate calculated in accordance with Article
III as cited above.
ATR = Average Transmission Rate based on the most recent
unbundling decision in Peso per kWh, computed as
Transmission Costs per unbundling divided by the
Annualized Sales in kWh per unbundling.
U = Gross Up Factor = (%System Loss / [1-%System Loss])
The % System Loss is based on the actual System Loss or the System
Loss cap whichever is lower plus actual company use or the company use
cap of 1% whichever is lower. The actual System Loss and company use
are based on the average of the most recent twelve (12) month period for
which information is available. Actual System Loss can be calculated on
an individual customer class level if the Distribution Utility has the
requisite information to support individual System Loss Rates.
The Guidelines for AGRA and SLRA remedied the problem of the GRAM
because it now expressly provides for system loss rate adjustments whereas the
GRAM did not, thus recognizing the volatility of system loss although it is still
subject to a cap.
Moreover, the inflexibility under the GRAM caused by the necessity of
quarterly applications to, and approval by, the ERC is inexistent under the AGRA.
Whereas the changes in adjustment rates required quarterly application and approval
by the ERC, the adjustment of generation rates and system loss rates are automatic
and prior approval by the ERC is not necessary. ERC regulation is made through
subsequent review, verification and confirmation. The only item which needs prior
approval is the Other Generation Rate Adjustments (OGA) mechanism, which refers
to adjustments deemed necessary by the Commission after prior verification and
confirmation. It includes under or over-recoveries in generation costs and recoveries
from violations of contracts and other pilferages.
3. Adjustment for Transmission Rates
Adjustment of Transmission Rates (ATR) by DUs is indispensable in discussing
the PPA because transmission costs were essential components of the PPA when the
rates were still bundled. As mentioned, the charges on consumers were required to
be unbundled by the EPIRA. 60 This entailed severing the items which were included
in one rate, and itemizing them with their own separate and distinct formula.
60 Rep. Act No. 9136 [2001], Sec. 36.
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A formula for transmission rate adjustment is necessary because of the volatility
of costs entailed in transmission. Transmission is the transfer of electricity from the
source, either the National Power Corporation or IPPs, to the DUs like electric
cooperatives and privately-owned corporations. This function is mainly handled by
the National Transmission Corporation (NTC) or Transco which has been operating
separately from the NPC since March 1, 2003.
Transmission rates emanate from costs in the planning, construction and
centralized operation and maintenance of high-voltage transmission facilities, grid
interconnections and ancillary services. 61 This varies depending on the level of
electrification within the area of transmission, or the weather and system loss.
If the level of electrification is low, there would entail more costs in building
various electricity-related infrastructure. As regards the weather, if storms rampage
the country there would be more costs in repairs and maintenance. The transmission
aspect of the power industry also suffers system loss on account of pilferage. These
are only some of the factors causing volatility in transmission charges beyond the
control of the DUs which the latter can pass on to the consumers.
Note, however, that the main cause for variation in transmission costs is the
amount loaned to acquire assets and equipment for transmission of electricity. These
are outstanding loans subject to interest and affected by changes in currency. As
such, transmission costs are also subject to periodic adjustments affected by pertinent
indices like the consumer price index.
Given the nature of transmission costs, the following were formulated depending
on how the transmission rates were expressed:
1. Peso/kWh - Customer classes with Transmission Rates expressed in
Peso per Kilowatt Hour (Peso/kWh):
Where:
TRn =
tn + OTCA
TRn = Transmission Rate expressed in Peso/Kwh
tn = Current TRANSCO Transmission Rate x billing
determinant for the previous twelve (12) months
ending December 31 multiplied by the Coincident
Peak (CP) demand allocation factor for customer
61 See http://www.transco.ph/aboutus.asp
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Juan Arturo Iluminado C. de Castro
classn corresponding to the same period, if
available, or the CP demand allocation factor as
reflected in the last approved unbundled rates of
DUs.
OTCA = Other Transmission Cost Adjustment
P = kWh purchased for the previous twelve (12)
months ending December 31 for customer classn.
2. Peso/kW - Customer classes with Transmission Rates expressed in
Peso per kiloWatt (Peso/kW):
Where:
TRn =
(tn + OTCA)
Dn
TRn = Transmission Rate expressed in Peso/Kw
tn = Current TRANSCO Transmission Rate x billing
determinant for the previous twelve (12) months
ending December 31 multiplied by the Coincident
Peak (CP) demand allocation factor for customer
classn corresponding to the same period, if
available, or the CP demand allocation factor as
reflected in the last approved unbundled rates
of DUs
OTCA = Other Transmission Cost Adjustment
Dn = kW billing demand for the previous twelve (12)
months ending December 31 for customer classn.
3. Mixed = Peso/kWh & Peso/kW: Customer classes with transmission
rates expressed in both Peso/kWh and Peso/kW. The component
expressed in Peso/kWh shall remain constant. On the other hand, the
component expressed in Peso/kW shall be adjusted using the following
formula.
TWRn =
tn - [TKRn *Sn) + OTCA]
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The Purchased Power Adjustment (PPA) Scheme and Its Derivatives:
Deciphering Cost Recovery Mechanisms and Understanding Energy Distribution
Where:
TWRn = Transmission Rate component in Peso/Kw
tn = Current TRANSCO Transmission Rate x billing
determinant for the previous twelve (12) months
ending December 31 multiplied by the
Coincident Peak (CP) demand allocation factor
for customer classn corresponding to the same
period, if available, or the CP demand allocation
factor as reflected in the last approved
unbundled rated of DUs
TKRn = Current Transmission Rate component
expressed in Peso/kWh
Sn = kWh sales for the previous twelve (12) months
ending December 31 for customer classn
OTCA = Other Transmission Cost Adjustment In the
case of OTCA, the DUs shall calculate OTCA
from the effectivity of these guidelines.
Dn = kW billing demand for the previous twelve (12)
months ending December 31 for customer classn
Other Adjustment Mechanisms
Note that AGRA, SLR, and ATR are not the only automatic adjustment
mechanisms by which costs are shifted to the consumers by DUs. There are many
other adjustment mechanisms which are recognized as valid and reasonable
considering their volatility and objectivity. In NASECORE, the ERC discussed the
criteria for valid for automatic adjustment mechanisms, thus:
Automatic adjustment clauses have been adopted for the recovery of
certain utility costs only under the following limited and well-recognized
circumstances: (1) when such costs are extremely volatile, changing rapidly
over short periods of time, e.g., the cost of coal or other fuel burned to
generate electricity or the cost of natural gas; (2) when such volatile cost
changes represent significant portions of total utility operating expenses,
and (3) when such volatile cost changes are beyond the ability of the
utility to control, e.g., a utility must purchase coal or gas at whatever
prices that procedures or pipelines are willing to sell (Re Mountain States
Telephone. & Teleg. Co., 78 PUR 4th 287, 1986). The Oregon Public
Utility Commission recently described the purpose of an “escalator”
clause, which it euphemistically called a “tracker” as follows: “It purports
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Juan Arturo Iluminado C. de Castro
to track a particular cost, increasing or decreasing revenues just enough
to offset the alleged change in cost. The isolated cost is ordinarily one
over which the utility has no influence and about which there is little
likelihood of dispute” (Re Portland General Electric Co., 104 PUR 4th
266, 268, Or. P.U.C., 1989).
It is clear from the foregoing that “escalator” or “tracker” or any other
similar automatic adjustment clauses are merely cost recovery or cost
“flow-through” mechanisms; that what they purport to cover are operating
costs only which are very volatile and unstable in nature and over which
the utility has no control; and that the use of the said clauses is deemed
necessary to enable the utility to make the consequent adjustments on
the billings to its customers so that ultimately its rate of return would not
be quickly eroded by the escalations in said costs of operation. The total
of all rate adjustments should not operate to increase overall rate of
return for a particular utility company above the basic rates approved in
the last previous rate case (Re Adjustment Clause in Telephone Rate
Schedules, 3 PUR 4th 298, N.J. Bd. of Pub. Util. Comm’rs., 1973. Affirmed
66 N.J. 476, 33 A.2d 4, 8 PUR 4th 36, N.J.,1975).
Note, however, that the validity of escalator clauses are still dependent on
whether or not the law expressly provides for it and whether or not its imposition
was in accordance with law. Thus, even if the foregoing criteria were present, the
adjustment or escalator clause would still be null and void if it does not have basis in
law or if it did not comply with the requirements of the law like in NASECORE
where the adjustment rate granted to MERALCO violated the publication
requirements of the IRR.
As of date, the following adjustment mechanisms have been implemented
without prior approval of the ERC:
a. Generation Rate Adjustment Mechanism (GRAM) but applicable only
sale of electricity by IPPs to NAPOCOR
b. Incremental Currency Exchange Recovery Adjustment (ICERA)
c. Transmission Rate Adjustment Mechanism
d. Transmission True-up Mechanism
e. System Loss Rate Adjustment Mechanism
f. Lifeline Rate Recover Mechanism
g. Cross-subsidy Mechanism
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h. Local Franchise Tax Recovery Mechanism
i. Business Tax Recovery Mechanism
j. Automatic Generation Rate Adjustment Mechanism
k. VAT Recovery Mechanism
l. Incremental Generation Cost Adjustment Mechanism
m. Recovery of Deferred Accounting Adjustment for Fuel Cost and Power
Producers by NPC and NPC SPUG. 62
These adjustment mechanisms, one way or another, will become part of the
billing charges to the consumers. For all intents and purposes, the PPA has not been
eliminated but merely transformed into different forms in accordance with the
unbundling policy of the EPIRA.
Other charges, particularly those pertaining to “true-up” mechanisms arose on
account of the absence of adjustments for volatile costs. These are recovery
mechanisms by which DUs could pass on the costs to consumers which DUs were
not able to pass on under the previous system of rate fixing. An example would be
the Transmission True-Up Mechanism which seeks to recover volatile costs which
were not considered under the previous bundled system. Remember that Transmission
Costs were bundled together with generation costs on account of the fact that both
sectors were owned by the NPC or NAPOCOR.
The unbundling of rates and allowance of adjustment mechanisms finds its
basis and rationale in the same philosophy behind the EPIRA as enunciated in
Freedom from Debt Coalition vs. Energy Regulation Commission: 63
One of the landmark pieces of legislation enacted by Congress in recent
years is the EPIRA. It established a new policy, legal structure and
regulatory framework for the electric power industry.
The new thrust is to tap private capital for the expansion and improvement
of the industry as the large government debt and the highly capitalintensive
character of the industry itself have long been acknowledged as
the critical constraints to the program. To attract private investment,
largely foreign, the jaded structure of the industry had to be addressed.
While the generation and transmission sectors were centralized and
monopolistic, the distribution side was fragmented with over 130 utilities,
62 Amendments to Section 4 (e) of Rule 3 and Section 7 of Rule 18 of the Implementing Rules and Regulations
(IRR) of Republic Act No. 9136 or EPIRA, June 21, 2007
63 432 SCRA 157,171-172 [2004], G.R. No. 161113, June 15, 2004.
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Juan Arturo Iluminado C. de Castro
mostly small and uneconomic. The pervasive flaws have caused a low
utilization of existing generation capacity; extremely high and
uncompetitive power rates; poor quality of service to consumers; dismal
to forgettable performance of the government power sector; high system
losses; and an inability to develop a clear strategy for overcoming these
shortcomings.
Thus, the EPIRA provides a framework for the restructuring of the
industry, including the privatization of the assets of the National Power
Corporation (NPC), the transition to a competitive structure, and the
delineation of the roles of various government agencies and the private
entities. The law ordains the division of the industry into four (4) distinct
sectors, namely: generation, transmission, distribution and supply.
Corollarily, the NPC generating plants have to privatized and its
transmission business spun off and privatized thereafter. (citations
omitted)
The adjustment mechanisms allow recovery of costs by DUs and other players
in the power industry from the consumers. All the costs in generation, transmission,
distribution, and supply are passed on to the consumers from big end-users like
large companies to the ordinary person in far-flung provinces. Note, however, the
consumers are protected by the State whenever too much profit becomes the priority
of such public utilities. DUs including the ECs cannot overcharge at the expense of
the public and worse, they cannot complain that they are not overcharging enough. 64
As regards the flip-flop in adopting different computation methodologies, it is
important to note the nature of rate regulation as follows:
xxx
… the rule then as it is now, is that rate regulating authorities are not
hidebound to use any single formula or combination of formulas for
property valuation purposes because the rate-making process involves
the balancing of investor and consumer interests which takes into account
various factors that may be unique or peculiar to a particular rate revision
application. 65
What the Ordinary Consumer Can Do
Obviously, it always pays to conserve electricity and maximize its use. Less
obvious however is consumer participation in system loss which has its own
64 See Republic vs. MERALCO, 401 SCRA 130 [2003], G.R. Nos. 141314, April 9, 2003.
65 See Republic vs. MERALCO, ibid.
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adjustment mechanism. System Loss accounts for the difference in the amount of
electricity purchased from source and the amount of electricity sold to its end-users.
These is the electricity lost in the process of transmission and distribution to the
consumers attributable to natural causes and pilferage. The natural causes for loss
are beyond anyone’s control. It is in the pilferage that consumers play a more direct
and material role.
Electric pilferage has been criminalized by the Anti-Electricity and Electric
Transmission Lines/Materials Pilferage Act of 1994 which imposes a penalty of
prisión mayor or a fine ranging from en thousand pesos to twenty thousand pesos or
both, at the discretion of the court, for illegal use of electricity, 66 and an imprisonment
of reclusión temporal or a fine ranging from fifty thousand pesos to one hundred thousand
pesos or both at the discretion of the court for theft of electric power transmission
lines and materials. 67
Despite this criminalization pilferage persists. It even has peak and low seasons.
December registers the highest rate of pilferage while January has the lowest due to
the holiday season. Apparently, pilferers also use Christmas lights.
Perhaps a common misperception is that electric pilferage is a victimless crime.
The only obvious victim would be MERALCO or the DU concerned. With this
perception, households become indifferent to the illegal connections of their
neighbors because these households believe they would not be affected.
To curb pilferage, the public must be made aware that they are directly affected
by their neighbor’s illegal connections. Consumers actually bear the burden of the
pilferage because these losses are just passed on and imputed in their power charges
or billings by MERALCO or other DUs. In reality, it is the consumers who pay for
the illegal connections.
The direct effect of pilferage to the consumers should be enough incentive for
reporting illegal connections to the NPC or the police authorities. As additional
incentive, a monetary scheme has been devised by R.A. No. 7832. A monetary reward
in the minimum amount of five thousand pesos will be given to any person who shall
report to the NPC or law enforcement authorities any act which constitutes theft of
electric power transmission lines and materials.
66 Rep. Act 7832 [1994], Sec. 7 (a) in relation to Section. 2.
67 Rep. Act 7832 [1994], Sec. 7 (b) in relation to Section 3.
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Conclusion
This paper sought to decipher the nature and function of the PPA and other
adjustment mechanisms amidst the mathematical mysticism of the power charges as
experienced by consumers. Apparently, they are accommodations to DUs. The
interplay among the DUs which are public utilities, the government regulators such
as the ERC, and the consuming public has been encapsulated by the Supreme Court
in Republic vs. MERALCO:
“Rate regulation calls for a careful consideration of the totality of facts
and circumstances material to each application for an upward rate revision.
Rate regulators should strain to strike a balance between the clashing
interests of the public utility and the consuming public and the balance
must assure a reasonable rate of return to public utilities without being
unreasonable to the consuming public. What is reasonable or
unreasonable depends on a calculus of changing circumstances that ebb
and flow with time. Yesterday cannot govern today, no more than today
can determine tomorrow. x x x”
The rapid pace of transition from one formula or system of computation to
another indicates a continuing effort to search for the correct formula that
approximates and reflects actual costs. Apparently, the perfect and all-encompassing
formula continues to elude state regulators.
An important feature of the policy behind the electric power industry is the
bundling and unbundling of rates. Prior to EPIRA, the components of each power
charge have been lumped and imputed into a more universal rate. Under the bundled
rates, consumers do not have the opportunity to examine the particular components
of the power charge and billings as all these components are already included in one
item of their charge. The bundled rates contravene the right of consumers to be
informed on the items in their electric bill. Thus, unbundling became indispensable
in reforming the electric power industry.
In the effort to understand the interplay between the DUs, regulators and
consumers, what comes to mind is the fact that each of them plays a crucial role in
the goal of charging reasonable electricity rates. The DUs must incur operational
costs in the most efficient manner. The regulator must continue the search for the
perfect formula that strikes a balance between the business interest of DUs and the
consumers. For their part, consumers must contribute in guarding against pilferage,
an integral part of system loss which DUs are authorized to impute in their power
charges. Only when these players run in harmony with each other will the electric
power industry truly be reformed.
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Survey of 2006 Supreme Court
Decisions on Property
and Land Registration
I. Classification of Property
Eduardo A. Labitag*
A. Property of Public Dominion
1. Property For Public Use For Public Purpose and for the Development of
National Wealth
a. Forest Land
In several cases last year the Supreme Court had occasion to restate the rule
on non-appropriability of inalienable lands of the public domain.
Republic vs. Naguiat
G.R. No. 134209, January 24, 2006
Public forest lands or forest reserves, unless declassified and released by positive
act of the Government so that they may form part of the disposable agricultural
lands of the public domain, are not capable of private appropriation. As to these
assets, the rules on confirmation of imperfect title do not apply. Given this postulate,
the principal issue is whether or not the areas in question have ceased to have the
status of forest or other inalienable lands of the public domain.
Forests, in the context of both the Public Land Act and the Constitution
classifying lands of the public domain into “agricultural, forest or timber, mineral
lands and national parks,” do not necessarily refer to a large tract of wooded land or
an expanse covered by dense growth of trees and underbrush. In Heirs of Amunategui,
___ SCRA 19__, as ruled by the Supreme Court:
“A forested area classified as forest land of the public domain does not
lose such classification simply because loggers or settlers have stripped it
of its forest cover. Parcels of land classified as forest land may actually be
covered with grass or planted to crops by kaingin cultivators or other
farmers. “Forest lands” do not have to be on mountains or in out of the
way places. . . . . The classification is merely descriptive of its legal nature
* Professor of Law, College of Law, University of the Philippines.
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Eduardo A. Labitag
or status and does not have to be descriptive of what the land actually
looks like. . . .”
Under Section 2, Article XII of the Constitution, which embodies the Regalian
doctrine, all lands of the public domain belong to the State — the source of any
asserted right to ownership of land. All lands not appearing to be clearly of private
dominion presumptively belong to the State. Accordingly, public lands not shown to
have been reclassified or released as alienable agricultural land or alienated to a
private person by the State remain part of the inalienable public domain. Under
Section 6 of the Public Land Act, the prerogative of classifying or reclassifying lands
of the public domain, i.e., from forest or mineral to agricultural and vice versa,
belongs to the Executive Branch of the government and not the court. Needless to
stress, the onus to overturn by incontrovertible evidence, the presumption that the
land subject of an application for registration is alienable or disposable rests with
the applicant.
The Court emphasized that unwarranted appropriation of public lands has
been a notorious practice resorted to in land registration cases. For this reason, the
Court has made it a point to stress, when appropriate, that declassification of forest
and mineral lands, as the case may be, and their conversion into alienable and
disposable lands need an express and positive act from the government.
The foregoing considered, the issue of whether or not respondent and her
predecessor-in-interest have been in open, exclusive and continuous possession of
the parcels of land in question is now of little moment. For, unclassified land, as
here, cannot be acquired by adverse occupation or possession; occupation thereof in
the concept of owner, however long, cannot ripen into private ownership and be
registered as title.
Heirs of Palanca vs. Republic
G.R. No. 151312, August 30, 2006
On July 1973, the heirs of Pedro S. Palanca, (PETITIONERS) filed an
application to bring the pieces of land they allegedly owned under the operation of
the Land Registration Act. These are: a two hundred thirty-nine thousand nine
hundred eighty (239,980) square meter parcel of land situated in Barrio Panlaitan,
Municipality of Busuanga, Province of Palawan, as shown on plan Psu-04-000074,
and a one hundred seventy-six thousand five hundred eighty-eight (176,588) square
meter land in Barrio of Panlaitan (Island of Capari), Municipality of New Busuanga,
Province of Palawan, as shown on plan Psu-04-000073.
The petitioners acquired said realties by inheritance from the late Pedro S.
Palanca, who had occupied and possessed said land openly and continuously in the
concept of an owner since 1934, or 39 years before the filing of said application, and
planted on said lands about 1,200 coconut trees on each land, declared the same for
taxation purposes and paid the taxes thereof.
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In Civil Case No. 573 entitled “Heirs of Pedro Palanca, vs. Guillamac” for “Recovery
of Possession of a Parcel of Land” the Court of First Instance of Palawan rendered
a decision on March 4, 1970, declaring the heirs of Pedro S. Palanca, as the rightful
possessors of the land at Talampulan Island, Bario of Panlaitan
After trial, the CFI of Palawan issued a decision on December 1977 declaring
petitioners as the owners in fee simple of the two parcels of land in question.
On December 2000, or after almost twenty-three years, respondent Republic
of the Philippines filed with the CA a petition for annulment of judgment, cancellation
of the decree of registration and title, and reversion. Respondent sought to annul
the December 15, 1977 decision of the CFI, arguing that the decision was null and
void because the two lands in question were unclassified public forest land and, as
such, were not capable of private appropriation. On July 2001, the CA rendered a
decision in favor of the respondents
The issue presented to the Supreme Court was whether or not the land
in dispute is alienable. The Court ruled in the negative.
The validity of the CFI (RTC now) decision was impugned on the basis of the
court’s lack of jurisdiction. If the properties were alienable public lands, then the
CFI, acting as a land registration court, had jurisdiction over them and could validly
confirm petitioners’ imperfect title. Otherwise, if the properties were indeed public
forests, then the CA was correct in declaring that the land registration court never
acquired jurisdiction over the subject matter of the case and, as a result, its decision
decreeing the registration of the properties in favor of petitioners was be null and
void.
The reason for this is the fact that public forests are inalienable public lands.
The possession of public forests on the part of the claimant, however long, cannot
convert the same into private property. Possession in such an event, even if spanning
decades or centuries, could never ripen into ownership. Unless and until the land
classified as forest is released in an official proclamation to that effect so that it may
form part of the disposable lands of the public domain, the rules on confirmation of
imperfect title do not apply.
In the present case, the Court found that Land Classification Map No. 839,
Project 2-A indicated that the Talampulan and Capari Islands on which the properties
are located were unclassified public lands as of December 9, 1929. It was by virtue
of Executive Proclamation No. 219 issued on July 2, 1967 that these islands were
subsequently classified as national reserves. Based on these, these properties have
never been released for public disposition. Obviously, from the time that petitioners
and their predecessor-in-interest were occupied the properties in 1934 until the time
that an application for registration was filed in 1973, these properties remained as
inalienable public lands.
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The ponencia ruled that it is true that the land classification map does not
categorically state that the islands are public forests, the fact that they were unclassified
lands leads to the same result. In the absence of the classification as mineral or
timber land, the land remains unclassified land until released and rendered open to
disposition. When the property is still unclassified, whatever possession applicants
may have had, and however long, still cannot ripen into private ownership. This is
because, pursuant to Constitutional precepts, all lands of the public domain belong
to the State, and the State is the source of any asserted right to ownership in such
lands and is charged with the conservation of such patrimony. Thus, the Court has
emphasized the need to show in registration proceedings that the government,
through a positive act, has declassified inalienable public land into disposable land
for agricultural or other purposes.
To reiterate, where there is a showing that lots sought to be registered are
part of the public domain, the applicant for land registration under Section 48 of
Commonwealth Act No. 141 must secure a certification from the government that
the lands claimed to have been possessed by the applicant as owner for more than
30 years are alienable and disposable. Petitioners’ failure to do so in this case, when
taken with the evidence adduced by respondent showing that the lands in question
indeed remain part of the public domain and form part of the national reserves,
confirms that the CFI never acquired jurisdiction to order the registration of such
lands in favor of petitioners, and certainly justifies their reversion to the State.
b. Public Plaza
Roman Catholic Bishop of Kalibo Aklan vs. Municipality of Buruanga, Aklan
G.R. No. 149145, March 31, 2006
In 1894, the Roman Catholic Church of Buruanga, Aklan was built in the
middle portion of a lot, with an area of 9,545 square meters, and is a block bounded
by four streets on all sides, and has been in existence since then up to the present.
In 1978, the Municipality of Buruanga constructed its municipal building on
the northeastern portion of the subject lot after it obtained the permission of Fr.
Jesus Patiño, then parish priest of Buruanga.
In October 1989, the said municipal building was razed by fire allegedly
perpetrated by members of the New People’s Army. On November 25, 1989, the
Roman Catholic Bishop of Kalibo, through its counsel, wrote to the Municipal Mayor
of Buruanga requesting the officials of the said municipality to refrain from
constructing its new building on the same site because it is the property of the church.
Further, it needed the said land for its social action projects.
On March 12, 1990, the Roman Catholic Bishop of Kalibo wrote the
Department of Public Works and Highways of the said province requesting the said
office not to issue any building permit to the Municipal Mayor and/or the Municipality
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of Buruanga in connection with the construction of its municipal building on the
land owned by the Roman Catholic Bishop of Kalibo.
The construction of the new municipal building on the same site proceeded. In
1990, the Roman Catholic Bishop of Kalibo, Aklan, filed with the RTC thereof a
complaint for declaration of ownership and quieting of title to land with prayer for
preliminary injunction against the Municipality of Buruanga, Aklan.
On November 29, 1990, the lower court appointed Geodetic Engineer Santiago
of the Bureau of Lands as Commissioner and directed him to identify and delineate
the lot in question. The sketch submitted by Engr. Santiago showed the delineation
of Lot 138 into three parts: Lots 138-A, 138-B and 138-C. The municipal building
stood on Lot 138-A; the Roman Catholic Church stood on Lot 138-B and the municipal
health center and the Buruanga Community Medicare building stood on Lot 138-C.
It also showed that portions of Lots 138-A and 138-C were being used as public
plaza.
The trial court ruled that The Roman Catholic Bishop of Kalibo, Aklan is the
lawful owner and possessor of Lot 138-B while it declared that the Municipality of
Buruanga is declared the lawful owner and possessor of Lot 138-A and Lot 138-C,
said lots being public plaza destined for public use.
On appeal by the petitioner, the Court of Appeals affirmed the ownership of
the Roman Catholic Bishop of Kalibo over Lot 138-B but reversed the court a quo’s
ruling relative to the ownership of Lots 138-A and 138-C. The appellate court declared
the said lots property of public dominion, hence, not owned by either of the parties.
On the issue of whether or not the petitioner’s claim of ownership over
Lots 138-A and 138-C should be sustained, the Supreme Court ruled
against the petitioner Roman Catholic Church.
The Court found that the petitioner has not shown that, at one time after the
church was built in 1894 in the middle of Lot 138 (now Lot 138-B), it exercised acts
of ownership or possession over Lots 138-A and 138-C as well. It emphasized that
the petitioner’s allegation that it merely tolerated the construction of not only the
municipal building but also the other improvements thereon, e.g., the rural health
center, Buruanga community Medicare hospital, basketball court, Rizal monument
and grandstand, has remained unsubstantiated.
The Court ruled that the petitioner has not shown that it exercised proprietary
acts or acts of dominion over Lots 138-A and 138-C, to the exclusion of others, to
buttress its claim of ownership over these lots; Contrary to its submission, the
petitioner has not acquired ipso jure or by operation of law a government grant or
title to the entire Lot 138.
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Eduardo A. Labitag
One of the important requisites for the application of the pertinent provisions
of Act No. 926 and Act No. 2874 (the old Public Land laws) is the “open, continuous,
exclusive and notorious possession and occupation” of the land by the applicant.
Actual possession of land consists in the manifestation of acts of dominion over it of
such a nature as a party would naturally exercise over his own property.
Since the law speaks of “possession and occupation.” and these words are
separated by the conjunction, the clear intention of the law is not to make one
synonymous with the other. Possession is broader than occupation because it includes
constructive possession. When, therefore, the law adds the word occupation, it seeks
to delimit the all-encompassing effect of constructive possession. Taken together
with the words open, continuous, exclusive and notorious, the word occupation serves
to highlight the fact that for one to qualify under paragraph (b) of the aforesaid
section, his possession of the land must not be mere fiction.
Possession is open when it is patent, visible, apparent, notorious and not
clandestine. It is continuous when uninterrupted, unbroken and not intermittent or
occasional; exclusive when the adverse possessor can show exclusive dominion over
the land and an appropriation of it to his own use and benefit; and notorious when
it is so conspicuous that it is generally known and talked of by the public or the
people in the neighborhood.
Use of land is adverse when it is open and notorious.
Indisputably, the petitioner has been in open, continuous, exclusive and
notorious possession and occupation of Lot 138-B since 1894 as evidenced by the
church structure built thereon. However, the record is bereft of any evidence that
would tend to show that such possession and occupation extended to Lots
138-A and 138-C beginning the same period. No single instance of the exercise by
the petitioner of proprietary acts or acts of dominion over these lots was established.
Its unsubstantiated claim that the construction of the municipal building as well as
the subsequent improvements thereon, e.g., the rural health center, Buruanga
community Medicare hospital, basketball court, Rizal monument and grandstand,
was by its tolerance does not constitute proof of possession and occupation on its
part.
Absent the important requisite of open, continuous, exclusive and notorious
possession and occupation thereon since 1894, no government grant or title to Lots
138-A and 138-C had vested upon the petitioner ipso jure or by operation of law.
Possession under paragraph 6 of section 54 of Act No. 926, as amended by paragraph
(b) of section 45 of Act No. 2874, is not gained by mere nominal claim.
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On the issue of whether or not Lots 138-A and 138-C are property of
public dominion, hence, not susceptible to private ownership the Supreme
Court ruled that:
Ruling: Yes.
The appellate court correctly declared that Lots 138-A and 138-C comprise
the public plaza and are property of public dominion; hence, they may not be the
object of appropriation either by the petitioner or respondent municipality.
In the case of Bishop of Calbayog vs. Director of Lands (45 SCRA 418, 19___)
involving the same question of ownership of the land which surrounded the parish
church of the town, the Supreme Court therein declared that the public plaza and
public thoroughfare are not subject to registration by the church; that since neither
the Church nor the municipality presented positive proof of ownership or exclusive
possession for an appreciable period of time, and the only indubitable fact is the
free and continuous use of Lot 2 by residents of Catarman, and the town had no
public plaza to speak of other than the disputed parcel of land, there was a strong
presumption that the same had been segregated as a public plaza upon the founding
of the municipality of Catarman.
In the present case, the following improvements now stand on Lots 138-A and
138-C: the municipal building, rural health center, Buruanga community Medicare
hospital, basketball court, Rizal monument and grandstand. Except for the
construction of the municipal building, the other improvements were made on Lots
138-A and 138-C, and continuously used by the public without the petitioner’s
objection. Further, there is no proof that the petitioner merely tolerated the
construction of these improvements.
On the other hand, the free and continuous use by the public of Lots 138-A
and 138-C, as found by the court a quo and affirmed by the appellate court,
incontrovertibly establishes that they are property for public use.
Property for public use of provinces and towns are governed by the same
principles as property of public dominion of the same character. The ownership of
such property, which has the special characteristics of a collective ownership for the
general use and enjoyment, by virtue of their application to the satisfaction of the
collective needs, is in the social group, whether national, provincial, or municipal.
Their purpose is not to serve the State as a juridical person, but the citizens; they
are intended for the common and public welfare, and so they cannot be the object of
appropriation, either by the State or by private persons.
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2. Lakebed
Eduardo A. Labitag
Republic vs. Candy Maker Inc.
G.R. No. 163766, June 22, 2006
Issue: Whether the land in question may be the subject of registration.
Ruling: No.
Applicants for confirmation of imperfect title must, therefore, prove the
following: (a) that the land forms part of the disposable and alienable agricultural
lands of the public domain; and (b) that they have been in open, continuous, exclusive,
and notorious possession and occupation of the same under a bona fide claim of
ownership either since time immemorial or since June 12, 1945.
Under the Regalian doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. The presumption is
that lands of whatever classification belong to the State. Unless public land is
shown to have been reclassified as alienable or disposable to a private person by the
State, it remains part of the inalienable public domain. Property of the public domain
is beyond the commerce of man and not susceptible of private appropriation and
acquisitive prescription. Occupation thereof in the concept of owner no matter how
long cannot ripen into ownership and be registered as a title. The statute of
limitations with regard to public agricultural lands does not operate against the
State unless the occupant proves possession and occupation of the same after a
claim of ownership for the required number of years to constitute a grant from the
State.
No public land can be acquired by private persons without any grant from the
government, whether express or implied. It is indispensable that there be a showing
of a title from the State. The rationale for the period “since time immemorial or
since June 12, 1945” lies in the presumption that the land applied for pertains to the
State, and that the occupants or possessor claim an interest thereon only by virtue
of their imperfect title as continuous, open and notorious possession.
To prove that the land subject of an application for registration is alienable, an
applicant must conclusively establish the existence of a positive act of the government
such as a presidential proclamation or an executive order, or administrative action,
investigation reports of the Bureau of Lands investigator or a legislative act or statute.
Until then, the rules on confirmation of imperfect title do not apply. A certification
of the Community Environment and Natural Resources Officer in the Department
of Environment and Natural Resources stating that the land subject of an application
is found to be within the alienable and disposable site per a land classification project
map is sufficient evidence to show the real character of the land subject of the
application.
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The applicant is burdened to offer proof of specific acts of ownership to
substantiate the claim over the land. Actual possession consists in the manifestation
of acts of dominion over it of such a nature as a party would actually exercise over
his own property. A mere casual cultivation of portions of the land by the claimant
does not constitute sufficient basis for a claim of ownership; such possession is not
exclusive and notorious as to give rise to a presumptive grant from the State.
Under Section 6 of P.D. 813 amending Rep. Act No. 4850, the LLDA is
empowered to issue such rules and regulations as may be necessary to effectively
carry out the policies and programs therein provided including the policies and
projects of the LLDA, subject to the approval of the National Economic Development
Authority.
In 1996, the Board of Directors of LLDA approved Resolution No. 113, series
of 1996 relating to the Environmental Uses Fee Systems and Approval of the Work
and Financial Plan for its operationalization in the Laguna de Bay Basin. Section 5 of
the Resolution provides that the LLDA as a matter of policy is to maintain all
shoreland areas lying below elevation 12.50 meters as buffer zone in consonance
with the LLDA policies, plans programs for the improvement of the water quality
and pollution and conservation of the water resources of the Laguna de Bay.
As gleaned from the Survey Report of Magalonga, Polanco and Medenilla of
the LLDA based on the ocular inspection dated September 14, 2001 as well as the
Memorandum of Engineer Christopher Pedrezuela, the property is located below
the reglementary level of 12.50 m.; hence, part of the bed of the Laguna de Bay, and,
as such, is public land.
Under R.A. No. 4850 and the issuances of LLDA, registerable rights acquired
by occupants before the effectivity of the law are recognized. However, the respondent
failed to adduce proof that its predecessors-in-interest had acquired registerable
title over the property before July 18, 1966
3. Lakebed; Definition of Continuous and Notorious Possession
PELBEL Manufacturing Corp. vs. Republic
G.R. No. 141174, July 31, 2006
Petitioners, in this case, applied for registration of title to two parcels of land
covered by Plan Psu-240345. Both parcels of land are located in San Juan, Taytay,
Rizal, near the shore of Laguna de Bay. The controlling law in the instant case is
Commonwealth Act No. 141, as amended, otherwise known as the Public Land Act.
It governs what were used to be known as public agricultural lands, or what are
otherwise known as alienable and disposable lands of the public domain.
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Eduardo A. Labitag
Under the Public Land Act, there is a presumption that the land applied for
belongs to the state, and that the occupants and possessors can only claim an interest
in the land by virtue of their imperfect title or continuous, open, and notorious
possession thereof for a period prescribed by law. This principle is rooted in the
Regalian doctrine, under which the State is the source of any asserted right to
ownership of land. The basic doctrine is that all lands not otherwise appearing to be
clearly within private ownership are presumed to belong to the State.
Any applicant for judicial confirmation of an imperfect title has the burden of
proving, by incontrovertible evidence, that the (a) land applied for is alienable and
disposable public land; and, (b) the applicant, by himself or through his predecessorsin-interest
had occupied and possessed the land, in the concept of owner, openly,
continuously, exclusively, and adversely since June 12, 1945, or earlier.
We hold that petitioners failed to show that the parcels of land subject of their
application are alienable and disposable. The government, through the Laguna Lake
Development Authority, established that the areas sought to be registered are below
the statutory minimum elevation of 12.50 meters, hence formed part of the bed of
Laguna Lake under Republic Act (R.A.) No. 4850, as amended. In a Report dated
November 19, 1985, Laguna Lake Development Authority Geodetic Engineer Joel
G. Merida stated that one-half of the area of Lot 1 and the entire area of Lot 2, Psu-
240345, are covered by mud and lake water at an elevation of 11.77 meters, and the
highest observed elevation is 12.19 meters. This means that the subject lots form
part of the lake bed or basin of Laguna Lake. Sec. 41(11) of R.A. No. 4850 sets the
minimum water elevation at 12.50 meters. Lands located at and below such elevation
are public lands which form part of the bed of said lake.
Art. 502 of the Civil Code enumerates the bodies of water that are properties
of public dominion, as follows:
The following are of public dominion:
(1) Rivers and their natural beds;
(2) Continuous or intermittent waters of springs and brooks running in
their natural beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands of public
dominion;
(4) Lakes and lagoons formed by Nature on public lands, and their beds;
xxx xxx xxx
The SC agreed with the ruling of the appellate court that the fact that a few of
the other estates in the vicinity had succeeded in being registered, and that there are
already existing houses and roads between Laguna Lake and the subject lots, does
not prove that the subject lots are not part of the Laguna Lake bed. Mr. Ananias
Mariano registered 6,993 square meters of land in his name under Original Certificate
of Title (OCT) No. 8906 which land appears to be even located farther from the
lake than the subject lots, while Juvencio Ortañez registered 84,238 square meters
of land in his name under OCT No. 55351 which land is situated near the margins of
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the Laguna Lake. The land titles of these two individuals only prove that they are
the owners in fee simple of the respective real properties described therein,
free from all liens and encumbrances except such as may be expressly noted thereon
or otherwise reserved by law. They do not prove petitioners’ title to the subject
lots.
In Ledesma vs. Municipality of Iloilo, the SC held that “simple possession of a
certificate of title, under the Torrens System, does not make the possessor the true
owner of all the property described therein. If a person obtains a title, under the
Torrens System, which includes by mistake or oversight land which cannot be
registered under the Torrens System, he does not, by virtue of said certificate alone,
become the owner of the lands illegally included.”
Possession is open when it is visible and apparent to a common observer.
Continuous possession consists of uninterrupted acts of nonpermissive possession
of property by the current occupants and their predecessors.
To be notorious, possession must be so conspicuous that it is generally known
and talked of by the public or at least by the people in the vicinity of the premises.
Mere possession of land and the making of vague assertions to the public that a
possessor is claiming the land are not sufficient to satisfy the requirement of open
and notorious possession.
4. Foreshore Land
SIAIN Enterprises vs. F.F. Cruz
G.R. No. 146616, August 31, 2006
Western Visayas Industrial Corporation (WESVICO) filed on September 1973
a foreshore lease application over the foreshore land adjacent to certain lots registered
in its name, located in La Paz, Iloilo City, including Lot 3309. Later, it withdrew the
application and filed on March 1976 a petition for registration over the same
foreshore land with the then Court of First Instance of Iloilo. The case was, however,
archived as WESVICO’s representative could no longer be contacted.
WESVICO ceased to hold operations and its properties including Lot 3309
were foreclosed by the Development Bank of the Philippines (DBP) which later
consolidated its ownership thereon.
On July 1983, F.F. Cruz & Co. (F.F. CRUZ) filed with the Bureau of Lands,
Iloilo City, a foreshore lease application over a foreshore land, a portion of which is
adjacent to Lot 3309.
Petitioner Siain Enterprises Inc. (SIAIN), who purchased from the DBP the
properties previously owned by WESVICO including Lot 3309, filed on September
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Eduardo A. Labitag
1986 a foreshore lease application 7over the foreshore land adjacent to the properties
it bought from DBP.
When SIAIN learned that 130 linear meters of the foreshore land subject of
F.F. Cruz’s foreshore lease application overlapped that covered by its foreshore
lease application, it filed on January 1987 a protest alleging that it being the owner
of the property adjoining the overlapping area, it should be given preference in its
lease.
On March 1987, the Sangguniang Panglungsod of Iloilo City, by Resolution
No. 174, approved the recommendation of its Committee on Finance that “for the
mutual interest” of F.F. Cruz and SIAIN, SIAIN would get 70 linear meters and F.F.
Cruz would get 60 linear meters of the disputed area, in light of its finding that,
among other things, both SIAIN and F.F. Cruz would “contribute substantially to
the economic growth of the City of Iloilo.”
The Land Management Bureau (LMB) through its Director dismissed SIAIN’s
protest. SIAIN appealed to the Secretary of the Department of Environment and
Natural Resources (DENR).
On May 1997, then DENR Acting Secretary Antonio G.M. La Viña set aside
the LMB Order, and rendered a decision in favor of SIAIN.
F.F. Cruz appealed to the Office of the President. The Office of the President,
through then Executive Secretary Ronaldo B. Zamora, reversed the decision of the
DENR Acting Secretary and reinstated that of the LMB
SIAIN filed a petition for review before the CA. The CA dismissed SIAIN’s
petition.
Issue: Who has better right over the foreshore land, SIAIN or F.F. Cruz
Ruling: SIAIN.
The key to the present controversy lies in the classification of the disputed
area. The DENR Secretary found that the disputed area is a “natural foreshore,”
hence, it concluded that SIAIN, being a littoral owner (owner of land bordering the
sea or lake or other tidal waters), has preferential right to lease it as provided in paragraph
32 of Lands Administrative Order No. 7-1 dated April 30, 1936 which reads:
32. Preference of Riparian Owner. — The owner of the property adjoining
foreshore lands or lands covered with water bordering upon shores or
banks of navigable lakes or rivers, shall be given preference to apply for
such lands adjoining his property as may not be needed for the public
service, subject to the laws and regulations governing lands of this nature,
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provided that he applies therefore within sixty (60) days from the date he
receives a communication from the Director of Lands advising him of his
preferential right.
The Office of the President went on to hold that since the disputed area is
already reclaimed land, it cannot be subject to littoral claim, SIAIN, not being the
littoral owner within the contemplation of the law, citing Santulan vs. The Executive
Secretary which elucidated on the principal reason for giving a riparian or littoral
owner preferential right, thus:
Now, then, is there any justification for giving to the littoral owner the
preferential right to lease the foreshore land abutting on his land? That
rule in paragraph 32 is in consonance with article 4 of the Spanish Law of
Waters of 1866 which provides that, while lands added to the shores by
accretions and alluvial deposits caused by the action of the sea form part
of the public domain, such lands, when they are no longer washed by the
waters of the sea are not necessary for purposes of public utility, or for
the establishment of special industries, or for the coast guard service,”
shall be declared by the Government “to be the property of the owners of
the estates adjacent thereto and as increment thereof.”
In other words, article 4 recognizes the preferential right of the littoral (riparian
according to paragraph 32) to the foreshore land formed by accretions or alluvial
deposits due to the action of the sea. The reason for the preferential right is the
same as the justification for giving accretions to the riparian owner for the diminutions
which his land suffers by reason of the destructive force of the waters. So, in the case
of littoral lands, he who loses by the encroachments of the sea should gain by its
recession.
That the foreshore area had been reclaimed does not remove it from its
classification of foreshore area subject to the preferential right to lease of the littoral
owner.
It bears noting that it was not the reclamation that brought the disputed
foreshore area into existence. Such foreshore area existed even before F.F. Cruz
undertook its reclamation. It was “formed by accretions or alluvial deposits due to
the action of the sea.” Following Santulan, the littoral owner has preferential right
to lease the same.
Contrary to the ruling of the Office of the President, as affirmed by the appellate
court, littoral owner WESVICO cannot be considered to have waived or abandoned
its preferential right to lease the disputed area when it subsequently filed an
application for registration thereover. For being a part of the public domain, ownership
of the area could not be acquired by WESVICO. Its preferential right remained,
however. Its move to have the contested land titled in its name, albeit a faux pas, in
fact more than proves its interest to utilize it.
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A. Right to Recover Property
1. In general
Eduardo A. Labitag
II. Ownership/Possession
Ramos-Balalio vs. Ramos
G.R. No. 168464, January 23, 2006
Issue: WON Zenaida, as an applicant for public land, may be considered
as having any right to the land occupied, which may entitle her to sue in
courts for the return of the possession thereof
Ruling:
Zenaida has proven prior possession of the portion of land she claims as her
share, which possession antedates the filing of the homestead application. She
produced evidence showing that she has filed a verified application for the registration
of the land with the Bureau of Lands on August 10, 1971, which is still pending. The
documents remain uncontested and the application has not been assailed by any of
the parties to the case. She alleged that during the lifetime of her mother, she and
her maternal grandfather cultivated and occupied the land.
Zenaida presented tax declarations both in her name and that of her
predecessor-in-interest (mother Susana Bueno) covering the property. Time and again,
we have held that although tax declarations or realty tax payments of property are
not conclusive evidence of ownership, nevertheless, they are good indicia of possession
in the concept of owner for no one in his right mind would be paying taxes for a
property that is not in his actual or at least constructive possession. They constitute
at least proof that the holder has a claim of title over the property. The voluntary
declaration of a piece of property for taxation purposes manifests not only one’s
sincere and honest desire to obtain title to the property and announces his adverse
claim against the State and all other interested parties, but also the intention to
contribute needed revenues to the Government.
Zenaida’s uncontested and verified application for a homestead patent coupled
with her open and notorious occupation of the land convinces us of her preferential
right to possess the land claimed, which entitles her to be protected by the law in
such possession.
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2. Collateral Attack
Erasusta vs. Amorin
G.R. No. 149231, July 17, 2006
Subject of the controversy are 4 lots (Lot 11, Lot 19-A, Lot 19-C, and Lot 34-D)
located at Maria Luisa Street, Sampaloc, Manila. These lots originally formed part
of the Prieto Estate owned by the late Antonio Prieto, Sr. (Prieto). The Prieto Estate
was subdivided into separate lots and sold to tenants on installment basis.
De Los Reyes is among the tenants who purchased lots from Prieto under
separate contracts of sale on installment. Lot 11 was sold to her as early as April
1955, while Lot 19-A, Lot 19-C and Lot 34-D were purchased by her on December
1960, September 1959 and October 1959, respectively.
De Los Reyes later transferred her rights over Lot 19-C to Fortunato A. Amorin,
the late husband of respondent Amparo J. Amorin. The next day, Prieto executed a
deed of sale in favor of Fortunato and, by virtue thereof, TCT No. 91454/T-732 was
issued in Fortunato’s name.
The Amorins took possession of the house located at No. 933 Maria Luisa
Street, supposedly the place where Lot 19-C is located, and erected their own
residential house thereon. After the death of Fortunato, the Amorins executed an
Extrajudicial Partition. On January 1969, TCT No. 95422 was issued in the Amorins’
names.
In September 1973, a representative from the Bank went to the Amorins’
house at No. 933, informing them that they are occupying Lot 19-A which had been
mortgaged to and foreclosed by the Bank. In 1974, the Bank sent a formal demand
letter for the Amorins to vacate the premises, insisting that they were occupying Lot
19-A and that the Bank was now the owner of said lot.
Apparently, De Los Reyes was deceived by a certain Valenzuela into entrusting
to the latter the documents evidencing her rights over Lot 11, Lot 19-A, and Lot 34-
D on Valenzuela’s representation that he would assist De Los Reyes in transferring
the titles of said lots to her three (3) children. Valenzuela, thru a forged deed of
assignment, fraudulently transferred the rights over the 3 lots to his own name.
The subdivision owner, Prieto, unaware of the fraud and forged instrument, executed
a deed of sale over the same 3 lots in favor of Valenzuela who eventually secured
TCTs in his own name. Valenzuela then mortgaged the 3 lots to respondent Bank as
collaterals for a loan obtained by him.
De Los Reyes filed two (2) criminal complaints for estafa through falsification
of public documents against Valenzuela. Valenzuela was later convicted in both
cases.
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Eduardo A. Labitag
On 1970, the respondent Bank foreclosed Valenzuela’s real estate mortgages.
On account thereof, Lot 11, Lot 19-A and Lot 34-D were sold at a public auction to
the respondent Bank as the highest bidder. The Bank consolidated its ownership
over the 3 lots and was issued new TCTs.
Amparo checked the records in the office of the subdivision owner and with
the Land Registration Commission (LRC). The records of the LRC confirmed the
mix-up in the designations of Lot 19-C and Lot 19-A. It turned out that Lot 19-C
was, in fact, the one located at No. 925 Maria Luisa St. and Lot 19-A was the one
located at No. 933 Maria Luisa Street.
Amparo, demanded that De Los Reyes and the latter’s tenants surrender and
vacate the premises at No. 925 Maria Luisa Street, which is actually Lot 19-C, but
De Los Reyes refused. De Los Reyes insisted that the lot being occupied by the
Amorins at No. 933 Maria Luisa Street is Lot 19-C.
The Amorins filed in the then CFI of Manila, an action for Recovery of
Ownership with Damages, against De Los Reyes, the latter’s tenants at No. 925
Maria Luisa Street, and the respondent Bank.
On January 1986, the TC rendered a decision ordering the cancellation of the
3 certificates of title issued to the Bank, the correction by the Register of Deeds of
the title of the Amorins to correspond to the master plan of the LRC and the
correction of the subdivision plan pertaining to the property of the Amorins to
correspond to the master plan of the LRC. The trial court ruled that “What was
actually sold to the Amorins by Lucena delos Reyes was Lot 19-A located at 933
Maria Luisa Street and not Lot 19-C located at 925 Maria Luisa Street.”
In another Order dates August 1996, the TC modified its earlier decision by
(1) ordering the cancellation of the respondent Bank’s TCT on Lot 11 and Lot 34-D
and Valenzuela’s TCTs on Lot 11, Lot 19-A, and Lot 34-D for having been obtained
from fraudulent source; and (2) ordering the Register of Deeds to interchange the
technical descriptions of Lot 19-A and Lot 19-C
On appeal, the CA rendered a decision reversing that of the trial court and
granting the respondent Bank’s appeal and dismissing the separate appeal of De Los
Reyes
Issue 1: Who has better right over the lot, the Bank or De Los Reyes?
Ruling: De Los Reyes.
While it is a familiar doctrine that a forged or fraudulent document may become
the root of a valid title if the property has already been transferred from the name
of the owner to that of the forger, the same does not always hold true. The doctrine
likewise emphasizes that only a person who deals with registered property in good
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faith will acquire good title from a forger and be absolutely protected by a Torrens
title.
In the final analysis, the resolution of this case depends on the issue of whether
the respondent Bank is a mortgagee/purchaser in good faith
It is a matter of judicial notice that a banking institution, before approving a
loan, sends its representative to the premises of the land offered as collateral, and
investigates who are the true owners and actual possessors thereof. Here, evidence
is wanting that the respondent Bank did make any such investigation. Quite
significantly, it was established during trial that an employee of respondent Bank by
the name of Jesus Ortega was a close friend of swindler Valenzuela. In fact, it was
never disputed that no officer or employee of the respondent Bank inspected the
premises before accepting the same as collaterals for the loan it extended to
Valenzuela.
It cannot be overemphasized that the respondent Bank, being in the business
of extending loans secured by real estate mortgages, is familiar with the rules on
land registration. As such, it was, as here, expected to exercise more care and prudence
than ordinary private individuals in its dealing with registered lands. Given, inter
alia, the suspicious-provoking presence of occupants, other than the owner, on the
land to be mortgaged, it behooved the respondent Bank to conduct a more exhaustive
investigation on the history of the mortgagor’s title. That the respondent Bank
accepted in mortgage the properties in question, notwithstanding the existence of
structures thereon and the actual and visible presence thereat of persons other than
the mortgagor, constitutes gross negligence amounting to bad faith.
Respondent claims that, being an innocent mortgagee, it should not be required
to conduct an exhaustive investigation on the history of the mortgagor’s title before
it could extend a loan. Respondent, however, is not an ordinary mortgagee; it is a
mortgagee-bank. As such, unlike private individuals, it is expected to exercise greater
care and prudence in its dealings, including those involving registered lands. A banking
institution is expected to exercise due diligence before entering into a mortgage
contract. The ascertainment of the status or condition of a property offered to it as
security for a loan must be a standard and indispensable part of its operations.
Issue 2: Whether the Bank’s titles over Lot 11, Lot 19-A and Lot 34-D
can be collaterally attacked?
Ruling: Yes.
The concept of non-collateral attack of title is based on Section 48, PD 1529,
21 which provides:
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Certificate not Subject to Collateral attack. — A certificate of title shall
not be subject to collateral attack. It cannot be altered, modified, or
cancelled except in a direct proceeding in accordance with law.
Clear it is from the above that what cannot be collaterally attacked is the
certificate of title and not the title itself. As it is, a certificate of title is the document
issued by the Register of Deeds in case of conveyance of real estates and is known as
TCT. But by title, the law refers to the ownership which a certificate of title merely
represents. Apparently, respondent Bank confuses a certificate of title with the title
itself. Placing a parcel of land under the mantle of the Torrens system does not
mean that ownership thereof can no longer be disputed. Ownership is different
from a certificate of title.
Also, Bank did not raise the issue of non-collateral attack on its titles as a
defense in the trial court. Hence, it cannot be raised for the first time on appeal.
This defense, if at all, is deemed waived.
3. Accion Reivindicatoria
Iglesia ni Cristo vs. Ponferrada
G.R. No. 168943, October 27, 2006
Alicia, Alfredo, Roberto, Enrique and Susan, all surnamed Santos, and Sonia
Santos-Wallin, represented by Enrique G. Santos, filed a complaint for Quieting of
Title and/or Accion Reivindicatoria before the RTC of QC against the Iglesia Ni
Cristo (INC). From the complaint, plaintiffs appear to be the heirs of Enrique Santos,
represented by Enrique G. Santos. The latter signed the Verification and Certificate
of Non-Forum Shopping. Defendant moved to dismiss on the ground that the case
involved more than one plaintiff but the verification and certification against forum
shopping incorporated in the complaint was signed only by Enrique Santos. Although
the complaint alleges that plaintiffs are represented by Enrique Santos, there is no
showing that he was, indeed, authorized to so represent the other plaintiffs to file
the complaint and to sign the verification and certification of non-forum shopping.
RTC denied the MTD. It declared that since Enrique Santos was one of the heirs,
his signature in the verification and certification constitutes substantial compliance
with the Rules. The court, likewise, held that prescription had not set in and that
failure to state the address of plaintiffs in the complaint does not warrant the dismissal
of the complaint. CA affirmed the lower court.
Issue 1: Whether verification executed by one of the plaintiffs is
sufficient?
Ruling: Yes.
The general rule is that the certification must be signed by all plaintiffs in a
case and the signature of only one of them is insufficient. However, the Court has
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also stressed in a number of cases that the rules on forum shopping were designed
to promote and facilitate the orderly administration of justice and thus should not
be interpreted with such absolute literalness as to subvert its own ultimate and
legitimate objective. The rule of substantial compliance may be availed of with respect
to the contents of the certification. This is because the requirement of strict
compliance with the provisions merely underscores its mandatory nature in that the
certification cannot be altogether dispensed with or its requirements completely
disregarded. The Court applied the rule on substantial compliance because of the
commonality of interest of all the parties with respect to the subject of the controversy.
In the instant case, both parties have their respective TCTs over the property.
They have a common interest over the property being the heirs of the late Enrique
Santos, the alleged registered owner of the subject property as shown in one of the
TCTs. As such heirs, they are considered co-owners pro indiviso of the whole property
since no specific portion yet has been adjudicated to any of the heirs. Consequently,
as one of the heirs and principal party, the lone signature of Enrique G. Santos in
the verification and certification is sufficient for the RTC to take cognizance of the
case. The commonality of their interest gave Enrique G. Santos the authority to
inform the RTC on behalf of the other plaintiffs therein that they have not
commenced any action or claim involving the same issues in another court or tribunal,
and that there is no other pending action or claim in another court or tribunal involving
the same issues.
Considering that at stake in the present case is the ownership and possession
over a prime property in Quezon City, the apparent merit of the substantive aspects
of the case should be deemed as a special circumstance or compelling reason to
allow the relaxation of the rule.
Issue 2: Whether there is a need to show Enrique G Santos’ authority to
represent his co-heirs.
Ruling: No.
Respondents herein are co-owners of the subject property. As such co-owners,
each of the heirs may properly bring an action for ejectment, forcible entry and
detainer, or any kind of action for the recovery of possession of the subject properties.
Thus, a co-owner may bring such an action, even without joining all the other coowners
as co-plaintiffs, because the suit is deemed to be instituted for the benefit of
all.
We uphold the validity of the complaint because of the following circumstances:
the caption of the instant case is Heirs of Enrique Santos vs. Iglesia ni
Cristo;
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the opening statement of the complaint states that plaintiffs are the
heirs of Enrique Santos and likewise names the particular heirs of
the latter who instituted the complaint below;
the case involves a property owned by the predecessor-in-interest of
plaintiffs therein; and
the verification signed by Enrique G. Santos clearly states that he is
one of the children of the late Enrique Santos and that he represents
the heirs of said Enrique Santos
Issue 3: Whether prescription has set in?
Ruling: No.
A cloud is said to be a semblance of a title, either legal or equitable, or a cloud
of an interest in land appearing in some legal form but which is, in fact, unfounded,
or which it would be inequitable to enforce. An action for quieting of title is
imprescriptible until the claimant is ousted of his possession.
Admittedly, respondents interposed that the owner of a real property, as
plaintiff, is entitled to the relief of quieting of title even if, at the time of the
commencement of his action, he was not in actual possession of real property. After
all, under Article 477 of the New Civil Code, the owner need not be in possession of
the property. If on the face of TCT under the name of plaintiff, its invalidity does
not appear but rests partly in pais, an action for quieting of title is proper. As gleaned
from the averments of the complaint, the action of respondents was one for quieting
of title under Rule 64 of the Rules of Court, in relation to Article 476 of the New
Civil Code
In the present case, respondent alleged in their complaint, that their father,
Enrique Santos, was the owner of the property based on TCT issued on July 27,
1961; and that, after his death on February 9, 1970, they inherited the property;
Enrique Santos, during his lifetime, and respondents, after the death of the former,
had been in actual, continuous and peaceful possession of the property until 1994
when petitioner claimed ownership based on TCT issued on September 18, 1984
and barred respondents from fencing their property.
The alternative reinvindicatory action against petitioner. An accion reinvindicatoria
does not necessarily presuppose that the actual and material possession of the
property is on defendant and that plaintiff seeks the recovery of such possession
from defendant. It bears stressing that an accion reinvindicatoria is a remedy seeking
the recovery of ownership and includes jus possidendi, jus utendi, and jus fruendi as well.
It is an action whereby a party claims ownership over a parcel of land and seeks
recovery of its full possession. Thus, the owner of real property in actual and material
possession thereof may file an accion reinvindicatoria against another seeking ownership
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over a parcel of land including jus vindicandi, or the right to exclude defendants from
the possession thereof. In this case, respondents filed an alternative reinvindicatory
action claiming ownership over the property and the cancellation of TCT under the
name of petitioner. In fine, they sought to enforce their jus utendi and jus vindicandi
when petitioner claimed ownership and prevented them from fencing the property.
Since respondents were in actual or physical possession of the property when they
filed their complaint against petitioner on October 24, 2001, the prescriptive period
for the reinvindicatory action had not even commenced to run, even if petitioner
was able to secure TCT over the property in 1984
Petition denied.
2. Forcible Entry/ Unlawful Detainer
a. difference between forcible entry and unlawful detainer
Cajayon vs. Santiago
G.R. No. 149118, February 16, 2006
Flaviana Lim Cajayon and Carmelita Lim Constantino (PETITIONERS) and
Isagani Candelaria (CANDELARIA) were co-owners of a 260-square meter lot, then
covered by Transfer Certificate of Title (TCT) No. C-10870.
On February 1995, a partition agreement was entered into by petitioners and
Candelaria, wherein Lot 6-A, Psd 00-034294, containing an area of 100 square meters,
more or less, was adjudicated to Candelaria, while Lot 6-B, Psd 00-034294, containing
an area of 160 square meters, more or less, was given to petitioners. TCT No. C-
10870 was cancelled and TCT No. 288500 was issued in the name of petitioners.
On May 1995, Candelaria sold his property, including the improvements
thereon, to Spouses Santiago and Fortunata Batuyong (RESPONDENTS). TCT No.
294743 was issued in their names over the said parcel of land.
On 21 May 1996, petitioners started the construction of a seven (7)-door
bungalow-type building that allegedly intruded into the lot of respondents. The
parties were summoned by barangay officials to a meeting on the matter. It was then
agreed upon that petitioners would defer the construction work pending the result
of a relocation survey to be conducted by a government surveyor.
The verification survey yielded the findings that Lot 6-A (Candelaria’s) and
Lot 6-B (petitioners’) were not correctly positioned geographically on the ground
with respect to TCT No. 294743. Thus, as per survey, sub-lot B with an area of
10.43 square meters serves as right of way of Lot 6-B (petitioners’ lot) while sub-lot
C with an area of 10.18 square meters was the portion of Lot 6-A (respondents’ lot)
presently occupied by petitioners.
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Despite the delineation of said boundaries, petitioners proceeded with the
forestalled construction, allegedly occupying at least 20.61 square meters of
respondents’ lot, including the portion being used as right of way for petitioners’
tenants.
The demands of the respondents for the petitioners to vacate the encroached
portion were left unheeded.
On, 14 April 1997, the respondents filed an ejectment case against the petitioners
before the Metropolitan Trial Court of Caloocan City.
The MeTC rendered a decision ordering the petitioners to vacate and surrender
possession of a portion of respondents’ lot. On appeal, the RTC affirmed the decision
of the MeTC.
Issue: Whether the court acquired jurisdiction over the ejectment case
filed by the respondents
Ruling: Yes.
From the above-quoted allegations taken in tandem with the textbook
distinctions between forcible entry and unlawful detainer, it is clear that the complaint
makes out a case for forcible entry, as opposed to unlawful detainer. The distinctions
between the two forms of ejectment suits, are: first, in forcible entry, the plaintiff
must prove that he was in prior physical possession of the premises until he was
deprived thereof by the defendant, whereas, in unlawful detainer, the plaintiff need
not have been in prior physical possession; second, in forcible entry, the possession
of the land by the defendant is unlawful from the beginning as he acquires possession
thereof by force, intimidation, threat, strategy or stealth, while in unlawful detainer,
the possession of the defendant is inceptively lawful but it becomes illegal by reason
of the termination of his right to the possession of the property under his contract
with the plaintiff; third, in forcible entry, the law does not require a previous demand
for the defendant to vacate the premises, but in unlawful detainer, the plaintiff must
first make such demand, which is jurisdictional in nature.
Respondents had been in prior physical possession of the property in the concept
of owner prior to petitioners’ intrusion on 21 May 1996. When petitioners encroached
upon respondents’ lot and started construction works thereon the latter was
dispossessed of the area involved. Despite various demands by respondents to vacate,
petitioners obstinately refused to do so. Clearly, petitioners’ entry into the said
property was illegal from the beginning, precluding an action for unlawful detainer.
On the other hand, to establish a case of forcible entry, the complaint must
allege that one in physical possession of a land or building has been deprived of that
possession by another through force, intimidation, threat, strategy or stealth. It is
not essential, however, that the complaint should expressly employ the language of
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the law. It would be sufficient that facts are set up showing that dispossession took
place under said conditions.
The words “by force, intimidation, threat, strategy or stealth” include every
situation or condition under which one person can wrongfully enter upon real property
and exclude another, who has had prior possession thereof. To constitute the use of
“force” as contemplated in the above-mentioned provision, the trespasser does not
have to institute a state of war. Nor is it even necessary that he use violence against
the person of the party in possession. The act of going on the property and excluding
the lawful possessor therefrom necessarily implies the exertion of force over the
property, and this is all that is necessary.
In the case at bar, petitioners’ encroachment into respondents’ property in an
oppressive and malevolent manner, coupled with their refusal to vacate the premises
despite knowledge of the proper boundaries and heedless of respondents’ serious
objections, indelibly connotes “force” within the meaning of the law.
Petitioners contend that while they concede they might have intruded on
respondents’ property, the action is barred by prescription because it was filed more
than one (1) year after the occurrence of the alleged intrusion. The contention is
baseless. Section 1, Rule 70 of the Rules of Court allows a plaintiff to bring an action
in the proper inferior court for forcible entry or unlawful detainer within one (1)
year, respectively, after such unlawful deprivation or withholding of possession. In
forcible entry, the one-year period is counted from the date of actual entry on the
land. Records show that the ejectment suit was instituted on 11 April 1997. Petitioners’
actual entry into the property, according to the complaint, took place on 21 May
1996. Thus, the suit was filed well within the one (1)-year period mandated by law.
b. issues to be decided in ejectment cases
Copuyoc vs. De Sola
G.R. No. 151322, October 11, 2006
The principal issue to be resolved in forcible entry cases is mere physical or
material possession (possession de facto) and not juridical possession (possession de
jure) nor ownership of the property involved. Title is not involved.
In David vs. Cordova, the SC explained:
The only question that the courts must resolve in ejectment proceedings
is — who is entitled to the physical possession of the premises, that is, to
the possession de facto and not to the possession de jure. It does not even
matter if a party’s title to the property is questionable, or when both
parties intruded into public land and their applications to own the land
have yet to be approved by the proper government agency. Regardless of
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Eduardo A. Labitag
the actual condition of the title to the property, the party in peaceable
quiet possession shall not be thrown out by a strong hand, violence or
terror. Neither is the unlawful withholding of property allowed. Courts
will always uphold respect for prior possession.
Thus, a party who can prove prior possession can recover such possession
even against the owner himself. Whatever may be the character of his possession, if
he has in his favor prior possession in time, he has the security that entitles him to
remain on the property until a person with a better right lawfully ejects him. To
repeat, the only issue that the court has to settle in an ejectment suit is the right to
physical possession.
It is also well settled that in civil cases, the burden of proof is on the plaintiff
to establish his case by a preponderance of evidence. If the plaintiff claims a right
granted or created by law, the same must be proven by competent evidence. The
plaintiff must rely on the strength of his own evidence and not on the weakness of
that of his opponent.
3. Building, Planting, Sowing
a. Useful Improvements by Lessee
Programme Inc. vs. Province of Bataan
G.R. No. 144635, June 26, 2006
BASECO was the owner of Piazza Hotel and Mariveles Lodge, both located
in Mariveles, Bataan. BASECO granted petitioner a contract of lease over Piazza
Hotel from January 1, 1986 to January 1, 1989, subject to renewal by mutual
agreement of the parties. After the expiration of the three-year lease period, petitioner
was allowed to continue operating the hotel on monthly extensions of the lease.
Presidential Commission on Good Government (PCGG) issued a sequestration order
against BASECO pursuant to Executive Order No. 1 of former President Corazon
C. Aquino. Among the properties provisionally seized and taken over was the lot on
which Piazza Hotel stood. However, Piazza Hotel was sold at a public auction for
non-payment of taxes to Province of Bataan. BASECO’s TCT was cancelled and a
new TCT was issued to the Province of Bataan. Petitioner filed a complaint for
preliminary injunction and collection of sum of money against BASECO. Respondent,
as the new owner of the property, filed a motion for leave to intervene. After its
motion was granted, respondent filed a complaint-in-intervention praying, inter alia,
that petitioner be ordered to vacate Piazza Hotel and Mariveles Lodge for lack of
legal interest. During the pre-trial of the complaint-in-intervention, the parties agreed
that the case be tried on the sole issue of whether respondent province, as complainantintervenor,
was the legitimate owner of the Piazza Hotel and Mariveles Lodge. Trial
court rendered judgment in favor of respondent. CA affirmed.
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Issue: Whether the Province of Bataan can claim ownership of Piazza
Hotel and Mariveles Lodge?
Ruling: Yes.
Time and again, we have ruled that factual matters are best evaluated by trial
courts which can scrutinize evidence and hear testimony presented and offered by
the parties (in this case, on the issue of ownership of the subject property). All the
more does this principle ring true in this petition since such factual determination
by the RTC was upheld by the CA. Only questions of law are the proper subject of
a petition for review on certiorari in this Court, unless any of the known exceptions
is extant in this case.
The evidence clearly established respondent’s ownership of Piazza Hotel. First,
the title of the land on which Piazza Hotel stands was in the name of respondent.
Second, Tax Declaration No. 12782 was in the name of respondent as owner of
Piazza Hotel.
Third, petitioner was doubtlessly just a lessee. In the lease contract annexed
to the complaint, petitioner in fact admitted BASECO’s (respondent’s predecessorin-interest)
ownership then of the subject property.
The Rules of Court states that “an admission, verbal or written, made by a
party in the course of the proceedings in the same case, does not require proof. The
admission may be contradicted only by showing that it was made through palpable
mistake or that no such admission was made. To be considered as a judicial admission,
the same must be made in the same case in which it is offered. In its own complaint
for preliminary injunction and sum of money, petitioner acknowledged that it was
not the owner of the property when it stated that “BASECO leased to petitioner the
building Piazza Hotel and its outlet Mariveles Lodge xxx for monthly rentals of
P6,500.00.” Petitioner could not possibly be the owner of a building merely leased
to it.
Furthermore, petitioner’s reference to Article 448 of the Civil Code to justify
its supposed rights as “possessor in good faith” was erroneous.
The benefits granted to a possessor in good faith cannot be maintained by the
lessee against the lessor because, such benefits are intended to apply only to a case
where one builds or sows or plants on land which he believes himself to have a claim
of title and not to lands wherein one’s only interest is that of a tenant under a rental
contract, otherwise, it would always be in the power of a tenant to improve his
landlord out of his property. Besides, as between lessor and lessee, the Code applies
specific provisions designed to cover their rights.
Hence, the lessee cannot claim reimbursement, as a matter of right, for useful
improvements he has made on the property, nor can he assert a right of retention
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until reimbursed. His only remedy is to remove the improvement if the lessor does
not choose to pay its value; but the court cannot give him the right to buy the land.
Petitioner’s assertion that Piazza Hotel was constructed “at (its) expense” found
no support in the records. Neither did any document or testimony prove this claim.
At best, what was confirmed was that petitioner managed and operated the hotel. There
was no evidence that petitioner was the one which spent for the construction or
renovation of the property. And since petitioner’s alleged expenditures were never
proven, it could not even seek reimbursement of one-half of the value of the
improvements upon termination of the lease under Article 1678 of the Civil Code.
Petition denied.
b. Mutual Bad Faith
Feliciano vs. Zaldivar
G.R. No. 162593. September 26, 2006
Action for Declaration of Nullity of TCT; Art. 440 CC Applied
Remegia Y. Feliciano (FELICIANO) filed against the spouses Aurelio and Luz
Zaldivar a complaint for declaration of nullity of TCTNo. T-17993 and reconveyance
of the property consisting of 243 square meters of lot situated in Cagayan de Oro
City. The said title is registered in the name of Aurelio Zaldivar.
Feliciano alleges that she was the registered owner of a parcel of land in Cagayan
de Oro City with an area of 444 square meters, covered by TCT No. T-8502.
Sometime in 1974, Aurelio, allegedly through fraud, was able to obtain TCT No. T-
17993 covering the 243-sq-m portion of Feliciano’s lot as described in her TCT No.
T-8502.
Feliciano also contends that the subject lot was originally leased from her by
Pio Dalman, Aurelio’s father-in-law, for P5.00 a month, later increased to P100.00 a
month in 1960. She further alleged that she was going to mortgage the subject lot to
Ignacio Gil for P100.00, which, however, did not push through because Gil took
back the money without returning the receipt she had signed as evidence of the
supposed mortgage contract. Thereafter, in 1974, Aurelio filed with the then Court
of First Instance of Misamis Oriental a petition for partial cancellation of TCT No.
T-8502. It was allegedly made to appear therein that Aurelio and his spouse Luz
acquired the subject lot from Dalman who, in turn, purchased it from Gil. The petition
was granted and TCT No. T-17993 was issued in Aurelio’s name.
Feliciano denied that she sold the subject lot either to Gil or Dalman. She
likewise impugned as falsified the joint affidavit of confirmation of sale that she and
her uncle, Narciso Labuntog, purportedly executed before a notary public, where
Feliciano appears to have confirmed the sale of the subject property to Gil. She
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alleged that she never parted with the certificate of title and that it was never lost.
As proof that the sale of the subject lot never transpired, Feliciano pointed out that
the transaction was not annotated on TCT No. T-8502.
The RTC rendered a judgment in favor of Feliciano. On appeal, the CA
reversed the decision of the RTC and ruled in favor of the Zaldivars
Issue 1: Whether the Court of Appeals was correct in ruling that the
land in dispute was correctly registered in the name of Aurelio Zaldivar.
Ruling: No.
It should be recalled that respondent Aurelio Zaldivar filed with the then CFI
of Misamis Oriental a petition for issuance of a new owner’s duplicate copy of TCT
No. T-8502, alleging that the owner’s duplicate copy was lost. In the Order dated
March 20, 1974, the said CFI granted the petition and consequently, a new owner’s
duplicate copy of TCT No. T-8502 was issued. However, as the trial court correctly
held, the CFI which granted Aurelio’s petition for the issuance of a new owner’s
duplicate copy of TCT No. T-8502 did not acquire jurisdiction to issue such order.
It has been consistently ruled that “when the owner’s duplicate certificate of title
has not been lost, but is in fact in the possession of another person, then the
reconstituted certificate is void, because the court that rendered the decision had no
jurisdiction. Reconstitution can validly be made only in case of loss of the original
certificate.” In such a case, the decision authorizing the issuance of a new owner’s
duplicate certificate of title may be attacked any time.
The new owner’s duplicate TCT No. T-8502 issued by the CFI in the name of
Aurelio is thus void. As Feliciano averred during her testimony, the owner’s duplicate
copy of TCT No. T-8502 was never lost and was in her possession from the time it
was issued to her.
The court a quo correctly nullified TCT No. T-17993 in Aurelio’s name,
emanating as it did from the new owner’s duplicate TCT No. T-8502, which Aurelio
procured through fraud. Aurelio cannot raise the defense of indefeasibility of title
because “the principle of indefeasibility of a Torrens title does not apply where
fraud attended the issuance of the title. The Torrens title does not furnish a shield
for fraud.” As such, a title issued based on void documents may be annulled.
Neither can the respondents spouses Zaldivar rely on the principle of
indefeasibility of TCT No. 17793 which was issued in favor of Aurelio. As it is, the
subject lot is covered by two different titles: TCT No. T-8502 in Feliciano’s name
covering an area of 444 sq m including therein the subject lot, and TCT No. 17793
in the name of Aurelio covering the subject lot. Aurelio’s title over the subject lot
has not become indefeasible, by virtue of the fact that TCT No. T-8502 in the name
of Feliciano has remained valid.
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The claim of indefeasibility of the petitioner’s title under the Torrens land
title system would be correct if previous valid title to the same parcel of land did not
exist. The respondent had a valid title . . . It never parted with it; it never handed or
delivered to anyone its owner’s duplicate of the transfer certificate of title; it could
not be charged with negligence in the keeping of its duplicate certificate of title or
with any act which could have brought about the issuance of another certificate
upon which a purchaser in good faith and for value could rely. If the petitioner’s
contention as to indefeasibility of his title should be upheld, then registered owners
without the least fault on their part could be divested of their title and deprived of
their property. Such disastrous results which would shake and destroy the stability
of land titles had not been foreseen by those who had endowed with indefeasibility
land titles issued under the Torrens system
Issue 2: What are the rights of Feliciano over the house built by the
Zaldivar spouses over the land in dispute?
Ruling:
Nonetheless, the Court is not unmindful of the fact that respondents had built
their house on the subject lot and, despite knowledge thereof, Feliciano did not lift
a finger to prevent it. Article 453 of the Civil Code is applicable to their case:
ART. 453. If there was bad faith, not only on the part of the person who
built, planted or sowed on the land of another, but also on the part of the
owner of such land, the rights of one and the other shall be the same as
though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever
the act was done with his knowledge and without opposition on his part.
Under the circumstances, respondents and Feliciano are in mutual bad faith
and, as such, would entitle the former to the application of Article 448 of the Civil
Code governing builders in good faith:
ART. 448. The owner of the land on which anything has been built, sown
or planted in good faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the indemnity provided
for in Articles 546 29 and 548, 30 or to oblige the one who built or
planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if
its value is considerably more than that of the building or trees. In such a
case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after the proper indemnity.
The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
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Feliciano is obliged to exercise either of the following options: (1) to appropriate
the improvements, including the house, built by the Zaldivars on the subject lot by
paying the indemnity required by law, or (2) sell the subject lot to the Zaldivars.
Feliciano cannot refuse to exercise either option and compel respondents to remove
their house from the land. In case Feliciano choose to exercise the second option,
Zaldivars are not obliged to purchase the subject lot if its value is considerably more
than the improvements thereon and in which case, the Zaldivars must pay rent to
Feliciano. If they are unable to agree on the terms of the lease, the court shall fix the
terms thereof.
4. Action to Quiet Title
Rumarate vs. Hernandez
G.R. No. 168222, April 18, 2006
Lot No. 379 was previously possessed and cultivated by Teodulo Rumarate’s
(Teodulo) godfather, Santiago Guerrero (Santiago), a bachelor, who used to live
with the Rumarate family in San Pablo City. From 1925 to 1928, Santiago occupied
Lot No. 379 cultivating five hectares thereof.
Before moving to Kagakag, Lopez, Quezon in 1929, Santiago orally bequeathed
his rights over Lot No. 379 to Teodulo and entrusted to him a copy of a Decision of
the Court of First Instance (CFI) of Tayabas dated April 21, 1925 recognizing his
(Santiago) rights over Lot No. 379. Since Teodulo was only 14 years old then, his
father helped him cultivate the land. Their family thereafter cleared the land, built a
house and planted coconut trees, corn, palay and vegetables thereon.
From 1929, Teodulo and later, his wife and 11 children possessed the land as
owners and declared the same for taxation, the earliest being in 1961.
In 1960, Santiago executed an “Affidavit (quit-claim)” ratifying the transfer of
his rights over Lot No. 379 to Teodulo.
In 1970, Teodulo discovered that spouses Cipriano Hernandez and Julia Zoleta,
respondents’ predecessors-in-interest, were able to obtain a title over Lot No. 379.
He did not immediately file a case against respondents because he was advised to
just remain on the land and pay the corresponding taxes thereon.
On September 1, 1992, petitioner spouses Teodulo Teodulo and Rosita
Rumarate filed an action for reconveyance of real property and/or quieting of title
with damages against respondent heirs of the late spouses Cipriano Hernandez and
Julia Zoleta
Respondents claimed that on November 11, 1964, Santiago sold the questioned
lot to their parents, the spouses Cipriano Hernandez and Julia Zoleta, for P9,000.00.
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The trial court rendered a decision in favor of petitioners. On appeal to the
Court of Appeals, the CA reversed the decision of the trial court.
Issue 1: To whom should Lot No. 379 be awarded? To petitioners who
possessed and cultivated the lot since 1929 up to the present, but do not
have a certificate of title over the property, or to respondents who have
a certificate of title but are not in possession of the disputed lot?
Ruling: The land should be awarded to the petitioners.
In an action for quieting of title, the court is tasked to determine the respective
rights of the parties so that the complainant and those claiming under him may be
forever free from any danger of hostile claim.
Under Article 476 of the Civil Code, the remedy may be availed of only when,
by reason of any instrument, record, claim, encumbrance or proceeding, which appears
valid but is, in fact, invalid, ineffective, voidable or unenforceable, a cloud is thereby
cast on the complainant’s title to real property or any interest therein. Article 477 of
the same Code states that the plaintiff must have legal or equitable title to, or interest
in the real property which is the subject matter of the suit.
For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest
in the real property subject of the action; and (2) the deed, claim, encumbrance or
proceeding claimed to be casting cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
In the present case, The SC found that Teodulo’s open, continuous, exclusive,
notorious possession and occupation of Lot No. 379, in the concept of an owner for
more than 30 years vested him and his heirs title over the said lot.
The law applicable at the time Teodulo completed his 30-year possession (from
1929 to 1959) of Lot No. 379, in the concept of an owner was Sec. 48(b) of
Commonwealth Act No. 141 or the Public Land Act, as amended by Republic Act
(RA) No. 1942, effective June 22, 1957 30 which provides:
Sec. 48. The following-described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply
to the Court of First Instance (now Regional Trial Courts) of the province
where the land is located for confirmation of their claims and the issuance
of a certificate of title thereafter, under the Land Registration Act (now
Property Registration Decree), to wit:
xxx xxx xxx
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(b) Those who by themselves or through their predecessors-in-interest
have been, in continuous, exclusive, and notorious possession and
occupation of agricultural lands of the public domain, under a bona fide
claim of acquisition or ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title, except
when prevented by war or force majeure. Those shall be conclusively
presumed to have performed all the conditions essential to a government
grant and shall be entitled to a certificate of title under the provisions of
this chapter.
When the conditions specified therein are complied with, the possessor is
deemed to have acquired, by operation of law, a right to a government grant, without
necessity of a certificate of title being issued, and the land ceases to be part of the
public domain. The confirmation proceedings would, in truth be little more than a
formality, at the most limited to ascertaining whether the possession claimed is of
the required character and length of time; and registration thereunder would not
confer title, but simply recognize a title already vested. The proceedings would not
originally convert the land from public to private land, but only confirm such
conversion already effected by operation of law from the moment the required period
of possession became complete.
A careful examination of the evidence on record shows that Teodulo possessed
and occupied Lot No. 379 in the concept of an owner. Since 1929, Teodulo cultivated
the controverted land, built his home, and raised his 11 children thereon. In 1957,
he filed a homestead application over Lot No. 379 but failed to pursue the same.
After his demise, all his 11 children continued to till the land. From 1929 to 1960,
Santiago never challenged Teodulo’s possession of Lot No. 379 nor demanded or
received the produce of said land. For 31 years Santiago never exercised any act of
ownership over Lot No. 379. And, in 1960, he confirmed that he is no longer
interested in asserting any right over the land by executing in favor of Teodulo a
quitclaim.
All these prove that Teodulo possessed and cultivated the land as owner thereof
since 1929. While the oral donation in 1929 as well as the 1960 quitclaim ceding Lot
No. 379 to Teodulo are void for non-compliance with the formalities of donation,
they nevertheless explain Teodulo and his family’s long years of occupation and
cultivation of said lot and the nature of their possession thereof.
There is no question that the donation in question is invalid because it involves
an immovable property and the donation was not made in a public document as
required by Article 633 of the old Civil Code, in connection with Article 1328 of the
same Code, but it does not follow that said donation may not serve as basis of
acquisitive prescription when on the strength thereof the donee has taken possession
of the property adversely and in the concept of owner.
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In the instant case, Santiago’s short-lived possession and cultivation of Lot
No. 379 could not vest him title. While he tilled the land in 1925, he ceased to
possess and cultivate the same since 1928. He abandoned the property and allowed
Teodulo to exercise all acts of ownership. His brief possession of Lot No. 379 could
not thus vest him title. Nemo potest plus juris ad alium transferre quam ipse habet. No one
can transfer a greater right to another than he himself has. Hence, spouses Cipriano
Hernandez and Julia Zoleta and herein respondents did not acquire any right over
the questioned lot and the title issued in their names are void, because of the legal
truism that the spring cannot rise higher than the source.
Issue 2: WON the action for quieting of title has already prescribed
Ruling: No.
An action for quieting of title is imprescriptible, as in the present case, where
the person seeking relief is in possession of the disputed property.
A person in actual possession of a piece of land under claim of ownership may
wait until his possession is disturbed or his title is attacked before taking steps to
vindicate his right, and that his undisturbed possession gives him the continuing
right to seek the aid of a court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his title.
Considering that petitioners herein continuously possessed Lot No. 379 since
1929 up to the present, their right to institute a suit to clear the cloud over their title
cannot be barred by the statute of limitations.
Ragasa vs. Sps. Roa
G.R. No. 141964, June 30, 2006
On May 1989, Spouses Edesito and Consorcia (RAGASA SPOUSES) entered
into a contract with Oakland Development Resources Corporation for the purchase
in installments of a piece of property, with improvements covered by TCT No.
27946.
The Ragasa Spouses took possession of the property covered by TCT No.
27946 and resided thereat together with their relatives who continued to occupy the
same whenever the Ragasa Spouses would leave for Italy where they both worked.
In March 1992, Ragasa Spouses were able to fully pay for the agreed purchase
price of the property and a Deed of Absolute Sale dated March 12, 1992 was executed
by and between Oakland Development Resources Corporation and the original
owner’s copy of TCT No. 27946 was turned over to them.
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Despite the execution of the Deed of Absolute Sale, the Corporation failed to
cause the transfer of title to plaintiffs. On the part of plaintiffs, all the while they
thought that the Deed of Absolute Sale and possession of the original of the owner’s
copy of TCT No. 27946 was more than sufficient to protect their rights and interests
over the property
Sometime March of 1999 Consorcia Ragasa decided to cause the transfer of
registration of TCT No. 27946, upon learning that Oakland Development Resources
Corporation was no longer functional as a corporate entity. She was surprised to
learn from the Registry of Deeds for Quezon City that on April 14, 1995, the property
in question was sold by defendant Ex-Officio Sheriff of Quezon City] to defendants
Gerardo and Rodriga Roa (ROA SPOUSES) as the highest bidder.
The Ragasa Spouses filed a complaint against the Roa Spouses before the QC
RTC. The Roa Spouses moved for the dismissal of the complaint on the grounds of
prescription and laches. The RTC granted the motion. Characterizing the suit as an
action “upon an injury to the rights of the plaintiff” which, according to Article 1146
of the Civil Code, must be filed within four years, the RTC held that Ragasa Spouses’
action was barred by prescription for having been filed more than four years after
the registration of the execution sale.
Issue: Whether the suit filed by the Ragasa Spouses has already
prescribed.
Ruling: No.
A reading of the allegations in petitioners’ complaint reveals that the action
was essentially one for quieting of title to real property under Article 476 of the
Civil Code which states:
Whenever there is a cloud on title to real property or any interest therein,
by reason of any instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud being cast upon title to real
property or any interest therein.
To make out an action to quiet title under the foregoing provision, the initiatory
pleading has only to set forth allegations showing that (1) the plaintiff has “title to
real property or any interest therein” and (2) the defendant claims an interest therein
adverse to the plaintiff’s arising from an “instrument, record, claim, encumbrance,
or proceeding which is apparently valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable.”
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Thus, the averments in petitioners’ complaint that (1) they acquired ownership
of a piece of land by tradition or delivery as a consequence of sale and (2) private
respondents subsequently purchased the same piece of land at an allegedly void
execution sale were sufficient to make out an action to quiet title under Article 476.
This being the case, Article 1146, which refers to actions “upon an injury to
the rights of the plaintiff” and “upon a quasi-delict”, did not apply.
It is an established rule of American jurisprudence (made applicable in this
jurisdiction by Art. 480 of the New Civil Code) 12 that actions to quiet title to
property in the possession of the plaintiff are imprescriptible.
The prevailing rule is that the right of a plaintiff to have his title to land
quieted, as against one who is asserting some adverse claim or lien thereon, is not
barred while the plaintiff or his grantors remain in actual possession of the land,
claiming to be owners thereof, the reason for this rule being that while the owner in
fee continues liable to an action, proceeding, or suit upon the adverse claim, he has
a continuing right to the aid of a court of equity to ascertain and determine the
nature of such claim and its effect on his title, or to assert any superior equity in his
favor. He may wait until his possession is disturbed or his title is attacked before
taking steps to vindicate his right. But the rule that the statute of limitations is not
available as a defense to an action to remove a cloud from title can only be invoked
by a complainant when he is in possession. One who claims property which is in the
possession of another must, it seems, invoke his remedy within the statutory period.
Diaz vs. Virata
G.R. No. 162037, August 7, 2006
An action for quieting of title is a remedy which may be availed of only when
by reason of any instrument, record, claim, encumbrance or proceeding, which appears
valid but is, in fact, invalid, ineffective, voidable or unenforceable, a cloud is thereby
cast on the complainant’s title to real property or any interest therein.
Article 476 of the Civil Code provides:
Article 476. Whenever there is a cloud on title to real property or any
interest therein, by reason of any instrument, record, claim, encumbrance
or proceeding which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial
to said title, an action may be brought to remove such cloud or to quiet
the title. An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein.
Further, Article 477 of the same Code mandates that in an action to quiet
title, the party bringing the action must have a legal or, at least, an equitable title to
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the real property subject of the action and that the alleged cloud on his title must be
shown to be in fact invalid.
For an action to quiet title to prosper, two indispensable requisites must concur,
namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest
in the real property subject of the action; and (2) the deed, claim, encumbrance or
proceeding claimed to be casting cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
Time and again, we have upheld the fundamental principle in land registration
that a certificate of title serves as evidence of an indefeasible and incontrovertible
title to the property in favor of the person whose name appears therein. It becomes
the best proof of ownership of a parcel of land. Well-established is the principle that
the person holding a prior certificate is entitled to the land as against a person who
relies on a subsequent certificate. This rule refers to the date of the certificate of
title. Absent any muniment of title issued prior to 1959 in favor of appellants [Enrique,
et al.] which could prove their ownership over the contested lots, this Court is left
with no other alternative but to declare appellants’ claim over the properties as
void.
By express provision of Section 48 of Presidential Decree No. 1529, a certificate
of title cannot be subject to a collateral attack, thus:
SEC. 48. Certificate not subject to collateral attack. — A certificate of
title shall not be subject to collateral attack. It cannot be altered, modified,
or cancelled except in a direct proceeding in accordance with law.
When is an action a direct attack and when is it collateral? This Court made a
distinction, to wit:
An action is deemed an attack on a title when the object of the action or
proceeding is to nullify the title, and thus challenge the judgment pursuant
to which the title was decreed. The attack is direct when the object of the
action is to annul or set aside such judgment, or enjoin its enforcement.
On the other hand, the attack is indirect or collateral when, in an action
to obtain a different relief, an attack on the judgment is nevertheless
made as an incident thereof.
Laches is defined as the failure to assert a right for an unreasonable and
unexplained length of time, warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it. This equitable defense is
based upon grounds of public policy, which requires the discouragement of stale
claims for the peace of society. Indeed, while it is true that a Torrens Title is
indefeasible and imprescriptible, the registered landowner may lose his right to
recover the possession of his registered property by reason of laches. However, In
the case at bar, laches cannot be appreciated in petitioners’ favor.
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For laches to apply, it must be shown that there was lack of knowledge or
notice on the part of the defendant that complainant would assert the right in which
he bases his suit.
B. Right to Just Compensation in Case of Expropriation
MIAA vs. Rodriguez
G.R. No. 161836, February 28, 2006
Manila International Airport Authority (MIAA), the government-owned and
controlled corporation managing and operating the Ninoy Aquino International
Airport Complex, implemented expansion programs for its runway. MIAA received
a letter from Joaquin Rodriguez (Rodriguez) proposing to sell one of the lots already
occupied by the expanded runway but assumed as not yet expropriated by the MIAA.
The proposal did not ripen to a deal. Subsequently Rodriguez bought the bigger lot
a portion of which was occupied by the runway, as well as all the rights to claim
reasonable rents and damages for the occupation, from its owner then, Buck Estate,
Inc. The property purchased had a portion already occupied by the runway. This
occupied portion is hereinafter referred to as the subject lot. Through a letter,
Rodriguez, through counsel, demanded from the MIAA full payment for the property
and back rentals for 27 years, amounting to P468,800,000.00. As he did not reach
an agreement with the MIAA, Rodriguez filed a case for accion reinvindicatoria with
damages. RTC rendered judgment in favor of Rodriguez. CA partially granted the
MR by including the legal rate of interest.
Issue: WON Rodriguez should be awarded compensation for the subject
lot?
Ruling: Yes.
While the instant case stemmed from the accion reinvindicatoria that Rodriguez
had filed, it essentially revolves around the taking of the subject lot by the MIAA.
There is “taking” when the expropriator enters private property not only for a
momentary period but for a more permanent duration, or for the purpose of devoting
the property to a public use in such a manner as to oust the owner and deprive him
of all beneficial enjoyment thereof. In this context, there was taking when the MIAA
occupied a portion thereof for its expanded runway.
The value of the property must be determined either as of the date of the
taking of the property or the filing of the complaint, “whichever came first.” Even
before the new rule, however, it was already held in Commissioner of Public Highways vs.
Burgos that the price of the land at the time of taking, not its value after the passage
of time, represents the true value to be paid as just compensation. It was, therefore,
error for the Court of Appeals to rule that the just compensation to be paid to
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respondent should be determined as of the filing of the complaint in 1990, and not
the time of its taking by the NIA in 1981, because petitioner was allegedly remiss in
its obligation to pay respondent, and it was respondent who filed the complaint. In
the case of Burgos, it was also the property owner who brought the action for
compensation against the government after 25 years since the taking of his property
for the construction of a road.
Issue: Whether damages should be awarded?
Ruling: Yes.
Undeniably, the MIAA’s illegal occupation for more than twenty (20) years
has resulted in pecuniary loss to Rodriguez and his predecessors-in-interest. Such
pecuniary loss entitles him to adequate compensation in the form of actual or
compensatory damages, which in this case should be the legal interest (6%) on the
value of the land at the time of taking, from said point up to full payment by the
MIAA. This is based on the principle that interest “runs as a matter of law and
follows from the right of the landowner to be placed in as good position as money
can accomplish, as of the date of the taking.”
Petitioners claim that Rodriguez is a buyer in bad faith since prior to his
purchase he was aware of the MIAA’s occupation of the property and therefore
proceeded with the purchase in anticipation of enormous profits from the subsequent
sale to the MIAA. The point is irrelevant. Regardless of whether or not Rodriguez
acted in bad faith, all that he will be entitled to is the value of the property at the
time of the taking, with legal interest thereon from that point until full payment of
the compensation by the MIAA. Besides, assuming the question is of any consequence,
the circumstances surrounding Rodriguez’s purchase may not even amount to bad
faith.
For more than twenty (20) years, the MIAA occupied the subject lot without
the benefit of expropriation proceedings and without the MIAA exerting efforts to
ascertain ownership of the lot and negotiating with any of the owners of the property.
To our mind, these are wanton and irresponsible acts which should be suppressed
and corrected. Hence, the award of exemplary damages and attorney’s fees is in
order. However, while Rodriguez is entitled to such exemplary damages and attorney’s
fees, the award granted by the courts below should be equitably reduced. We hold
that Rodriguez is entitled only to P200,000.00 as exemplary damages, and attorney’s
fees equivalent to one percent (1%) of the amount due.
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III. Co-ownership
A. Right of Redemption between co-owners excludes adjoining
owners
Avila vs. Sps. Barabat
G.R. No. 141993, March 17, 2006
Anunciacion Bahena vda. de Nemeño was the original owner of a lot in Cebu.
Upon her death, ownership of the lot was transferred by operation of law to her five
children, petitioners in this case. These heirs built their respective houses on the lot.
In 1964, respondent Benjamin Barabat leased a portion of the house owned by
Avila. His co-respondent, Jovita Barabat, moved in with him in 1969 when they got
married. Avila subsequently relocated to Cagayan de Oro City. She came back to
Cebu in July 1979 to sell her house and share in the lot to her siblings but no one
showed interest in it. She then offered it to respondents who agreed to buy it. Their
agreement was evidenced by a private document. Respondents stopped paying rentals
to Avila and took possession of the property as owners. They also assumed the
payment of realty taxes on it. They were confronted by petitioner Januario Adlawan
who informed them that they had until March 1982 only to stay in Avila’s place
because he was buying the property. Respondents replied that the property had
already been sold to them by Avila showing him the document. Afterwards they
received a letter from Atty. Joselito Alo informing them that Avila had sold her
house and share to his clients, the spouses Januario and Nanette Adlawan. Considering
the sale to the spouses Adlawan as prejudicial to their title and peaceful possession
of the property, they demanded that Avila execute a public document evidencing the
sale of the property to them but Avila refused. Respondents filed a complaint for
quieting of title with the RTC. It decided in favor of respondents. CA affirmed in
toto.
Issue 1: WON the transaction between Avila and Respondents is valid as
an absolute sale?
Ruling: Yes.
For Articles 1602 and 1604 (on equitable mortgage) to apply, two requisites
must concur: (1) the parties entered into a contract denominated as a contract of sale
and (2) their intention was to secure an existing debt by way of mortgage. Here, both
the trial and appellate courts found that Exhibit “A” evidenced a contract of sale.
They also agreed that the circumstances of the case show that Avila intended her
agreement with respondents to be a sale. Both courts were unanimous in finding
that the subsequent acts of Avila revealed her intention to absolutely convey the
disputed property. It was only after the perfection of the contract, when her siblings
began protesting the sale, that she wanted to change the agreement. Furthermore,
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contrary to petitioners’ claim, the trial court found that it was respondents who
took over the payment of real property taxes after the execution of Exhibit “A.”
Petitioners’ claim of gross inadequacy of selling price has no basis. They failed
to introduce evidence of the correct price at the time the land was sold to respondents
in 1979. How can we therefore conclude that the price was grossly inadequate? In
the absence of evidence as to the fair market value of a parcel of land at the time of
its sale, we cannot reasonably conclude that the price at which it was sold was
inadequate
Issue 2: WON the right of redemption of co-owners excludes that of
adjoining owners?
Ruling: Yes.
Petitioners’ right to redeem would have existed only had there been coownership
among petitioners-siblings. But there was none. For this right to be
exercised, co-ownership must exist at the time the conveyance is made by a co-owner
and the redemption is demanded by the other co-owner or co-owners. However, by
their own admission, petitioners were no longer co-owners when the property was
sold to respondents in 1979. The co-ownership had already been extinguished by
partition.
Every act intended to put an end to indivision among co-heirs is deemed to be
a partition. Here, the particular portions pertaining to petitioners had been
ascertained and they in fact already took possession of their respective parts
The purpose of partition is to separate, divide and assign a thing held in common
among those to whom it belongs. By their own admission, petitioners already
segregated and took possession of their respective shares in the lot. Their respective
shares were therefore physically determined, clearly identifiable and no longer ideal.
Thus, the co-ownership had been legally dissolved. With that, petitioners’ right to
redeem any part of the property from any of their former co-owners was already
extinguished. As legal redemption is intended to minimize co-ownership, once a
property is subdivided and distributed among the co-owners, the community ceases
to exist and there is no more reason to sustain any right of legal redemption
Under the law (Article 1622 of the Civil Code) , subject to certain conditions,
owners of adjoining urban land have the pre-emptive right to a lot before it is sold to
third parties, or the redemptive right if it has already been sold. However, this
provision does not apply here. Aside from the fact that petitioners never raised it as
an issue, the conditions provided for its application were not met. While the property
may be considered as urban land, it was not shown or even alleged that its area and
location would render a major portion of no practical use within a reasonable time.
Neither was there any allegation to the effect that the disputed property was bought
merely for speculation.
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B. No Co-Ownership in adulterous relationship
Rivera vs. Heirs of Villanueva
G.R. No. 141501, July 21, 2006
Petitioners are allegedly the half-brothers (Elino and Dominador), the halfsister-in-law
(Soledad), and the children of a half-brother (Teofila and Cecilia) of the
deceased Pacita Gonzales (hereinafter Gonzales).
Respondents Catalino, Lucia, Purificacion and Melchor, all surnamed Villanueva,
and Arnaldo vs. Avendano are allegedly the siblings, full and half-blood of Romualdo
Villanueva (hereinafter Villanueva). They are denominated as the heirs of Villanueva
and are represented by Melchor. The remaining respondents, Angelina Villanueva
(hereinafter respondent Angelina) and husband Victoriano de Luna, are allegedly
the daughter and the son-in-law, respectively, of the late Villanueva.
From 1927 until her death in 1980, Gonzales cohabited with Villanueva without
the benefit of marriage because the latter was married to one Amanda Musngi who
died on April 20, 1963. In the course of their cohabitation, they acquired several
properties including the properties involved in this case.
Gonzales died on July 3, 1980 without leaving a will. On August 1980, Villanueva
and respondent Angelina executed a deed of extrajudicial partition with sale, that
is, an extrajudicial settlement of Gonzales’ estate comprising a number of the disputed
properties.
Petitioners (Gonzales’ half-brothers, etc.) filed a case for partition of Gonzales’
estate and annulment of titles and damages with the RTC of Nueva Ecija. The RTC
rendered a decision dismissing the complaint. The CA affirmed the RTC decision.
Issue: WON the properties acquired by Gonzales and Villanueva during
their cohabitation were equally owned by them
Ruling: No.
According to the trial court Gonzales and Villanueva lived together without
the benefit of marriage and therefore their property relations were governed by
Article 144 of the Civil Code:
Art. 144. When a man and a woman live together as husband and wife,
but they are not married, or their marriage is void from the beginning,
the property acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by the rules on coownership.
However, the contending parties agreed that the relationship of Villanueva
and Gonzales was adulterous, at least until the death of Amanda Musngi, Villanueva’s
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legal wife, on April 20, 1963. While Romualdo Villanueva claimed that he and
Pacita C. Gonzales lived as husband and wife and that they were married, it turned
out that he was not legally married to the latter, for then, his marriage in the year
1927, was still subsisting with one Amanda Musngi.
Because the cohabitation of Villanueva and Gonzales from 1927 to 1963 was
adulterous, their property relations during those 36 years were not governed by
Article 144 of the Civil Code which applies only if the couple living together is not in
any way incapacitated from getting married. According to the doctrine laid down by
Juaniza vs. Jose, no co-ownership exists between parties to an adulterous relationship.
In Agapay vs. Palang, 342 Phil. 302 (1997), we expounded on this doctrine by
declaring that in such a relationship, it is necessary for each of the partners to prove
his or her actual contribution to the acquisition of property in order to be able to lay
claim to any portion of it. Presumptions of co-ownership and equal contribution do
not apply.
IV. Donation
Moralidad vs. Pernes
G.R. No. 152809, August 3, 2006
Mercedes Moralidad (Petitioner) owned a parcel of land under TCT No. T-
123125 of the Registry of Deeds of Davao City. Petitioner acquired the lot property
initially for the purpose of letting her niece, Arlene Pernes, move from Mandug to
Davao City but later she wanted the property to be also available to any of her kin
wishing to live and settle in Davao City. Petitioner made this intention in a document
she executed on July 21, 1986. The document reads:
I, MERCEDES VINA MORALIDAD, of legal age, single, having been born
on the 29 th day of January, 1923, now actually residing at 8021 Lindberg
Boulevard, Philadelphia, Pennsylvania, U.S.A., wishes to convey my honest
intention regarding my properties situated at Palm Village Subdivision, Bajada,
Davao City, 9501, … and hereby declare:
1. That it is my desire that Mr. and Mrs. Diosdado Pernes may build
their house therein and stay as long as they like;
2. That anybody of my kin who wishes to stay on the aforementioned
property should maintain an atmosphere of cooperation, live in harmony ad
must avoid bickering with one another;
3. That anyone of my kin may enjoy the privilege to stay therein and may
avail the use thereof. Provided, however, that the same is not inimical to the
purpose thereof;
4. That anyone of my kin who cannot conform with the wishes of the
undersigned may exercise the freedom to look for his own;
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5. That any proceeds or income derived from the aforementioned
properties shall be allotted to my nearest kin who have less in life in greater
percentage and lesser percentage to those who are better of in standing.
Following her retirement in 1993, petitioner came back to the Philippines to
stay with the respondent’s on the house they built on the subject property. In the
course of time, their relationship turned sour which eventually ended up with
petitioner filing an unlawful detainer suit against respondent spouses. Petitioner
alleged that she is the registered owner of he land on which the respondents built
their house; that through her counsel, she sent the respondent spouses a letter
demanding them to vacate the premises and to pay rentals therefore, which the
respondents failed to heed.
In their defense, the respondents alleged having entered the property in
question, building their house thereon and maintaining the same as their residence
with petitioner’s full knowledge and express consent. To prove their point, they
invited attention to her written declaration of July 21, 1986.
The MTC ruled in petitioner’s favor. On appeal, the RTC reversed the order
of the MTC, holding that respondents’ possession of the property in question was
not by mere tolerance but rather by her express consent. Petitioner appealed the
decision to the CA. The CA dismissed said appeal concluding that the ejectment
suit was premature and affirmed the RTC decision.
Issue 1: Whether a usufruct existed between petitioner and respondents?
Ruling: Yes.
Usufruct is defined under Article 562 of the Civil Code in the following wise:
“Art. 562. Usufruct gives a right to enjoy the property of another with the
obligation of preserving its form and substance, unless the title constituting
it or the law otherwise provides.”
Usufruct, in essence, is nothing else but simply allowing one to enjoy another’s
property. It is also defined as the right to enjoy the property of another temporarily,
including both the jus utendi and the jus fruendi, with the owner retaining the jus
disponendi or the power to alienate the same.
It is undisputed that petitioner, in a document dated July 21, 1986, made known
her intention to give respondents and her other kin the right to use and to enjoy the
fruits of her property. There can also be no quibbling about the respondents being
given the right “to build their own house” on the property and to stay thereat “as long as
they like”. Paragraph #5 of the same document earmarks “proceeds or income derived from
the aforementioned properties” for the petitioner’s “nearest kin who have less in life in greater
percentage to those who are better of in standing”. The established facts undoubtedly gave
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respondents not only the right to use the property but also granted them, among the
petitioner’s other kin, the right to enjoy the fruits thereof.
Issue 2: Whether the existing usufruct may be deemed to have been
extinguished or terminated?
Ruling: Terminated.
The term or period of the usufruct originally specified provides only one of
the bases for the right of a usufructuary to hold and retain possession of the thing
given in usufruct. There are other modes or instances whereby the usufruct shall be
considered terminated or extinguished. For sure, the Civil Code enumerates such
other modes of extinguishment:
ART. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention clearly
appears;
(2) By expiration of the period for which it was constituted, or by the
fulfillment of any resolutory condition provided in the title
creating the usufruct;
(3) By merger of the usufruct and ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the usufruct;
(7) By prescription.
The document executed by the petitioner dated July 21, 1986 constitutes the
title creating, and sets for the conditions of, the usufruct. Paragraph #3 thereof
states “That anyone of my kin may enjoy the privilege to stay therein and may avail the use
thereof. Provided, however, that the same is not inimical to the purpose thereof”.
What may be inimical to the purpose constituting the usufruct may be gleaned from
the preceding paragraph wherein petitioner made it abundantly clear “that anybody of
my kin who wishes to stay on the aforementioned property should maintain an atmosphere of
cooperation, live in harmony and must avoid bickering with one another.” That the
maintenance of a peaceful and harmonious relations between and among kin
constitutes an indispensable condition for the continuance of the usufruct is clearly
deduced from the succeeding Paragraph # 4 where petitioner stated “That anyone of
my kin who cannot conform with the wishes of the undersigned may exercise the freedom to look for
this own.” In fine, the occurrence of any of the following: the loss of the atmosphere
of cooperation, the bickering or the cessation of harmonious relationship between/
among kin constitutes a resolutory condition which, by express wish of the
petitioner, extinguishes the usufruct.
To reiterate, the relationship between the petitioner and respondents respecting
the property in question is one of owner and usufructuary. Accordingly, respondent’s
claim for reimbursement of the improvements they introduced on the property during
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the effectivity of the usufruct should be governed by applicable statutory provisions
and principles on usufruct. In this regard, we cite with approval what Justice Edgardo
Parras wrote on the matter:
If the builder is a usufructuary, his rights will be governed by Arts. 579 and
580. In case like this, the terms of the contract and the pertinent provisions of law
should govern (3 Manresa 215-216; see also Montinola vs. Bantug, 71 Phil 449).
By express provision of law, respondents, as usufructuary, do not have the
right to reimbursement for the improvements they may have introduced on the
property. We quote Articles 579 and 580 of the Civil Code:
ART. 579. The usufructuary may make on the property held in
usufruct such useful improvements or expenses for mere pleasure as he
may deem proper, provided he does not alter its form or substance; but
he shall have no right to be indemnified therefor. He may, however,
remove such improvements, should it be possible to do so without damage
to the property.
ART. 580. The usufructuary may set off the improvements he may
have made on the property against any damage to the same.
Given the foregoing perspective, respondents will have to be ordered to vacate
the premises without any right of reimbursement. If the rule on reimbursement or
indemnity were otherwise, then the usufructuary might, as an author pointed out,
improve the owner out of his property. The respondents may, however, remove or
destroy the improvements they may have introduced thereon without damaging the
petitioner’s property.
LAND TITLES and DEEDS
A. Indefeasibility of the Torrens Title
Fil. Estate vs. Trono
G.R. No. 130871, February 17, 2006
Respondents’ application for registration of a parcel of land already covered
by a Torrens title is actually a collateral attack against petitioners’ title not permitted
under the principle of indefeasibility of a Torrens title. It is well settled that a Torrens
title cannot be collaterally attacked; the issue on the validity of title, i.e., whether or
not it was fraudulently issued, can only be raised in an action expressly instituted
for the purpose. Hence, whether or not respondents have the right to claim title
over the property in question is beyond the province of the instant proceeding. That
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should be threshed out in a proper action. It has been invariably stated that the real
purpose of the Torrens System is to quiet title to land and to stop forever any
question as to its legality. Once a title is registered, the owner may rest secure,
without the necessity of waiting in the portals of the court, or sitting on the “mirador
su casa” to avoid the possibility of losing his land.
In Ramos vs. Rodriguez (244 SCRA 418), we held:
It must be noted that petitioners failed to rebut the LRA report and only
alleged that the title of the Payatas Estate was spurious, without offering
any proof to substantiate this claim. TCT No. 8816, however, having
been issued under the Torrens System, enjoys the conclusive presumption
of validity. As we declared in an earlier case (Reyes and Nadres vs. Borbon and
Director of Lands, 50 Phil. 791), “the very purpose of the Torrens system
would be destroyed if the same land may be subsequently brought under
a second action for registration.” The application for registration of the
petitioners in this case would, under the circumstances, appear to be a
collateral attack of TCT No. 8816 which is not allowed under Section 48
of P.D. 1529. (underscoring ours)
Corollarily, Section 32 of the same law states:
Sec. 32. Review of decree of registration; Innocent purchaser for value.
— The decree of registration shall not be reopened or revised by reason
of absence, minority, or other disability of any person adversely affected
thereby, nor by any proceeding in any court for reversing judgment,
subject, however, to the right of any person, including the government
and the branches thereof, deprived of land or of any estate or interest
therein by such adjudication or confirmation of title obtained by actual
fraud, to file in the proper Court of First Instance a petition for reopening
and review of the decree of registration not later than one year from and
after the date of the entry of such decree of registration, but in no case
shall such petition be entertained by the court where an innocent purchaser
for value has acquired the land or an interest therein whose rights may
be prejudiced. Whenever the phrase “innocent purchaser for value” or an
equivalent phrase occurs in this Decree, it shall be deemed to include an
innocent lessee, mortgagee, or other encumbrancer for value.
Upon the expiration of said period of one year, the decree of registration and
the certificate of title issued shall become incontrovertible. Any person aggrieved by
such decree of registration in any case may pursue his remedy by action for damages
against the applicant or any other person responsible for the fraud.
A decree of registration that has become final shall be deemed conclusive not
only on the questions actually contested and determined, but also upon all matters
that might be litigated or decided in the land registration proceedings.
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B. Good Faith Buyer
Eduardo A. Labitag
Naval vs. Camalla
G.R. No. 167412, February 22, 2006
While we agree with the appellate court that respondents have superior right
over the petitioner on the subject property, we find Article 1544 inapplicable to the
case at bar since the subject land was unregistered at the time of the first sale. The
registration contemplated under this provision has been held to refer to registration
under the Torrens System, which considers the act of registration as the operative
act that binds the land. 28 Thus, in Carumba vs. Court of Appeals, we held that Article
1544 of the Civil Code has no application to land not registered under Torrens
System. The law applicable therefore is Act No. 3344, which provides for the
registration of all instruments on land neither covered by the Spanish Mortgage
Law nor the Torrens System. Under this law, registration by the first buyer is
constructive notice to the second buyer that can defeat his right as such buyer in
good faith.
Applying the law, we held in Bautista vs. Fule that the registration of an instrument
involving unregistered land in the Registry of Deeds creates constructive notice and
binds third person who may subsequently deal with the same property.
We also held in Bayoca vs. Nogales 31 that:
Verily, there is absence of prior registration in good faith by petitioners
of the second sale in their favor. As stated in the Santiago case, registration
by the first buyer under Act No. 3344 can have the effect of constructive
notice to the second buyer that can defeat his right as such buyer. On
account of the undisputed fact of registration under Act No. 3344 by [the
first buyers], necessarily, there is absent good faith in the registration of
the sale by the [second buyers] for which they had been issued certificates
of title in their names. It follows that their title to the land cannot be
upheld.
Even if petitioner argues that she purchased and registered the subject land in
good faith and without knowledge of any adverse claim thereto, respondents still
have superior right over the disputed property.
We held in Rayos vs. Reyes 32 that:
“[T]he issue of good faith or bad faith of the buyer is relevant only where
the subject of the sale is registered land and the purchaser is buying the
same from the registered owner whose title to the land is clean . . . in such
case the purchaser who relies on the clean title of the registered owner is
protected if he is a purchaser in good faith for value.” Since the properties
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in question are unregistered lands, petitioners as subsequent buyers
thereof did so at their peril. Their claim of having bought the land in
good faith, i.e., without notice that some other person has a right to or
interest in the property, would not protect them if it turns out, as it
actually did in this case, that their seller did not own the property at the
time of the sale.
It is an established principle that no one can give what one does not have, nemo
data quod non habet. Accordingly, one can sell only what one owns or is authorized to
sell, and the buyer can acquire no more than what the seller can transfer legally. In
the case at bar, since Ildefonso no longer owned the subject land at the time of the
sale to the petitioner, he had nothing to sell and the latter did not acquire any right
to it.
True, a certificate of title, once registered, should not thereafter be impugned,
altered, changed, modified, enlarged or diminished except in a direct proceeding
permitted by law. Moreover, Section 32 of Presidential Decree No. 1529 provides
that “upon the expiration of said period of one year, the decree of registration and
the certificate of title shall become incontrovertible.”
However, it does not deprive an aggrieved party of a remedy in law. What
cannot be collaterally attacked is the certificate of title and not the title or ownership
which is represented by such certificate. Ownership is different from a certificate of
title. The fact that petitioner was able to secure a title in her name did not operate
to vest ownership upon her of the subject land. Registration of a piece of land under
the Torrens System does not create or vest title, because it is not a mode of acquiring
ownership. A certificate of title is merely an evidence of ownership or title over the
particular property described therein. It cannot be used to protect a usurper from
the true owner; nor can it be used as a shield for the commission of fraud; neither
does it permit one to enrich himself at the expense of others. Its issuance in favor of
a particular person does not foreclose the possibility that the real property may be
co-owned with persons not named in the certificate, or that it may be held in trust
for another person by the registered owner.
As correctly held by the Court of Appeals, notwithstanding the indefeasibility
of the Torrens title, the registered owner may still be compelled to reconvey the
registered property to its true owners. The rationale for the rule is that reconveyance
does not set aside or re-subject to review the findings of fact of the Bureau of Lands.
In an action for reconveyance, the decree of registration is respected as
incontrovertible. What is sought instead is the transfer of the property or its title
which has been wrongfully or erroneously registered in another person’s name, to
its rightful or legal owner, or to the one with a better right.
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Bautista vs. Silva
G.R. No. 157434, September 19, 2006
That Transfer Certificate of Title No. B-37189 of the Registry of Deeds over a
parcel of land situated in Barrio of Parada, Valenzuela, Metro Manila, containing an
area of 216 square meters, was registered in the names of Spouses Berlina F. Silva
and Pedro M. Silva on August 14, 1980
On March 1988, Pedro M. Silva, for himself and as attorney-in-fact of his wife
Berlina F. Silva, thru a Special Power of Attorney purportedly executed on November
1987 by Berlina F. Silva in his favor, signed and executed a Deed of Absolute Sale
over the said parcel of land covered by Transfer Certificate of Title No. B-37189 in
favor of defendants-spouses Claro Bautista and Nida Bautista
TCT No. 37189 was cancelled and in lieu thereof, TCT No. V-2765 of the
Registry of Deeds for the Valenzuela Branch was issued in the names of Spouses
Claro Bautista and Nida Bautista on March 1988.
Berlinda filed in the RTC an action for Annulment of Deed of Absolute Sale
and TCT No. V-2765, Reconveyance and Damages. The RTC rendered a decision
in favor of Silva. The CA affirmed the RTC’s decision.
Issue: Who is a buyer for value in good faith?
Ruling:
A buyer for value in good faith is one who buys property of another, without
notice that some other person has a right to, or interest in, such property and pays
full and fair price for the same, at the time of such purchase, or before he has notice
of the claim or interest of some other persons in the property. He buys the property
with the well-founded belief that the person from whom he receives the thing had
title to the property and capacity to convey it.
To prove good faith, a buyer of registered and titled land need only show that
he relied on the face of the title to the property. He need not prove that he made
further inquiry for he is not obliged to explore beyond the four corners of the title.
Such degree of proof of good faith, however, is sufficient only when the following
conditions concur: first, the seller is the registered owner of the land; second, the
latter is in possession thereof; and third, at the time of the sale, the buyer was not
aware of any claim or interest of some other person in the property, or of any defect
or restriction in the title of the seller or in his capacity to convey title to the property.
Absent one or two of the foregoing conditions, then the law itself puts the
buyer on notice and obliges the latter to exercise a higher degree of diligence by
scrutinizing the certificate of title and examining all factual circumstances in order
to determine the seller’s title and capacity to transfer any interest in the property.
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Under such circumstance, it is no longer sufficient for said buyer to merely show
that he relied on the face of the title; he must now also show that he exercised
reasonable precaution by inquiring beyond the title. Failure to exercise such degree
of precaution makes him a buyer in bad faith.
C. Direct and Collateral Attack on Certificate of Tile
Diaz vs. Virata
G.R. No. 162037, August 7, 2006
When is an action a direct attack and when is it collateral? This Court made a
distinction, to wit:
An action is deemed an attack on a title when the object of the action or
proceeding is to nullify the title, and thus challenge the judgment pursuant
to which the title was decreed. The attack is direct when the object of the
action is to annul or set aside such judgment, or enjoin its enforcement.
On the other hand, the attack is indirect or collateral when, in an action
to obtain a different relief, an attack on the judgment is nevertheless
made as an incident thereof.
D. Reconveyance
1. Property held in Trust
Cervantes vs. Madarcos
G.R. No. 146050, September 27, 2006
In connection, and in relation to the issue of prescription, since the land in
question was evidently obtained by private respondent through fraudulent
machinations by means of which a free patent and title were issued in his name, he
is deemed to have held it in trust for the benefit of petitioner who was prejudiced by
his actions.
The Civil Code provides:
ARTICLE 1456. If property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes.
The remedy of reconveyance, which has its basis on Section 53 of Presidential
Decree No. 1529, otherwise known as the Property Registration Decree, and the
foregoing article of the Civil Code, is available to petitioner as alleged and prayed
for in his pleading.
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An action for reconveyance based on an implied trust prescribes in ten years
from the issuance of the Torrens title over the property. Here, private respondent’s
certificate of title was issued on April 6, 1977. Petitioner previously initiated a similar
case, Civil Case No. 1505, against respondent on September 8, 1981 which had the
effect of suspending the prescriptive period until it was dismissed by the Court of
First Instance of Palawan on October 21, 1981. The present case was later on filed
on May 18, 1987. Clearly, the present action is not barred by prescription.
2. Application of Res Judicata
Villarino vs. Avila
G.R. No. 131191, September 26, 2006
Spouses Villarino filed an action for Annulment of Title, Reconveyance,
respondent (AVILAS). The property sought to be reconveyed was a portion of Lot
No. 967 situated in San Fernando, Cebu and covered by OCT No. 1035. Said title
was issued to the Avilas, as the culmination of the land registration proceedings.
In said case, the Villarino spouses opposed the application of the Avilas for
the registration of Lot No. 967 on the ground that a portion of Lot No. 967 encroached
upon Lot No. 968 to the extent of 2,146 square meters. Lot No. 968 is the adjacent
property belonging to the Villarino spouses per OCT No. 14601 issued in their
names.
The decision in the LRC Case had become final and executory. The
corresponding decree of registration was issued on January 1989, paving the way
for the issuance of OCT No. 1035 in the name of the Avilas.
The Villarino spouses averred that the registration of Lot No. 967 was based
on an erroneous survey and technical description. They sought the reconveyance of
the disputed area and the cancellation of OCT No. 1035 to reflect the consequent
reduction in area.
The RTC dismissed the case. The CA affirmed the RTC’s decision.
Issue: Whether the action instituted by the Villarino Spouses is barred
by res judicata.
Ruling: Yes.
For res judicata to serve as an absolute bar to a subsequent action, the following
requisites must concur: (1) the former judgment or order must be final; (2) the
judgment or order must be on the merits; (3) it must have been rendered by a court
having jurisdiction over the subject matter and parties; and (4) there must be between
the first and second actions, identity of parties, of subject matter, and of causes of
action.
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When there is no identity of causes of action, but only an identity of issues,
there exists res judicata in the concept of conclusiveness of judgment. Although it
does not have the same effect as res judicata in the form of bar by former judgment
which prohibits the prosecution of a second action upon the same claim, demand, or
cause of action, the rule on conclusiveness of judgment bars the relitigation of
particular facts or issues in another litigation between the same parties on a different
claim or cause of action.
All the elements of res judicata in the mode of bar by prior judgment are present
in the instant case. The final decision in LRC Case No. N-1175, which has long been
executed, is a bar to the civil case filed by petitioners. There is no question that said
decision was an adjudication on the merits. Petitioners and respondents were the
same party litigants in LRC Case No. N-1175 and in Civil Case No. CEB-13599.
Petitioners claim that the disputed portion is covered by their title, but that it
was erroneously included in the survey and technical description of Lot No. 967
subject of the Avilas’ land registration application. Precisely, that was the content
and thrust of petitioners’ opposition to the Avilas’ land registration application. But
the land registration court debunked the opposition and upheld the application.
Petitioners could have appealed the decision of the land registration court. They did
not. Their failure to do so rendered said decision final and executory. After the
finality of the decision, the decree of registration and the certificate of title were
issued as a matter of course. The final decision has appropriately engendered the
application of the principle of res judicata.
E. Reconstitution of Title
Subido vs. Republic
G.R. No. 152149, April 25, 2006
As may be noted, Section 13 of R.A. No. 26 specifically enumerates the manner
of notifying interested parties of the petition for reconstitution, namely: (a) publication
in the Official Gazette; (b) posting on the main entrance of the provincial capitol
building and of the municipal building of the municipality or city in which the land is
situated; and (c) by registered mail or otherwise, to every person named in the notice.
The notification process being mandatory, non-compliance with publication
and posting requirements would be fatal to the jurisdiction of the reconstituting
trial court and invalidates the whole reconstitution proceedings. So would failure to
notify, in the manner specifically prescribed in said Section 13, interested persons of
the initial hearing date.
Contextually, Section 13 particularly requires that the notice of the hearing be
sent to the property occupant or other persons interested, by registered mail or
otherwise. The term “otherwise” could only contemplate a notifying mode other
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Eduardo A. Labitag
than publication, posting, or thru the mail. That other mode could only refer to
service of notice by hand or other similar mode of delivery.
It cannot be over-emphasized that R.A. No. 26 specifically provides the special
requirements and procedures that must be followed before the court can properly
act, assume and acquire jurisdiction over the petition and grant the reconstitution
prayed for. These requirements, as the Court has repeatedly declared, are mandatory.
Publication of notice in the Official Gazette and the posting thereof in provincial
capitol and city/municipal buildings would not be sufficient. The service of the notice
of hearing to parties affected by the petition for reconstitution, notably actual
occupant/s of the land, either by registered mail or hand delivery must also be made.
In the case at bar, the “posting of the notice at the place where TCT No.
95585 is situated” is not, as urged by petitioner, tantamount to compliance with the
mandatory requirement that notice by registered mail or otherwise be sent to the
person named in the notice.
In view of what amounts to a failure to properly notify parties affected by the
petition for reconstitution of the date of the initial hearing thereof, the appellate
court correctly held that the trial court indeed lacked jurisdiction to take cognizance
of such petition. And needless to stress, barring the application in appropriate cases
of the estoppel principle, a judgment rendered by a court without jurisdiction to
take cognizance of the case is void, ergo, without binding legal effect for any purpose.
Government vs. Wee
G.R. No. 147212, March 24, 2006
Respondent Salvador Wee (Wee) contends that pursuant to an Extra-Judicial
Settlement of Estate with Sale, he acquired from the heirs of Francisco Rivera the
parcel of land subject of the petition
The copy of the Original Certificate of Title No. 0-10046 was lost and/or
destroyed, as evidenced by the certification issued by the Register of Deeds of
Zamboanga City
The property was declared by Francisco Rivera for taxation purposes. No coowner’s,
mortgagee’s or lessee’s duplicate copy of the certificate of title has been
issued. No deed or other instrument adversely affecting the ownership of the property
has been presented for registration in the Register of Deeds of Zamboanga City.
Wee filed Cadastral Case No. 96-1 on January 2, 1996, seeking the judicial
reconstitution of Original Certificate of Title No. 0-10046. The RTC issued its Order
allowing reconstitution of Original Certificate of Title No. 0-10046. The CA affirmed
the RTC’s decision.
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Issue: WON the RTC acquired jurisdiction over the action for
reconstitution
Ruling: No.
Petitioner reiterates its argument that the trial court did not acquire jurisdiction
over the case for non-compliance with the jurisdictional requirements set in Section
13 of R.A. No. 26.
Substantial compliance with the jurisdictional requirements laid down in
Sections 12 and 13 of R.A. No. 26 is not enough; the trial court’s acquisition of
jurisdiction over the reconstitution case is hinged on a strict compliance with the
requirements of the law.
It must be stressed that the purposes of the stringent and mandatory character
of the legal requirements of publication, posting and mailing are to safeguard against
spurious and unfounded land ownership claims, to apprise all interested parties of
the existence of such action, and to give them enough time to intervene in the
proceeding.
Where the authority to proceed is conferred by a statute and the manner of
obtaining jurisdiction is mandatory, the same must be strictly complied with, or the
proceedings will be utterly void. As such, the court upon which the petition for
reconstitution of title is filed is duty-bound to examine thoroughly the petition for
reconstitution of title and review the record and the legal provisions laying down the
germane jurisdictional requirements.
Lozano vs. Register of Deeds
G.R. No. 166899, August 10, 2006
The reconstitution of the title or deed is simply the re-issuance of the copy of
the certificate of title allegedly lost or destroyed in its original form and condition.
The purpose of the reconstitution of title or any document is to have the same
reproduced, after observing the procedure provided by law, in the same form they
were when the loss or destruction occurred.
Section 41, second paragraph of Act No. 496 reads:
“Immediately upon the entry of the decree of registration the clerk shall
send a certified copy thereof, under the seal of the court to the register of
deeds for the province, or provinces or city in which the land lies, and the
register of deeds shall transcribe the decree in a book to be called the
“Registration Book,” in which a leaf, or leaves, in consecutive order, shall
be devoted exclusively toe ach title. The entry made by the register of
deeds in this book in each case shall be the original certificate of title, and
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Eduardo A. Labitag
shall be signed by him and sealed with the seal of the court. All certificates
of title shall be numbered consecutively, beginning with number one. The
register of deeds in each case make an exact duplicate of the original
certificate, including the seal, but putting on it the words “owner’s
duplicate certificate,” and deliver the same to the owner or to his attorney
duly authorized. In case of a variance between the owner’s duplicate
certificate and the original certificate the original shall prevail. The certified
copy of the decree of registration shall be filed and numbered by the
register of deeds with a reference noted on it to the place of record of the
original certificate of title: Provided, however, That when an application
includes land lying in more than one province or one province and the
city of Manila, the court shall cause the part lying in each province or in
the city of Manila to be described separately by metes and bounds in the
decree of registration, and the clerk shall send to the register of deeds of
each province, or the city of Manila, as the case may be, a copy of the
decree containing a description of the land within that province or city,
and the register of deeds shall register the same and issue an owner’s
duplicate therefore, and thereafter for all matters pertaining to registration
under this Act the portion in each province or city shall be treated as a
separate parcel of land.”
Any title issued by the Register of Deeds, including the original copy on file in
the Office of the Register of Deeds or the owner’s duplicate of said title, must bear
the signature of the Register of Deeds. Hence, the owner’s duplicate copy of title
relied upon by the petitioner must be authentic and not spurious.
In the present case, the owner’s duplicate of TCT No. 17100 which petitioners
adduced in evidence is not signed by the Register of Deeds, and does not even contain
the number of the title certificate. After the words “Certifico de Transferencio De
Titulo No.” is a blank space where the number of the title is supposed to be typewritten.
The petitioners failed to explain why the owner’s duplicate of TCT No. 17100 does
not contain such signature. Thus, the ruling of the CA that the owner’s duplicate
presented by the petitioners is spurious is correct.
Calimpong vs. Heirs of Gumela
G.R. No. 163751, March 31, 2006
The title of ownership on the land is vested upon the owner upon the expiration
of the period to appeal from the decision or adjudication by the cadastral court,
without such appeal having been perfected. The certificate of title would then be
necessary for purposes of effecting registration of subsequent disposition of the
land where court proceedings would no longer be necessary.
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As we have here a decree issued by the cadastral court, ordering the issuance
to Inocencio de los Santos of the certificate of title over Lot No. 395 after the decision
adjudicating ownership to him of the said property had already become final, and
there being no imputation of irregularity in the said cadastral proceedings, title of
ownership on the said adjudicatee was vested as of the date of the issuance of such
judicial decree. The land, for all intents and purposes, had become from that time,
registered property which could not be acquired by adverse possession.
Whether a certificate of title was issued in the name of respondent’s
predecessors-in-interest is immaterial. For, following De la Merced, the title of
ownership on respondent’s predecessors-in-interest was vested as of 1927. The lot,
for all intents and purposes, had become from said date registered property which
could not be acquired by adverse possession and was, therefore, beyond the
jurisdiction of the Land Management Bureau of the DENR (formerly the Bureau of
Lands) to subject it to free patent.
Under the provision of Act No. 2874 pursuant to which the title of private
respondents’ predecessor in interest was issued, the President of the Philippines or
his alter ego, the Director of Lands, has no authority to grant a free patent for land
that has ceased to be a public land and has passed to private ownership, and a title
so issued is null and void. The nullity arises not, from the fraud or deceit, but from
the fact that the land is not under the jurisdiction of the Bureau of Lands. The
jurisdiction of the Director of Lands is limited only to public lands and does not
cover lands privately owned.
The purpose of the legislature in adopting the former Public Land Act, Act
No. 2874, was and is to limit its application to lands of the public domain, and lands
held in private ownership are not included therein and are not affected in any manner
whatsoever thereby. Land held in freehold or fee title, or of private ownership,
constitute no part of the public domain and cannot possibly come within the purview
of said Act No. 2874, inasmuch as the “subject” of such freehold or private land is
not embraced in any manner in the title of the Act and the same are excluded from
the provisions of the text thereof.
Republic vs. Sps. Sanchez
G.R. No. 146081, July 17, 2006
In sum, RA 26 separates petitions for reconstitution of lost or destroyed
certificates of title into two main groups with two different requirements and
procedures. Sources enumerated in Sections 2(a), 2(b), 3(a), 3(b), and 4(a) of RA 26
are lumped under one group (Group A); and sources enumerated in Sections 2(c),
2(d), 2(e), 2(f), 3(c), 3(d), 3(e), and 3(f) are placed together under another group
(Group B). For Group A, the requirements for judicial reconstitution are set forth in
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Eduardo A. Labitag
Section 10 in relation to Section 9 of RA 26; while for Group B, the requirements
are in Sections 12 and 13 of the same law.
There is no question that in [petitions for] reconstitution involving Sections
12 and 13 of RA 26, notices to adjoining owners and to the actual occupants of the
land are mandatory and jurisdictional. But in petitions for reconstitution falling under
Sections 9 and 10 of RA 26 where, as in the present case, the source is the owner’s
duplicate copy, notices to adjoining owners and to actual occupants of the land are
not required. When the law is clear, the mandate of the courts is simply to apply it,
not to interpret or to speculate on it.
Reconstitution proceedings under RA 26 has for their purpose the restoration
in the original form and condition of a lost or destroyed instrument attesting the
title of a person to a piece of land. Thus, reconstitution must be granted only upon
clear proof that the title sought to be restored was indeed issued to the petitioner.
Strict observance of this rule is vital to prevent parties from exploiting reconstitution
proceedings as a quick but illegal way to obtain Torrens certificates of titles over
parcels of land which turn out to be already covered by existing titles. The social
and economic costs of such modus operandi cannot be underestimated.
As was observed by the SC in Director of Lands vs. Court of Appeals:
The efficacy and integrity of the Torrens System must be protected and
preserved to ensure the stability and security of land titles for otherwise
land ownership in the country would be rendered erratic and restless and
can certainly be a potent and veritable cause of social unrest and agrarian
agitation. . . . . The real purpose of the Torrens System which is to quiet
title to the land must be upheld and defended, and once a title is registered,
the owner may rest secure, without the necessity of waiting in the portals
of the court or sitting in the mirador de su casa to avoid the possibility of
losing his land.
Republic vs. Jacob
G.R. No. 146874, July 20, 2006
Section 48(b) of Commonwealth Act No. 141, as amended by Republic Act No.
1942, reads:
Section 48.The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such lands
or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the issuance of a
certificate of title therefor, under the Land Registration Act, to wit:
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(b) Those who by themselves or through their predecessors in-interest
therein have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain, under a bona
fide claim of acquisition of ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a Government
grant and shall be entitled to a certificate of title under the provisions of
this chapter.
This provision was further amended by Presidential Decree (P.D.) No. 1903 by
substituting the phrase “for at least thirty years” with “since June 12, 1945,” thus:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII,
of the Public Land Act are hereby amended in the sense that these
provisions shall apply only to alienable and disposable lands of the public
domain which have been in open, continuous, exclusive and notorious
possession, and occupation by the applicant himself or through his
predecessor-in-interest, under a bona fide claim of acquisition of
ownership, since June 12, 1945
Section 14(1) of P.D. No. 1529, otherwise known as the Property Registration
Decree, likewise provides:
SEC. 14. Who may apply. — The following persons may file in the proper
Court of First Instance [now Regional Trial Court] an application for
registration of title to land, whether personally or through their duly
authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest have
been in open, continuous, exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain under a bona fide claim of
ownership since June 12, 1945, or earlier
Applicants for confirmation of imperfect title must, therefore, prove the
following: (a) that the land forms part of the disposable and alienable agricultural
lands of the public domain; and (b) that they have been in open, continuous, exclusive,
and notorious possession and occupation of the same under a bona fide claim of
ownership either since time immemorial or since June 12, 1945.
Under the Regalian doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. The presumption is
that lands of whatever classification belong to the State. Unless public land is shown
to have been reclassified as alienable or disposable to a private person by the State,
it remains part of the inalienable public domain. Property of the public domain is
beyond the commerce of man and not susceptible of private appropriation and
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Eduardo A. Labitag
acquisitive prescription. Occupation thereof in the concept of owner no matter how
long cannot ripen into ownership and be registered as a title. The statute of
limitations with regard to public agricultural lands does not operate against the
State unless the occupant proves possession and occupation of the same after a
claim of ownership for the required number of years to constitute a grant from the
State.
No public land can be acquired by private persons without any grant from the
government, whether express or implied. It is indispensable that there be a showing
of a title from the State. The rationale for the period “since time immemorial or
since June 12, 1945” lies in the presumption that the land applied for pertains to the
State, and that the occupants or possessor claim an interest thereon only by virtue
of their imperfect title as continuous, open and notorious possession.
In the present case, when private respondent filed her application with the
RTC on May 6, 1994, Lot No. 4094 was no longer alienable and disposable property
of the public domain, since as of August 14, 1970, by virtue of Proclamation No.
739, it was segregated from the public domain and declared part of the reservation
for the development of geothermal energy. 25 Private respondent filed her application
for confirmation 24 years after the said proclamation was issued; thus, the period of
her possession and occupancy after such proclamation can no longer be tacked in
favor of the claimant.
D. Cadastral Proceedings
Veranga vs. Republic
G.R. No. 149114, July 21, 2006
Under the Cadastral System, pursuant to initiative on the part of the
Government, titles for all the land within a stated area, are adjudicated whether or
not the people living within this district desire to have titles issued. The purpose, as
stated in section one of the Cadastral Act (No. 2259), is to serve the public interests,
by requiring that the titles to any lands “be settled and adjudicated.”
Admitting that such compulsory registration of land and such excessive
interference with private property constitutes due process of law and that the Acts
providing for the same are constitutional, a question not here raised, yet a study of
the law indicates that many precautions are taken to guard against injustice. The
proceedings are initiated by a notice of survey. When the lands have been surveyed
and plotted, the Director of Lands, represented by the Attorney General, files a
petition in court praying that the titles to the lands named be settled and adjudicated.
Notice of the filing of the petition is then published twice in successive issues of the
Official Gazette in both the English and Spanish languages. All persons interested
are given the benefit of assistance by competent officials and are informed of their
rights. A trial is had. “All conflicting interests shall be adjudicated by the court and
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decrees awarded in favor of the persons entitled to the lands or the various parts
thereof, and such decrees, when final, shall be the bases of original certificates of
title in favor of said persons.” (Act No. 2259, Sec. 11.) Aside from this, the commotion
caused by the survey and a trial affecting ordinarily many people, together with the
presence of strangers in the community, should serve to put all those affected on
their guard.
After trial in a cadastral case, three actions are taken. The first adjudicates
ownership in favor of one of the claimants. This constitutes the decision — the
judgment — the decree of the court, and speaks in a judicial manner. The second
action is the declaration by the court that the decree is final and its order for the
issuance of the certificates of title by the Chief of the Land Registration Office. Such
order is made if within thirty days from the date of receipt of a copy of the decision
no appeal is taken from the decision. This again is judicial action, although to a less
degree than the first.
The third and last action devolves upon the General Land Registration Office.
This office has been instituted “for the due effectuation and accomplishment of the
laws relative to the registration of land.” (Administrative Code of 1917, Sec. 174.) An
official found in the office, known as the chief surveyor, has as one of his duties “to
prepare final decrees in all adjudicated cases.” (Administrative Code of 1917, Sec.
177.) This latter decree contains the technical description of the land and may not be
issued until a considerable time after the promulgation of the judgment. The form
of the decree used by the General Land Registration Office concludes with the words:
“Witness, the Honorable (name of the judge), on this the (date).” The date that is
used as authority for the issuance of the decree is the date when, after hearing the
evidence, the trial court decreed the adjudication and registration of the land.
The judgment in a cadastral survey, including the rendition of the decree, is a
judicial act. As the law says, the judicial decree when final is the base of the certificate
of title. The issuance of the decree by the Land Registration Office is ministerial act.
The date of the judgment, or more correctly stated, the date on which the defeated
party receives a copy of the decision, begins the running of the time for the
interposition of a motion for a new trial or for the perfection of an appeal to the
Supreme Court. The date of the title prepared by the Chief Surveyor is unimportant,
for the adjudication has taken place and all that is left to be performed is the mere
formulation of the technical description. If an unknown individual could wait possibly
years until the day before a surveyor gets around to transcribing a technical
description of a piece of land, the defeated party could just as reasonably expect the
same consideration for his appeal. As a matter of fact, the so-called unknown is a
party just as much as the known oppositor for notice is to all the world, and the
decree binds all the world.
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Eduardo A. Labitag
Sps. Rodriguez vs. CA
G.R. No. 142687, July 20, 2006
The Property Registration Decree requires that the deed of sale with assumption
of mortgage be registered with the Register of Deeds in order to be binding on third
persons. The law provides:
Sec. 51. Conveyance and other dealings by registered owner. An owner
of registered land may convey, mortgage, lease, charge or otherwise deal
with the same in accordance with existing laws. He may use such forms of
deeds, mortgages, leases or other voluntary instruments as are sufficient
in law. But no deed, mortgage, lease, or other voluntary instrument, except
a will purporting to convey or affect registered land shall take effect as a
conveyance or bind the land, but shall operate only as a contract between
the parties and as evidence of authority to the Register of Deeds to make
registration.
The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the province or
city where the land lies.
It is admitted in this case that the deed of sale with assumption of mortgage
was not registered, but instead, respondents Barrameda filed an affidavit of adverse
claim with the Register of Deeds. In the case at bar, the reason given for the nonregistration
of the deed of sale with assumption of mortgage was that the owner’s
duplicate copy of the certificate of title was in the possession of HMDF. It was not
shown, however, that either respondents Barrameda or respondents Calingo exerted
any effort to retrieve the owner’s duplicate copy from the HMDF for the purpose of
registering the deed of sale with assumption of mortgage. In fact, the parties did not
even seek to obtain the consent of, much less inform, the HMDF of the sale of the
property.
Again, we stress that the annotation of an adverse claim is a measure designed
to protect the interest of a person over a piece of property where the registration of
such interest or right is not otherwise provided for by the law on registration of real
property.
The deed of sale with assumption of mortgage executed by respondents Calingo
and Barrameda is a registerable instrument. In order to bind third parties, it must
be registered with the Office of the Register of Deeds. It was not shown in this case
that there was justifiable reason why the deed could not be registered. Hence, the
remedy of adverse claim cannot substitute for registration.
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Caoibes vs. Pantoja-Caoibes
G.R. No. 162873, July 21, 2006
The agreement of the parties is analogous to a deed of sale in favor of
respondent, it having transferred ownership for and in consideration of her payment
of the loan in the principal amount of P19,000 outstanding in the name of one
Guillermo C. Javier. The agreement having been made through a public instrument,
the execution was equivalent to the delivery of the property to respondent.
In respondent’s complaint for specific performance, she seeks to enforce the
agreement for her to be subrogated and/or substituted as applicant in the land
registration proceeding over Lot 2.
The agreement is of course in consonance with Sec. 22 of P.D. 1529 (Property
Registration Decree which became effective on June 11, 1978) reading:
SEC. 22. Dealings with land pending original registration. — After the
filing of the application and before the issuance of the decree of
registration, the land therein described may still be the subject of dealings
in whole or in part, in which case the interested party shall present to the
court the pertinent instruments together with the subdivision plan
approved by the Director of Lands in case of transfer of portions thereof,
and the court, after notice to the parties, shall order such land registered
subject to the conveyance or encumbrance created by said instruments,
or order that the decree of registration be issued in the name of the
person to whom the property has been conveyed by said instruments.
The law does not require that the application for registration be amended by
substituting the “buyer” or the “person to whom the property has been conveyed”
for the applicant. Neither does it require that the “buyer” or the “person to whom
the property has been conveyed” be a party to the case. He may thus be a total
stranger to the land registration proceedings. The only requirements of the law are:
(1) that the instrument be presented to the court by the interested party together
with a motion that the same be considered in relation with the application; and (2)
that prior notice be given to the parties to the case.
In light of the law and jurisprudence, the substitution by respondent of
petitioners as applicant in the land registration case over Lot 2 is not even necessary.
All respondent has to do is to comply with the requirements under the above-quoted
Sec. 22 of the Property Registration Decree. Ergo, it was unnecessary for respondent
to file the case for specific performance subject of the present petition against
petitioners to honor their agreement allowing her to be substituted in their stead as
applicant in the land registration proceeding.
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E. Relocation Survey
Eduardo A. Labitag
Tabaniag vs. Tanque
G.R. No. 144024, July 27, 2006
Plaintiff Margarito Tanque (TANQUE) is the son of Anastasio Tanque who,
during his lifetime, owned and possessed a parcel of land with an area of 47,443
square meters situated at Tubungan, Iloilo. Upon the death of his father on December
1966, Tanque took over the ownership and possession of the said land and declared
the same in his name for taxation purposes. He has, since then, paid the real property
taxes on the land until the present time.
When the lands in Tubungan, Iloilo were cadastrally surveyed by the Bureau
of Lands in 1982, Tanque’s parcel of land was surveyed and identified as Cadastral
Lot 2104 with an area of 4.7433 hectares. On February 1986, OCT No. F-31883 was
issued to Tanque based on Free Patent No. 17553 obtained from the Bureau of
Lands.
In 1988, defendant Pedro Tagabi (TAGABI) asserted ownership over a portion
of Cadastral Lot 2104 with an area of 654 square meters, claiming that the same
forms part of Cadastral Lot 2097 which is owned by him.
Without the knowledge and consent of Tanque, Tagabi had the said portion
entered into by his co-defendant, Demetrio Tabaniag, who planted the same with
palay and corn.
Tanque went to the Bureau of Lands and asked that Cadastral Lot 2104 be
relocated to determine whether a portion was encroached upon by Tagabi. The
relocation survey was made by Geodetic Engineer Ernesto Ciriaco in the presence
of both Tanque Tababi and Tabaniag. It was found out that, indeed, a portion with
an area of 654 square meters within lot 2104 was encroached upon by the defendants.
Tanque filed an action in court to recover possession of the disputed portion.
The RTC rendered a decision in favor of Tanque. The appeal of the defendants in
the CA was dismissed upon motion of Tanque.
Issue: WON the defendants are bound by the findings of the courtappointed
commissioner showing that the questioned area of 654 square
meters is inside Cadastral Lot 2104.
Ruling: Yes.
The Order of the Bureau of Lands was issued at the instance of both parties
and this Order categorically states that the relocation survey should be made to
ascertain whether the disputed portion is “within Cadastral Lot 2097 or 2104 of the
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Cadastral Survey of Tubungan, Iloilo”. Since the lots to be relocated are cadastral
lots, it is but logical and proper that the relocation survey should be conducted on
the basis of the data gathered during the cadastral survey.
According to Geodetic Engineer Filomeno Dano, both plaintiff and defendant
Tagabi, were present during the relocation survey and both were fully aware of and,
in fact, agreed to the use by the Commissioner of the cadastral records and the
available data pertinent to the cadastral survey of the two lots. In fact, both parties
helped the Commissioner and pointed to the disputed portion using the available
cadastral records relative to the two cadastral lots.
In any case, it is quite clear from the text of the Order dated February 5, 1993
appointing the Commissioner that the parties agreed to abide by the results of the
relocation survey which results, according to the same Order, “shall be made the
basis of resolving the dispute between them”. It is now too late in the day, so to
speak, for the defendants to back out from such commitment that they had made.
Having agreed to abide by the results of the relocation survey, defendants are
now estopped from questioning the same. In Bulacan vs. Torcino (134 SCRA 252), the
Supreme Court held:
“The Torcinos try to impugn the results of the relocation survey. We
agree with the appellee that the appellants are now estopped on this
issue because they themselves prayed in the stipulation of facts that the
findings of the geodetic engineer would be the basis for the decision of
the Court of First Instance. We see no error, much less any grave abuse
of discretion, in the lower court’s findings that the house of the Torcinos
encroached on the lot of Victoriano Bulacan”
Settled is the rule that a certificate of title cannot be subject to collateral
attack and can be altered, modified, or cancelled only in a direct proceeding in
accordance with law. In Mallilin, Jr. vs. Castillo, the Court held that an action is
considered as an attack on a title when the object of the action or proceeding is to
nullify the title, and thus challenge the judgment pursuant to which the title was
decreed. The attack is direct when the object of an action or proceeding is to annul,
or set aside such judgment, or enjoin its enforcement. On the other hand, the attack
is indirect or collateral when, in an action to obtain a different relief, an attack on
the judgment is nevertheless made as an incident thereof.
In the present case, the attack on respondent’s title is definitely merely collateral
as the relief being sought by respondent in his action was recovery of ownership and
possession. Petitioners’ attack on the validity of respondent’s certificate of title was
merely raised as a defense in their Answer filed with the trial court.
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F. Extrinsic and Intrinsic Fraud in Land Registration Cases
Cal vs. Zosa
G.R. No. 152518, July 31, 2006
The right of a person deprived of land or of any estate or interest therein by
adjudication or confirmation of title obtained by actual or extrinsic fraud is recognized
by law under Section 32 of P.D. No. 1529, thus:
Review of decree of registration; Innocent purchaser for value. — The
decree of registration shall not be reopened or revised by reason of
absence, minority, or other disability of any person adversely affected
thereby, nor by any proceeding in any court for reversing judgments,
subject, however, to the right of any person, including the government
and the branches thereof, deprived of land or of any estate or interest
therein by such adjudication or confirmation of title obtained by actual
fraud, to file in the proper Court of First Instance (now the Regional
Trial Court) a petition for reopening and review of the decree of
registration not later than one year from and after the date of the entry
of such decree of registration, but in no case shall such petition be
entertained by the court where an innocent purchaser for value has
acquired the land or an interest therein, whose rights may be prejudiced.
Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds
from an intentional deception practiced by means of the misrepresentation or
concealment of a material fact. Constructive fraud is construed as a fraud because of
its detrimental effect upon public interests and public or private confidence, even
though the act is not done with an actual design to commit positive fraud or injury
upon other persons.
Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic
where the fraudulent acts pertain to an issue involved in the original action, or
where the acts constituting the fraud were or could have been litigated therein. Fraud
is regarded as extrinsic where it prevents a party from having a trial or from presenting
his entire case to the court, or where it operates upon matters pertaining not to the
judgment itself but to the manner in which it is procured, so that there is not a fair
submission of the controversy. Extrinsic fraud is also actual fraud, but collateral to
the transaction sued upon.
The “fraud” contemplated by Section 32, P.D. No. 1529 is extrinsic. For fraud
to justify a review of a decree, it must be extrinsic or collateral, and the facts upon
which it is based have not been controverted or resolved in the case where the
judgment sought to be annulled was rendered.
Thus, relief is granted to a party deprived of his interest in land where the
fraud consists in a deliberate misrepresentation that the lots are not contested when
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in fact, they are; or in willfully misrepresenting that there are no other claims; or in
deliberately failing to notify the party entitled to notice; or in inducing him not to
oppose an application; or in misrepresenting about the identity of the lot to the true
owner by the applicant causing the former to withdraw his application. In all these
examples, the overriding consideration is that the fraudulent scheme of the prevailing
litigant prevented a party from having his day in court or from presenting his case.
The fraud, therefore, is one that affects and goes into the jurisdiction of the court.
Relief on the ground of fraud will not be granted where the alleged fraud goes
into the merits of the case, is intrinsic and not collateral, and has been controverted
and decided, like what is very much obtaining in the present case.
Ugale vs. Gorospe
G.R. No. 149516, September 11, 2006
Federico U. Gorospe (GOROSPE), is the registered owner of a parcel of land
situated in Maddalero, Buguey, Cagayan, having bought the same from Maria Ugale
and Enrique Unciano, evidenced by two separate Deeds of Sale. As a consequence,
Transfer Certificate of Title No. 85450 was issued in his name.
When Gorospe tried to exercise attributes of ownership of the lot, he was
prevented from doing so by the defendants claiming to be the installed tenants of
defendant Juanita A. Vibangco and her brother, Ninoy Altura.
Gorospe filed the present case to remove the clouds over his title and for the
recovery of possession of the disputed land.
The RTC ruled in favor of the defendants. On appeal, the CA reversed the
decision of the RTC and ruled in favor of Gorospe.
Issue: WON the CA was correct when it applied the principle of
indefeasibility of title in favor of Gorospe
Ruling: Yes.
In this case, the CA correctly held that the claim of petitioners in their Answer
that respondent’s title was acquired through fraud is nothing less than a collateral
attack on the decree of registration and title which is against the principle of
indefeasibility and incontrovertibility of the title in favor of the person whose name
appears therein and the rule that any attack on the validity of such title should be
threshed out only in an action directly or expressly filed for that purpose.
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This is consistent with the precept that the validity of a Torrens title cannot be
assailed collaterally. Section 48 of Presidential Decree No. 1529 provides that:
Certificate not Subject to Collateral attack. — A certificate of title shall
not be subject to collateral attack. It cannot be altered, modified, or
cancelled except in a direct proceeding in accordance with law.
Indeed, a certificate of title, once registered, should not thereafter be impugned,
altered, changed, modified, enlarged or diminished, except in a direct proceeding
permitted by law. Otherwise, reliance on registered titles would be lost.
Here, the attack on the validity of private respondent’s certificate of title was
raised as a defense in petitioners’ Answer filed with the trial court. Such defense is
in the nature of a collateral attack which is not allowed by law as the issue of the
validity of title, i.e. whether or not it was fraudulently issued, can only be raised in
an action expressly instituted for that purpose.
Petitioners argue that respondent cannot invoke the principle of indefeasibility
of title since he knew of petitioners’ possession of the property since time
immemorial; that he was not in good faith. While there are rulings stating that a
buyer of a real property which is in the possession of persons other than the seller
must be wary and should investigate the rights of those in possession, otherwise
such buyer cannot be regarded as a buyer in good faith, petitioners in this case,
however, failed to show that they have a better right over the subject property. As
respondent has presented TCT No. T-85450 in his name, the burden of proof has
shifted to petitioners who must establish by preponderance of evidence their
allegation that they have a better right over the subject property. This petitioners
failed to do.
Republic vs. Sps. Enriquez
G.R. No. 160990, September 11, 2006
Before one can register his title over a parcel of land, the applicant must show
that (a) he, by himself or through his predecessors-in-interest, has been in open,
continuous, exclusive and notorious possession and occupation of the subject land
under a bona fide claim of ownership since June 12, 1945 or earlier; and (b) the land
subject of the application is alienable and disposable land of the public domain.
One of the mandatory requirements in applications of original registration of
land is the submission in evidence of the original tracing cloth plan or the “sepia
copy” (Diazo Polyester Film), duly approved by the Bureau of Lands. This is to
establish the true identity of the land to ensure that it does not overlap a parcel of
land or a portion thereof already covered by a previous land registration, and to
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forestall the possibility that it will be overlapped by a subsequent registration of any
adjoining land. Failure to comply with this requirement is fatal to petitioner’s
application for registration.
Nevertheless, in several cases, the Court allowed substantial compliance with
this rule.
In Recto vs. Republic of the Philippines (440 SCRA 79) this Court held that blueprint
copies of the original tracing cloth plan from the Bureau of Lands and other evidence
could also provide sufficient identification to identify a piece of land for registration
purposes, as the property was sufficiently identified by: 1) the blueprint copy of the
plan and technical description which were both approved by the Land Management
Services of the Department of Environment and Natural Resources (DENR); and 2)
the report of the Land Management Sector stating that the subject property is not a
portion of, nor identical to any previously approved isolated survey. The applicants
in the Recto case also submitted a certified true copy of the original tracing cloth
plan to the CA as well as a certification from the Land Registration Authority attesting
that the original plan in diazo polyester film was on file.
In Republic of the Philippines vs. Hubilla (451 SCRA 181), the Court also deemed
as substantial compliance the submission of the following in lieu of the original
tracing cloth plan, to wit: 1) a blueprint copy of the subdivision plan approved by the
Director of Lands; 2) a technical description approved by the Land Management
Bureau of the DENR; 3) a certification from the DENR Community Environment
and Natural Resources Office (CENRO) which states that the Property has not been
forfeited for non-payment of real estate taxes, is entirely within the alienable and
disposable zone as of December 31, 1925, has not been previously titled and is not
covered by any previous public land application; and 4) a report of the Land
Management Bureau stating that the Property is not recorded in their lot and plan
index cards as being subject of a previous public land application. The applicants
also filed a motion to admit original tracing cloth plan with the Court of Appeals
during the pendency of the appeal and attached thereto the original plan, which the
Court noted as the same as the blueprint subdivision plan offered as evidence before
the trial court.
G. Action for Declaration of Nullity of TCT
Feliciano vs. Zaldivar
G.R. No. 162593, September 26, 2006
Remegia Y. Feliciano (FELICIANO) filed against the spouses Aurelio and Luz
Zaldivar a complaint for declaration of nullity of TCTNo. T-17993 and reconveyance
of the property consisting of 243 square meters of lot situated in Cagayan de Oro
City. The said title is registered in the name of Aurelio Zaldivar.
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Feliciano alleges that she was the registered owner of a parcel of land in Cagayan
de Oro City with an area of 444 square meters, covered by TCT No. T-8502.
Sometime in 1974, Aurelio, allegedly through fraud, was able to obtain TCT No. T-
17993 covering the 243-sq-m portion of Feliciano’s lot as described in her TCT No.
T-8502.
Feliciano also contends that the subject lot was originally leased from her by
Pio Dalman, Aurelio’s father-in-law, for P5.00 a month, later increased to P100.00 a
month in 1960. She further alleged that she was going to mortgage the subject lot to
Ignacio Gil for P100.00, which, however, did not push through because Gil took
back the money without returning the receipt she had signed as evidence of the
supposed mortgage contract. Thereafter, in 1974, Aurelio filed with the then Court
of First Instance of Misamis Oriental a petition for partial cancellation of TCT No.
T-8502. It was allegedly made to appear therein that Aurelio and his spouse Luz
acquired the subject lot from Dalman who, in turn, purchased it from Gil. The petition
was granted and TCT No. T-17993 was issued in Aurelio’s name.
Feliciano denied that she sold the subject lot either to Gil or Dalman. She
likewise impugned as falsified the joint affidavit of confirmation of sale that she and
her uncle, Narciso Labuntog, purportedly executed before a notary public, where
Feliciano appears to have confirmed the sale of the subject property to Gil. She
alleged that she never parted with the certificate of title and that it was never lost.
As proof that the sale of the subject lot never transpired, Feliciano pointed out that
the transaction was not annotated on TCT No. T-8502.
The RTC rendered a judgment in favor of Feliciano. On appeal, the CA
reversed the decision of the RTC and ruled in favor of the Zaldivars
Issue 1: Whether the CA was correct in ruling that the land in dispute
was correctly registered in the name of Aurelio Zaldivar.
Ruling: No.
It should be recalled that respondent Aurelio Zaldivar filed with the then CFI
of Misamis Oriental a petition for issuance of a new owner’s duplicate copy of TCT
No. T-8502, alleging that the owner’s duplicate copy was lost. In the Order dated
March 20, 1974, the said CFI granted the petition and consequently, a new owner’s
duplicate copy of TCT No. T-8502 was issued. However, as the trial court correctly
held, the CFI which granted Aurelio’s petition for the issuance of a new owner’s
duplicate copy of TCT No. T-8502 did not acquire jurisdiction to issue such order.
It has been consistently ruled that “when the owner’s duplicate certificate of title
has not been lost, but is in fact in the possession of another person, then the
reconstituted certificate is void, because the court that rendered the decision had no
jurisdiction. Reconstitution can validly be made only in case of loss of the original
certificate.” In such a case, the decision authorizing the issuance of a new owner’s
duplicate certificate of title may be attacked any time.
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The new owner’s duplicate TCT No. T-8502 issued by the CFI in the name of
Aurelio is thus void. As Feliciano averred during her testimony, the owner’s duplicate
copy of TCT No. T-8502 was never lost and was in her possession from the time it
was issued to her.
The court a quo correctly nullified TCT No. T-17993 in Aurelio’s name,
emanating as it did from the new owner’s duplicate TCT No. T-8502, which Aurelio
procured through fraud. Aurelio cannot raise the defense of indefeasibility of title
because “the principle of indefeasibility of a Torrens title does not apply where
fraud attended the issuance of the title. The Torrens title does not furnish a shield
for fraud.” As such, a title issued based on void documents may be annulled.
Neither can the respondents spouses Zaldivar rely on the principle of
indefeasibility of TCT No. 17793 which was issued in favor of Aurelio. As it is, the
subject lot is covered by two different titles: TCT No. T-8502 in Feliciano’s name
covering an area of 444 sq m including therein the subject lot, and TCT No. 17793
in the name of Aurelio covering the subject lot. Aurelio’s title over the subject lot
has not become indefeasible, by virtue of the fact that TCT No. T-8502 in the name
of Feliciano has remained valid.
The claim of indefeasibility of the petitioner’s title under the Torrens land
title system would be correct if previous valid title to the same parcel of land did not
exist. The respondent had a valid title . . . It never parted with it; it never handed or
delivered to anyone its owner’s duplicate of the transfer certificate of title; it could
not be charged with negligence in the keeping of its duplicate certificate of title or
with any act which could have brought about the issuance of another certificate
upon which a purchaser in good faith and for value could rely. If the petitioner’s
contention as to indefeasibility of his title should be upheld, then registered owners
without the least fault on their part could be divested of their title and deprived of
their property. Such disastrous results which would shake and destroy the stability
of land titles had not been foreseen by those who had endowed with indefeasibility
land titles issued under the Torrens system
Issue 2: What are the rights of Feliciano over the house built by the
Zaldivar spouses over the land in dispute?
Ruling:
Nonetheless, the Court is not unmindful of the fact that respondents had
built their house on the subject lot and, despite knowledge thereof, Feliciano
did not lift a finger to prevent it. Article 453 of the Civil Code is applicable
to their case:
ART. 453. If there was bad faith, not only on the part of the person
who built, planted or sowed on the land of another, but also on the
part of the owner of such land, the rights of one and the other shall
be the same as though both had acted in good faith.
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It is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without
opposition on his part.
Under the circumstances, respondents and Feliciano are in mutual bad faith
and, as such, would entitle the former to the application of Article 448 of the Civil
Code governing builders in good faith:
ART. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate as
his own the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 29 and 548, 30 or to oblige
the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such a case, he shall pay
reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after the proper indemnity. The
parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Feliciano is obliged to exercise either of the following options: (1) to appropriate
the improvements, including the house, built by the Zaldivars on the subject lot by
paying the indemnity required by law, or (2) sell the subject lot to the Zaldivars.
Feliciano cannot refuse to exercise either option and compel respondents to remove
their house from the land. In case Feliciano choose to exercise the second option,
Zaldivars are not obliged to purchase the subject lot if its value is considerably more
than the improvements thereon and in which case, the Zaldivars must pay rent to
Feliciano. If they are unable to agree on the terms of the lease, the court shall fix the
terms thereof.
H. Free Patent
Saad Agro. Industrial vs. Republic
G.R. No. 152570, September 27, 2006
On October 1967, Socorro Orcullo (Orcullo) filed her application for Free
Patent for Lot No. 1434, a parcel of land with an area of 12.8477 hectares located in
Barangay Abugon, Sibonga, Cebu. On February 1971, the Secretary of Agriculture
and Natural Resources issued Free Patent No. 473408, while the Registry of Deeds
for the Province of Cebu issued OCT No. 0-6667 over the said lot.
The subject lot was sold to SAAD Agro-Industries, Inc. (CORPORATION)
by one of Orcullo’s heirs.
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Sometime in 1995, the Republic of the Philippines, through the Solicitor
General, filed a complaint for annulment of title and reversion of the lot, on the
ground that the issuance of the said free patent and title for Lot No. 1434 was
irregular and erroneous, following the discovery that the lot is allegedly part of the
timberland and forest reserve of Sibonga, Cebu. The discovery was made after Pedro
Urgello filed a letter-complaint DENR of Cebu City, about the alleged illegal cutting
of mangrove trees and construction of dikes within the area covered by Urgello’s
Fishpond Lease Agreement.
On 14 July 1995, Urgello filed a complaint-in-intervention against the heirs of
Orcullo. However, the heirs failed to file their answer to the complaint and were
thus declared in default.
The RTC dismissed the complaint. On appeal, the CA revered the RTC’s
decision.
Issue: WON the respondent was able to prove that the free patent and
the original title were erroneously and irregularly obtained.
Ruling: No.
It has been held that a complaint for reversion involves a serious controversy,
involving a question of fraud and misrepresentation committed against the government
and it is aimed at the return of the disputed portion of the public domain. It seeks to
cancel the original certificate of registration, and nullify the original certificate of
title, including the transfer certificate of title of the successors-in-interest because
the same were all procured through fraud and misrepresentation. Thus, the State,
as the party alleging the fraud and misrepresentation that attended the application
of the free patent, bears that burden of proof. Fraud and misrepresentation, as
grounds for cancellation of patent and annulment of title, should never be presumed
but must be proved by clear and convincing evidence, mere preponderance of evidence
not even being adequate.
It is but judicious to require the Government, in an action for reversion, to
show the details attending the issuance of title over the alleged inalienable land and
explain why such issuance has deprived the State of the claimed property.
In the present case, the Solicitor General claimed that “Free Patent No. 473408
and Original Certificate of Title No. 0-6667 were erroneously and irregularly obtained
as the Bureau of Lands (now Lands Management Bureau) did not acquire jurisdiction
over the land subject thereof, nor has it the power and authority to dispose of the
same through [a] free patent grant, hence, said patent and title are null and void ab
initio.” It was incumbent upon respondent to prove that the free patent and original
title were truly erroneously and irregularly obtained. Unfortunately, respondent failed
to do so.
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Reliance on this provision is highly misplaced. P.D. No. 705 was promulgated
only on 19 May 1975, or four (4) years after the free patent and title were awarded
to Orcullo. Thus, it finds no application in the instant case. Prior forestry laws,
including P.D. No. 389, which was revised by P.D. No. 705, does not contain a similar
provision. Article 4 of the Civil Code provides that “laws shall have no retroactive
effect unless the contrary is provided.” The Court does not infer any intention on
the part of then President Marcos to ordain the retroactive application of Sec. 13 of
P.D. No. 705. Thus, even assuming for the nonce that subject parcel was unclassified
at the time Orcullo applied for a free patent thereto, the fact remains that when the
free patent and title were issued thereon in 1971, respondent in essence segregated
said parcel from the mass of public domain. Thus, it can no longer be considered
unclassified and forming part of the public forest as provided in P.D. No. 705.
Private interests have intervened before classification was made pursuant to
P.D. No. 705. Not only has Orcullo by herself and through her predecessors-in-interest
cultivated and possessed the subject lot since 1930, a free patent was also awarded
to her and a title issued in her name as early as 1971. In fact, it appears that the
issuance of the free patent and certificate of title was regular and in order. Orcullo
complied with the requisites for the acquisition of free patent provided under
Commonwealth Act No. 141 (Public Land Act), as certified by the Director of Lands
and approved by the Secretary of Agriculture and Natural Resources.
I. Jurisdiction of Director of Lands
Angeles vs. Republic, G.R. No. 166281, October 27, 2006
The well-entrenched rule is that when property has ceased to be public because
it has been acquired by a private individual by operation of law, the Director of
Lands loses jurisdiction over the said property and the State has no more title over
the property.
In this case, public respondent no longer has a cause of action for reversion of
the property against the heirs of Juan Sanga and petitioners.
Miscellaneous Cases
A. Paraphernal vs. Conjugal Property
Spouses Mendoza Go vs. Yamane
G.R. No. 160762, May 3, 2006
A parcel of land in Baguio City was registered in the name on Muriel Pucay
Yamane, wife of Leonardo Yamane. This land was sold at a public auction as it was
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levied to satisfy the lien for attorney’s fees. No redemption was made during the 1
year period so a Final Sheriff’s Certificate of Sale was issued to spouses Go. A case
was filed with the RTC for cancellation of the sale by Leonardo Yamane on the
ground that it was conjugal property. RTC dismissed. CA reversed holding that
property acquired during marriage is presumed to be conjugal.
Issue: Whether the property was paraphernal or conjugal?
Ruling: Conjugal.
The mere registration of a property in the name of one spouse does not destroy
its conjugal nature. Hence, it cannot be contended in the present case that, simply
because the title and the Deed of Sale covering the parcel of land were in the name
of Muriel alone, it was therefore her personal and exclusive property. As stated
earlier, to rebut the presumption of the conjugal nature of the property, petitioners
must present clear and convincing evidence.
The non-redemption of the property by respondent within the period prescribed
by law did not, in any way, indicate the absence of his right or title to it. Since
petitioners have failed to present convincing evidence that the property is paraphernal,
the presumption that it is conjugal therefore stands.
Charging lien is not chargeable against conjugal property. The expenses
incurred by Muriel for the recovery of the balance of the purchase price of her
paraphernal property are her exclusive responsibility. This piece of land may not be
used to pay for her indebtedness, because her obligation has not been shown to be
one of the charges against the conjugal partnership. Moreover, her rights to the
property are merely inchoate prior to the liquidation of the conjugal partnership.
Under the New Civil Code, a wife may bind the conjugal partnership only when she
purchases things necessary for the support of the family, or when she borrows money
for that purpose upon her husband’s failure to deliver the needed sum; when
administration of the conjugal partnership is transferred to the wife by the courts or
by the husband; or when the wife gives moderate donations for charity. Failure to
establish any of these circumstances in the present case means that the conjugal
asset may not be bound to answer for Muriel’s personal obligation
B. Emancipation Patent
Estribillo vs. DAR
G.R. No. 159674, June 30, 2006
Inasmuch as there is no positive statement of the Public Land Law, regarding
the titles granted thereunder, such silence should be construed and interpreted in
favor of the homesteader who come into the possession of his homestead after
complying with the requirements thereof. Section 38 of the Land Registration Law
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should be interpreted to apply by implication to the patent issued by the Director of
Lands, duly approved by the Minister of Natural Resources, under the signature of
the President of the Philippines, in accordance with law.
After complying with the procedure, therefore, in Section 105 of Presidential
Decree No. 1529, otherwise known as the Property Registration Decree (where the
DAR is required to issue the corresponding certificate of title after granting an EP
to tenant-farmers who have complied with Presidential Decree No. 27), 24 the TCTs
issued to petitioners pursuant to their EPs acquire the same protection accorded to
other TCTs. “The certificate of title becomes indefeasible and incontrovertible upon
the expiration of one year from the date of the issuance of the order for the issuance
of the patent, . . . . Lands covered by such title may no longer be the subject matter
of a cadastral proceeding, nor can it be decreed to another person.”
As was held by the SC through Justice J.B.L. Reyes in Lahora vs. Dayanghirang,
Jr., 147 Phil. 301, 304 (1971):
The rule in this jurisdiction, regarding public land patents and the character
of the certificate of title that may be issued by virtue thereof, is that
where land is granted by the government to a private individual, the
corresponding patent therefor is recorded, and the certificate of title is
issued to the grantee; thereafter, the land is automatically brought within
the operation of the Land Registration Act, the title issued to the grantee
becoming entitled to all the safeguards provided in Section 38 of the said
Act. In other words, upon expiration of one year from its issuance, the
certificate of title shall become irrevocable and indefeasible like a
certificate issued in a registration proceeding.
The EPs themselves, like the Certificates of Land Ownership Award (CLOAs)
in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of 1988), are
enrolled in the Torrens system of registration. The Property Registration Decree in
fact devotes Chapter IX 27 on the subject of EPs. Indeed, such EPs and CLOAs are,
in themselves, entitled to be as indefeasible as certificates of title issued in registration
proceedings.
C. Double Sale
Delfin vs. Banez
G.R. No. 132281, September 15, 2006
From the very opening statement of the appellate court in the decision under
review, it is obvious that said court, along with the court below it, resolved the
controversy on the premise that there exists a case of double sale. On that premise,
the CA and the trial court applied to this case the provisions of Article 1544 of the
Civil Code, which reads:
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ART. 1544. If the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence thereof,
to the person who presents the oldest title, provided there is good faith.
The application of Article 1544 of the Civil Code presupposes the existence
of two (2) valid and binding contracts of sale, which, under legal contemplation, is
made possible by the operation of the Torrens System whereunder registration is
the operative act which transfers title or ownership of a titled property, such that
before the first buyer registers his sale to consolidate ownership and title in his
favor, the seller who retains the title and ownership in the meantime can validly
transfer such title and ownership by way of a second sale to another buyer, who, in
case he succeeds in registering said second sale before he acquired notice of the first
sale, can defeat the rights of the first buyer under Article 1544 of the Civil Code.
To the two (2) courts below, the two (2) sales of the lot in question — Lot No. 3-
D-1 — are: (1) the sale entered into on May 9, 1979 between Josefina, through her
attorney-in-fact, Atty. Carlos Valdez, Jr., in favor of Lagon over the 4,094-square
meter portion of the former Lot No. 3 which portion covered the entire area of Lot
No. 3-D-1, referred to herein as the first sale; and (2) the sale of Lot No. 3-D-1
entered into between Josefina and Delfin on June 4, 1987, hereinafter referred to as
the second sale. While on the surface, there is apparently a situation of double sale,
in truth and in law, there is only one: the sale of Lot No. 3-D-1 by Josefina to the
petitioner on June 4, 1987. Hence, Article 1544 of the Civil Code finds no application
in this case.
With the reality that this Court in Valdez deemed the so-called first sale as null
and void by reason of Lagon’s breach of the express terms and conditions relative
thereto before the second sale was entered into by and between Josefina and Delfin,
the provisions of Article 1544 of the Civil Code on double sales do not apply. Josefina
had full and complete ownership over the subject lot (Lot No. 3-D-1) at the time of
the second sale, the obligation to return to Lagon the sum of money originally received
by her from the latter notwithstanding. This title and ownership of Lot No. 3-D-1
was effectively transferred from Josefina to Delfin with the issuance of a clean new
transfer certificate of title in the name of Delfin upon the registration of the second
sale.
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D. FORECLOSURE OF A REAL ESTATE MORTGAGE
Guanco vs. Antolo
G.R. No. 150852, July 31, 2006
Under Section 5 of Republic Act No. 720, as amended by Rep. Act No. 7939,
the provincial sheriff is mandated to post a notice of the foreclosure of the real
estate mortgage in at least three of the most conspicuous public places not only in
the municipality but also in the barrio where the land mortgaged is situated during
the 60-day period immediately preceding the public auction:
The foreclosure of mortgages covering loans granted by rural banks shall
be exempt from the publication in newspapers now required by law where
the total amount of the loan, including interests due and unpaid, does
not exceed three thousand pesos. It shall be sufficient publication in such
cases if the notices of foreclosure are posted in at least three of the most
conspicuous public places in the municipality and barrio where the land
mortgaged is situated during the period of sixty days immediately
preceding the public auction. Proof of publication as required herein shall
be accomplished by affidavit of the sheriff or officer conducting the
foreclosure sale and shall be attached with the records of the case: Provided,
That when a homestead or free patent land is foreclosed, the homesteader
or free patent holder, as well as their heirs shall have the right to redeem
the same within two years from the date of foreclosure in case of a land
not covered by a Torrens title or two years from the date of the registration
of the foreclosure in the case of a land covered by a Torrens title: Provided,
finally, That in case of borrowers who are mere tenants the produce
corresponding to their share may be accepted as security.
In the present case, the provincial sheriff failed to comply with the law. It
appears on the face of the Final Deed of Sale executed by Deputy Sheriff Alvior that
the petition for extrajudicial foreclosure of the real estate mortgage purportedly
filed with the said office was dated July 21, 1977. The deputy sheriff set the public
auction sale on August 19, 1977, or less than a month after the filing of the said
petition, short of the 60 day-period under Section 5 of Rep. Act No. 720, as amended.
E. Lease
Josefa vs. Buenaventura
G.R. No. 163429, March 3, 2006
Lourdes San Buenaventura is the owner of a 364-sqm parcel of land in Pasig
City. On July 15, 1990, Johnny Josefa entered into a Contract of Lease with San
Buenaventura over the said parcel of land. The parties agreed that the period covered
by the lease agreement is from August 1, 1990 to July 31, 1995, or a period of five
(5) years, renewable upon agreement of the parties.
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Upon expiry of the contract, San Buenaventura wrote Josefina informing him
that the lease would no longer be extended but that he may continue with the lease
at a rental rate of P30,000.00 a month. Josefa was told to vacate the property and
pay any arrearages if he opted not to lease the property after the expiration of the
lease contract. However, Josefa refused to vacate the premises. He continued to
occupy the property and paid a monthly rental of P15,400.00 which San Buenaventura
received. However, San Buenaventura subsequently made demands for Josefa to
vacate the property in a Letter dated June 3, 1998. Josefa still refused to leave the
premises.
San Buenaventura then filed a complaint for unlawful detainer against Josefa
which was however dismissed due to the plaintiff’s failure to secure a certification
from the lupon ng barangay. The complaint was refiled with the MeTC Pasig and
docketed as Civil Case No. 6798.
In his Answer, Josefa averred that San Buenaventura had no cause of action
because under the contract, San Buenaventura was obliged to renew the lease. Josefa
pointed out that because of this commitment to renew the contract, he made
renovations and improvements on the land. He also set up attorney’s fees as
counterclaim against San Buenaventura. He prayed that should the lease contract
not be renewed, San Buenaventura be ordered to reimburse to him the cost of the
improvements in the amount of not less than P3,000,000.00.
The MeTC ruled in favor of San Buenaventura, declaring that the phrase
“renewable upon agreement of the parties” in the lease contract implied mutuality,
i.e. both parties’ consent to the renewal of the lease.
Josefa appealed to the RTC. The RTC reversed the ruling of the MeTC holding
that the inclusion of the renewal clause in the contract showed the intent on the part
of both parties to extend the lease without any condition or requirement of mutual
agreement. It declared that the phrase was merely a useless addition “for the
convenience of any party who may wish, in bad faith, to back out of the extension of
the lease.” According to the RTC, “the only time that phrase may come into play is
when both parties mutually decline to extend the lease, but when only one party
insists on the extension while the other party refuses, the latter party is bound by
the term.”
San Buenaventura appealed to the CA. The CA reversed and declared that,
after the expiration of the five-year period in the lease contract, the owner of the
property had the right not only to terminate the lease but to demand a new rental
rate. It held that it was unfair for the lessee to refuse to pay the demanded increased
rate and still remain in possession of the property. The CA also ruled that Josefa
could not claim to be a builder in good faith since he knew that he was only a lessee,
whose rights relative to the improvements he introduced on the property are governed
by Article 1678 of the New Civil Code.
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Eduardo A. Labitag
Issue 1: Whether the lease contract between petitioner and respondent
contained a “renewal clause”, and as such, they had agreed to extend the
period of lease after July 31, 1995? NO.
It bears stressing that after the subject lease contract expired on July 15, 1995,
petitioner was already unlawfully withholding possession of the leased premises
from respondent as to entitle the latter to file her complaint for ejectment against
petitioner as defendant. Since the lease contract was executed for a determinate
time, such contract ceased on the day fixed without need of further demand. A
notice to vacate constitutes an express act on the part of the lessor that he no longer
consents to the continued occupation by the lessee of the property. Hence, respondent,
as plaintiff in the trial court, had a cause of action for ejectment against petitioner
who was the defendant below.
It is true that petitioner and respondent agreed that the subject lease contract
was “renewable upon agreement”. The Court notes, however, that the effect of the
petitioner’s intransigent refusal to pay the P30,000.00 monthly rental proposed by
respondent was the failure of the parties to agree on the renewal of the contract.
The clause “renewable upon the agreement of the parties” in the lease contract is
clear and admits of no other interpretation: the contract is renewable only upon
agreement of the parties. If no such agreement is forged, petitioner has no other
option except to vacate the property.
Even petitioner himself admits that under the subject clause, the lease contract
would not be automatically renewed upon its expiration on July 31, 1995. Respondent,
as the owner of the property whose title is recognized in the lease contract, was not
obliged to agree to renew the lease contract, much less negotiate with petitioner for
such renewal if she opts not to renew the agreement. Since the renewal of the contract
contemplates the death of the old contract, it is necessary that the new one be executed
by the parties. A contract can only be renewed upon the mutual agreement of the
parties or at the will of both of them. After all, as the Court ruled in Bruce vs. Court
of Appeals:
In the case at bar, it was not specifically indicated who may exercise the
option to renew, neither was it stated that the option was given for the
benefit of herein petitioner. Thus, pursuant to the Fernandez ruling and
Article 1196 of the Civil Code, the period of the lease contract is deemed
to have been set for the benefit of both parties. Renewal of the contract
may be had only upon their mutual agreement or at the will of both of
them. Since the private respondents were not amenable to a renewal,
they cannot be compelled to execute a new contract when the old contract
terminated on June 1, 1994. It is the owner-lessor’s prerogative to
terminate the lease at its expiration. The continuance, effectivity and
fulfillment of a contract of lease cannot be made to depend exclusively
upon the free and uncontrolled choice of the lessee between continuing
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the payment of the rentals or not, completely depriving the owner of any
say in the matter. Mutuality does not obtain in such a contract of lease
and no equality exists between the lessor and the lessee since the life of
the contract would be dictated solely by the lessee.
In Fernandez vs. CA, the Court ruled that the stipulation of the parties in their
lease contract “to be renewable” at the option of both parties stresses that the faculty
to renew was given not to the lessee alone nor to the lessor by himself but to the two
simultaneously; hence, both must agree to renew if a new contract is to come about.
Issue 2: Whether Josefa could be considered a builder in good faith.
Ruling: No.
In this case, there is no question that petitioner was initially a lawful possessor
because his entry into the property is by virtue of a lease contract with respondent.
However, as a mere lessee whose possession after the expiration of the contract is at
the sufferance of the owner of the property, he cannot claim to be a builder in good
faith. Under Article 1678 NCC, petitioner is entitled to one-half of the value of the
improvements only if respondent, as the owner decides to appropriate the
improvements. Since respondent refused to appropriate the improvements, petitioner
cannot compel her to reimburse to him one-half of their value. The sole right of the
petitioner under Article 1678 is to remove the improvements without causing any
more damage upon the property leased than is necessary.
Issue 3: Whether the CA erred in ordering him to pay P30,000.00
monthly rental for the renewal of the lease contract.
Ruling: Yes.
The submission of the petitioner has no merit. In the first place, the CA awarded
the P30,000.00 monthly rentals not for the renewal of the lease contract, but as
compensation for petitioner’s continued occupancy of the property after the lease
expired. However, we agree with petitioner’s contention that the increase of the
award to P30,000.00 has no factual basis considering that the appellate court failed
to state its basis for doubling the amount adjudged by the trial court. It simply
increased the award in the dispositive portion of its decision.
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Eduardo A. Labitag
G.Q. GARMENTS, INC. vs. MIRANDA
G.R. No. 161722, July 20, 2006
Angel Miranda is the registered owner of a 9,646 square meters parcel of land
located at Niog, Bacoor, Cavite. In 1984, Angelito Miranda, the son of Angel Miranda,
established the Executive Machineries and Equipment Corporation (EMECO). He
owned 80% of the stocks, while his wife Florenda owned 10%. That year, Angel entered
into a verbal contract of lease over the Property with EMECO, and allowed it to
build a factory thereon. The agreement was on a month-to-month basis, at the rate
of P8,000 per month. EMECO constructed its factory on the property. At the outset,
EMECO paid the monthly rentals. However, after Angelito died on June 21, 1988,
EMECO failed to pay the rentals but still continued possessing the leased
premises.
On November 19, 1989, the factory of EMECO was totally razed by fire. In a
letter to EMECO dated June 3, 1991, Angel demanded the payment of accrued
rentals in the amount of P280,000.00 as of May 1991. EMECO was also informed
that the oral contract of lease would be terminated effective June 30, 1991. However,
EMECO failed to pay the accrued rentals and to vacate the property. Another
demand letter dated September 27, 1991 was sent to EMECO. It vacated the leased
premises, but the accrued rentals remained unpaid.
Sometime in November 1991, Florenda arrived at the office of petitioner and
offered to sublease the property to Wilson Kho, the Officer-in Charge of the
corporation. Florenda showed Kho a purported copy of a contract of lease over the
said property allegedly executed by Angel in favor of EMECO. After visiting and
viewing the property, Kho agreed to rent the area upon the condition that its true
and registered owner would personally sign the lease contract in his presence. When
Florenda failed to present Angel for said purpose, Kho turned down her proposal.
Later, Kho was able to locate Angel and offered, in behalf of G.Q. Garments,
to lease the property. Angel agreed. On December 23, 1991, Angel and the
corporation, executed a contract of lease over the subject property. The lease was
for a period of 15 years for a monthly rental of P30,000.00. As lessee, it was authorized
to introduce improvements, structures, and buildings on the property as it
may deem necessary and for the purpose for which it was leased. After securing
the necessary documents, the construction of a building and a factory then
commenced.
On January 27, 1992, Florenda, together with several armed men who identified
themselves as policemen, forcibly evicted petitioner from the leased premises. During
the encounter, Florenda and her men took some equipment, machinery and other
properties belonging to petitioner, thereby causing loss and damage to said
properties.
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In the meantime, Angel secured a copy of the purported contract of lease he
allegedly executed in favor of EMECO. On March 12, 1992, he filed a complaint for
declaration of nullity of the contract of lease before the RTC alleging that his signature
as lessor was a forgery.
Meanwhile, G.Q. Garments sought the help of the Philippine National Police
(PNP). General Gerardo N. Flores, Deputy Director General and Chief Directorial
Staff, issued a Memorandum to Superintendent Wenceslao A. Soberano, ordering
the latter to prevent his men from interfering with the pending civil case. Petitioner
subsequently regained possession over the leased premises.
Florenda and her group were undaunted. They went back to the place and
ousted the guards and other personnel manning the corporation’s office, and even
removed their equipment, and ransacked anew their raw materials, electric wire and
other valuables inside.
On April 20, 1992, petitioner instituted an action for damages and recovery of
possession of the property before the RTC of Cavite City, Branch 17, with Angel,
EMECO and Florenda, as alternative defendants.
On June 25, 1992, Angel and G.Q. Garments, as plaintiffs, filed a separate
complaint for ejectment against Florenda before the MTC of Bacoor, Cavite. After
due proceedings, the court ordered the eviction of Florenda and all those claiming
the property in her behalf. The decision was appealed to the RTC. However, for
failure to pay a supersedeas bond, the decision was executed and Florenda was evicted
from the property.
On November 26, 1993, the RTC rendered judgment in Civil Case No. N-
5573, dismissing the complaint against all the alternative defendants without
prejudice. It declared that plaintiff was entitled to damages, but it had to dismiss the
complaint because of the pendency of Civil Case Nos. 92-699 and 92-1265. However,
the RTC resolved to deny the motion of petitioner prompting it to appeal to the
Court of Appeals. Angel Miranda also appealed the decision, which was docketed
as CA-G.R. CV No. 45567.
On September 22, 1994, the RTC rendered judgment in Civil Case No. 92-
699 in favor of Angel and declared the contract of lease purportedly executed by
him and EMECO void.
On October 29, 2002, the CA rendered judgment reversing the decision of
the RTC. It dismissed the complaint with prejudice against Angel Miranda and
ordered Florenda Miranda to pay G.Q. Garments, Inc. the amount of: (1) P300,000.00
as and for nominal damages; (2) P200,000.00 as and for attorney’s fees; and (3) To
pay the costs of suit.
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Eduardo A. Labitag
G.Q. Garments filed a motion for the reconsideration. It averred that Angel
was liable for damages under Article 1654(3) of the New Civil Code, under which, as
lessor, he was obliged “to maintain the lessee in the peaceful and adequate enjoyment
of the lease for the entire duration of the contract.” It likewise cited De la Cruz vs.
Seminary of Manila where it was ruled that in case of legal disturbance, the lessor is
liable for whatever the lessee has lost by virtue of the breach of the contract and that
it is the duty of the lessor to place the lessee in legal possession of the premises and
to maintain him in the peaceful possession of the property during the lifetime of the
lease. It insisted that the lessor who fails in the performance of such obligation must
indemnify the lessee for the damages occasioned thereby, the true measure of damages
being the actual loss to the lessee arising from the breach of the contract on the part
of the lessor. The motion was denied by the CA.
Issue 1: Whether respondents are liable to petitioner for the amount of
P10,000,000.00 by way of actual damages?
Ruling: No.
To be entitled to an award of actual damages, it is necessary to prove the
precise amount of the loss with a reasonable degree of certainty, premised upon
competent proof and on the best evidence obtainable by the injured party to justify
such award. The award of actual damages cannot be simply based on the mere
allegation of a witness without any tangible claim, such as receipts or other
documentary proofs to support such claim. Failing to satisfy the court that petitioner
certainly suffered actual damages, its claim must now fail.
In this case, there is no question that, indeed, petitioner sustained damages
because its equipment, machineries, and other valuables were taken, and its building
was destroyed by respondent Florenda Miranda and her cohorts. Respondent Angel
Miranda did not cause the damages sustained by petitioner’s property. However,
the only evidence adduced by the petitioner to prove the value of said property is
the testimony of Kho. No other proof was adduced to establish the value or price of
the equipment, machineries and valuables taken by respondent Florenda Miranda,
as well as the damage to petitioner’s building. The bare claim of Kho that the
petitioner sustained actual damages in the amount of P10,000,000.00 is utterly
insufficient on which to anchor a judgment for actual damages in the amount of
P10,000,000.00; it is speculative and merely a surmise.
Issue 2: Whether Angel Miranda was liable for damages caused to
petitioner’s property.
Ruling: No.
We agree with the ruling of the CA that respondent Angel Miranda is not
liable for damages caused to petitioner’s property. Article 1654 of the New Civil
Code reads:
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Art. 1654. The lessor is obliged:
(1) To deliver the thing which is the object of the contract
in such a condition as to render it fit for the use intended;
(2) To make on the same during the lease all the necessary
repairs in order to keep it suitable for the use to which it
has been devoted, unless there is a stipulation to the contrary;
(3) To maintain the less in the peaceful and adequate
enjoyment of the lease for the entire duration of the contract.
Under the provision, a lessor is obliged to maintain petitioner’s peaceful and
adequate enjoyment of the premises for the entire duration of the lease. In case of
noncompliance with these obligations, the lessee may ask for the rescission of the
lease contract and indemnification for damages or only the latter, allowing the contract
to remain in force.
The trespass referred to in Article 1654, paragraph 3, of the New Civil Code,
is legal trespass or perturbacion de mero derecho. The lessor is not liable for the mere
fact of a trespass or trespass in fact (perturbacion de mero hecho) made by a third person
of the leased property. The lessee shall have a direct action against the trespasser
and not against the lessor. As explained by the Court, if the act of trespass is not
accompanied or preceded by anything which reveals a really juridical intention on
the part of the trespasser, in such wise that the lessee can only distinguish the material
fact, such a trespass is merely a trespass in fact.
The duty of the lessor to maintain the lessee in the peaceful and adequate
enjoyment of the leased property for the entire duration of the contract is merely a
warranty that the lessee shall not be disturbed in having legal and not physical
possession of the property.
In this case, the trespass perpetrated by respondent Florenda Miranda and
her confederates was merely trespass in fact. They forcibly entered the property
and caused damage to the equipment and building of petitioner, because the latter
refused to enter into a contract of lease with EMECO over the property upon
respondent Florenda Miranda’s failure to present respondent Angel Miranda to
sign the contract of lease. It turned out that respondent Florenda Miranda attempted
to hoodwink petitioner and forged respondent Angel Miranda’s signature on the
contract of lease she showed to petitioner. It appears that respondent Florenda
Miranda tried to coerce the petitioner into executing a contract of lease with EMECO
over the property, only to be rebuffed by the petitioner.
Petitioner cannot rely on the ruling of this Court in De la Cruz vs. Seminary of
Manila, because, in this case, respondent Angel Miranda had the legal power to
place petitioner in the peaceful possession of the property upon the execution of the
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Eduardo A. Labitag
contract of lease between him and petitioner; in fact, actual possession of the property
was placed in the hands of petitioner, enabling it to start the construction of its
factory.
Julia-ay vs. Estate of Buenaventura
G.R. No. 149788, May 31, 2006
Starting in 1995, Romeo Julag-ay leased an apartment owned by Felimon
Buenaventura, Sr. On October 15, 1996, Felimon Buenaventura, Sr. died intestate,
survived by his two children, Teresita and Felimon Buenaventura, Jr. Felimon
Buenaventura, Jr. took over the administration of the property. During his
administration, Julag-ay failed to pay rentals covering the whole year of 1998.
Felimon Buenaventura, Jr. died on December 17, 1998. Teresita assumed the
administration of the property. On February 28, 1999, Julag-ay paid Teresita rental
payments for the month of January and February 1999, but made no further
payments.
In April 1999, Teresita referred the matter to the Lupon Tagapamayapa for
conciliation. During the proceedings, Julag-ay acknowledged that he had not paid his
monthly rentals and promised to pay in installments. Despite his promise, he still
failed to pay.
On April 5, 1999, Teresita demanded that Julag-ay vacate the leased premises.
Julag-ay refused. She then filed a complaint for ejectment asserting that the estate is
the lawful owner of the property and that the estate had been deprived of the use of
the property because of Julag-ay’s refusal to vacate the premises, and that it had
suffered damages because of his refusal to pay arrears in rents due.
Julag-ay answered that Teresita had no personality to sue since she was not the
legal representative of the Estate of Felimon Buenaventura, Sr. He also asserted
that the said estate had no cause of action to eject him from the property, as it was
owned by the Estate of Felisa Tamio de Buenaventura, which was under the
administration of Resurreccion A. Bihis. He claimed that he did not owe Teresita
any arrears in rent payments as he had already paid rent to Resurreccion A. Bihis.
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Issue 1: Whether Teresita had legal personality to file the ejectment
case.
Ruling: Yes.
The evidence is clear that after Felimon Buenaventura, Sr. and his son,
Buenaventura, Jr. died, Teresita was appointed as administratrix of his estate. As
administratrix of the estate, Teresita has the unquestionable personality to file an
ejectment suit against Julag-ay. Likewise the records show that Julag-ay dealt with
Felimon Buenaventura, Sr. while he was still alive, and, thereafter, with his known
children, Buenaventura, Jr. and Teresita. He paid the rentals of the property to
them. Petitioner’s promissory note and his payment of two months’ rents to Teresita
are eloquent proofs of his recognition of Teresita as Felimon Buenaventura, Sr.’s
lawful successor. In this connection, Article 1436 CC provides:
Article 1436. A lessee or bailee is estopped from asserting title to the
thing leased or received, as against the lessor or bailor.
In relation thereto, Rule 131, Section 2(b) of the Rules of Court provides:
Sec. 2. Conclusive presumptions – The following are instances of conclusive
presumptions:
x x x
(b) The tenant is not permitted to deny the title of his landlord at the
time of the commencement of the relations of landlord and tenant between
them.
These provisions bar Julag-ay from contesting the title of his landlord, i.e., the
Estate or its representative. This Court has consistently held that lessees who have
had undisturbed possession for the entire term under the lease, like Julag-ay, are
estopped to deny their landlord’s title, or to assert a better title not only in themselves,
but also in some third person, while they remain in possession of the leased premises
and until they surrender possession to the landlord. It is of no significance that
Julag-ay is not claiming title to the property for himself. Estoppel still applies, as he
enjoyed the use of the property without interruption from 1995.
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Eduardo A. Labitag
Issue 2: Whether Julag-ay may raise the legality of Teresita’s adoption
by Felimon Buenaventura, Sr.?
Ruling: No.
It is futile for Julag-ay to raise the issue of the legality of Teresita’s adoption
by Felimon Buenaventura, Sr. These proceedings are not the proper venue to ventilate
the legality of her adoption. As a rule, ejectment proceedings are limited to the
solitary issue of legality of possession. This issue affects the peace of the community
and should be resolved with dispatch. It should not be delayed by peripheral issues
appropriate to be resolved by other courts.
Issue 3: Whether the appellate court erred when it relied on the affidavit
executed jointly by Felisa Tamio de Buenaventura and Felimon
Buenaventura, Sr. to prove their co-ownership of the property in question?
Ruling: No.
It is unprocedural to rule on the ownership of the subject property. To reiterate,
the only issue in ejectment proceedings is the legality of Julag-ay’s physical possession
of the premises - - - his possession de facto and not his possession de jure. Thus, we
have ruled that it is of no moment that at the time an action for unlawful detainer is
under litigation, there is another action respecting the same property and the same
parties involving the issue of ownership. The rights asserted and the reliefs prayed
for are different in the two cases. Consequently, it is untenable for Julag-ay to demand
that Teresita should first prove herself to be the true and lawful owner of the property
before she asserts her right to its possession. It is settled that an action for unlawful
detainer may be filed even by one who is not an owner of the property in dispute.
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Integrated Bar of the Philippines
ABELARDO C. ESTRADA
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