Investment Law

GARCIA v THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE
ANDINDUSTRY, LUZON PETROCHEMICAL CORPORATION and PILIPINAS
SHELLCORPORATION
177 SCRA 374, September 7, 1989
Ponente: J. Grino-Aquino
FACTS: A group of Taiwanese investors doing business under the name Bataan
PetrochemicalCorporation (BPC) filed with the Board of Investments (BOI) an application for
registration as a domestic producer of petrochemicals. BPC specified Bataan as theplant site.
One of the terms and conditions of the registration was the use of ―naphthacracker‖ and
―naphtha‖ as feedstock for its petrochemical plant. The petrochemicalproject was to be a joint
venture with the Philippine National Oil Company (PNOC).BPC was issued a Certificate of
Registration on February 24, 1988; was granted―pioneer status‖, and was given fiscal and
other incentives by the BOI.On January 25, 1989, BPC sent a letter to the BOI advising the
latter of the former‘sdesire to amend the original registration of its project by (1) changing the
job site fromBataan to Batangas; (2) increasing the investment amount from US$220 million
toUS$320 million; (3) increasing the production capacity of its naphtha craker,polyethylene
plant and polypropylene plant, and; (4) changing the feedstock fromnaphtha only to ―naphtha
and/or liquefied petroleum gas‖.The petitioner, the congressman for the second district of
Bataan, opposed the transfer of the proposed petrochemical plant to Batangas. The petitioner
requested theDepartment of Trade and Industry (DTI) for a copy of the amendment
reportedlysubmitted by the Taiwanese investors, as well as the original application for
registrationtogether with any and all attachments to the said original application and
theamendment as well. The Taiwanese investors declined to give their consent to therelease
of the petitioner‘s requested documents.On May 25, 1989, the BOI approved the revision of
the registration of BPC‘spetrochemical project.On June 26, 1989, the petitioner filed for
certiorari and prohibition with a prayer for preliminary injunction, alleging that the BOI and DTI
gravely abused their discretion bynot observing due process in approving the amendment
without hearing, in refusing to furnish the petitioner copies of pertinent documents in violation
of the Government‘spolicy of transparency, in approving the transfer of the petrochemical
plant from Bataanto Batangas, in approving the change in feedstock from naphtha only to
naphtha and/or LPG, and in showing gross partiality for BPC.
ISSUE:1.)Whether or not the BOI committed grave abuse of discretion when it approvedthe
amendments of the registration of the BPC2.)Whether or not the BOI denied the petitioner of
due process when it deniedpetitioner‘s request for a copy of the amendments and when it
approved, withouthearing, the amendments of the registration of the BPC
RULING:1.)Yes. The BOI failed to publish the amended application for registration of
theBataan Petrochemical Corporation (BPC) as it was in effect a new application.The notice
invites any person with valid objections to or pertinent comments tofile them in writing to BOI
within one week from the date of the notice‘spublication.The publication recognizes that the
proposed investment is a matter of publicconcern on which the public has a right to be heard.
When the BOI approvedBPC‘s application to establish its petrochemical plant in Limay,

Bataan, theinhabitants of that province, particularly the affected community acquired
aninterest in the project which they have the right to protect. Therefore, they,―affected
communities‖, have the right to be consulted; as was also therequirement of the Investments
Code.2.)Yes. The BOI was ordered to allow the petitioner access to its records on theoriginal
and amended applications for registration of the BPC, excluding,however, privileged papers
containing trade secrets and other business andfinancial information.The BOI was also
ordered to set for hearing the petitioner‘s opposition to theamended application for the
petitioner to present all evidence in his possessionto support his opposition to BPC‘s
amendments.The petition for certiorari was granted and the petition for a writ of prohibition of
preliminary injunction is denied.
DISSENTING OPINION:No. The BOI did not commit grave abuse of discretion in approving
the amendments toBPC‘s registration nor has it failed to observe due process in approving
the samewithout a formal hearing. The BOI is the administrative body specifically tasked
tohandle specific matters such as the case at hand. Furthermore, due hearing is requiredonly
in connection with controversies between registered enterprises or investors,pursuant to the
Omnibus Investments Code and the law does not speak at all of ahearing on applications for
registrations.
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G.R. No. 92024 November 9, 1990
CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner,
vs.
THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND INDUSTRY,
LUZON PETROCHEMICAL CORPORATION, and PILIPINAS SHELL
CORPORATION, respondents.
GUTIERREZ, JR., J.:
This is a petition to annul and set aside the decision of the Board of Investments
(BOI)/Department of Trade and Industry (DTI) approving the transfer of the site of the
proposed petrochemical plant from Bataan to Batangas and the shift of feedstock for that
plant from naphtha only to naphtha and/or liquefied petroleum gas (LPG).
This petition is a sequel to the petition in G.R. No. 88637 entitled "Congressman Enrique T.
Garcia v. the Board of Investments", September 7, 1989, where this Court issued a decision,
ordering the BOI as follows:
WHEREFORE, the petition for certiorari is granted. The Board of Investments is
ordered: (1) to publish the amended application for registration of the Bataan
Petrochemical Corporation, (2) to allow the petitioner to have access to its
records on the original and amended applications for registration, as a
petrochemical manufacturer, of the respondent Bataan Petrochemical
Corporation, excluding, however, privileged papers containing its trade secrets

and other business and financial information, and (3) to set for hearing the
petitioner's opposition to the amended application in order that he may present
at such hearing all the evidence in his possession in support of his opposition to
the transfer of the site of the BPC petrochemical plant to Batangas province.
The hearing shall not exceed a period of ten (10) days from the date fixed by the
BOI, notice of which should be served by personal service to the petitioner
through counsel, at least three (3) days in advance. The hearings may be held
from day to day for a period of ten (10) days without postponements. The
petition for a writ of prohibition or preliminary injunction is denied. No costs.
(Rollo, pages 450-451)
However, acting on the petitioner's motion for partial reconsideration asking that we rule on
the import of P.D. Nos. 949 and 1803 and on the foreign investor's claim of right of final
choice of plant site, in the light of the provisions of the Constitution and the Omnibus
Investments Code of 1987, this Court on October 24, 1989, made the observation that P.D.
Nos. 949 and 1803 "do not provide that the Limay site should be the only petrochemical zone
in the country, nor prohibit the establishment of a petrochemical plant elsewhere in the
country, that the establishment of a petrochemical plant in Batangas does not violate P.D. No.
949 and P.D. No. 1803.
Our resolution skirted the issue of whether the investor given the initial inducements and other
circumstances surrounding its first choice of plant site may change it simply because it has
the final choice on the matter. The Court merely ruled that the petitioner appears to have lost
interest in the case by his failure to appear at the hearing that was set by the BOI after receipt
of the decision, so he may be deemed to have waived the fruit of the judgment. On this
ground, the motion for partial reconsideration was denied.
A motion for reconsideration of said resolution was filed by the petitioner asking that we
resolve the basic issue of whether or not the foreign investor has the right of final choice of
plant site; that the non-attendance of the petitioner at the hearing was because the decision
was not yet final and executory; and that the petitioner had not therefor waived the right to a
hearing before the BOI.
In the Court's resolution dated January 17, 1990, we stated:
Does the investor have a "right of final choice" of plant site? Neither under the
1987 Constitution nor in the Omnibus Investments Code is there such a 'right
of final choice.' In the first place, the investor's choice is subject to processing
and approval or disapproval by the BOI (Art. 7, Chapter II, Omnibus Investments
Code). By submitting its application and amended application to the BOI for
approval, the investor recognizes the sovereign prerogative of our Government,
through the BOI, to approve or disapprove the same after determining whether
its proposed project will be feasible, desirable and beneficial to our country. By
asking that his opposition to the LPC's amended application be heard by the BOI,
the petitioner likewise acknowledges that the BOI, not the investor, has the last
word or the "final choice" on the matter.

Secondly, as this case has shown, even a choice that had been approved by the
BOI may not be 'final', for supervening circumstances and changes in the
conditions of a place may dictate a corresponding change in the choice of plant
site in order that the project will not fail. After all, our country will benefit only
when a project succeeds, not when it fails. (Rollo, pp. 538-539)
Nevertheless, the motion for reconsideration of the petitioner was denied.
A minority composed of Justices Melencio-Herrera, Gancayco, Sarmiento and
this ponente voted to grant the motion for reconsideration stating that the hearing set by the
BOI was premature as the decision of the Court was not yet final and executory; that as
contended by the petitioner the Court must first rule on whether or not the investor has the
right of final choice of plant site for if the ruling is in the affirmative, the hearing would be a
useless exercise; that in the October 19, 1989 resolution, the Court while upholding validity of
the transfer of the plant site did not rule on the issue of who has the final choice; that they
agree with the observation of the majority that "the investor has no final choice either under
the 1987 Constitution or in the Omnibus Investments Code and that it is the BOI who decides
for the government" and that the plea of the petitioner should be granted to give him the
chance to show the justness of his claim and to enable the BOI to give a second hard look at
the matter.
Thus, the herein petition which relies on the ruling of the Court in the resolution of January 17,
1990 in G.R. No. 88637 that the investor has no right of final choice under the 1987
Constitution and the Omnibus Investments Code.
Under P.D. No. 1803 dated January 16, 1981, 576 hectares of the public domain located in
Lamao, Limay, Bataan were reserved for the Petrochemical Industrial Zone under the
administration, management, and ownership of the Philippine National Oil Company (PNOC).
The Bataan Refining Corporation (BRC) is a wholly government owned corporation, located at
Bataan. It produces 60% of the national output of naphtha.
Taiwanese investors in a petrochemical project formed the Bataan Petrochemical Corporation
(BPC) and applied with BOI for registration as a new domestic producer of petrochemicals. Its
application specified Bataan as the plant site. One of the terms and conditions for registration
of the project was the use of "naphtha cracker" and "naphtha" as feedstock or fuel for its
petrochemical plant. The petrochemical plant was to be a joint venture with PNOC. BPC was
issued a certificate of registration on February 24, 1988 by BOI.
BPC was given pioneer status and accorded fiscal and other incentives by BOI, like: (1)
exemption from taxes on raw materials, (2) repatriation of the entire proceeds of liquidation
investments in currency originally made and at the exchange rate obtaining at the time of
repatriation; and (3) remittance of earnings on investments. As additional incentive, the House
of Representatives approved a bill introduced by the petitioner eliminating the 48% ad
valoremtax on naphtha if and when it is used as raw materials in the petrochemical plant.
(G.R. No. 88637, September 7, 1989, pp. 2-3. Rollo, pp. 441-442)

However, in February, 1989, A.T. Chong, chairman of USI Far East Corporation, the major
investor in BPC, personally delivered to Trade Secretary Jose Concepcion a letter dated
January 25, 1989 advising him of BPC's desire to amend the original registration certification
of its project by changing the job site from Limay, Bataan, to Batangas. The reason adduced
for the transfer was the insurgency and unstable labor situation, and the presence in
Batangas of a huge liquefied petroleum gas (LPG) depot owned by the Philippine Shell
Corporation.
The petitioner vigorously opposed the proposal and no less than President Aquino expressed
her preference that the plant be established in Bataan in a conference with the Taiwanese
investors, the Secretary of National Defense and The Chief of Staff of the Armed Forces.
Despite speeches in the Senate and House opposing the Transfer of the project to Batangas,
BPC filed on April 11, 1989 its request for approval of the amendments. Its application is as
follows: "(l) increasing the investment amount from US $220 million to US $320 million; (2)
increasing the production capacity of its naphtha cracker, polythylene plant and polypropylene
plant; (3) changing the feedstock from naphtha only to "naphtha and/or liquefied petroleum
gas;" and (4) transferring the job site from Limay, Bataan, to Batangas. (Annex B to Petition;
Rollo, p. 25)
Notwithstanding opposition from any quarters and the request of the petitioner addressed to
Secretary Concepcion to be furnished a copy of the proposed amendment with its
attachments which was denied by the BOI on May 25, 1989, BOI approved the revision of the
registration of BPC's petrochemical project. (Petition, Annex F; Rollo, p. 32; See pp. 4 to 6,
Decision in G.R. No. 88637; supra.)
BOI Vice-Chairman Tomas I. Alcantara testifying before the Committee on Ways and Means
of the Senate asserted that:
The BOI has taken a public position preferring Bataan over Batangas as the site
of the petrochemical complex, as this would provide a better distribution of
industries around the Metro Manila area. ... In advocating the choice of Bataan
as the project site for the petrochemical complex, the BOI, however, made it
clear, and I would like to repeat this that the BOI made it clear in its view that the
BOI or the government for that matter could only recomend as to where the
project should be located. The BOI recognizes and respect the principle that the
final chouce is still with the proponent who would in the final analysis provide the
funding or risk capital for the project. (Petition, P. 13; Annex D to the petition)
This position has not been denied by BOI in its pleadings in G.R. No. 88637 and in the
present petition.
Section 1, Article VIII of the 1987 Constitution provides:
SECTION 1. The judicial power shall be vested in one Supreme Court and in
such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual

controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
There is before us an actual controversy whether the petrochemical plant should remain in
Bataan or should be transferred to Batangas, and whether its feedstock originally of naphtha
only should be changed to naphtha and/or liquefied petroleum gas as the approved amended
application of the BPC, now Luzon Petrochemical Corporation (LPC), shows. And in the light
of the categorical admission of the BOI that it is the investor who has the final choice of the
site and the decision on the feedstock, whether or not it constitutes a grave abuse of
discretion for the BOI to yield to the wishes of the investor, national interest notwithstanding.
We rule that the Court has a constitutional duty to step into this controversy and determine
the paramount issue. We grant the petition.
First, Bataan was the original choice as the plant site of the BOI to which the BPC agreed.
That is why it organized itself into a corporation bearing the name Bataan. There is available
576 hectares of public land precisely reserved as the petrochemical zone in Limay, Bataan
under P.D. No. 1803. There is no need to buy expensive real estate for the site unlike in the
proposed transfer to Batangas. The site is the result of careful study long before any covetous
interests intruded into the choice. The site is ideal. It is not unduly constricted and allows for
expansion. The respondents have not shown nor reiterated that the alleged peace and order
situation in Bataan or unstable labor situation warrant a transfer of the plant site to Batangas.
Certainly, these were taken into account when the firm named itself Bataan Petrochemical
Corporation. Moreover, the evidence proves the contrary.
Second, the BRC, a government owned Filipino corporation, located in Bataan produces 60%
of the national output of naphtha which can be used as feedstock for the plant in Bataan. It
can provide the feedstock requirement of the plant. On the other hand, the country is short of
LPG and there is need to import the same for use of the plant in Batangas. The local
production thereof by Shell can hardly supply the needs of the consumers for cooking
purposes. Scarce dollars will be diverted, unnecessarily, from vitally essential projects in
order to feed the furnaces of the transferred petrochemical plant.
Third, naphtha as feedstock has been exempted by law from the ad valorem tax by the
approval of Republic Act No. 6767 by President Aquino but excluding LPG from exemption
from ad valorem tax. The law was enacted specifically for the petrochemical industry. The
policy determination by both Congress and the President is clear. Neither BOI nor a foreign
investor should disregard or contravene expressed policy by shifting the feedstock from
naphtha to LPG.
Fourth, under Section 10, Article XII of the 1987 Constitution, it is the duty of the State to
"regulate and exercise authority over foreign investments within its national jurisdiction and in
accordance with its national goals and priorities." The development of a self-reliant and
independent national economy effectively controlled by Filipinos is mandated in Section 19,

Article II of the Constitution.
In Article 2 of the Omnibus Investments Code of 1987 "the sound development of the national
economy in consonance with the principles and objectives of economic nationalism" is the set
goal of government.
Fifth, with the admitted fact that the investor is raising the greater portion of the capital for the
project from local sources by way of loan which led to the so-called "petroscam scandal", the
capital requirements would be greatly minimized if LPC does not have to buy the land for the
project and its feedstock shall be limited to naphtha which is certainly more economical, more
readily available than LPG, and does not have to be imported.
Sixth, if the plant site is maintained in Bataan, the PNOC shall be a partner in the venture to
the great benefit and advantage of the government which shall have a participation in the
management of the project instead of a firm which is a huge multinational corporation.
In the light of all the clear advantages manifest in the plant's remaining in Bataan, practically
nothing is shown to justify the transfer to Batangas except a near-absolute discretion given by
BOI to investors not only to freely choose the site but to transfer it from their own first choice
for reasons which remain murky to say the least.
And this brings us to a prime consideration which the Court cannot rightly ignore.
Section 1, Article XII of the Constitution provides that:
xxx xxx xxx
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full
and efficient use of human and natural resources, and which are competitive in
both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.
xxx xxx xxx
Every provision of the Constitution on the national economy and patrimony is infused with the
spirit of national interest. The non-alienation of natural resources, the State's full control over
the development and utilization of our scarce resources, agreements with foreigners being
based on real contributions to the economic growth and general welfare of the country and
the regulation of foreign investments in accordance with national goals and priorities are too
explicit not to be noticed and understood.
A petrochemical industry is not an ordinary investment opportunity. It should not be treated
like a garment or embroidery firm, a shoe-making venture, or even an assembler of cars or
manufacturer of computer chips, where the BOI reasoning may be accorded fuller faith and
credit. The petrochemical industry is essential to the national interest. In other ASEAN
countries like Indonesia and Malaysia, the government superintends the industry by
controlling the upstream or cracker facility.
In this particular BPC venture, not only has the Government given unprecedented favors,

among them:
(1) For an initial authorized capital of only P20 million, the Central Bank gave an
eligible relending credit or relending facility worth US $50 million and a debt to
swap arrangement for US $30 million or a total accommodation of US $80
million which at current exchange rates is around P2080 million.
(2) A major part of the company's capitalization shall not come from foreign
sources but from loans, initially a Pl Billion syndicated loan, to be given by both
government banks and a consortium of Philippine private banks or in common
parlance, a case of 'guiniguisa sa sariling manteca.'
(3) Tax exemptions and privileges were given as part of its 'preferred pioneer
status.'
(4) Loan applications of other Philippine firms will be crowded out of the Asian
Development Bank portfolio because of the petrochemical firm's massive loan
request. (Taken from the proceedings before the Senate Blue Ribbon
Committee).
but through its regulatory agency, the BOI, it surrenders even the power to make a company
abide by its initial choice, a choice free from any suspicion of unscrupulous machinations and
a choice which is undoubtedly in the best interests of the Filipino people.
The Court, therefore, holds and finds that the BOI committed a grave abuse of discretion in
approving the transfer of the petrochemical plant from Bataan to Batangas and authorizing
the change of feedstock from naphtha only to naphtha and/or LPG for the main reason that
the final say is in the investor all other circumstances to the contrary notwithstanding. No
cogent advantage to the government has been shown by this transfer. This is a repudiation of
the independent policy of the government expressed in numerous laws and the Constitution
to run its own affairs the way it deems best for the national interest.
One can but remember the words of a great Filipino leader who in part said he would not
mind having a government run like hell by Filipinos than one subservient to foreign dictation.
In this case, it is not even a foreign government but an ordinary investor whom the BOI allows
to dictate what we shall do with our heritage.
WHEREFORE, the petition is hereby granted. The decision of the respondent Board of
Investments approving the amendment of the certificate of registration of the Luzon
Petrochemical Corporation on May 23, 1989 under its Resolution No. 193, Series of 1989,
(Annex F to the Petition) is SET ASIDE as NULL and VOID. The original certificate of
registration of BPC' (now LPC) of February 24, 1988 with Bataan as the plant site and
naphtha as the feedstock is, therefore, ordered maintained.
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SECOND DIVISION

ENRIQUE T. GARCIA,
Petitioner,

- versus -

J.G. SUMMIT PETROCHEMICAL CORPORATION,*
Respondent.

G.R. No. 127925

Present:

QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

Promulgated:

February 23, 2007
x --------------------------------------------------------------------------------------- x

DECISION
CARPIO MORALES, J.:

Petitioner Enrique T. Garcia comes to this Court a third time on a matter involving the
establishment of a petrochemical plant in the country.

On the first occasion,[1] in G.R. No. 88637, Garcia v. Board of Investments, he was sustained
by this Court that the amended application for registration of the Bataan Petrochemical
Corporation (BPC) must be published so that those opposing it might be given an opportunity
to be heard, and that access to the amended application and its supporting papers be allowed
by the Board of Investments (BOI or the Board), subject to limitations, in line with the
constitutionally guaranteed right to information on matters of national concern.

In the subsequent case, G.R. No. 92024, similarly entitled Garcia v. Board of Investments,[2]
this Court affirmed that the BOI‘s approval of the amended certificate of registration of the
Luzon Petrochemical Corporation (LPC, formerly the BPC) should be nullified, by virtue of
which the original certificate of registration with Bataan as the plant site, and with naphtha as
the feedstock, was ordered maintained.

Petitioner now asks this Court to declare whether Presidential Decree (P.D.) Nos. 949[3] and
1803,[4] the laws creating a petrochemical complex in Limay, Bataan, prohibit the
establishment of a petrochemical facility outside of it.

Respondent J.G. Summit Petrochemical Corporation was registered by the BOI as a new
domestic producer of polyethylene and polypropylene resins, for which it was issued on May
24, 1994 BOI Certificate of Registration No. DP-94-001. As a pre-registration condition, it

was required to submit to the BOI the exact location of its plant within ninety (90) days from
the date of the approval of its application.

By letter of May 11, 1994, respondent informed the BOI that its plant would be located
in barangay Alangilanan, Manjuyod, Negros Oriental. On January 29, 1996, however, it
advised the Board in writing that its plant site would be located in barangay Simlong,
Batangas City, instead of Negros Oriental.

On February 4, 1996, the BOI caused the publication of respondent‘s amended
application for registration in a newspaper of general publication to enable interested persons
to file their sworn objections within one (1) week from said publication. In due time, petitioner
and concerned residents of barangay Simlong, Batangas submitted separate letters of
opposition.

Petitioner objected to the Batangas plant site, citing as basis the 1990 decision of this Court in
G.R. No. 92024,[5] which annulled the Board‘s approval of the change of plant site from
Bataan to Batangas, and of feedstock from naphtha only to naphtha and/or liquefied
petroleum gas (LPG). He argued that by the said decision, this Court declared the Bataan
petrochemical zone as the only possible site for petrochemical plants as provided for under
P.D. Nos. 949 and 1803.

As agreed upon during the pre-hearing conference on respondent‘s amended
application for registration conducted on March 14, 1996, the parties, except for the residents
of barangay Simlong, submitted their respective position papers, replies and rejoinders, after
which the matter was submitted for resolution.

On May 24, 1996, the BOI dismissed petitioner‘s opposition, reconfirmed respondent‘s
registration, and approved the amendment of the latter‘s certificate, with Batangas as the
plant site. It ruled, among other things, that this Court‘s Resolution of October 24, 1989 in the
first Garcia[6] case clarified that the establishment of a petrochemical plant in Batangas does
not violate P.D. Nos. 949 and 1803; that in evaluating herein respondent‘s choice of Batangas
as plant site, the Board considered other important factors such as project viability and costs
as well as the government‘s effort towards industrialization and development in the various
regions; and that locating a petrochemical project in Batangas would be to the national
interest as shown by a 1995 report of the Stanford Research Institute (SRI), which was
commissioned by the BOI to undertake a study of the petrochemical industry in the country.

With regard to the BOI‘s purported choice of Bataan as a petrochemical plant site, the Board
held that the preference of said site which was previously expressed by former BOI vicechairperson and managing head Tomas I. Alcantara about 10 years ago should not be
considered as its present stand especially in light of new developments and conditions.

For failure to file a timely report of its intended change of plant site, which delay was
considered a violation of the Rules and Regulations to Implement Executive Order No. 226[7]
or the Omnibus Investments Code, the BOI fined respondent.

Without moving for a reconsideration of the May 24, 1996 BOI decision, petitioner filed
a petition for review before the Court of Appeals (CA or the appellate court), assailing the
Board‘s alleged reliance on the report of the SRI that ―the country can actually accommodate
at least four (4) naphtha cracker plants‖ while failing to mention the report‘s qualification that
the second naphtha plant would be viable only in the year 2005. And he decried the failure to
make known to the parties the SRI report before or during the hearings, he adding that during
the 15-day reglementary period for the filing of a motion for reconsideration, he had tried to
secure a copy of the report but to no avail.

In its Comment[8] to the petition, respondent challenged petitioner‘s standing to file the case,
absent any constitutional question therein. At any rate, it contended that the decision in the
second Garcia[9] case did not rule that petrochemical plants must be established in Bataan
exclusively.

On its part, the BOI debunked petitioner‘s claim that he was not aware of the SRI report,
having himself actively participated in one of the meetings convened under the auspices of
the ad hoc committee on petrochemicals in which the report was discussed.[10] It likewise
stated that petitioner could have easily obtained an abstract of the pertinent portions of the
SRI report before the lapse of the time to file a motion for reconsideration of its decision had
he or his counsel been minded to secure the same from the BOI Records Division, the Legal
Department, or the Basic Industries Department.

By Decision of January 21, 1997, the CA dismissed the petition for lack of merit, thereby
affirming the BOI decision.

In affirming the BOI decision, the appellate court held it was ―replete with details on why
respondent should be allowed to build its naphtha cracker facility in Batangas City.‖[11]

As regards petitioner‘s contention that no petrochemical plant should be allowed outside of
the Bataan petrochemical complex, the appellate court noted that even this Court, acting on
petitioner‘s motion for reconsideration in G.R. No. 88637, ―then ruled against the exclusivity of
Limay, Bataan, as the site of the only petrochemical plant in the country.‖[12]

A copy of the SRI Report having already been sent and received by petitioner on July 5, 1996,
the CA no longer passed upon his claim that he was not furnished any such copy.

Hence, this Petition.

As a preliminary matter, this Court notes that the instant Petition is brought not only as an
appeal of the January 21, 1997 CA Decision, but also as a certiorari petition against the May
24, 1996 Decision of the BOI which, under the Rules, must be filed not later than sixty (60)
days from notice (on May 29, 1996[13]) of the Board‘s judgment[14] or until July 29, 1996.
Having been filed out of time on February 27, 1997, the certiorari petition against the BOI
must be dismissed.

Respecting petitioner‘s opposition to its amended application for the establishment of its
petrochemical plant in Batangas, respondent maintains that petitioner does not stand to suffer
any injury from the approval of the application, hence, he is not a real party in interest;[15]
and neither does petitioner have standing to question its amended application because he is
not challenging the same on the ground that it violates the Constitution.[16]

Petitioner submits, on the other hand, that he has a legal interest in determining the legality of
locating respondent‘s plant site in Batangas in light of P.D. Nos. 949 and 1803. He adds that
this Court has recognized his standing in the two previous Garcia cases, which are similar in
nature to the present petition. Alternatively, he claims that respondent is itself raising a
constitutional issue, i.e., that it would be deprived of its right to use its property in Batangas
should it be compelled to locate its plant in Bataan.

Petitioner‘s legal interest to oppose the amended application for registration of the LPC was

recognized in G.R. No. 88637 amidst the circumstances surrounding that case. Thus this
Court declared:

There is no merit in the public respondents‘ [referring to the BOI and Department of Trade
and Industry] contention that the petitioner has ‗no legal interest‘ in the matter of the transfer
of the BPC petrochemical plant from the province of Bataan to the province of Batangas. The
provision in the Investments Code requiring publication of the investor‘s application for
registration in the BOI is implicit recognition that the proposed investment or new industry is a
matter of public concern on which the public has a right to be heard. And, when the BOI
approved BPC‘s application to establish its petrochemical plant in Limay, Bataan, the
inhabitants of that province, particularly the affected community in Limay, and the petitioner
herein as the duly elected represent[tative] of the Second District of Bataan acquired an
interest in the project which they have a right to protect. Their interest in the establishment of
the petrochemical plant in their midst is actual, real, and vital because it will affect not only
their economic life but even the air they will breathe.[17] (Emphasis supplied)

It can not be gainsaid that the provision in the Omnibus Investment Code of 1987 requiring
publication of the investor‘s application for registration remains to be a source of petitioner‘s
legal interest to oppose herein respondent‘s amended application.

In G.R. No. 88637, this Court ruled that an amended application was ―in effect a new
application‖ which must be published ―so that whoever may have any objection to the transfer
may be heard.‖[18]

Article 7, subparagraph 3 of the Omnibus Investments Code, as amended, provides that
among the powers and duties of the BOI is to ―[p]rocess and approve applications for
registration with the Board, imposing such terms and conditions as it may deem necessary to
promote the objectives of this Code, including . . . payment of application, registration,
publication and other necessary fees . . .‖ Consonant with this provision, Section 4 of Rule III
of the Rules Implementing the Code provides:

SECTION 4. Publication of Application. — Upon the official acceptance of the application,
notice thereof shall be published once in a newspaper of general circulation or in any manner
that the Board may require, at applicant's expense, in a format indicating the name of the

applicant, the area of investment, the capacity applied for and the plant site, if any.

At the time respondent‘s amended application was filed, petitioner, as representative of
Bataan, had as much interest as in the previous cases to ensure the viability of the
petrochemical complex in Bataan. Certainly, the successful operation of the Bataan
petrochemical complex would mean tremendous economic gains and employment
opportunities for the province. Conversely, its non-viability and failure would spell economic
hardships for the people there. For this reason, petitioner‘s pleadings have invariably stressed
that any petrochemical plant outside of Bataan would make the Philippine National Oil
Corporation (PNOC) project less viable, because the
market could not absorb the output of more than one petrochemical complex.

That the petrochemical industry has been declared a preferred area of investment and
conferred a pioneer status in the country‘s 1994-1996 Investments Priorities Plan (IPP)[19]
underscores its importance to the economy. As this Court aptly observed in G.R. No. 92024,
―[a] petrochemical industry is not an ordinary investment opportunity‖ and is ―essential to the
national interest . . .‖[20]

This Court has brushed aside technicalities of procedure and relaxed the rules of standing in
cases of transcendental significance, especially where the issue or issues involved have
important ramifications to the nation.[21] Thus, granting that petitioner has no right to oppose
respondent‘s amended application, the transcendental importance of the case and the
significance of the issues raised herein are considered sufficient to clothe him with legal
interest.

The alleged constitutional question raised by respondent, meanwhile, need not detain this
Court any longer considering that it is not central to the resolution of the main issue. Courts
will not touch the issue of constitutionality unless it is truly unavoidable to settle the
controversy.[22]

And on to the crux of the present controversy, which is the legality of the establishment
of respondent‘s petrochemical plant in barangay Simlong, Batangas City.

In the main, petitioner posits that the CA erred in sustaining the BOI Decision, because the
laws creating the 576-hectare Bataan petrochemical zone in Limay, Bataan prohibit the
establishment of respondent‘s petrochemical plant outside of the zone.[23] He specifically
assails the CA decision for affirming the BOI‘s rulings that (1) the country can accommodate
four naphtha cracker facilities by 1996, (2) the Board‘s refusal to grant him access to the SRI
report did not violate the constitutional guarantee of due process and access to information on
matters of public concern, and (3) the national interest would be served by allowing
respondent to locate its plant in Batangas, instead of Bataan.[24]

The question of whether P.D. Nos. 949 and 1803 had intended the petrochemical
complex in Limay, Bataan to be the exclusive site of any and all petrochemical plants has
previously been placed squarely before this Court in G.R. No. 88637. The question was
distinctly set forth by petitioner in his certiorari petition[25] when he argued that the BOI and
the Department of Trade and Industry gravely abused their discretion in approving the BPC‘s
amended certificate of registration transferring the plant site from Bataan to Batangas and
changing the feedstock from naphtha only to naphtha and/or LPG. And he reiterated his
argument in his motion for partial reconsideration of this Court‘s September 7, 1989 Decision
amid the alleged omission to rule on it in the first instance. By Resolution of October 24, 1989,
this Court declared:

The petitioner‘s motion for partial reconsideration asks this Court to rule on his contention that
the transfer of the Bataan (now Luzon) Petrochemical plant site from Bataan to Batangas
violates PD Nos. 949 and 1803 reserving a 576-hectare site in Limay, Bataan as a
―petrochemical industrial zone‖ and placing it under the administration, management and
ownership of the Philippine National Oil Company (PNOC). The Court treated that issue sub
silencio because these presidential decrees do not provide that the Limay site shall be the
only petrochemical zone in the country, nor prohibit the establishment of a petrochemical
plant elsewhere in the country. Therefore, the establishment of a petrochemical plant in
Batangas does not violate P.D. 949 and P.D. 1803. (Emphasis and underscoring supplied)

The above quoted pronouncement notwithstanding, petitioner contends that the Resolution
contained merely an ―observation‖ on the import of P.D. Nos. 949 and 1803. The observation,
he adds, could not apply to the present petition, because it was not the ground cited for the
denial of his motion for partial reconsideration, but his alleged loss of interest in the case.
Neither, he continues, was it part of this Court‘s ruling in the subsequent case as it was
mentioned therein only to complete the recital of antecedent events.[26]

Petitioner‘s contentions are bereft of merit.

It behooves this Court to clarify that its Resolution of October 24, 1989 issued a ruling, not
just an observation, on the issue of whether the change of plant site from Bataan to Batangas
violated P.D. Nos. 949 and 1803. Since the issue had been pressed as essential to the
resolution of petitioner‘s petition for certiorari and motion for reconsideration in G.R. No.
88637, this Court ruled ―that the establishment of a petrochemical plant in Batangas does not
violate P.D. 949 and P.D. 1803.‖[27]

By the immediately cited ruling, this Court laid down a jurisprudential precedent that must be
applied in the present case in accordance with the doctrine of stare decisis et non quieta
movere. Follow past precedents and do not disturb what has been settled. A point of law,
once established by the court, will generally be followed by the same court and by all courts of
lower rank in subsequent cases in which the same legal issue is raised. Stare decisis
proceeds from the first principle of justice that, absent powerful countervailing considerations,
like cases ought to be decided alike.[28]

Petitioner himself appeared to have conceded to this Court‘s ruling as he did not assail it in
his motion for reconsideration of the October 24, 1989 Resolution. As narrated by this Court
in G.R. No. 92024, his motion for reconsideration of its October 24, 1989 Resolution merely
asked that ―we resolve the basic issue of whether or not the foreign investor has the right of
final choice of plant site; that the non-attendance of the petitioner at the hearing was because
the decision was not yet final and executory; and that the petitioner had not therefore waived
the right to a hearing before the BOI.‖[29]

Parenthetically, the October 24, 1989 Resolution of this Court in G.R. No. 88637 also held
that ―[t]here is no merit in the petitioner‘s other contention that [this Court] erred in ruling that
the BOI‘s decision on the matter of transferring the LPC petrochemical complex to Batangas
is appealable only to the President whose decision shall be final, as provided in Article 36 of
the 1987 Omnibus Investments Code . . .‖[30] (Emphasis and underscoring supplied). By
refusing to attend the hearing at the BOI which he passionately sought, petitioner was
deemed to have lost interest and to have waived the fruit of this Court‘s judgment. Thereafter,
the motion for reconsideration was disposed of, as follows:

WHEREFORE, the petitioner‘s motion for partial reconsideration of the decision in this case is
denied for lack of merit. (Underscoring supplied)

It was, therefore, not solely on the ground of his alleged loss of interest that petitioner‘s
motion for reconsideration was denied, but also the lack of merit in his contentions regarding
the exclusivity of the Bataan petrochemical site and the proper forum for appealing the BOI
Decision.

As to the argument that the ―observation‖ made in the Resolution of October 24, 1989 was
neither adopted nor reaffirmed in G.R. No. 92024 but merely mentioned therein to complete
the narration of facts, the same is too specious to consider. There was no occasion or reason
in G.R. No. 92024 for this Court to reiterate its ruling against the exclusivity of the Bataan
petrochemical complex because the question then presented for resolution was whether ―the
BOI committed a grave abuse of discretion in approving the transfer of the petrochemical
plant from Bataan to Batangas and authorizing the change of feedstock from naphtha to
naphtha and/or LPG for the main reason that the final say is in the investor all other
circumstances to the contrary notwithstanding.‖[31] (Emphasis supplied)

Petitioner‘s submission that G.R. No. 92024 has ruled that the petrochemical industry must be
located in the Bataan petrochemical zone is bereft of merit too. What this Court declared in
that case was that the plant site of the LPC should be in Bataan, given the peculiar factual
circumstances and issues related to the proposed transfer, among them the original choice of
Bataan as plant site; the intended partnership of LPC, a foreign investor, with the PNOC; the
fact that the Bataan Refining Corporation can supply naphtha for the petrochemical plant; and
the importance of an
independent national economy. Clearly then, the decision was
applicable only to LPC, more so, since this Court had declared earlier in G.R. No. 88637 that
P.D. Nos. 949 and 1830 do not prohibit the establishment of a petrochemical plant outside of
the Bataan petrochemical industrial zone.

If only to lay the matter finally to rest, this Court now reiterates that P.D. Nos. 949 and 1830
do not prohibit the establishment of a petrochemical plant outside of Limay, Bataan. A
meticulous perusal of the two decrees reveals that nowhere in their provisions is it stated or
can it be inferred that all petrochemical plants must be established in Limay, Bataan or, stated
differently, that Bataan is intended to be the only site for all petrochemical plants.

By Proclamation No. 361 dated March 6, 1968,[32] then President Marcos reserved 418

hectares of the public domain located at Lamao, Limay, Bataan for industrial estate purposes
under the administration of the National Power Corporation. The proclamation was amended
on November 29, 1969 by Proclamation No. 630,[33] by virtue of which the area reserved was
enlarged and its administration transferred to the National Development Company.

P.D. No. 949 dated June 17, 1976 later transferred the ―administration, management, and
ownership‖ of the area to the PNOC[34] for it to manage, operate and develop the area as a
petrochemical industrial zone.[35] In line therewith, Section 2 provided:

SECTION 2. The Philippine National Oil Company shall manage, operate and develop the
said parcel of land as a petrochemical industrial zone and will establish, develop and operate
or cause the establishment, development and operation thereat of petrochemical and related
industries by itself or its subsidiaries or by any other entity or person it may deem competent
alone or in joint venture; Provided, that, where any petrochemical industry is operated by
private entities or persons, whether or not in joint venture with the Philippine National Oil
Company or its subsidiaries, the Philippine National Oil Company may lease, sell and/or
convey such portions of the petrochemical industrial zone to such private entities or persons.
(Emphasis supplied)

What is clear then is that the law reserved an area for a petrochemical industrial zone in
Bataan and that PNOC was to operate, manage and develop it. There is, however, nothing
further in the law to indicate that the choice of Limay, Bataan as a petrochemical zone was
exclusive. On the contrary, the use of the word ―may‖ in the proviso of Section 2 runs counter
to the exclusivity of the Bataan site because it makes it merely directory, rather than
mandatory, for the PNOC to lease, sell and/or convey portions of the petrochemical industrial
zone to private entities or persons locating their plants therein.

Even the following preambular clauses of P.D. No. 949 do not express any intent to make the
Bataan site exclusive:

WHEREAS, the establishment, development and operation of a petrochemical complex and
related industries in a petrochemical site is vital to economic and industrial development;

WHEREAS, the efficient implementation of this objective in that site at Lamao, Limay, Bataan,
more specifically described in Proclamation No, 361 dated March 6, 1968 as amended by
Proclamation No. 630 dated November 29, 1969 can best be achieved thru an entity
equipped and competent to pursue in earnest such an undertaking.

P.D. No. 1803 dated January 16, 1981 was briefer and more straightforward. It sought simply
to amend P.D. No. 949 by enlarging by 188 hectares the area reserved for the petrochemical
industrial zone under the administration, management and ownership of the PNOC, bringing it
to a total of 576 hectares. Thus its preambular and resolutory clauses provided:

WHEREAS, Presidential Decree No. 949, amending Proclamation No. 361 dated March 6,
1968 and Proclamation No. 630 dated November 29, 1969, declared that site at Lamao,
Limay, Bataan described in the aforementioned Proclamations as petrochemical industrial
zone.

WHEREAS, it is necessary to include as part of the petrochemical industrial zone several
parcels of land located in the Municipality of Mariveles, Province of Bataan.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do hereby amend Presidential Decree
No. 949 dated June 17, 1976, by enlarging the area reserved for the Petrochemical Industrial
Zone under the administration, management and ownership of the Philippine National Oil
Company, by including, as part thereof, certain parcels of land of the private domain situated
in the Municipality of Mariveles, Province of Bataan, subject to private rights if any there be…

Ubi lex non distinguit nec nos distinguere debemus. When the law makes no distinction, the
Court should not distinguish.[36]

The questions regarding the capacity of the country to accommodate four naphtha
cracker facilities by 1996 and the alleged violation of petitioner‘s right to due process and
access to information on matters of national concern, having arisen from the SRI report, shall
be discussed jointly.

Contrary to petitioner‘s contention, the BOI Decision in fact mentioned that based on the SRI
studies, the number of new and additional petrochemical facilities, including the four naphtha
cracker plants, could be sustained by the country from the years 1996 to 2012.[37] This
matter must have been taken into consideration by the Board when it ruled that locating a
petrochemical project in Batangas was warranted and in the national interest.

The BOI has been specifically tasked by law to ―[p]repare or contract for the preparation of
feasibility and other pre-investment studies for pioneer areas . . . ,‖[38] to ―[p]repare or
contract for the preparation of industry and sectoral development programs and gather and
compile statistical, technical, marketing, financial and other data, including recommendations
on investment policies,‖[39] to ―[c]ollate, analyze and compile pertinent information and
studies concerning areas that have been or may be declared preferred areas of
investments‖[40] and to prepare and submit the IPP.[41] As has been this Court‘s consistent
holding, administrative and quasi-judicial agencies, which have acquired special knowledge
and expertise on matters falling under their jurisdiction, are in a better position to pass
judgment thereon.[42] As a general rule, their findings of fact are generally accorded great
respect by the courts.[43]

As for petitioner‘s claim that he was denied due process and access to information of national
concern because of the Board‘s omission to make the SRI report known before and during
the hearings of respondent‘s amended application, it is bereft of merit. Petitioner has not
denied having actively participated in the August 23, 1995 meeting of the ad hoc committee
on the petrochemical industry in which the report was discussed. But even granting that the
report was not mentioned during the hearings, petitioner could have easily moved for a
reconsideration of the BOI Decision, reserving his right to refute the SRI findings upon actual
receipt of a copy thereof.

Finally, it is not for this Court to rule on whether the national interest would be served by
allowing respondent to locate its plant in Batangas, instead of Bataan. As the first Garcia
case held, ―[t]his Court is not concerned with the economic, social, and political aspects of this
case for it does not possess the necessary technology and scientific expertise to determine
whether the transfer of the proposed BPC petrochemical
complex from Bataan to
Batangas and the change of fuel from naphtha only to ‗naphtha and/or LPG will be best for
the project and for our country.
This Court is not about to delve into the economics and
politics of this
case . . . .‖[44]

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.

NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION
vs.
ONGPIN G.R. No. 67752 April 10, 1989
This is a petition for prohibition with preliminary injunction praying that: (a) Presidential
Decree No. 1789 otherwise known as the "Omnibus Investment Code," dated January 16,
1981, the 1981 Investment Priorities Plan and Executive Order No. 676 which approved the
said plan dated April 10, 1981; and (b) Presidential Decree No. 1892 which allowed an
increase in foreign equity participation in preferred areas of investment effective for one (1)
year dated December 4, 1983, all be declared unconstitutional. As gathered from the records,
the factual background of this case, is as follows: On January 16,1981 or one day before
President Ferdinand E. Marcos signed Proclamation No. 2045 announcing the lifting of
Martial Law in the Philippines, he, pursuant to his legislative or decree-making power under
both the 1935 Constitution and the transitory provisions of the 1973 Constitution, issued P.D.
No. 1789 otherwise known as the Omnibus Investment Code, revising, modifying and
amending R.A. No. 5186 and R.A. No. 6135, both enacted by the Congress of the Philippines.
Shortly thereafter or on December 4,1983, President Marcos issued P.D. No. 1892,
suspending for a period of one year from date of its effectivity the nationality requirement of at
least 60% Philippine Nationals for non- pioneer industries entitled to registration under
aforementioned P.D. No. 1789. Petitioner NEPA, suing as citizens of the Philippines,
taxpayers, businessmen, officers and members of said association, who allegedly stand to be
adversely affected by the enforcement or continued enforcement of the aforementioned
presidential decrees filed the instant petition in this Court, seeking to enjoin public
respondents from enforcing said decrees as well as "The Investment Priorities Plan" actually
a memorandum of the Minister of Trade to the President, consisting of preferred areas of
economic activity that are entitled to investment incentives under P.D. No. 1789 and
Executive Order No. 676, entitled "Approving the 1981 Investment Priorities Plan," on the
ground that they are unconstitutional; and after hearing declare them as such.
ISSUE:
Whether NEPA had been adversely affected by the application of the provisions of the
Investment Priorities Plan and Executive Order No. 676.
HELD:
Petitioners question the constitutionality of Sections 1 and 3 of P.D. 1892 in relation to P.D.
1789, the 1981 Investment Priorities Plan and Executive Order No. 676 quoted earlier, as
being violative of the due process and equal protection clauses of the

1973 Constitution as well as Sections 8 and 9 of Article XIV thereof, and seek to prohibit
respondent Minister of Finance from implementing said laws. Yet, not even one of the
petitioners has been adversely affected by the application of those provisions. No actual
conflict has been alleged wherein the petitioner could validly and possibly say that the
increase in foreign equity participation in non-pioneer areas of investment from the period of
December 2,1983 to December 4,1984 had any direct bearing on them, such as considerable
rise in unemployment, real increase in foreign investment, unfair competition with Philippine
nationals, exploitation of the country's natural resources by foreign investors under the
decrees. Petitioners advance an abstract, hypothetical issue which is in effect a petition for an
advisory opinion from this Court. As a general rule, the constitutionality of a statute will be
passed upon only if, and to the extent that it is directly and necessarily involved in justiciable
controversy and is essential to the protection of the rights of the parties concerned. The 1981
Investment Priorities Plan which is an over-all plan prepared by the Board of Investments is
simply an analysis, synthesis and projection of data collected by the Board from public and
private sources which are measurements and indicators in areas of production, production
capacities and possibilities in areas of economic activities from which investors might select
(Article 28, P.D. 1789), while Executive Order No. 676 if but an approval of said plan. They
are by no means violative of the Constitution nor were they successfully shown to be inimical
to public interest. But more than that, it wig be noted that P.D. 1892
ipso jure
ceased its effectivity on December 4, 1984, while P.D. 1789 has been expressly repealed by
Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987

FIRST DIVISION
[G.R. No. 117680. February 9, 1996]

FIRST LEPANTO CERAMICS, INC., petitioner, vs. HON. COURT OF APPEALS and
MARIWASA MANUFACTURING, INC., respondents.
DECISION
VITUG, J.:

Sought to be reversed by the Court is the 13th August 1993 decision of the Court of Appeals
nullifying the approval,[1] dated 10 December 1992, by the Board of Investments (―BOI‖) of
the application of First Lepanto Ceramics, Inc., for an amendment of its Certificate of

Registration No. EP 89-452 that would change the registered product from ―glazed floor tiles‖
to ―ceramic tiles.‖

Petitioner First Lepanto Ceramics, Inc., was registered as a ―non-pioneer enterprise‖ with
public respondent BOI having been so issued, on 16 October 1989, a Certificate of
Registration (No. EP 89-452) under Executive Order No. 226, also known as the Omnibus
Investments Code of 1987, in the manufacture of glazed floor tiles. Among the specific terms
and conditions imposed on First Lepanto‘s registration were that:

―1. The enterprise shall export at least 50% of its production; (and)

―2. The enterprise shall produce only glazed floor tile.‖[2]

First Lepanto was, by virtue of its registration, granted non-fiscal and fiscal incentives by the
BOI, including an exemption from taxes on raw materials and tax and duty exemption on its
imported capital equipment.

Private respondent Mariwasa Manufacturing, Inc., a competitor of First Lepanto, is also
registered with the BOI as a non-pioneer producer of ceramic tiles (Certificate of Registration
No. 89-427).

In a letter, dated 10 August 1991, addressed to the BOI, First Lepanto requested for an
amendment of its registered product to ―ceramic tiles‖ in order to likewise enable it to
manufacture ceramic wall tiles; however, before the BOI could act on First Lepanto‘s request
for amendment, Mariwasa and Fil-Hispano Ceramics, Inc., already had on file their separate
complaints with the BOI against First Lepanto for violating the terms and conditions of its
registration by the use of its tax and duty-free equipment in the production of ceramic wall
tiles.

On 30 April 1992, the BOI rendered a decision finding First Lepanto guilty and imposing on
the latter a fine of P797,950.40 without prejudice, however, 1) to an imposition of additional
penalty should First Lepanto continue to commit the same violation; and 2) to the Board‘s
authority to consider/evaluate First Lepanto‘s request for an amendment of its certificate of
registration, including, among other things, a change in its registered product from ―glazed

floor tiles‖ to ―ceramic tiles.‖[3]

After paying the imposed fine, First Lepanto, on 20 June 1992, formally filed its application
with the BOI (docketed BOI Case No. 92-005)[4] to amend its registered product from ―glazed
floor tiles‖ to ―ceramic tiles.‖

On 06 August 1992, another verified complaint was filed by Mariwasa with the BOI (docketed
BOI Case No. 92-004) which asseverated that, despite BOI‘s finding that First Lepanto had
violated the terms and conditions of its registration, the latter still continued with its
unauthorized production and sale of ceramic wall tiles. Respondent BOI dismissed the
complaint for lack of merit.[5] Its motion for reconsideration having been denied, Mariwasa
appealed the case to the Office of the President.[6]

In the meantime, First Lepanto caused the publication, on 24 September 1992, in the Manila
Bulletin of a notice on the official filing with the BOI of the aforementioned application for
amendment of Certificate of Registration No. EP 89-452 (BOI Case No. 92-005).[7] Mariwasa
opposed the application. On 10 December 1992, respondent BOI handed down its decision
approving First Lepanto‘s application.

Mariwasa went to the Court of Appeals via a petition for review, with an application for a writ
of preliminary injunction and/or temporary restraining order, assailing the decision of the BOI.
On 17 February 1992, the appellate court issued a temporary restraining order enjoining the
BOI and First Lepanto from enforcing or executing the assailed ruling. First Lepanto moved
for the dismissal of the petition and to lift the restraining order. The motion was denied. On 13
August 1993, the Court of Appeals rendered its now disputed decision[8] annulling the 10th
December 1992 decision of the BOI. First Lepanto moved for a reconsideration but it was
denied.

Hence, the instant recourse.

The Court grants the petition.

The challenged decision of the appellate court, annulling the BOI decision in Case No. 92-005,
is anchored mainly on the fact that the BOI did not hold in abeyance its action on First

Lepanto‘s application for amendment of its certificate of registration until after BOI Case No.
92-004 would have been finally resolved. It has described the grant by the BOI of First
Lepanto‘s application to be ―premature‖ and ―an exercise in futility‖ in the sense that ―(i)f a
decision is rendered in aforesaid BOI case (92-004) finding merit in the complaint, it is not
farfetch that cancellation of (First Lepanto‘s) certificate of registration may be ordered.‖ It is
unacceptable, in our view, for the appellate court to base its peremptory judgment on a
conjecture. i.e., the possibility that BOI Case No. 92-004 could be decided against petitioner,
and to second-guess the BOI on what it would do in the event of such an adverse ruling. The
appellate court itself has recognized that the final results of the controversy in BOI Case No.
92-004 cannot necessarily foreclose or circumscribe the action that may be had on First
Lepanto‘s application for amendment. Under Chapter II, Art. 7(8) of E.O. No. 226,[9] the BOI
need not cancel the certificate of a registrant found to have infringed the terms and conditions
of its registration.

Rather significant is the fact that to hold the BOI from taking action on First Lepanto‘s
application would be to defeat the declaration of investment policies expressed in the law; viz.:

―ART. 2. Declaration of Investment Policies. - To accelerate the sound development of the
national economy in consonance with the principles and objectives of economic nationalism
and in pursuance of a planned economically feasible and practical dispersal of industries and
the promotion of small and medium scale industries, under condition which will encourage
competition and discourage monopolies.‖[10]

The BOI is the agency tasked with evaluating the feasibility of an investment project and to
decide which investment might be compatible with its development plans. The exercise of
administrative discretion is a policy decision and a matter that can best be discharged by the
government agency concerned and not by the courts.[11] BOI has allowed the amendment of
First Lepanto‘s product line because that agency ―believes that allowing First Lepanto to
manufacture wall tiles as well will give it the needed technical and market flexibility, a key
factor, to enable the firm to eventually penetrate the world market and meet its export
requirements.‖[12] In Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary,[13] we
have already said and now still reiterate that -‖x x x while the administration grapples with the
complex and multifarious problems caused by unbridled exploitation of these resources, the
judiciary will stand clear. A long line of cases establish the basic rule that the courts will not
interfere in matters which are addressed to the sound discretion of government agencies
entrusted with the regulation of activities coming under the special technical knowledge and
training of such agencies.‖

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals is
hereby REVERSED and SET ASIDE and the decision of the Board of Investments is
REINSTATED. No costs.

SECOND DIVISION

PHILLIPS SEAFOOD (PHILIPPINES)

G.R. No. 175787

CORPORATION,
Petitioner,

Present:

QUISUMBING, J.,
Chairperson,
- versus -

CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.

THE BOARD OF INVESTMENTS,
Respondent.

Promulgated:

February 4, 2009

x ------------------------------------------------------------------------------------x

DECISION

TINGA, J.:

This is a petition for review on certiorari[1] under Rule 45 of the 1997 Rules of Civil
Procedure, assailing two related resolutions of the Court of Appeals in CA-G.R. SP No. 89327.
The Resolution[2] dated 24 May 2006 dismissed petitioner‘s petition for review under Rule 43
and its omnibus motion seeking to amend the petition and to suspend the period for filing a
reply. The Resolution[3] dated 24 November 2006 denied petitioner‘s motion for
reconsideration of the earlier resolution.

The following factual antecedents are matters of record.

Petitioner Phillips Seafood (Philippines) Corporation is a domestic corporation engaged
in the export of processed crabmeat and other seafood products. Petitioner was incorporated
on 20 October 1992 and registered under its previous corporate name of Phillips Seafood
Masbate, Inc.

On 08 January 1993, petitioner registered with respondent Bureau of Investments (BOI) as an
existing and expansion producer of soft shell crabs and other seafood products, on a nonpioneer status under Certificate of Registration No. EP 93-219.[4] Petitioner‘s plant was
situated in Piña, Masbate, while its administrative office was then located in Cebu City before
it was subsequently relocated to Calong-Calong, Airport Subdivision, Bacolod City.

Petitioner was granted an Income Tax Holiday (ITH) for six (6) years beginning July 1993 to
July 1999,[5] for locating in a less-developed area in accordance with Article 40[6] of
Executive Order (E.O.) No. 226, otherwise known as The Omnibus Investments Code of 1987.

Petitioner used to supply semi-processed raw materials to Phillips Seafood (Phils.), Inc.
(PSPI), an affiliate corporation also engaged in the export of seafood products, before the

latter‘s closure due to financial difficulties. On 21 July 1997, petitioner acquired the right to
use the canning facility of PSPI in Bacolod City during the temporary suspension of PSPI‘s
operations. Unable to recover from its financial reverses, PSPI eventually stopped operations.

On 14 December 1998, petitioner acquired the title to the plant, facilities, equipment and other
assets belonging to PSPI, including its picking facilities in Cebu City.[7] In October 1999,
petitioner relocated its plant and office in Bacolod City to Barangay Banica, Roxas City.
Petitioner informed respondent BOI of said transfer.[8] Petitioner also filed with respondent
BOI an application for registration of its new plant having an expanded capacity of 155,205
kilograms a year.

In a letter dated 18 November 1999, respondent BOI informed petitioner that the latter‘s ITH
under Certificate of Registration No. EP

93-219 would be extended until 12 August 2000, pursuant to Article 39 (a) (1) (ii)[9] of
Executive Order No. 226.[10]

On 06 January 2000, respondent BOI granted petitioner‘s application for registration of its
new plant in Roxas City under Certificate of Registration No. VI EP 2000-002. Petitioner‘s
registration was categorized as a new producer on a non-pioneer status with an ITH for four
years beginning January 2000.[11]

On 22 June 2000, respondent BOI approved the registration of petitioner as a ―New Producer
of Processed Fish‖ under another Certificate of Registration No. XI EP 2000-74 with an ITH
for four years beginning April 2000.[12]

On 04 May 2000, petitioner filed with respondent BOI an application for an ITH for taxable
year 1999 under Certificate of Registration No. EP 93-219. It filed another application for an
ITH for the year 2000 under Certificate of Registration No. VI EP 2000-002 covering its
crabmeat products and under Certificate of Registration No. XI EP 20000-74 covering its
processed fish products.

Petitioner changed its corporate name from PS-Masbate to its current name of Phillips
Seafood (Philippines) Corporation, which was approved by respondent BOI on 16 February
2001.[13]

In a letter dated 25 September 2003, respondent BOI informed petitioner that the ITH
previously granted would be applicable only to the period from 13 August 1999 to 21 October
1999 or before petitioner‘s transfer to a ―not less-developed area.‖[14] Petitioner wrote
respondent BOI requesting for a reconsideration of its decision.[15]

On 03 May 2004, petitioner received by fax BOI‘s letter denying its motion for
reconsideration.[16] Petitioner elevated the matter to the Office of the President, which
dismissed petitioner‘s appeal on the ground of lack of jurisdiction in a Decision dated 22
September 2004.[17] The Office of the President likewise denied petitioner‘s motion for
reconsideration in an Order dated 14 March 2005.[18] Petitioner received a copy of the order
on 01 April 2005.

On 05 April 2005, petitioner filed a petition for review before the Court of Appeals,
questioning the dismissal of its appeal before the Office of the President. The petition argued
that the executive power of control over the acts of officials under the Office of the President
is superior to the appellate jurisdiction of the Court of Appeals over decisions of quasi-judicial
agencies under the 1997 Rules of Civil Procedure.[19]

After respondent BOI filed its comment on the petition, petitioner filed an omnibus motion
asking for leave to file an amended petition to counter the issues raised in the comment for
the first time and to suspend the period for filing a reply.[20]

On 24 May 2006, the Court of Appeals rendered the first assailed resolution denying
petitioner‘s omnibus motion and dismissing its petition for review. The appellate court denied
petitioner‘s omnibus motion on the ground that the same was filed with intent to delay the
case. Simultaneously, the appellate court dismissed the petition for review for having been
filed out of time as petitioner opted to appeal to the Office of the President instead of filing a
Rule 43 petition to the Court of Appeals within the reglementary period. On 24 November
2006, the Court of Appeals issued the second assailed resolution denying petitioner‘s motion

for reconsideration.

Hence, the instant petition anchored on the following arguments: (1) petitioner‘s
omnibus motion asking for the amendment of its petition for review was filed to avoid the
multiplicity of suits; (2) the executive power of control over the acts of department secretaries
must not be rendered illusory by rules of procedure; and (3) petitioner is entitled to the ITH.

In the main, petitioner argues that the review by the Office of the President of the
decisions of respondent BOI must be allowed; otherwise, the President‘s constitutional power
to review the decisions of department secretaries will be rendered illusory if said decisions
may be reviewed only by the Court of Appeals.

The right to appeal is not a constitutional, natural or inherent right – it is a statutory
privilege and of statutory origin and, therefore, available only if granted or provided by statute.
It may be exercised only in the manner prescribed by, and in accordance with, the provisions
of the law.[21] Thus, in determining the appellate procedure governing administrative
agencies exercising quasi-judicial or regulatory functions such as respondent BOI, a perusal
of the legislative enactments creating them is imperative.

The BOI was created by virtue of E.O. No. 226 at the time when then President Corazon
Aquino was exercising legislative powers under the Freedom Constitution Executive Order
(E.O.) No. 226, otherwise known as the Omnibus Investments Acts of 1987, laid down the
powers and duties of respondent both as a policy-making body and a regulatory agency
tasked with facilitating the growth of investment in the country. Article 7, E.O. No. 226 directs
respondent to act as a collegial body when exercising its duties and powers. In addition to its
administrative or policy-making and regulatory functions, the BOI is also empowered to
promulgate rules and regulations to implement the provisions of E.O. No. 226.[22]

As a policy-making body, the BOI is charged with the duties, among others, of preparing an
annual investment priorities plan that gives incentives to specific activities,[23] of
recommending to the Bureau of Immigration the entry of foreign nationals for employment
purposes,[24] and of inspecting registered enterprises for compliance purposes.[25]

Among the regulatory functions of the BOI are the processing of applications for
registration,[26] the cancellation of registration or suspension of the enjoyment of certain
incentives under E.O. No. 226,[27] and the resolution of controversies arising from the
implementation of E.O. No. 226.[28] There is no doubt that the resolution of petitioner‘s claim
that it is entitled to the ITH in the instant case calls for the exercise of the BOI‘s regulatory
functions.

E.O. No. 226 also provides for various remedies from the action or decision of the BOI,
depending on the nature of the controversy. These remedies, which are interspersed among
the provisions of E.O. No. 226, are as follows:

ART. 7. Powers and Duties of the Board. — The Board shall be responsible for the regulation
and promotion of investments in the Philippines. x x x The presence of four (4) governors
shall constitute a quorum and the affirmative vote of four (4) governors in a meeting validly
held shall be necessary to exercise its powers and perform its duties, which shall be as
follows:

(4) After due hearing, decide controversies concerning the implementation of the relevant
books of this Code that may arise between registered enterprises or investors therein and
government agencies, within thirty (30) days after the controversy has been submitted for
decision: Provided, That the investor or the registered enterprise may appeal the decision of
the Board within thirty (30) days from receipt thereof to the President;

x x x

ART. 36. Appeal from Board‘s Decision. — Any order or decision of the Board shall be final
and executory after thirty (30) days from its promulgation. Within the said period of thirty (30)
days, said order or decision may be appealed to the Office of the President. Where an appeal
has been filed, said order or decision shall be final and executory ninety (90) days after the
perfection of the appeal, unless reversed.

x x x

ART. 50. Cause for Cancellation of Certificate of Authority or Payment of Fine. — A violation
of any of the requirements set forth in Article 49 of the terms and conditions which the Board
may impose shall be sufficient cause to cancel the certificate of authority issued pursuant to
this Book and/or subject firms to the payment of fines in accordance with the rules and
regulations issued by the Board: x x x Provided, further, That where the issuance of said
license has been irregular or contrary to law, any person adversely affected thereby may file
an action with the Regional Trial Court where said alien or foreign business organization
resides or has its principal office to cancel said license. In such cases, no injunction shall
issue without notice and hearing; and appeals and other proceedings for review shall be filed
directly with the Supreme Court.

x x x

ART. 82. Judicial Relief. — All orders or decisions of the Board in cases involving the
provisions of this Code shall immediately be executory. No appeal from the order or decision
of the Board by the party adversely affected shall stay such order or decision: Provided, That
all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of
the order or decision. [Emphasis supplied]

E.O. No. 226 apparently allows two avenues of appeal from an action or decision of the BOI,
depending on the nature of the controversy. One mode is to elevate an appeal to the Office of
the President when the action or decision pertains to either of these two instances: first, in the
decisions of the BOI over controversies concerning the implementation of the relevant
provisions of E.O No. 226 that may arise between registered enterprises or investors and
government agencies under Article 7;[29] and second, in an action of the BOI over
applications for registration under the investment priorities plan under Article 36.[30]

Another mode of review is to elevate the matter directly to judicial tribunals. For instance,
under Article 50, E.O. No. 226, a party adversely affected by the issuance of a license to do
business in favor of an alien or a foreign firm may file with the proper Regional Trial Court an
action to cancel said license. Then, there is Article 82, E.O. No. 226, which, in its broad
phraseology, authorizes the direct appeal to the Supreme Court from any order or decision of
respondent BOI ―involving the provisions of E.O. No. 226.‖

E.O. No. 226 contains no provision specifically governing the remedy of a party whose
application for an ITH has been denied by the BOI in the same manner that Articles 7 and 36
thereof allow recourse to the Office of the President in certain instances. Nevertheless, Article
82 of E.O. No. 22 is the catch-all provision allowing the appeal to the courts from all other
decisions of respondent BOI involving the other provisions of E.O. No. 226. The intendment of
the law is undoubtedly to afford immediate judicial relief from the decision of respondent BOI,
save in cases mentioned under Articles 7 and 36.

In relation to Article 82, E.O. No. 226, Section 1 of Rule 43 of the 1997 Rules of Civil
Procedure expressly includes respondent BOI as one of the quasi-judicial agencies whose
judgments or final orders are appealable to the Court of Appeals via a verified petition for
review. Appeals from judgments and final orders of quasi-judicial agencies are now required
to be brought to the Court of Appeals on a verified petition for review, under the requirements
and conditions in Rule 43 which was precisely formulated and adopted to provide for a
uniform rule of appellate procedure for quasi-judicial agencies.[31]

Thus, petitioner should have immediately elevated to the Court of Appeals the denial by
respondent BOI of its application for an ITH. From the letter dated 09 October 2003 of
respondent BOI, which informed petitioner that its ITH would be extended only from 13
August 1999 to 21 October 1999, petitioner appealed to the Office of the President, a
recourse that is not sanctioned by either the Rules of Civil Procedure or by the Omnibus
Investments Code of 1987.

Petitioner cannot invoke Article 36 of E.O. No. 226 to justify its appeal to the Office of the
President. Article 36, along with Article 7, which allows recourse to the Office of the President,
applies to specific instances, namely, controversies between a registered enterprise and a
government agency and decisions concerning the registration of an enterprise, respectively.
Expresio unius est exclusio alterius. This enumeration is exclusive so that other controversies
outside of its

purview, including petitioner‘s entitlement to an ITH, can invoke only the appellate judicial

relief provided under Article 82. In the instant case, the denial of petitioner‘s application for an
ITH is not within the cases where the law expressly provides for appellate recourse to the
Office of the President. That being the case, petitioner should have elevated its appeal to the
Court of Appeals under Rule 43.

Petitioner further contends that from the decision of respondent BOI, appeal to the Office of
the President should be allowed; otherwise, the constitutional power of the President to
review acts of department secretaries will be rendered illusory by mere rules of procedure.

The executive power of control over the acts of department secretaries is laid down in Section
17, Article VII[32] of the 1987 Constitution. The power of control has been defined as the
―power of an officer to alter or modify or nullify or set aside what a subordinate officer had
done in the performance of his duties and to substitute the judgment of the former for that of
the latter.‖

Such ―executive control‖ is not absolute. The definition of the structure of the executive
branch of government, and the corresponding degrees of administrative control and
supervision is not the exclusive preserve of the executive. It may be effectively limited by the
Constitution, by law, or by judicial decisions.[33] All the more in the matter of appellate
procedure as in the instant case. Appeals are remedial in nature; hence, constitutionally
subject to this Court‘s rule-making power. The Rules of Procedure was issued by the
Court pursuant to
Section 5, Article VIII[34] of the Constitution, which expressly empowers the Supreme Court
to promulgate rules concerning the procedure in all courts.

Parenthetically, Administrative Order (A.O.) No. 18[35] expressly recognizes an exception to
the remedy of appeal to the Office of the President from the decisions of executive
departments and agencies. Under Section 1[36] thereof, a decision or order issued by a
department or agency need not be appealed to the Office of the President when there is a
special law that provides for a different mode of appeal. In the instant case, the enabling law
of respondent BOI, E.O. No. 226, explicitly allows for immediate judicial relief from the
decision of respondent BOI involving petitioner‘s application for an ITH. E.O. No. 226 is a law

of special nature and should prevail over A.O. No. 18.

WHEREFORE, the instant petition for review on certiorari is DENIED and the resolutions of
the Court of Appeals dated 24 May 2006 and 24 November 2006 in CA-G.R. SP No. 89327
are AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 110571

March 10, 1994

FIRST LEPANTO CERAMICS, INC., petitioner,
vs.
THE COURT OF APPEALS and MARIWASA MANUFACTURING, INC., respondents.

Castillo, Laman, Tan & Pantaleon for petitioner.

De Borja, Medialdea, Ata, Bello, Guevarra & Serapio for private respondent.

NOCON, J.:

Brought to fore in this petition for certiorari and prohibition with application for preliminary

injunction is the novel question of where and in what manner appeals from decisions of the
Board of Investments (BOI) should be filed. A thorough scrutiny of the conflicting provisions of
Batas Pambansa Bilang 129, otherwise known as the "Judiciary Reorganization Act of 1980,"
Executive Order No. 226, also known as the Omnibus Investments Code of 1987 and
Supreme Court Circular No. 1-91 is, thus, called for.

Briefly, this question of law arose when BOI, in its decision dated December 10, 1992 in BOI
Case No. 92-005 granted petitioner First Lepanto Ceramics, Inc.'s application to amend its
BOI certificate of registration by changing the scope of its registered product from "glazed
floor tiles" to "ceramic tiles." Eventually, oppositor Mariwasa filed a motion for reconsideration
of the said BOI decision while oppositor Fil-Hispano Ceramics, Inc. did not move to
reconsider the same nor appeal therefrom. Soon rebuffed in its bid for reconsideration,
Mariwasa filed a petition for review with respondent Court of Appeals pursuant to Circular 191.

Acting on the petition, respondent court required the BOI and petitioner to comment on
Mariwasa's petition and to show cause why no injunction should issue. On February 17, 1993,
respondent court temporarily restrained the BOI from implementing its decision. This
temporary restraining order lapsed by its own terms on March 9, 1993, twenty (20) days after
its issuance, without respondent court issuing any preliminary injunction.

On February 24, 1993, petitioner filed a "Motion to Dismiss Petition and to Lift Restraining
Order" on the ground that respondent court has no appellate jurisdiction over BOI Case No.
92-005, the same being exclusively vested with the Supreme Court pursuant to Article 82 of
the Omnibus Investments Code of 1987.

On May 25, 1993, respondent court denied petitioner's motion to dismiss, the dispositive
portion of which reads as follows:

WHEREFORE, private respondent's motion to dismiss the petition is hereby DENIED, for lack
of merit.

Private respondent is hereby given an inextendible period of ten (10) days from receipt hereof
within which to file its comment to the petition. 1

Upon receipt of a copy of the above resolution on June 4, 1993, petitioner decided not to file
any motion for reconsideration as the question involved is essentially legal in nature and
immediately filed a petition for certiorari and prohibition before this Court.

Petitioner posits the view that respondent court acted without or in excess of its jurisdiction in
issuing the questioned resolution of May 25, 1993, for the following reasons:

I.
Respondent court has no jurisdiction to entertain Mariwasa's appeal from the BOI's
decision in BOI Case No. 92-005, which has become final.

II.
The appellate jurisdiction conferred by statute upon this Honorable Court cannot be
amended or superseded by Circular No. 1-91. 2

Petitioner then concludes that:

III.

Mariwasa has lost it right to appeal . . . in this case. 3

Petitioner argues that the Judiciary Reorganization Act of 1980 or Batas Pambansa Bilang
129 and Circular 1-91, "Prescribing the Rules Governing Appeals to the Court of Appeals
from a Final Order or Decision of the Court of Tax Appeals and Quasi-Judicial Agencies"
cannot be the basis of Mariwasa's appeal to respondent court because the procedure for
appeal laid down therein runs contrary to Article 82 of E.O. 226, which provides that appeals
from decisions or orders of the BOI shall be filed directly with this Court, to wit:

Judicial relief. — All orders or decisions of the Board
(of Investments) in cases involving the provisions of this Code shall immediately be executory.
No appeal from the order or decision of the Board by the party adversely affected shall stay
such an order or decision; Provided, that all appeals shall be filed directly with the Supreme
Court within thirty (30) days from receipt of the order or decision.

On the other hand, Mariwasa maintains that whatever "obvious inconsistency" or
"irreconcilable repugnancy" there may have been between B.P. 129 and Article 82 of E.O.
226 on the question of venue for appeal has already been resolved by Circular 1-91 of the
Supreme Court, which was promulgated on February 27, 1991 or four (4) years after E.O. 226
was enacted.

Sections 1, 2 and 3 of Circular 1-91, is herein quoted below:

1.
Scope. — These rules shall apply to appeals from final orders or decisions of the Court
of Tax Appeals. They shall also apply to appeals from final orders or decisions of any quasijudicial agency from which an appeal is now allowed by statute to the Court of Appeals or the
Supreme Court. Among these agencies are the Securities and Exchange Commission, Land
Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy
Regulatory Board, National Telecommunications Commission, Secretary of Agrarian Reform
and Special Agrarian Courts under RA 6657, Government Service Insurance System,
Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission
and Philippine Atomic Energy Commission.

2.
Cases not covered. — These rules shall not apply to decisions and interlocutory orders
of the National Labor Relations Commission or the Secretary of Labor and Employment under
the Labor Code of the Philippines, the Central Board of Assessment Appeals, and other
quasi-judicial agencies from which no appeal to the courts is prescribed or allowed by statute.

3.
Who may appeal and where to appeal. — The appeal of a party affected by a final
order, decision, or judgment of the Court of Tax Appeals or of a quasi-judicial agency shall be
taken to the Court of Appeals within the period and in the manner herein provided, whether
the appeal involves questions of fact or of law or mixed questions of fact and law. From final
judgments or decisions of the Court of Appeals, the aggrieved party may appeal by certiorari
to the Supreme Court as provided in Rule 45 of the Rules of Court.

It may be called that Section 9(3) of B.P. 129 vests appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards of quasi-judicial agencies on the Court of
Appeals, to wit:

(3)
Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders,
awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within
the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of
the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The Intermediate Appellate Court shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual issues raised in
cases falling within its original and appellate jurisdiction, including the power to grant and
conduct new trials or further proceedings.

These provisions shall not apply to decisions and interlocutory orders issued under the Labor
Code of the Philippines and by the Central Board of Assessment Appeals.

Clearly evident in the aforequoted provision of B.P. 129 is the laudable objective of providing
a uniform procedure of appeal from decisions of all quasi-judicial agencies for the benefit of
the bench and the bar. Equally laudable is the twin objective of B.P. 129 of unclogging the
docket of this Court to enable it to attend to more important tasks, which in the words of Dean
Vicente G. Sinco, as quoted in our decision in Conde v. Intermediate Appellate Court 4 is
"less concerned with the decisions of cases that begin and end with the transient rights and
obligations of particular individuals but is more intertwined with the direction of national
policies, momentous economic and social problems, the delimitation of governmental
authority and its impact upon fundamental rights.

In Development Bank of the Philippines vs. Court of Appeals, 5 this Court noted that B.P. 129
did not deal only with "changes in the rules on procedures" and that not only was the Court of
Appeals reorganized, but its jurisdiction and powers were also broadened by Section 9
thereof. Explaining the changes, this Court said:

. . . Its original jurisdiction to issue writs of mandamus, prohibition, certiorari and habeas
corpus, which theretofore could be exercised only in aid of its appellate jurisdiction, was
expanded by (1) extending it so as to include the writ of quo warranto, and also (2)
empowering it to issue all said extraordinary writs "whether or not in aid of its appellate
jurisdiction." Its appellate jurisdiction was also extended to cover not only final judgments of

Regional Trial Courts, but also "all final judgments, decisions, resolutions, orders or awards
of . . . quasi-judicial agencies, instrumentalities, boards or commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
provisions of this Act, and of sub-paragraph (1) of the third paragraph and subparagraph (4)
of the fourth paragraph of Section 17 of the Judiciary Act of 1948," it being noteworthy in this
connection that the text of the law is broad and comprehensive, and the explicitly stated
exceptions have no reference whatever to the Court of Tax Appeals. Indeed, the intention to
expand the original and appellate jurisdiction of the Court of Appeals over quasi-judicial
agencies, instrumentalities, boards, or commissions, is further stressed by the last paragraph
of Section 9 which excludes from its provisions, only the "decisions and interlocutory orders
issued under the Labor Code of the Philippines and by the Central Board of Assessment
Appeals." 6

However, it cannot be denied that the lawmaking system of the country is far from perfect.
During the transitional period after the country emerged from the Marcos regime, the
lawmaking power was lodged on the Executive Department. The obvious lack of deliberation
in the drafting of our laws could perhaps explain the deviation of some of our laws from the
goal of uniform procedure which B.P. 129 sought to promote.

In exempli gratia, Executive Order No. 226 or the Omnibus Investments Code of 1987
provides that all appeals shall be filed directly with the Supreme Court within thirty (30) days
from receipt of the order or decision.

Noteworthy is the fact that presently, the Supreme Court entertains ordinary appeals only
from decisions of the Regional Trial Courts in criminal cases where the penalty imposed is
reclusion perpetua or higher. Judgments of regional trial courts may be appealed to the
Supreme Court only by petition for review on certiorari within fifteen (15) days from notice of
judgment in accordance with Rule 45 of the Rules of Court in relation to Section 17 of the
Judiciary Act of 1948, as amended, this being the clear intendment of the provision of the
Interim Rules that "(a)ppeals to the Supreme Court shall be taken by petition for certiorari
which shall be governed by Rule 45 of the Rules of Court." Thus, the right of appeal provided
in E.O. 226 within thirty (30) days from receipt of the order or decision is clearly not in
consonance with the present procedure before this Court. Only decisions, orders or rulings of
a Constitutional Commission (Civil Service Commission, Commission on Elections or
Commission on Audit), may be brought to the Supreme Court on original petitions for
certiorari under Rule 65 by the aggrieved party within thirty (30) days form receipt of a copy
thereof. 7

Under this contextual backdrop, this Court, pursuant to its Constitutional power under Section
5(5), Article VIII of the 1987 Constitution to promulgate rules concerning pleading, practice
and procedure in all courts, and by way of implementation of B.P. 129, issued Circular 1-91
prescribing the rules governing appeals to the Court of Appeals from final orders or decisions
of the Court of Tax Appeals and quasi-judicial agencies to eliminate unnecessary
contradictions and confusing rules of procedure.

Contrary to petitioner's contention, although a circular is not strictly a statute or law, it has,
however, the force and effect of law according to settled jurisprudence. 8 In Inciong v. de
Guia, 9 a circular of this Court was treated as law. In adopting the recommendation of the
Investigating Judge to impose a sanction on a judge who violated Circular No. 7 of this Court
dated
September 23, 1974, as amended by Circular No. 3 dated April 24, 1975 and Circular No. 20
dated October 4, 1979, requiring raffling of cases, this Court quoted the ratiocination of the
Investigating Judge, brushing aside the contention of respondent judge that assigning cases
instead of raffling is a common practice and holding that respondent could not go against the
circular of this Court until it is repealed or otherwise modified, as "(L)aws are repealed only by
subsequent ones, and their violation or non-observance shall not be excused by disuse, or
customs or practice to the contrary." 10

The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular 1-91 because
the former grants a substantive right which, under the Constitution cannot be modified,
diminished or increased by this Court in the exercise of its rule-making powers is not entirely
defensible as it seems. Respondent correctly argued that Article 82 of E.O. 226 grants the
right of appeal from decisions or final orders of the BOI and in granting such right, it also
provided where and in what manner such appeal can be brought. These latter portions simply
deal with procedural aspects which this Court has the power to regulate by virtue of its
constitutional rule-making powers.

The case of Bustos v. Lucero 11 distinguished between rights created by a substantive law
and those arising from procedural law:

Substantive law creates substantive rights . . . . Substantive rights is a term which includes
those rights which one enjoys under the legal system prior to the disturbance of normal
relations (60 C.J., 980). Substantive law is that part of the law which creates, defines and
regulates rights, or which regulates rights and duties which give rise to a cause of action, as
oppossed to adjective or remedial law, which prescribes the method of enforcing rights or

obtains a redress for their invasion. 12

Indeed, the question of where and in what manner appeals from decisions of the BOI should
be brought pertains only to procedure or the method of enforcing the substantive right to
appeal granted by E.O. 226. In other words, the right to appeal from decisions or final orders
of the BOI under E.O. 226 remains and continues to be respected. Circular 1-91 simply
transferred the venue of appeals from decisions of this agency to respondent Court of
Appeals and provided a different period of appeal, i.e., fifteen (15) days from notice. It did not
make an incursion into the substantive right to appeal.

The fact that BOI is not expressly included in the list of quasi-judicial agencies found in the
third sentence of Section 1 of Circular 1-91 does not mean that said circular does not apply to
appeals from final orders or decision of the BOI. The second sentence of Section 1 thereof
expressly states that "(T)hey shall also apply to appeals from final orders or decisions of any
quasi-judicial agency from which an appeal is now allowed by statute to the Court of Appeals
or the Supreme Court." E.O. 266 is one such statute. Besides, the enumeration is preceded
by the words "(A)mong these agencies are . . . ," strongly implying that there are other quasijudicial agencies which are covered by the Circular but which have not been expressly listed
therein. More importantly, BOI does not fall within the purview of the exclusions listed in
Section 2 of the circular. Only the following final decisions and interlocutory orders are
expressly excluded from the circular, namely, those of: (1) the National Labor Relations
Commission; (2) the Secretary of Labor and Employment; (3) the Central Board of
Assessment Appeals and (4) other quasi-judicial agencies from which no appeal to the courts
is prescribed or allowed by statute. Since in DBP v. CA 13 we upheld the appellate jurisdiction
of the Court of Appeals over the Court of Tax Appeals despite the fact that the same is not
among the agencies reorganized by B.P. 129, on the ground that B.P. 129 is broad and
comprehensive, there is no reason why BOI should be excluded from
Circular 1-91, which is but implementary of said law.

Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the
manner and method of enforcing the right to appeal from decisions of the BOI are concerned.
Appeals from decisions of the BOI, which by statute was previously allowed to be filed directly
with the Supreme Court, should now be brought to the Court of Appeals.

WHEREFORE, in view of the foregoing reasons, the instant petition for certiorari and
prohibition with application for temporary restraining order and preliminary injunction is hereby
DISMISSED for lack of merit. The Temporary Restraining Order issued on July 19, 1993 is

hereby LIFTED.

SO ORDERED

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 110571 October 7, 1994
FIRST LEPANTO CERAMICS, INC., petitioner,
vs.
THE COURT OF APPEALS and MARIWASA MANUFACTURING, INC., respondents.
Castillo, Laman. Tan & Pantaleon for petitioner.
De Borja, Medi, Aldea, Ata, Bello, Guevarra & Serapio for private respondent.
RESOLUTION
MENDOZA, J.:
This is a motion for the reconsideration of the decision of the Second Division 1 sustaining the
jurisdiction of the Court of Appeals over appeals from the decisions of the Board of
Investments and, consequently, dismissing the petition forcertiorari and prohibition filed by
petitioner First Lepanto Ceramics, Inc. Because of the importance of the question raised, the
Court en banc agreed to accept the matter for consideration.
Petitioner's contention is that Circular No. 1-91 cannot be deemed to have superseded art. 82
of
the
Omnibus
Investments
Code
of
1987
(E.O.
No. 226) because the Code, which President Aquino promulgated in the exercise of
legislative authority, is in the nature of a substantive act of Congress defining the jurisdiction
of courts pursuant to Art. VIII, § 2 of the Constitution, while the circular is a rule of procedure
which this Court promulgated pursuant to its rule-making power under Art. VIII § 5(5).
Petitioner questions the holding of the Second Division that although the right to appeal
granted by art. 82 of the Code is a substantive right which cannot be modified by a rule of
procedure, nonetheless, questions concerning where and in what manner the appeal can be
brought are only matters of procedure which this Court has the power to regulate.
Even assuming that there is merit in petitioner's contention, however, the result reached in the
main decision is nonetheless, correct from another point of view.
Judicial review of the decisions and final orders of the BOI was originally provided for in the

Omnibus
Investments
Art. 78 of which stated:

Code

of

1981

(P.D.

No.

1789), 2

Art. 78. Judicial Relief . — All orders or decisions of the Board in cases involving
the provisions of this Code shall immediately be executory. No appeal from the
order or decision of the Board by the party adversely affected shall stay such
order or decision: Provided, That all appeals shall be filed directly with the
Supreme Court within thirty (30) days from receipt of the order or decision.
Art. 78 was thereafter amended by B.P. Blg. 129, 3 by granting in § 9 thereof exclusive
appellate jurisdiction to the then Intermediate Appellate Court (now the Court of Appeals) over
the decisions and final orders of quasi-judicial agencies. When the Omnibus Investments
Code of 1987 (E.O. No. 226) was promulgated on July 17, 1987, the right to appeal from the
decisions and final orders of the BOI to the Supreme Court was again granted. Thus, the
present Code provides:
Art. 82. Judicial Relief . — All orders or decisions of the Board in cases involving the
provisions of this Code shall immediately be executory. No appeal from the order or decision
of the Board by the party adversely affected shall stay such order or decision: Provided, That
all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of
the order or decision.
By then, however, the present Constitution had taken effect. 4 The Constitution now provides
in Art. VI, § 30 that "No law shall be passed increasing the appellate jurisdiction of the
Supreme Court as provided in this Constitution without its advice and concurrence." This
provision is intended to give the Supreme Court a measure of control over cases placed
under its appellate jurisdiction. For the indiscriminate enactment of legislation enlarging its
appellate jurisdiction can unnecessarily burden the Court and thereby undermine its essential
function of expounding the law in its most profound national aspects.
Now, art. 82 of the 1987 Omnibus Investments Code, by providing for direct appeals to the
Supreme Court from the decisions and final orders of the BOI, increases the appellate
jurisdiction of this Court. Since it was enacted without the advice and concurrence of this
Court, this provision never became effective, with the result that it can never be deemed to
have
amended
BP
Blg. 129, § 9. Consequently, the authority of the Court of Appeals to decide cases appealed
to it from the BOI must be deemed to have been conferred by B.P. Blg. 129, § 9, to be
exercised by it in accordance with the procedure prescribed by Circular No. 1-91.
Indeed, there is no reason why decisions and final orders of the BOI must be directly
appealed to this Court. As already noted in the main decision in this case, the purpose of § 9
of B.P. Blg. 129 is to provide uniform appeals to the Court of Appeals from the decisions and
final orders of all quasi-judicial agencies, with the exception only of those issued under the
Labor Code and those rendered by the Central Board of Assessment Appeals. It is, therefore,
regrettable that in the adoption of the Omnibus Investments Code of 1987 the advice and
concurrence of the Supreme Court, as required by the Constitution, had not been obtained in

providing for the appeal of the decisions and final orders of the BOI directly to the Supreme
Court.
WHEREFORE, the motion for reconsideration is DENIED.