ABAKADA vs Purisima, En Banc G.R. No. 168056 September 1, 2005

7/23/2019 ABAKADA vs Purisima, En Banc G.R. No. 168056 September 1, 2005

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Republic of the PhilippinesSUPREME COURT

EN BANC

G.R. No. 168056 September 1, 2005

ABAKADA GURO PART !"ST #$ormer%& AAS'AS( O$$"CERS SAMSON S. A!CANTARA )*+ED "NCENT S. A!BANO,Petitioners,vs.T-E -ONORAB!E EECUT"E SECRETAR EDUARDO ERM"TA/ -ONORAB!E SECRETARO$ T-E DEPARTMENT O$ $"NANCE CESAR PUR"S"MA/ )*+ -ONORAB!E COMM"SS"ONERO$ "NTERNA! REENUE GU"!!ERMO PARANO, 'R.,Respondent.

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

G.R. No. 16!"#

A$%&'&N( $. P&)EN*E', +R., '%&A P. E+ERC&*(-E*RAA, +&NGG( E. E*RAA, PAN/&'(). 'AC(N, A'/RE( . '&), +A)B A.. )AR&GA', AN ERG&( R. ()E0A &&&,Petitioners,vs.EECUT"E SECRETAR EDUARDO R. ERM"TA, CESAR . PUR"S"MA, SECRETAR O$$"NANCE, GU"!!ERMO !. PARANO, 'R., COMM"SS"ONER O$ T-E BUREAU O$ "NTERNA!REENUE,Respondent.

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

G.R. No. 1661

A(C&A*&(N (/ P&'&P&NA 2E'' EA'ER, &NC. represented b3 its President, R(AR&(AN*(N&(4 PE*R(N EA'ER5 A(C&A*&(N represented b3 its President, R%*2 E. BARB&B&4A(C&A*&(N (/ CA'*E EA'ER5 (/ *2E P2&'&PP&NE represented b3 its President,)ERCE&*A A. GARC&A4 R(AR&( AN*(N&( doin7 business under the n89e 8nd st3le of :ANBN(R*2 2E'' ER;&CE *A*&(N:4 '(%RE )AR*&NE< doin7 business under the n89e 8ndst3le of :2E'' GA*E = N. ()&NG(:4 BE*2


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8nd st3le of :;&('AG(-P** ER;&CE CEN*ER:4 )(*(R&*5 2EAR* C(RP(RA*&(Nrepresented b3 its ;ice-President for (per8tions, +(E'&*( /. /'(RE'&


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)ountin7 bud7et deficit, revenue 7ener8tion, in8deu8te fisc8l 8lloc8tion for educ8tion, incre8sede9olu9ents for he8lth orFers, 8nd ider cover87e for full v8lue-8dded t8x benefits these 8re there8sons h3 Republic Act No. H@@# R.A. No. H@@#D18s en8cted. Re8sons, the isdo9 of hich,the Court even ith its extensive constitution8l poer of revie, c8nnot probe. *he petitioners inthese c8ses, hoever, uestion not onl3 the isdo9 of the l8, but 8lso perceived constitution8linfir9ities in its p8ss87e.

Ever3 l8 eno3s in its f8vor the presu9ption of constitution8lit3. *heir 8r7u9ents notithst8ndin7,petitioners f8iled to ustif3 their c8ll for the inv8lidit3 of the l8. 2ence, R.A. No. H@@# is notunconstitution8l.

!EG"S!AT"E -"STOR

R.A. No. H@@# is 8 consolid8tion of three le7isl8tive bills n89el3, 2ouse Bill Nos. @III 8nd @#"I,8nd en8te Bill No. 1HI".

House Bill No. 3555!8s introduced on first re8din7 on +8nu8r3 #, !""I. *he 2ouse Co99ittee on>83s 8nd )e8ns 8pproved the bill, in substitution of 2ouse Bill No. 16, hich Represent8tive

Rep.D Eric . in7son introduced on Au7ust , !"". *he President certified the bill on +8nu8r3 #,!""I for i99edi8te en8ct9ent. (n +8nu8r3 !#, !""I, the 2ouse of Represent8tives 8pproved thebill on second 8nd third re8din7.

House Bill No. 3705@on the other h8nd, substituted 2ouse Bill No. @1"I introduced b3 Rep.8l8cnib /. B8terin8, 8nd 2ouse Bill No. @@1 introduced b3 Rep. +8cinto ;. P8r8s. &ts :9other bill:is 2ouse Bill No. @III. *he 2ouse Co99ittee on >83s 8nd )e8ns 8pproved the bill on /ebru8r3 !,!""I. *he President 8lso certified it 8s ur7ent on /ebru8r3 , !""I. *he 2ouse of Represent8tives8pproved the bill on second 8nd third re8din7 on /ebru8r3 !, !""I.

)e8nhile, the en8te Co99ittee on >83s 8nd )e8ns 8pproved Senate Bill No. 1950on )8rch#, !""I, :in substitution of en8te Bill Nos. 1@@#, 1@ 8nd 1#@, t8Fin7 into consider8tion 2ouse

Bill Nos. @III 8nd @#"I.: en8tor R8lph G. Recto sponsored en8te Bill No. 1@@#, hile en8te BillNos. 1@ 8nd 1#@ ere both sponsored b3 ens. /r8nFlin ). rilon, +u8n ). /l8vier 8nd /r8ncisN. P8n7ilin8n. *he President certified the bill on )8rch 11, !""I, 8nd 8s 8pproved b3 the en8teon second 8nd third re8din7 on April 1@, !""I.

(n the s89e d8te, April 1@, !""I, the en8te 87reed to the reuest of the 2ouse of Represent8tivesfor 8 co99ittee conference on the dis87reein7 provisions of the proposed bills.

Before lon7, the Conference Co99ittee on the is87reein7 Provisions of 2ouse Bill No. @III,2ouse Bill No. @#"I, 8nd en8te Bill No. 1HI", :8fter h8vin7 9et 8nd discussed in full free 8ndconference,: reco99ended the 8pprov8l of its report, hich the en8te did on )83 1", !""I, 8ndith the 2ouse of Represent8tives 87reein7 thereto the next d83, )83 11, !""I.

(n )83 !@, !""I, the enrolled cop3 of the consolid8ted 2ouse 8nd en8te version 8s tr8ns9ittedto the President, ho si7ned the s89e into l8 on )83 !, !""I. *hus, c89e R.A. No. H@@#.

+ul3 1, !""I is the effectivit3 d8te of R.A. No. H@@#.I>hen s8id d8te c89e, the Court issued 8te9por8r3 restr8inin7 order, effective i99edi8tel3 8nd continuin7 until further orders, enoinin7respondents fro9 enforcin7 8nd i9ple9entin7 the l8.
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(r8l 8r7u9ents ere held on +ul3 1, !""I. i7nific8ntl3, durin7 the he8rin7, the Court spe8Fin7throu7h )r. +ustice Arte9io ;. P8n78nib8n, voiced the r8tion8le for its issu8nce of the te9por8r3restr8inin7 order on +ul3 1, !""I, to itJ

+. PANGAN&BAN J . . . But before & 7o into the det8ils of 3our present8tion, let 9e ust tell 3ou 8 littleb8cF7round. ou Fno hen the l8 tooF effect on +ul3 1, !""I, the Court issued 8 *R( 8t 8bout I

o5clocF in the 8fternoon. But before th8t, there 8s 8 lot of co9pl8ints 8ired on television 8nd onr8dio. o9e people in 8 78s st8tion ere co9pl8inin7 th8t the 78s prices ent up b3 1"K. o9epeople ere co9pl8inin7 th8t their electric bill ill 7o up b3 1"K. (ther ti9es people ridin7 indo9estic 8ir c8rrier ere co9pl8inin7 th8t the prices th8t the35ll h8ve to p83 ould h8ve to 7o up b31"K. >hile 8ll th8t 8s bein7 8ired, per 3our present8tion 8nd per our on underst8ndin7 of the l8,th8t5s not true. &t5s not true th8t the e-v8t l8 necess8ril3 incre8sed prices b3 1"K unifor9l3 isn5t itL

A**. BAN&$%E J No, our 2onor.

+. PANGAN&BAN J &t is notL

A**. BAN&$%E J &t5s not, bec8use, our 2onor, there is 8n Executive (rder th8t 7r8nted the

Petroleu9 co9p8nies so9e subsid3 . . . interrupted

+. PANGAN&BAN J *h8t5s correct . . .

A**. BAN&$%E J . . . 8nd therefore th8t 8s 9e8nt to te9per the i9p8ct . . . interrupted

+. PANGAN&BAN J . . . 9iti78tin7 9e8sures . . .

A**. BAN&$%E J es, our 2onor.

+. PANGAN&BAN J As 8 98tter of f8ct 8 p8rt of the 9iti78tin7 9e8sures ould be the eli9in8tion ofthe Excise *8x 8nd the i9port duties. *h8t is h3, it is not correct to s83 th8t the ;A* 8s to petroleu9

de8lers incre8sed prices b3 1"K.


+. PANGAN&BAN J And therefore, there is no ustific8tion for incre8sin7 the ret8il price b3 1"K tocover the E-;8t t8x. &f 3ou consider the excise t8x 8nd the i9port duties, the Net *8x ould prob8bl3be in the nei7hborhood of #KL >e 8re not 7oin7 into ex8ct fi7ures & 89 ust tr3in7 to deliver 8 pointth8t different industries, different products, different services 8re hit differentl3. o it5s not correct tos83 th8t 8ll prices 9ust 7o up b3 1"K.

A**. BAN&$%E J ou5re ri7ht, our 2onor.

+. PANGAN&BAN J No. /or inst8nce, o9estic Airline co9p8nies, )r. Counsel, 8re 8t presenti9posed 8 8les *8x of @K. >hen this E-;8t l8 tooF effect the 8les *8x 8s 8lso re9oved 8s 89iti78tin7 9e8sure. o, therefore, there is no ustific8tion to incre8se the f8res b3 1"K 8t best #K,correctL

A**. BAN&$%E J & 7uess so, our 2onor, 3es.

+. PANGAN&BAN J *here 8re other products th8t the people ere co9pl8inin7 on th8t first d83, erebein7 incre8sed 8rbitr8ril3 b3 1"K. And th8t5s one re8son 89on7 98n3 others this Court h8d to


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issue *R( bec8use of the confusion in the i9ple9ent8tion. *h8t5s h3 e 8dded 8s 8n issue in thisc8se, even if it5s t8n7enti8ll3 t8Fen up b3 the ple8din7s of the p8rties, the confusion in thei9ple9ent8tion of the E-v8t. (ur people ere subected to the 9erc3 of th8t confusion of 8n 8crossthe bo8rd incre8se of 1"K, hich 3ou 3ourself no 8d9it 8nd & thinF even the Govern9ent ill 8d9itis incorrect. &n so9e c8ses, it should be @K onl3, in so9e c8ses it should be 6K dependin7 on these9iti78tin7 9e8sures 8nd the loc8tion 8nd situ8tion of e8ch product, of e8ch service, of e8ch

co9p8n3, isn5t itL


+. PANGAN&BAN J Alri7ht. o th8t5s one re8son h3 e h8d to issue 8 *R( pendin7 the cl8rif ic8tionof 8ll these 8nd e ish the 7overn9ent ill t8Fe ti9e to cl8rif3 8ll these b3 9e8ns of 8 9oredet8iled i9ple9entin7 rules, in c8se the l8 is upheld b3 this Court. . . .6

*he Court 8lso directed the p8rties to file their respective )e9or8nd8.

G.R. No. 168056

Before R.A. No. H@@# tooF effect, petitionersABAKADA GURO P8rt3 'ist, et al., filed 8 petition forprohibition on )83 !#, !""I. *he3 uestion the constitution8lit3 of ections , I 8nd 6 of R.A. No.H@@#, 89endin7 ections 1"6, 1"# 8nd 1", respectivel3, of the N8tion8l &ntern8l Revenue CodeN&RCD. ection i9poses 8 1"K ;A* on s8le of 7oods 8nd properties, ection I i9poses 8 1"K;A* on i9port8tion of 7oods, 8nd ection 6 i9poses 8 1"K ;A* on s8le of services 8nd use orle8se of properties. *hese uestioned provisions cont8in 8 unifor9proviso8uthoriMin7 thePresident, upon reco99end8tion of the ecret8r3 of /in8nce, to r8ise the ;A* r8te to 1!K, effective+8nu8r3 1, !""6, 8fter 8n3 of the folloin7 conditions h8ve been s8tisfied, to itJ

. . . *h8t the President, upon the reco99end8tion of the ecret8r3 of /in8nce, sh8ll, effective+8nu8r3 1, !""6, r8ise the r8te of v8lue-8dded t8x to telve percent 1!KD, 8fter 8n3 of the folloin7conditions h8s been s8tisfiedJ

iD ;8lue-8dded t8x collection 8s 8 percent87e of Gross o9estic Product GPD of the previous3e8r exceeds to 8nd four-fifth percent ! IKD4 or

iiD N8tion8l 7overn9ent deficit 8s 8 percent87e of GP of the previous 3e8r exceeds one 8nd one-h8lf percent 1 OKD.

Petitioners 8r7ue th8t the l8 is unconstitution8l, 8s it constitutes 8b8ndon9ent b3 Con7ress of itsexclusive 8uthorit3 to fix the r8te of t8xes under Article ;&, ection !!D of the 1H# PhilippineConstitution.

G.R. No. 16820;

(n +une H, !""I, en. Auilino $. Pi9entel, +r.,et al., filed 8 petition for certiorariliFeise 8ss8ilin7the constitution8lit3 of ections , I 8nd 6 of R.A. No. H@@#.

Aside fro9 uestionin7 the so-c8lled stand-by authority of the President to incre8se the ;A* r8te to1!K, on the 7round th8t it 89ounts to 8n undue dele78tion of le7isl8tive poer, petitioners 8lsocontend th8t the incre8se in the ;A* r8te to 1!K contin7ent on 8n3 of the to conditions bein7s8tisfied viol8tes the due process cl8use e9bodied in Article &&&, ection 1 of the Constitution, 8s iti9poses 8n unf8ir 8nd 8ddition8l t8x burden on the people, in th8tJ 1D the 1!K incre8se is
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89bi7uous bec8use it does not st8te if the r8te ould be returned to the ori7in8l 1"K if theconditions 8re no lon7er s8tisfied4 !D the r8te is unf8ir 8nd unre8son8ble, 8s the people 8re unsureof the 8pplic8ble ;A* r8te fro9 3e8r to 3e8r4 8nd @D the incre8se in the ;A* r8te, hich is supposedto be 8n incentive to the President to r8ise the ;A* collection to 8t le8st !Iof the GP of theprevious 3e8r, should onl3 be b8sed on fisc8l 8deu8c3.

Petitioners further cl8i9 th8t the inclusion of 8 stand-by authority7r8nted to the President b3 theBic89er8l Conference Co99ittee is 8 viol8tion of the :no-89end9ent rule: upon l8st re8din7 of 8bill l8id don in Article ;&, ection !6!D of the Constitution.

G.R. No. 168


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G.R. No. 168ith re78rd to the issue of undue dele78tion ofle7isl8tive poer to the President, respondents contend th8t the l8 is co9plete 8nd le8ves nodiscretion to the President but to incre8se the r8te to 1!K once 8n3 of the to conditions providedtherein 8rise.

Respondents 8lso refute petitioners5 8r7u9ent th8t the incre8se to 1!K, 8s ell 8s the #"Kli9it8tion on the credit8ble input t8x, the 6"-9onth 89ortiM8tion on the purch8se or i9port8tion ofc8pit8l 7oods exceedin7 P1,""","""."", 8nd the IK fin8l ithholdin7 t8x b3 7overn9ent 87encies,is 8rbitr8r3, oppressive, 8nd confisc8tor3, 8nd th8t it viol8tes the constitution8l principle onpro7ressive t8x8tion, 89on7 others.

/in8ll3, respondents 98nifest th8t R.A. No. H@@# is the 8nchor of the 7overn9ent5s fisc8l refor987end8. A refor9 in the v8lue-8dded s3ste9 of t8x8tion is the core revenue 9e8sure th8t ill tilt theb8l8nce to8rds 8 sust8in8ble 98croecono9ic environ9ent necess8r3 for econo9ic 7roth.
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"SSUES

*he Court defined the issues, 8s follosJ

PROCEDURA! "SSUE

>hether R.A. No. H@@# viol8tes the folloin7 provisions of the ConstitutionJ

8. Article ;&, ection !, 8nd

b. Article ;&, ection !6!D

SUBSTANT"E "SSUES

1. >hether ections , I 8nd 6 of R.A. No. H@@#, 89endin7 ections 1"6, 1"# 8nd 1" of the N&RC,viol8te the folloin7 provisions of the ConstitutionJ

8. Article ;&, ection !1D, 8nd

b. Article ;&, ection !!D

!. >hether ection of R.A. No. H@@#, 89endin7 ections 11"AD!D 8nd 11"BD of the N&RC4 8ndection 1! of R.A. No. H@@#, 89endin7 ection 11CD of the N&RC, viol8te the folloin7 provisionsof the ConstitutionJ


b. Article &&&, ection 1

RU!"NG O$ T-E COURT

As 8 prelude, the Court dee9s it 8pt to rest8te the 7ener8l principles 8nd concepts of v8lue-8ddedt8x ;A*D, 8s the confusion 8nd inevit8bl3, liti78tion, breeds fro9 8 f8ll8cious notion of its n8ture.

*he ;A* is 8 t8x on spendin7 or consu9ption. &t is levied on the s8le, b8rter, exch8n7e or le8se of7oods or properties 8nd services.Bein7 8n indirect t8x on expenditure, the seller of 7oods orservices 983 p8ss on the 89ount of t8x p8id to the bu3er,Hith the seller 8ctin7 9erel3 8s 8 t8xcollector.1"*he burden of ;A* is intended to f8ll on the i99edi8te bu3ers 8nd ulti98tel3, the end-consu9ers.

&n contr8st, 8 direct t8x is 8 t8x for hich 8 t8xp83er is directl3 li8ble on the tr8ns8ction or business iten787es in, ithout tr8nsferrin7 the burden to so9eone else.11Ex89ples 8re individu8l 8ndcorpor8te inco9e t8xes, tr8nsfer t8xes, 8nd residence t8xes.1!

&n the Philippines, the v8lue-8dded s3ste9 of s8les t8x8tion h8s lon7 been in existence, 8lbeit in 8different 9ode. Prior to 1H#, the s3ste9 8s 8 sin7le-st87e t8x co9puted under the :cost deduction9ethod: 8nd 8s p838ble onl3 b3 the ori7in8l sellers. *he sin7le-st87e s3ste9 8s subseuentl39odified, 8nd 8 9ixture of the :cost deduction 9ethod: 8nd :t8x credit 9ethod: 8s used todeter9ine the v8lue-8dded t8x p838ble.1@%nder the :t8x credit 9ethod,: 8n entit3 c8n credit 878inst
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or subtr8ct fro9 the ;A* ch8r7ed on its s8les or outputs the ;A* p8id on its purch8ses, inputs 8ndi9ports.1

&t 8s onl3 in 1H#, hen President Cor8Mon C. Auino issued Executive (rder No. !#@, th8t the;A* s3ste9 8s r8tion8liMed b3 i9posin7 8 9ulti-st87e t8x r8te of "K or 1"K on 8ll s8les usin7 the:t8x credit 9ethod.:1I

E.(. No. !#@ 8s folloed b3 R.A. No. ##16 or the Exp8nded ;A* '8,16R.A. No. !1 or the&9proved ;A* '8,1#R.A. No. ! or the *8x Refor9 Act of 1HH#,18nd fin8ll3, the presentl3bele87uered R.A. No. H@@#, 8lso referred to b3 respondents 8s the ;A* Refor9 Act.

*he Court ill no discuss the issues in lo7ic8l seuence.

PROCEDURA! "SSUE

&.

>hether R.A. No. H@@# viol8tes the folloin7 provisions of the ConstitutionJ

8. Article ;&, ection !, 8nd

b. Article ;&, ection !6!D

A. *he Bic89er8l Conference Co99ittee

Petitioners Escudero,et al., 8nd Pi9entel,et al., 8lle7e th8t the Bic89er8l Conference Co99itteeexceeded its 8uthorit3 b3J

1D &nsertin7 the stand-by authorityin f8vor of the President in ections , I, 8nd 6 of R.A. No. H@@#4

!D eletin7 entirel3 the no pass-onprovisions found in both the 2ouse 8nd en8te bills4

@D &nsertin7 the provision i9posin7 8 #"K li9it on the 89ount of input t8x to be credited 878inst theoutput t8x4 8nd

D &ncludin7 the 89end9ents introduced onl3 b3 en8te Bill No. 1HI" re78rdin7 other Finds of t8xesin 8ddition to the v8lue-8dded t8x.

Petitioners no beseech the Court to define the poers of the Bic89er8l Conference Co99ittee.

&t should be borne in 9ind th8t the poer of intern8l re7ul8tion 8nd discipline 8re intrinsic in 8n3le7isl8tive bod3 for, 8s unerrin7l3 elucid8ted b3 +ustice tor3,?@4 te poer ++ *ot e7t, t o%+be tter%& mpr)3t3)b%e to tr)*)3t te b*e o4 te *)to*, eter )t )%%, or )t %e)t t+e3e*3&, +e%ber)to*, )*+ or+er.:1H*hus, Article ;&, ection 16 @D of the Constitution provides th8t:e8ch 2ouse 983 deter9ine the rules of its proceedin7s.: Pursu8nt to this inherent constitution8lpoer to pro9ul78te 8nd i9ple9ent its on rules of procedure, the respective rules of e8ch houseof Con7ress provided for the cre8tion of 8 Bic89er8l Conference Co99ittee.

*hus, Rule &;, ections 8nd H of the Rules of 2ouse of Represent8tives provides 8s follosJ
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ec. . &on$erence &o''ittee. = &n the event th8t the 2ouse does not 87ree ith the en8te onthe 89end9ent to 8n3 bill or oint resolution, the differences 983 be settled b3 the conferenceco99ittees of both ch89bers.

&n resolvin7 the differences ith the en8te, the 2ouse p8nel sh8ll, 8s 9uch 8s possible, 8dhere to8nd support the 2ouse Bill. &f the differences ith the en8te 8re so subst8nti8l th8t the3 98teri8ll3

i9p8ir the 2ouse Bill, the p8nel sh8ll report such f8ct to the 2ouse for the l8tter5s 8ppropri8te 8ction.

ec. H. &on$erence &o''ittee Reports. = . . . E8ch report sh8ll cont8in 8 det8iled, sufficientl3explicit st8te9ent of the ch8n7es in or 89end9ents to the subect 9e8sure.

. . .

*he Ch8ir98n of the 2ouse p8nel 983 be interpell8ted on the Conference Co99ittee Report priorto the votin7 thereon. *he 2ouse sh8ll vote on the Conference Co99ittee Report in the s89e98nner 8nd procedure 8s it votes on 8 bill on third 8nd fin8l re8din7.

Rule &&, ection @I of the Rules of the en8te st8tesJ

ec. @I. &n the event th8t the en8te does not 87ree ith the 2ouse of Represent8tives on theprovision of 8n3 bill or oint resolution, the differences sh8ll be settled b3 8 conference co99ittee ofboth 2ouses hich sh8ll 9eet ithin ten 1"D d83s 8fter their co9position. *he President sh8lldesi7n8te the 9e9bers of the en8te P8nel in the conference co99ittee ith the 8pprov8l of theen8te.

E8ch Conference Co99ittee Report sh8ll cont8in 8 det8iled 8nd sufficientl3 explicit st8te9ent of thech8n7es in, or 89end9ents to the subect 9e8sure, 8nd sh8ll be si7ned b3 8 98orit3 of the9e9bers of e8ch 2ouse p8nel, votin7 sep8r8tel3.

A co9p8r8tive present8tion of the conflictin7 2ouse 8nd en8te provisions 8nd 8 reconciled version

thereof ith the expl8n8tor3 st8te9ent of the conference co99ittee sh8ll be 8tt8ched to the report.

. . .

*he cre8tion of such conference co99ittee 8s 8pp8rentl3 in response to 8 proble9, not 8ddressedb3 8n3 constitution8l provision, here the to houses of Con7ress find the9selves in dis87ree9entover ch8n7es or 89end9ents introduced b3 the other house in 8 le7isl8tive bill. Given th8t one ofthe 9ost b8sic poers of the le7isl8tive br8nch is to for9ul8te 8nd i9ple9ent its on rules ofproceedin7s 8nd to discipline its 9e9bers, 983 the Court then delve into the det8ils of hoCon7ress co9plies ith its intern8l rules or ho it conducts its business of p8ssin7 le7isl8tionL Noteth8t in the present petitions, the issue is not hether provisions of the rules of both houses cre8tin7the bic89er8l conference co99ittee 8re unconstitution8l, bt eter te b3)mer)% 3o*4ere*3e

3ommttee ) tr3t%& 3omp%e+ t te r%e o4 bot oe, tereb& rem)** t* ter+3to* 3o*4erre+ po* t b& Co*re.

&n the recent c8se of %ari(as vs. #he )*ecutive Secretary,!"the Court )n Banc, *)*mo%&reiter8ted 8nd e9ph8siMed its 8dherence to the :enrolled bill doctrine,: thus, declinin7 thereinpetitioners5 ple8 for the Court to 7o behind the enrolled cop3 of the bill. Ass8iled in s8id c8se 8sCon7ress5s cre8tion of to sets of bic89er8l conference co99ittees, the l8cF of records of s8idco99ittees5 proceedin7s, the 8lle7ed viol8tion of s8id co99ittees of the rules of both houses, 8ndthe dis8ppe8r8nce or deletion of one of the provisions in the co9pro9ise bill sub9itted b3 the


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bic89er8l conference co99ittee. &t 8s 8r7ued th8t such irre7ul8rities in the p8ss87e of the l8nullified R.A. No. H""6, or the /8ir Election Act.

triFin7 don such 8r7u9ent, the Court held thusJ

%nder the :enrolled bill doctrine,: the si7nin7 of 8 bill b3 the pe8Fer of the 2ouse 8nd the en8te

President 8nd the certific8tion of the ecret8ries of both 2ouses of Con7ress th8t it 8s p8ssed 8reconclusive of its due en8ct9ent. A revie of c8ses reve8ls the Court5s consistent 8dherence to therule. Te Cort 4*+ *o re)o* to +e)te 4rom te )%t)r& r%e * t 3)e ere terre%)rte )%%ee+ b& te petto*er mot%& *o%e+ te *ter*)% r%e o4 Co*re, e.g.,3re)to* o4 te 2*+ or =r+ B3)mer)% Co*4ere*3e Commttee b& te -oe. T Cort *ot teproper 4orm 4or te e*4or3eme*t o4 tee *ter*)% r%e o4 Co*re, eter -oe orSe*)te. P)r%)me*t)r& r%e )re mere%& pro3e+r)% )*+ t ter ober)*3e te 3ort )e*o 3o*3er*. )teer +obt tere m)& be ) to te 4orm)% )%+t& o4 Rep. A3t No. F006 mtbe reo%e+ * t 4)or.*he Court reiter8tes its rulin7 inArroyo vs. De +enecia, vi.J

But the 3)e, bot ere )*+ )bro)+, * )r&* 4orm o4 e7preo*, )%% +e*& to te 3ort tepoer to *re *to )%%e)to* t)t, * e*)3t* ) %), ) -oe o4 Co*re 4)%e+ to 3omp%&

t t o* r%e, * te )be*3e o4 o* t)t tere ) ) o%)to* o4 ) 3o*ttto*)%proo* or te rt o4 pr)te *++)%.&n Os'e(a v. Pendatun, it 8s heldJ :At 8n3 r8te,courts h8ve decl8red th8t the rules 8dopted b3 deliber8tive bodies 8re subect to revoc8tion,9odific8tion or 8iver 8t the ple8sure of the bod3 8doptin7 the9.5A*+ t ) bee* )+ t)t?P)r%)me*t)r& r%e )re mere%& pro3e+r)%, )*+ t ter ober)*3e, te 3ort )e *o3o*3er*. Te& m)& be )e+ or +re)r+e+ b& te %e%)te bo+&.? Co*ee*t%&, ?mere4)%re to 3o*4orm to p)r%)me*t)r& )e %% *ot *)%+)te te )3to* #t)He* b& )+e%ber)te bo+&( e* te rete *mber o4 member )e )ree+ to ) p)rt3%)rme)re.:!1E9ph8sis suppliedD

*he fore7oin7 decl8r8tion is ex8ctl3 in point ith the present c8ses, here petitioners 8lle7eirre7ul8rities co99itted b3 the conference co99ittee in introducin7 ch8n7es or deletin7 provisions inthe 2ouse 8nd en8te bills. AFin to the %ari(as c8se,!!the present petitions 8lso r8ise 8n issue

re78rdin7 the 8ctions t8Fen b3 the conference co99ittee on 98tters re78rdin7 Con7ress5co9pli8nce ith its on intern8l rules. As st8ted e8rlier, one of the 9ost b8sic 8nd inherent poer ofthe le7isl8ture is the poer to for9ul8te rules for its proceedin7s 8nd the discipline of its 9e9bers.Con7ress is the best ud7e of ho it should conduct its on business expeditiousl3 8nd in the 9ostorderl3 98nner. &t is 8lso the sole

concern of Con7ress to instill discipline 89on7 the 9e9bers of its conference co99ittee if itbelieves th8t s8id 9e9bers viol8ted 8n3 of its rules of proceedin7s. Even the exp8nded urisdictionof this Court c8nnot 8ppl3 to uestions re78rdin7 onl3 the intern8l oper8tion of Con7ress, thus, theCourt is ont to den3 8 revie of the intern8l proceedin7s of 8 co-eu8l br8nch of 7overn9ent.

)oreover, 8s f8r b8cF 8s 1HH or 9ore th8n ten 3e8rs 87o, in the c8se of#olentino vs. Secretary o$

%inance,!@

the Court 8lre8d3 98de the pronounce9ent th8t :@4 ) 3)*e +ere+ * te pr)3t3e@o4 te B3)mer)% Co*4ere*3e Commttee t mt be ot * Co*re *3e t eto* *ot 3oere+ b& )*& 3o*ttto*)% proo* bt o*%& )* *ter*)% r%e o4 e)3 oe. :!*od8te, Con7ress h8s not seen it fit to 98Fe such ch8n7es 8dverted to b3 the Court. &t see9s,therefore, th8t Con7ress finds the pr8ctices of the bic89er8l conference co99ittee to be ver3 usefulfor purposes of pro9pt 8nd efficient le7isl8tive 8ction.

Nevertheless, ust to put 9inds 8t e8se th8t no bl8t8nt irre7ul8rities t8inted the proceedin7s of thebic89er8l conference co99ittees, the Court dee9s it necess8r3 to dell on the issue. *he Court
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observes th8t there 8s 8 necessit3 for 8 conference co99ittee bec8use 8 co9p8rison of theprovisions of 2ouse Bill Nos. @III 8nd @#"I on one h8nd, 8nd en8te Bill No. 1HI" on the other,reve8ls th8t there ere indeed dis87ree9ents. As pointed out in the petitions, s8id dis87ree9entsere 8s follosJ

-oe B%% No. =

With regard to "Stand-By Authority" in a!or o resident

Provides for 1!K ;A* on ever3 s8le of 7oods or properties 89endin7 ec. 1"6 of N&RCD4 1!K ;A* on i9pole8se of properties 89endin7 ec. 1" of N&RCD

With regard to the "no #ass-on" #ro!ision

No si9il8r provision

With regard to 70$ li%it on in#ut ta& 'redit

Provides th8t the input t8x credit for c8pit8l 7oods on hich 8 ;A* h8s been p8id sh8ll be eu8ll3 distributedservices other th8n c8pit8l 7oods sh8ll not exceed IK of the tot8l 89ount of such 7oods 8nd services4 8nd f11K of the tot8l 89ount of 7oods purch8sed.

With regard to a%end%ents to (e %ade to N)*+ #ro!isions regarding in'o%e and e&'iseta&es



Provided for 89end9ents tosever8l N&RC provisions

re78rdin7 corpor8te inco9e,percent87e, fr8nchise 8ndexcise t8xes

*he dis87ree9ents beteen the provisions in the 2ouse bills 8nd the en8te bill ere ith re78rd to1D h8t r8te of ;A* is to be i9posed4 !D hether onl3 the ;A* i9posed on electricit3 7ener8tion,tr8ns9ission 8nd distribution co9p8nies should not be p8ssed on to consu9ers, 8s proposed in theen8te bill, or both the ;A* i9posed on electricit3 7ener8tion, tr8ns9ission 8nd distribution


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co9p8nies 8nd the ;A* i9posed on s8le of petroleu9 products should not be p8ssed on toconsu9ers, 8s proposed in the 2ouse bill4 @D in h8t 98nner input t8x credits should be li9ited4 D8nd hether the N&RC provisions on corpor8te inco9e t8xes, percent87e, fr8nchise 8nd exciset8xes should be 89ended.

*here bein7 differences 8ndor dis87ree9ents on the fore7oin7 provisions of the 2ouse 8nd en8te

bills, the Bic89er8l Conference Co99ittee 8s 98nd8ted b3 the rules of both houses of Con7ressto 8ct on the s89e b3 settlin7 s8id differences 8ndor dis87ree9ents. *he Bic89er8l ConferenceCo99ittee 8cted on the dis87reein7 provisions b3 98Fin7 the folloin7 ch8n7esJ

1. >ith re78rd to the dis87ree9ent on the r8te of ;A* to be i9posed, it ould 8ppe8r fro9 theConference Co99ittee Report th8t the Bic89er8l Conference Co99ittee tried to brid7e the 78p inthe difference beteen the 1"K ;A* r8te proposed b3 the en8te, 8nd the v8rious r8tes ith 1!K8s the hi7hest ;A* r8te proposed b3 the 2ouse, b3 striFin7 8 co9pro9ise hereb3 the present 1"K;A* r8te ould be ret8ined until cert8in conditions 8rise, i.e., the v8lue-8dded t8x collection 8s 8percent87e of 7ross do9estic product GPD of the previous 3e8r exceeds ! IK, or N8tion8lGovern9ent deficit 8s 8 percent87e of GP of the previous 3e8r exceeds 1OK, hen the President,upon reco99end8tion of the ecret8r3 of /in8nce sh8ll r8ise the r8te of ;A* to 1!K effective

+8nu8r3 1, !""6.

!. >ith re78rd to the dis87ree9ent on hether onl3 the ;A* i9posed on electricit3 7ener8tion,tr8ns9ission 8nd distribution co9p8nies should not be p8ssed on to consu9ers or hether both the;A* i9posed on electricit3 7ener8tion, tr8ns9ission 8nd distribution co9p8nies 8nd the ;A*i9posed on s8le of petroleu9 products 983 be p8ssed on to consu9ers, the Bic89er8l ConferenceCo99ittee chose to settle such dis87ree9ent b3 8lto7ether deletin7 fro9 its Report 8n3no pass-onprovision.

@. >ith re78rd to the dis87ree9ent on hether input t8x credits should be li9ited or not, theBic89er8l Conference Co99ittee decided to 8dopt the position of the 2ouse b3 puttin7 8 li9it8tionon the 89ount of input t8x th8t 983 be credited 878inst the output t8x, 8lthou7h it cr8fted its onl8n7u87e 8s to the 89ount of the li9it8tion on input t8x credits 8nd the 98nner of co9putin7 the

s89e b3 providin7 thusJ

AD Credit8ble &nput *8x. = . . .

. . .

Provided,*he input t8x on 7oods purch8sed or i9ported in 8 c8lend8r 9onth for use in tr8de orbusiness for hich deduction for depreci8tion is 8lloed under this Code, sh8ll be spre8d evenl3over the 9onth of 8cuisition 8nd the fift3-nine IHD succeedin7 9onths if the 877re78te 8cuisitioncost for such 7oods, excludin7 the ;A* co9ponent thereof, exceeds one 9illion PesosP1,""",""".""DJ PR(;&E, hoever, th8t if the esti98ted useful life of the c8pit8l 7ood is lessth8n five ID 3e8rs, 8s used for depreci8tion purposes, then the input ;A* sh8ll be spre8d over such

shorter periodJ . . .

BD Excess (utput or &nput *8x. = &f 8t the end of 8n3 t8x8ble u8rter the output t8x exceeds theinput t8x, the excess sh8ll be p8id b3 the ;A*-re7istered person. &f the input t8x exceeds the outputt8x, the excess sh8ll be c8rried over to the succeedin7 u8rter or u8rtersJ PR(;&E th8t the inputt8x inclusive of input ;A* c8rried over fro9 the previous u8rter th8t 983 be credited in ever3u8rter sh8ll not exceed sevent3 percent #"KD of the output ;A*J PR(;&E, 2(>E;ER, *2A*8n3 input t8x 8ttribut8ble to Mero-r8ted s8les b3 8 ;A*-re7istered person 983 8t his option berefunded or credited 878inst other intern8l revenue t8xes, . . .


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. >ith re78rd to the 89end9ents to other provisions of the N&RC on corpor8te inco9e t8x,fr8nchise, percent87e 8nd excise t8xes, the conference co99ittee decided to include such89end9ents 8nd b8sic8ll3 8dopted the provisions found in en8te Bill No. 1HI", ith so9e ch8n7es8s to the r8te of the t8x to be i9posed.

%nder the provisions of both the Rules of the 2ouse of Represent8tives 8nd en8te Rules, the

Bic89er8l Conference Co99ittee is 98nd8ted to settle the differences beteen the dis87reein7provisions in the 2ouse bill 8nd the en8te bill. *he ter9 :settle: is s3non39ous to :reconcile: 8nd:h8r9oniMe.:!I*o reconcile or h8r9oniMe dis87reein7 provisions, the Bic89er8l ConferenceCo99ittee 983 then 8D 8dopt the specific provisions of either the 2ouse bill or en8te bill, bDdecide th8t neither provisions in the 2ouse bill or the provisions in the en8te bill ould

be c8rried into the fin8l for9 of the bill, 8ndor cD tr3 to 8rrive 8t 8 co9pro9ise beteen thedis87reein7 provisions.

&n the present c8se, the ch8n7es introduced b3 the Bic89er8l Conference Co99ittee ondis87reein7 provisions ere 9e8nt onl3 to reconcile 8nd h8r9oniMe the dis87reein7 provisions for itdid not inect 8n3 ide8 or intent th8t is holl3 forei7n to the subect e9br8ced b3 the ori7in8l

provisions.

*he so-c8lled stand-by authorityin f8vor of the President, hereb3 the r8te of 1"K ;A* 8nted b3the en8te is ret8ined until such ti9e th8t cert8in conditions 8rise hen the 1!K ;A* 8nted b3 the2ouse sh8ll be i9posed, 8ppe8rs to be 8 co9pro9ise to tr3 to brid7e the difference in the r8te of;A* proposed b3 the to houses of Con7ress. Nevertheless, such co9pro9ise is still tot8ll3 ithinthe subect of h8t r8te of ;A* should be i9posed on t8xp83ers.

*he no pass-on provision8s deleted 8lto7ether. &n the tr8nscripts of the proceedin7s of theBic89er8l Conference Co99ittee held on )83 1", !""I, en. R8lph Recto, Ch8ir98n of the en8teP8nel, expl8ined the re8son for deletin7 the no pass-on provision in this iseJ

. . . the thinFin7 8s ust to Feep the ;A* l8 or the ;A* bill si9ple. And e ere thinFin7 th8t nosector should be 8 benefici8r3 of le7isl8tive 7r8ce, neither should 8n3 sector be discri9in8ted on.*he ;A* is 8n indirect t8x. "t ) p) o*t)7. And let5s Feep it pl8in 8nd si9ple. 'et5s not confusethe bill 8nd put 8 no p8ss-on provision. *o-thirds of the orld h8ve 8 ;A* s3ste9 8nd in this to-thirds of the 7lobe, & h8ve 3et to see 8 ;A* ith 8 no p8ss-thou7h provision. o, the thinFin7 of theen8te is b8sic8ll3 si9ple, let5s Feep the ;A* si9ple.!6E9ph8sis suppliedD

Rep. *eodoro 'ocsin further 98de the 98nifest8tion th8t theno pass-on provision :never re8ll3eno3ed the support of either 2ouse.:!#

>ith re78rd to the 89ount of input t8x to be credited 878inst output t8x, the Bic89er8l ConferenceCo99ittee c89e to 8 co9pro9ise on the percent87e r8te of the li9it8tion or c8p on such input t8xcredit, but 878in, the ch8n7e introduced b3 the Bic89er8l Conference Co99ittee 8s tot8ll3 ithin

the intent of both houses to put 8 c8p on input t8x th8t 983 be

credited 878inst the output t8x. /ro9 the inception of the subect revenue bill in the 2ouse ofRepresent8tives, one of the 98or obectives 8s to :plu7 8 7l8rin7 loophole in the t8x polic3 8nd8d9inistr8tion b3 cre8tin7 vit8l restrictions on the cl8i9in7 of input ;A* t8x credits . . .: 8nd :Qb3introducin7 li9it8tions on the cl8i9in7 of t8x credit, e 8re c8ppin7 8 98or le8F87e th8t h8s pl8cedour collection efforts 8t 8n 8pp8rent dis8dv8nt87e.:!
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As to the 89end9ents to N&RC provisions on t8xes other th8n the v8lue-8dded t8x proposed inen8te Bill No. 1HI", since s8id provisions ere 89on7 those referred to it, the conferenceco99ittee h8d to 8ct on the s89e 8nd it b8sic8ll3 8dopted the version of the en8te.

*hus, 8ll the ch8n7es or 9odific8tions 98de b3 the Bic89er8l Conference Co99ittee ere 7er98neto subects of the provisions referred

to it for reconcili8tion. uch bein7 the c8se, the Court does not see 8n3 7r8ve 8buse of discretion89ountin7 to l8cF or excess of urisdiction co99itted b3 the Bic89er8l Conference Co99ittee. &nthe e8rlier c8ses of Philippine udes Association vs. Prado!H8nd #olentino vs. Secretary o$%inance,@"the Court reco7niMed the lon7-st8ndin7 le7isl8tive pr8ctice of 7ivin7 s8id conferenceco99ittee 89ple l8titude for co9pro9isin7 differences beteen the en8te 8nd the 2ouse. *hus, inthe #olentino c8se, it 8s held th8tJ

. . . it is ithin the poer of 8 conference co99ittee to include in its report 8n entirel3 ne provisionth8t is not found either in the 2ouse bill or in the en8te bill. &f the co99ittee c8n propose 8n89end9ent consistin7 of one or to provisions, there is no re8son h3 it c8nnot propose sever8lprovisions, collectivel3 considered 8s 8n :89end9ent in the n8ture of 8 substitute,: so lon7 8s such

89end9ent is 7er98ne to the subect of the bills before the co99ittee. After 8ll, its report 8s notfin8l but needed the 8pprov8l of both houses of Con7ress to beco9e v8lid 8s 8n 8ct of the le7isl8tivedep8rt9ent. Te 3)re t)t * t 3)e te Co*4ere*3e Commttee )3te+ ) ) tr+ %e%)te3)mber t tot )*& b).@1E9ph8sis suppliedD

B. R.A. /o. 0112 Does /ot +iolate Article +3, Section "45"6 o$ the &onstitution on the 7/o-A'end'ent Rule7

Article ;&, ec. !6 !D of the Constitution, st8tesJ

No bill p8ssed b3 either 2ouse sh8ll beco9e 8 l8 unless it h8s p8ssed three re8din7s on sep8r8ted83s, 8nd printed copies thereof in its fin8l for9 h8ve been distributed to its )e9bers three d83s

before its p8ss87e, except hen the President certifies to the necessit3 of its i99edi8te en8ct9entto 9eet 8 public c8l89it3 or e9er7enc3. %pon the l8st re8din7 of 8 bill, no 89end9ent thereto sh8llbe 8lloed, 8nd the vote thereon sh8ll be t8Fen i99edi8tel3 there8fter, 8nd the 3e8s 8nd n83sentered in the +ourn8l.

Petitioners5 8r7u9ent th8t the pr8ctice here 8 bic89er8l conference co99ittee is 8lloed to 8dd ordelete provisions in the 2ouse bill 8nd the en8te bill 8fter these h8d p8ssed three re8din7s is ineffect 8 circu9vention of the :no 89end9ent rule: ec. !6 !D, Art. ;& of the 1H# ConstitutionD, f8ilsto convince the Court to devi8te fro9 its rulin7 in the #olentino c8se th8tJ

Nor is there 8n3 re8son for reuirin7 th8t the Co99ittee5s Report in these c8ses 9ust h8veunder7one three re8din7s in e8ch of the to houses. &f th8t be the c8se, there ould be no end tone7oti8tion since e8ch house 983 seeF 9odific8tion of the co9pro9ise bill. . . .

Art. ". I 26 #2( mt, tere4ore, be 3o*tre+ ) re4err* o*%& to b%% *tro+3e+ 4or te 4rttme * eter oe o4 Co*re, *ot to te 3o*4ere*3e 3ommttee report.@!E9ph8sissuppliedD

*he Court reiter8tes here th8t te ?*o)me*+me*t r%e? re4er o*%& to te pro3e+re to be4o%%oe+ b& e)3 oe o4 Co*re t re)r+ to b%% *t)te+ * e)3 o4 )+ repe3teoe, be4ore )+ b%% tr)*mtte+ to te oter oe 4or t 3o*3rre*3e or )me*+me*t .
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;eril3, to construe s8id provision in 8 83 8s to proscribe 8n3 further ch8n7es to 8 bill 8fter onehouse h8s voted on it ould le8d to 8bsurdit3 8s this ould 9e8n th8t the other house of Con7ressould be deprived of its constitution8l poer to 89end or introduce ch8n7es to s8id bill. *hus, Art.;&, ec. !6 !D of the Constitution c8nnot be t8Fen to 9e8n th8t the introduction b3 the Bic89er8lConference Co99ittee of 89end9ents 8nd 9odific8tions to dis87reein7 provisions in bills th8t h8vebeen 8cted upon b3 both houses of Con7ress is prohibited.

&. R.A. /o. 0112 Does /ot +iolate Article +3, Section "8 o$ the &onstitution on )*clusive Oriinationo$ Revenue Bills

Co9in7 to the issue of the v8lidit3 of the 89end9ents 98de re78rdin7 the N&RC provisions oncorpor8te inco9e t8xes 8nd percent87e, excise t8xes. Petitioners refer to the folloin7 provisions, toitJ

ection !# R8tes of &nco9e *8x on o9estic Corpor8tion

!AD1D *8x on Resident /orei7n Corpor8tion

!BD1D &nter-corpor8te ividends

@BD1D &nter-corpor8te ividends

116 *8x on Persons Exe9pt fro9 ;A*

11# Percent87e *8x on do9estic c8rriers 8nd Feepers of G8r87e

11H *8x on fr8nchises

1!1 *8x on b8nFs 8nd Non-B8nF /in8nci8l &nter9edi8ries

1 Excise *8x on 98nuf8ctured oils 8nd other fuels

1I1 Excise *8x on 9iner8l products

!@6 Re7istr8tion reuire9ents


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!@# &ssu8nce of receipts or s8les or co99erci8l invoices

! isposition of &ncre9ent8l Revenue

Petitioners cl8i9 th8t the 89end9ents to these provisions of the N&RC did not 8t 8ll ori7in8te fro9the 2ouse. *he3 8ver th8t 2ouse Bill No. @III proposed 89end9ents onl3 re78rdin7 ections 1"6,1"#, 1", 11" 8nd 11 of the N&RC, hile 2ouse Bill No. @#"I proposed 89end9ents onl3 toections 1"6, 1"#,1", 1"H, 11" 8nd 111 of the N&RC4 thus, the other sections of the N&RC hich theen8te 89ended but hich 89end9ents ere not found in the 2ouse bills 8re not intended to be89ended b3 the 2ouse of Represent8tives. 2ence, the3 8r7ue th8t since the proposed 89end9entsdid not ori7in8te fro9 the 2ouse, such 89end9ents 8re 8 viol8tion of Article ;&, ection ! of theConstitution.

*he 8r7u9ent does not hold 8ter.

Article ;&, ection ! of the Constitution re8dsJ

ec. !. All 8ppropri8tion, revenue or t8riff bills, bills 8uthoriMin7 incre8se of the public debt, bills ofloc8l 8pplic8tion, 8nd priv8te bills sh8ll ori7in8te exclusivel3 in the 2ouse of Represent8tives but theen8te 983 propose or concur ith 89end9ents.

&n the present c8ses, petitioners 8d9it th8t it 8s indeed 2ouse Bill Nos. @III 8nd @#"I th8tiniti8ted the 9ove for 89endin7 provisions of the N&RC de8lin7 98inl3 ith the v8lue-8dded t8x.%pon tr8ns9itt8l of s8id 2ouse bills to the en8te, the en8te c89e out ith en8te Bill No. 1HI"proposin7 89end9ents not onl3 to N&RC provisions on the v8lue-8dded t8x but 8lso 89end9ents toN&RC provisions on other Finds of t8xes. &s the introduction b3 the en8te of provisions not de8lin7directl3 ith the v8lue- 8dded t8x, hich is the onl3 Find of t8x bein7 89ended in the 2ouse bills, still

ithin the purvie of the constitution8l provision 8uthoriMin7 the en8te to propose or concur ith89end9ents to 8 revenue bill th8t ori7in8ted fro9 the 2ouseL

*he fore7oin7 uestion h8d been su8rel3 8nsered in the #olentino c8se, herein the Court held,thusJ

. . . *o be7in ith, it is not the l8 = but the revenue bill = hich is reuired b3 the Constitution to:ori7in8te exclusivel3: in the 2ouse of Represent8tives. &t is i9port8nt to e9ph8siMe this, bec8use 8bill ori7in8tin7 in the 2ouse 983 under7o such extensive ch8n7es in the en8te th8t the result 983be 8 reritin7 of the hole. . . . At this point, h8t is i9port8nt to note is th8t, 8s 8 result of theen8te 8ction, 8 distinct bill 983 be produced. To *t t)t ) ree*e t)tte J )*+ *ot o*%& teb%% 3 *t)te+ te %e%)te pro3e 3%m*)t* * te e*)3tme*t o4 te %) J mt

bt)*t)%%& be te )me ) te -oe b%% o%+ be to +e*& te Se*)te> poer *ot o*%& to?'on'ur ,ith a%end%ents? bt )%o to ?#ro#ose a%end%ents.?&t ould be to viol8te thecoeu8lit3 of le7isl8tive poer of the to houses of Con7ress 8nd in f8ct 98Fe the 2ouse superior tothe en8te.


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Ge*, te*, te poer o4 te Se*)te to propoe )me*+me*t, te Se*)te 3)* propoe to* ero* ee* t repe3t to b%% 3 )re rere+ b& te Co*ttto* to or*)te *te -oe.

. . .

&ndeed, h8t the Constitution si9pl3 9e8ns is th8t the initi8tive for filin7 revenue, t8riff or t8x bills,bills 8uthoriMin7 8n incre8se of the public debt, priv8te bills 8nd bills of loc8l 8pplic8tion 9ust co9efro9 the 2ouse of Represent8tives on the theor3 th8t, elected 8s the3 8re fro9 the districts,temember o4 te -oe 3)* be e7pe3te+ to be more e*te to te %o3)% *ee+ )*+prob%em. O* te oter )*+, te e*)tor, o )re e%e3te+ )t %)re, )re e7pe3te+ to)ppro)3 te )me prob%em 4rom te *)to*)% perpe3te. Bot e )re tereb& m)+e tobe)r o* te e*)3tme*t o4 3 %).@@E9ph8sis suppliedD

ince there is no uestion th8t the revenue bill exclusivel3 ori7in8ted in the 2ouse ofRepresent8tives, the en8te 8s 8ctin7 ithin its

constitution8l poer to introduce 89end9ents to the 2ouse bill hen it included provisions in

en8te Bill No. 1HI" 89endin7 corpor8te inco9e t8xes, percent87e, excise 8nd fr8nchise t8xes.;eril3, Article ;&, ection ! of the Constitution does not cont8in 8n3 prohibition or li9it8tion on theextent of the 89end9ents th8t 983 be introduced b3 the en8te to the 2ouse revenue bill.

/urther9ore, the 89end9ents introduced b3 the en8te to the N&RC provisions th8t h8d not beentouched in the 2ouse bills 8re still in further8nce of the intent of the 2ouse in initi8tin7 the subectrevenue bills. *he Expl8n8tor3 Note of 2ouse Bill No. 16, the ver3 first 2ouse bill introduced onthe floor, hich 8s l8ter substituted b3 2ouse Bill No. @III, st8tedJ

(ne of the ch8llen7es f8ced b3 the present 8d9inistr8tion is the ur7ent 8nd d8untin7 t8sF of solvin7the countr35s serious fin8nci8l proble9s. *o do this, 7overn9ent expenditures 9ust be strictl39onitored 8nd controlled 8nd revenues 9ust be si7nific8ntl3 incre8sed. *his 983 be e8sier s8id

th8n done, but our fisc8l 8uthorities 8re still opti9istic the 7overn9ent ill be oper8tin7 on 8b8l8nced bud7et b3 the 3e8r !""H. &n f8ct, sever8l 9e8sures th8t ill result to si7nific8nt expenditures8vin7s h8ve been identified b3 the 8d9inistr8tion. "t pporte+ t ) 3re+b%e p)3H)e o4ree*e me)re t)t *3%+e me)re to mproe t)7 )+m*tr)to* )*+ 3o*tro% te%e)H)e * ree*e 4rom *3ome t)7e )*+ te )%e)++e+ t)7 #AT(. E9ph8sis suppliedD

Rep. Eric . in7son, in his sponsorship speech for 2ouse Bill No. @III, decl8red th8tJ

&n the bud7et 9ess87e of our President in the 3e8r !""I, she reiter8ted th8t e 8ll 8cFnoled7edth8t on top of our 87end8 9ust be the restor8tion of the he8lth of our fisc8l s3ste9.

&n order to consider8bl3 loer the consolid8ted public sector deficit 8nd eventu8ll3 8chieve 8b8l8nced bud7et b3 the 3e8r !""H, e *ee+ to ee *+o o4 opport*te 3 mteem po*)*t * te be***, bt * te %o* r* proe e44e3te )*+ be*e43)% to teoer)%% t)t o4 or e3o*om&. O*e 3 opport*t& ) ree o4 e7t* t)7 r)te,e)%)t* te re%e)*3e e* or pree*t 3o*+to*.@E9ph8sis suppliedD

Not8bl3 therefore, the 98in purpose of the bills e98n8tin7 fro9 the 2ouse of Represent8tives is tobrin7 in siMe8ble revenues for the 7overn9ent
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to supple9ent our countr35s serious fin8nci8l proble9s, 8nd i9prove t8x 8d9inistr8tion 8nd controlof the le8F87es in revenues fro9 inco9e t8xes 8nd v8lue-8dded t8xes. As these house bills eretr8ns9itted to the en8te, the l8tter, 8ppro8chin7 the 9e8sures fro9 the point of n8tion8lperspective, c8n introduce 89end9ents ithin the purposes of those bills. &t c8n provide for 83sth8t ould soften the i9p8ct of the ;A* 9e8sure on the consu9er,i.e., b3 distributin7 the burden8cross 8ll sectors inste8d of puttin7 it entirel3 on the shoulders of the consu9ers. *he sponsorship

speech of en. R8lph Recto on h3 the provisions on inco9e t8x on corpor8tion ere included isorth uotin7J

All in 8ll, the propos8l of the en8te Co99ittee on >83s 8nd )e8ns ill r8ise P6.@ billion in8ddition8l revenues 8nnu8ll3 even hile b3 9iti78tin7 prices of poer, services 8nd petroleu9products.

2oever, not 8ll of this ill be run7 out of ;A*. &n f8ct, onl3 P.# billion 89ount is fro9 the ;A* ontelve 7oods 8nd services. *he rest of the t8b = P1".I billion- ill be picFed b3 corpor8tions.

>h8t e therefore prescribe is 8 burden sh8rin7 beteen corpor8te Philippines 8nd the consu9er.>h3 should the l8tter be8r 8ll the p8inL >h3 should the fisc8l s8lv8tion be onl3 on the burden of the

consu9erL

*he corpor8te orld5s euit3 is in for9 of the incre8se in the corpor8te inco9e t8x fro9 @! to @Ipercent, but up to !"" onl3. *his ill r8ise P1".I billion 8 3e8r. After th8t, the r8te ill slide b8cF, notto its old r8te of @! percent, but to notches loer, to @" percent.

Cle8rl3, e 8re tellin7 those ith the c8p8cit3 to p83, corpor8tions, to be8r ith this e9er7enc3provision th8t ill be in effect for 1,!"" d83s, hile e put our fisc8l house in order. *his fisc8l9edicine ill h8ve 8n expir3 d8te.

/or their 8ssist8nce, 8 re8rd of t8x reduction 88its the9. >e intend to Feep the len7th of theirs8crifice brief. >e ould liFe to 8ssure the9 th8t not bec8use there is 8 li7ht 8t the end of the tunnel,

this 7overn9ent ill Feep on 98Fin7 the tunnel lon7.

*he responsibilit3 ill not rest solel3 on the e8r3 shoulders of the s98ll 98n. Bi7 business ill bethere to sh8re the burden.@I

As the Court h8s s8id, the en8te c8n propose 89end9ents 8nd in f8ct, the 89end9ents 98de onprovisions in the t8x on inco9e of corpor8tions 8re 7er98ne to the purpose of the house bills hichis to r8ise revenues for the 7overn9ent.

'iFeise, the Court finds the sections referrin7 to other percent87e 8nd excise t8xes 7er98ne to therefor9s to the ;A* s3ste9, 8s these sections ould cushion the effects of ;A* on consu9ers.Considerin7 th8t cert8in 7oods 8nd services hich ere subect to percent87e t8x 8nd excise t8xould no lon7er be ;A*-exe9pt, the consu9er ould be burdened 9ore 8s the3 ould be p83in7the ;A* in 8ddition to these t8xes. *hus, there is 8 need to 89end these sections to soften thei9p8ct of ;A*. A78in, in his sponsorship speech, en. Recto s8idJ

2oever, for poer pl8nts th8t run on oil, e ill reduce to Mero the present excise t8x on bunFerfuel, to lessen the effect of 8 ;A* on this product.

/or electric utilities liFe )er8lco, e ill ipe out the fr8nchise t8x in exch8n7e for 8 ;A*.


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And in the c8se of petroleu9, hile e ill lev3 the ;A* on oil products, so 8s not to destro3 the ;A*ch8in, e ill hoever brin7 don the excise t8x on soci8ll3 sensitive products such 8s diesel,bunFer, fuel 8nd Ferosene.

. . .

>h8t do 8ll these exercises point toL *hese 8re not contortions of 7ivin7 to the left h8nd h8t 8st8Fen fro9 the ri7ht. R8ther, these spr8n7 fro9 our concern of softenin7 the i9p8ct of ;A*, so th8tthe people c8n cushion the blo of hi7her prices the3 ill h8ve to p83 8s 8 result of ;A*.@6

*he other sections 89ended b3 the en8te pert8ined to 98tters of t8x 8d9inistr8tion hich 8renecess8r3 for the i9ple9ent8tion of the ch8n7es in the ;A* s3ste9.

*o reiter8te, the sections introduced b3 the en8te 8re 7er98ne to the subect 98tter 8nd purposesof the house bills, hich is to supple9ent our countr35s fisc8l deficit, 89on7 others. *hus, the en8te8cted ithin its poer to propose those 89end9ents.

SUBSTANT"E "SSUES

&.

>hether ections , I 8nd 6 of R.A. No. H@@#, 89endin7 ections 1"6, 1"# 8nd 1" of the N&RC,viol8te the folloin7 provisions of the ConstitutionJ


b. Article ;&, ection !!D

A. /o Undue Deleation o$ 9eislative Po:er

PetitionersABAKADA GURO P8rt3 'ist,et al., Pi9entel, +r.,et al., 8nd Escudero,et al.contend inco99on th8t ections , I 8nd 6 of R.A. No. H@@#, 89endin7 ections 1"6, 1"# 8nd 1",respectivel3, of the N&RC 7ivin7 the President thestand-by authorityto r8ise the ;A* r8te fro9 1"Kto 1!K hen 8 cert8in condition is 9et, constitutes undue dele78tion of the le7isl8tive poer to t8x.

*he 8ss8iled provisions re8d 8s follosJ

EC. . ec. 1"6 of the s89e Code, 8s 89ended, is hereb3 further 89ended to re8d 8s follosJ

EC. 1"6. ;8lue-Added *8x on 8le of Goods or Properties. =

AD R8te 8nd B8se of *8x. = *here sh8ll be levied, 8ssessed 8nd collected on ever3 s8le, b8rter orexch8n7e of 7oods or properties, 8 v8lue-8dded t8x euiv8lent to ten percent 1"KD of the 7rosssellin7 price or 7ross v8lue in 9one3 of the 7oods or properties sold, b8rtered or exch8n7ed, sucht8x to be p8id b3 the seller or tr8nsferorJ pro+e+, t)tte Pre+e*t, po* te re3omme*+)to*o4 te Se3ret)r& o4 $*)*3e, )%%, e44e3te ')*)r& 1, 2006, r)e te r)te o4 )%e)++e+ t)7to te%e per3e*t #12L(, )4ter )*& o4 te 4o%%o* 3o*+to* ) bee* )t4e+.

#( )%e)++e+ t)7 3o%%e3to* ) ) per3e*t)e o4 Gro Domet3 Pro+3t #GDP( o4 tepreo &e)r e73ee+ to )*+ 4or44t per3e*t #2


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#( *)to*)% oer*me*t +e43t ) ) per3e*t)e o4 GDP o4 te preo &e)r e73ee+ o*e )*+o*e)%4 per3e*t #1 L(.

EC. I. ection 1"# of the s89e Code, 8s 89ended, is hereb3 further 89ended to re8d 8s follosJ

EC. 1"#. ;8lue-Added *8x on &9port8tion of Goods. =

AD &n Gener8l. = *here sh8ll be levied, 8ssessed 8nd collected on ever3 i9port8tion of 7oods 8v8lue-8dded t8x euiv8lent to ten percent 1"KD b8sed on the tot8l v8lue used b3 the Bure8u ofCusto9s in deter9inin7 t8riff 8nd custo9s duties, plus custo9s duties, excise t8xes, if 8n3, 8ndother ch8r7es, such t8x to be p8id b3 the i9porter prior to the rele8se of such 7oods fro9 custo9scustod3J Provided, *h8t here the custo9s duties 8re deter9ined on the b8sis of the u8ntit3 orvolu9e of the 7oods, the v8lue-8dded t8x sh8ll be b8sed on the l8nded cost plus excise t8xes, if8n3J pro+e+, 4rter, t)t te Pre+e*t, po* te re3omme*+)to* o4 te Se3ret)r& o4$*)*3e, )%%, e44e3te ')*)r& 1, 2006, r)e te r)te o4 )%e)++e+ t)7 to te%e per3e*t#12L( )4ter )*& o4 te 4o%%o* 3o*+to* ) bee* )t4e+.

#( )%e)++e+ t)7 3o%%e3to* ) ) per3e*t)e o4 Gro Domet3 Pro+3t #GDP( o4 te

preo &e)r e73ee+ to )*+ 4or44t per3e*t #2


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9erch8ndise to the 7overn9ent 8nd usu8ll3 i9posed on 7oods or 9erch8ndise i9ported orexported.

PetitionersABAKADA GURO P8rt3 'ist,et al., further contend th8t dele78tin7 to the President thele7isl8tive poer to t8x is contr8r3 to republic8nis9. *he3 insist th8t 8ccount8bilit3, responsibilit3 8ndtr8nsp8renc3 should dict8te the 8ctions of Con7ress 8nd the3 should not p8ss to the President the

decision to i9pose t8xes. *he3 8lso 8r7ue th8t the l8 8lso effectivel3 nullified the President5s poerof control, hich includes the 8uthorit3 to set 8side 8nd nullif3 the 8cts of her subordin8tes liFe theecret8r3 of /in8nce, b3 98nd8tin7 the fixin7 of the t8x r8te b3 the President upon thereco99end8tion of the ecret8r3 of /in8nce.

Petitioners Pi9entel,et al.8ver th8t the President h8s 89ple poers to c8use, influence or cre8tethe conditions provided b3 the l8 to brin7 8bout either or both the conditions precedent.

(n the other h8nd, petitioners Escudero,et al.find biM8rre 8nd revoltin7 the situ8tion th8t thei9position of the 1!K r8te ould be subect to the hi9 of the ecret8r3 of /in8nce, 8n unelectedbure8ucr8t, contr8r3 to the principle of no t8x8tion ithout represent8tion. *he3 sub9it th8t theecret8r3 of /in8nce is not 98nd8ted to 7ive 8 f8vor8ble reco99end8tion 8nd he 983 not even 7ive

his reco99end8tion. )oreover, the3 8lle7e th8t no 7uidin7 st8nd8rds 8re provided in the l8 onh8t b8sis 8nd 8s to ho he ill 98Fe his reco99end8tion. *he3 cl8i9, nonetheless, th8t 8n3reco99end8tion of the ecret8r3 of /in8nce c8n e8sil3 be brushed 8side b3 the President since thefor9er is 8 9ere 8lter e7o of the l8tter, such th8t, ulti98tel3, it is the President ho decides hetherto i9pose the incre8sed t8x r8te or not.

A brief discourse on the principle of non-dele78tion of poers is instructive.

*he principle of sep8r8tion of poers ord8ins th8t e8ch of the three 7re8t br8nches of 7overn9enth8s exclusive co7niM8nce of 8nd is supre9e in 98tters f8llin7 ithin its on constitution8ll3 8lloc8tedsphere.@#A lo7ic8l

coroll8r3 to the doctrine of sep8r8tion of poers is the principle of non-dele78tion of poers, 8sexpressed in the '8tin 98xi9Jpotestas deleata non delearipotesthich 9e8ns :h8t h8s beendele78ted, c8nnot be dele78ted.:@*his doctrine is b8sed on the ethic8l principle th8t such 8sdele78ted poer constitutes not onl3 8 ri7ht but 8 dut3 to be perfor9ed b3 the dele78te throu7h theinstru9ent8lit3 of his on ud79ent 8nd not throu7h the intervenin7 9ind of 8nother.@H

>ith respect to the 'e7isl8ture, ection 1 of Article ;& of the Constitution provides th8t :the9eislative po:er shall be vested in the &onress o$ the Philippines :hich shall consist o$ a Senateand a ;ouse o$ Representatives.: *he poers hich Con7ress is prohibited fro9 dele78tin7 8rethose hich 8re strictl3, or inherentl3 8nd exclusivel3, le7isl8tive. Purel3 le7isl8tive poer, hich c8nnever be dele78ted, h8s been described 8s the )tort& to m)He ) 3omp%ete %) J 3omp%ete )to te tme e* t )%% t)He e44e3t )*+ ) to om t )%% be )pp%3)b%e J )*+ to +eterm*ete e7pe+e*3& o4 t e*)3tme*t."*hus, the rule is th8t in order th8t 8 court 983 be ustified in

holdin7 8 st8tute unconstitution8l 8s 8 dele78tion of le7isl8tive poer, it 9ust 8ppe8r th8t the poerinvolved is purel3 le7isl8tive in n8ture = th8t is, one 8ppert8inin7 exclusivel3 to the le7isl8tivedep8rt9ent. &t is the n8ture of the poer, 8nd not the li8bilit3 of its use or the 98nner of its exercise,hich deter9ines the v8lidit3 of its dele78tion.

Nonetheless, the 7ener8l rule b8rrin7 dele78tion of le7isl8tive poers is subect to the folloin7reco7niMed li9it8tions or exceptionsJ

1D ele78tion of t8riff poers to the President under ection ! !D of Article ;& of the Constitution4
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!D ele78tion of e9er7enc3 poers to the President under ection !@ !D of Article ;& of theConstitution4

@D ele78tion to the people 8t l8r7e4

D ele78tion to loc8l 7overn9ents4 8nd

ID ele78tion to 8d9inistr8tive bodies.

&n ever3 c8se of per9issible dele78tion, there 9ust be 8 shoin7 th8t the dele78tion itself is v8lid. &tis v8lid onl3 if the l8 8D is co9plete in itself, settin7 forth therein the polic3 to be executed, c8rriedout, or i9ple9ented b3 the dele78te418nd bD fixes 8 st8nd8rd S the li9its of hich 8re sufficientl3deter9in8te 8nd deter9in8ble S to hich the dele78te 9ust confor9 in the perfor98nce of hisfunctions.!A sufficient st8nd8rd is one hich defines le7isl8tive polic3, 98rFs its li9its, 98ps out itsbound8ries 8nd specifies the public 87enc3 to 8ppl3 it. &t indic8tes the circu9st8nces under hichthe le7isl8tive co998nd is to be effected.@Both tests 8re intended to prevent 8 tot8l tr8nsference ofle7isl8tive 8uthorit3 to the dele78te, ho is not 8lloed to step into the shoes of the le7isl8ture 8ndexercise 8 poer essenti8ll3 le7isl8tive.

&n People vs. +era,Ithe Court, throu7h e9inent +ustice +ose P. '8urel, expounded on the concept8nd extent of dele78tion of poer in this iseJ

&n testin7 hether 8 st8tute constitutes 8n undue dele78tion of le7isl8tive poer or not, it is usu8l toinuire hether the st8tute 8s co9plete in 8ll its ter9s 8nd provisions hen it left the h8nds of thele7isl8ture so th8t nothin7 8s left to the ud79ent of 8n3 other 8ppointee or dele78te of thele7isl8ture.

. . .

Te tre +t*3to*>, )& '+e R)**e&, betee* te +e%e)to* o4 poer to m)He te

%), 3 *e3e)r%& *o%e ) +3reto* ) to )t t )%% be, )*+ 3o*4err* )* )tort&or +3reto* ) to t e7e3to*, to be e7er3e+ *+er )*+ * pr)*3e o4 te %). Te 4rt3)**ot be +o*e/ to te %)tter *o )%+ obe3to* 3)* be m)+e.>

. . .

&t is contended, hoever, th8t 8 le7isl8tive 8ct 983 be 98de to the effect 8s l8 8fter it le8ves theh8nds of the le7isl8ture. &t is true th8t l8s 983 be 98de effective on cert8in contin7encies, 8s b3procl898tion of the executive or the 8doption b3 the people of 8 p8rticul8r co99unit3. &n >8398nvs. outh8rd, the upre9e Court of the %nited t8tes ruled th8t the le7isl8ture 983 dele78te 8poer not le7isl8tive hich it 983 itself ri7htfull3 exercise. Te poer to )3ert)* 4)3t 3 )poer 3 m)& be +e%e)te+. Tere *ot* ee*t)%%& %e%)te * )3ert)** te

e7te*3e o4 4)3t or 3o*+to* ) te b) o4 te t)H* *to e44e3t o4 ) %). T)t ) me*t)%pro3e 3ommo* to )%% br)*3e o4 te oer*me*t.Notithst8ndin7 the 8pp8rent tendenc3,hoever, to rel8x the rule prohibitin7 dele78tion of le7isl8tive 8uthorit3 on 8ccount of the co9plexit38risin7 fro9 soci8l 8nd econo9ic forces 8t orF in this 9odern industri8l 87e, the orthodoxpronounce9ent of +ud7e Coole3 in his orF on Constitution8l 'i9it8tions finds rest8te9ent in Prof.>illou7hb3Ts tre8tise on the Constitution of the %nited t8tes in the folloin7 l8n7u87e S spe8Fin7of decl8r8tion of le7isl8tive poer to 8d9inistr8tive 87enciesJ Te pr*3p%e 3 permt te%e%)tre to pro+e t)t te )+m*tr)te )e*t m)& +eterm*e e* te 3r3mt)*3e)re 3 ) rere te )pp%3)to* o4 ) %) +e4e*+e+ po* te ro*+ t)t )t te tme t
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)tort& r)*te+, te r%e o4 pb%3 po%3&, 3 te ee*3e o4 te %e%)te )3t, +eterm*e+ b& te %e%)tre. "* oter or+, te %e%)tre, ) t t +t& to +o,+eterm*e t)t, *+er e* 3r3mt)*3e, 3ert)* e7e3te or )+m*tr)te )3to* tobe t)He*, )*+ t)t, *+er oter 3r3mt)*3e, +44ere*t or *o )3to* )t )%% to be t)He*.)t t %e4t to te )+m*tr)te o443)% *ot te %e%)te +eterm*)to* o4 )tpb%3 po%3& +em)*+, bt mp%& te )3ert)*me*t o4 )t te 4)3t o4 te 3)e rere to

be +o*e )33or+* to te term o4 te %) b& 3 e oer*e+. Te e443e*3& o4 )* A3t) ) +e3%)r)to* o4 %e%)te %% mt, o4 3ore, 3ome 4rom Co*re, bt te)3ert)*me*t o4 te 3o*t*e*3& po* 3 te A3t )%% t)He e44e3t m)& be %e4t to 3)e*3e ) t m)& +e*)te. Te %e%)tre, te*, m)& pro+e t)t ) %) )%% t)He e44e3tpo* te )ppe** o4 4tre pe34e+ 3o*t*e*3e %e)* to ome oter pero* or bo+&te poer to +eterm*e e* te pe34e+ 3o*t*e*3& ) )re*. E9ph8sis suppliedD.6

&n )du vs. )ricta,#the Court reiter8tedJ

>h8t c8nnot be dele78ted is the 8uthorit3 under the Constitution to 98Fe l8s 8nd to 8lter 8ndrepe8l the94 the test is the co9pleteness of the st8tute in 8ll its ter9s 8nd provisions hen it le8vesthe h8nds of the le7isl8ture. *o deter9ine hether or not there is 8n undue dele78tion of le7isl8tive

poer, the inuir3 9ust be directed to the scope 8nd definiteness of the 9e8sure en8cted.Te%e%)te +oe *ot )b+3)te t 4*3to* e* t +e3rbe )t ob mt be +o*e, o to+o t, )*+ )t te 3ope o4 )tort&./or 8 co9plex econo93, th8t 983 be the onl3 83 inhich the le7isl8tive process c8n 7o for8rd. A +t*3to* ) rt4%%& bee* m)+e betee*+e%e)to* o4 poer to m)He te %) 3 *e3e)r%& *o%e ) +3reto* ) to )t t)%% be, 3 3o*ttto*)%%& m)& *ot be +o*e, )*+ +e%e)to* o4 )tort& or +3reto* )to t e7e3to* to be e7er3e+ *+er )*+ * pr)*3e o4 te %), to 3 *o )%+obe3to* 3)* be m)+e. *he Constitution is thus not to be re78rded 8s den3in7 the le7isl8ture thenecess8r3 resources of flexibilit3 8nd pr8ctic8bilit3. E9ph8sis suppliedD.

Cle8rl3, the le7isl8ture 983 dele78te to executive officers or bodies the poer to deter9ine cert8inf8cts or conditions, or the h8ppenin7 of contin7encies, on hich the oper8tion of 8 st8tute is, b3 itster9s, 98de to depend, but the le7isl8ture 9ust prescribe sufficient st8nd8rds, policies or li9it8tions

on their 8uthorit3.H>hile the poer to t8x c8nnot be dele78ted to executive 87encies, det8ils 8s tothe enforce9ent 8nd 8d9inistr8tion of 8n exercise of such poer 983 be left to the9, includin7 thepoer to deter9ine the existence of f8cts on hich its oper8tion depends.I"

*he r8tion8le for this is th8t the preli9in8r3 8scert8in9ent of f8cts 8s b8sis for the en8ct9ent ofle7isl8tion is not of itself 8 le7isl8tive function, but is si9pl3 8ncill8r3 to le7isl8tion. *hus, the dut3 ofcorrel8tin7 infor98tion 8nd 98Fin7 reco99end8tions is the Find of subsidi8r3 8ctivit3 hich thele7isl8ture 983 perfor9 throu7h its 9e9bers, or hich it 983 dele78te to others to perfor9.&ntelli7ent le7isl8tion on the co9plic8ted proble9s of 9odern societ3 is i9possible in the 8bsence of8ccur8te infor98tion on the p8rt of the le7isl8tors, 8nd 8n3 re8son8ble 9ethod of securin7 suchinfor98tion is proper.I1*he Constitution 8s 8 continuousl3 oper8tive ch8rter of 7overn9ent does notreuire th8t Con7ress find for itself

ever3 f8ct upon hich it desires to b8se le7isl8tive 8ction or th8t it 98Fe for itself det8ileddeter9in8tions hich it h8s decl8red to be prereuisite to 8pplic8tion of le7isl8tive polic3 to p8rticul8rf8cts 8nd circu9st8nces i9possible for Con7ress itself properl3 to investi78te.I!

&n the present c8se, the ch8llen7ed section of R.A. No. H@@# is the co99onprovisoin ections , I8nd 6 hich re8ds 8s follosJ
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*h8t the President, upon the reco99end8tion of the ecret8r3 of /in8nce, sh8ll, effective +8nu8r3 1,!""6, r8ise the r8te of v8lue-8dded t8x to telve percent 1!KD, 8fter 8n3 of the folloin7 conditionsh8s been s8tisfiedJ

iD ;8lue-8dded t8x collection 8s 8 percent87e of Gross o9estic Product GPD of the previous3e8r exceeds to 8nd four-fifth percent ! IKD4 or

iiD N8tion8l 7overn9ent deficit 8s 8 percent87e of GP of the previous 3e8r exceeds one 8nd one-h8lf percent 1 OKD.

*he c8se before the Court is not 8 dele78tion of le7isl8tive poer. &t is si9pl3 8 dele78tion of8scert8in9ent of f8cts upon hich enforce9ent 8nd 8d9inistr8tion of the incre8se r8te under the l8is contin7ent. *he le7isl8ture h8s 98de the oper8tion of the 1!K r8te effective +8nu8r3 1, !""6,contin7ent upon 8 specified f8ct or condition. &t le8ves the entire oper8tion or non-oper8tion of the1!K r8te upon f8ctu8l 98tters outside of the control of the executive.

No discretion ould be exercised b3 the President. 2i7hli7htin7 the 8bsence of discretion is the f8ctth8t the ord shallis used in the co99onproviso. *he use of the ord shallconnotes 8 98nd8tor3

order. &ts use in 8 st8tute denotes 8n i9per8tive obli78tion 8nd is inconsistent ith the ide8 ofdiscretion.I@>here the l8 is cle8r 8nd un89bi7uous, it 9ust be t8Fen to 9e8n ex8ctl3 h8t it s83s,8nd courts h8ve no choice but to see to it th8t the 98nd8te is obe3ed.I

*hus, it is the 9inisteri8l dut3 of the President to i99edi8tel3 i9pose the 1!K r8te upon theexistence of 8n3 of the conditions specified b3 Con7ress. *his is 8 dut3 hich c8nnot be ev8ded b3the President. &n8s9uch 8s the l8 specific8ll3 uses the ord shall, the exercise of discretion b3 thePresident does not co9e into pl83. &t is 8 cle8r directive to i9pose the 1!K ;A* r8te hen thespecified conditions 8re present. *he ti9e of t8Fin7 into effect of the 1!K ;A* r8te is b8sed on theh8ppenin7 of 8 cert8in specified contin7enc3, or upon the 8scert8in9ent of cert8in f8cts orconditions b3 8 person or bod3 other th8n the le7isl8ture itself.

*he Court finds no 9erit to the contention of petitionersABAKADA GURO P8rt3 'ist, et 8l. th8t thel8 effectivel3 nullified the President5s poer of control over the ecret8r3 of /in8nce b3 98nd8tin7the fixin7 of the t8x r8te b3 the President upon the reco99end8tion of the ecret8r3 of /in8nce. *heCourt c8nnot 8lso subscribe to the position of petitioners

Pi9entel,et al.th8t the ord shallshould be interpreted to 9e8n 'ayin vie of the phr8se :uponthe reco99end8tion of the ecret8r3 of /in8nce.: Neither does the Court find persu8sive thesub9ission of petitioners Escudero,et al.th8t 8n3 reco99end8tion b3 the ecret8r3 of /in8nce c8ne8sil3 be brushed 8side b3 the President since the for9er is 8 9ere 8lter e7o of the l8tter.

>hen one spe8Fs of the ecret8r3 of /in8nce 8s the 8lter e7o of the President, it si9pl3 9e8ns th8t8s he8d of the ep8rt9ent of /in8nce he is the 8ssist8nt 8nd 87ent of the Chief Executive. *he9ultif8rious executive 8nd 8d9inistr8tive functions of the Chief Executive 8re perfor9ed b3 8nd

throu7h the executive dep8rt9ents, 8nd the 8cts of the secret8ries of such dep8rt9ents, such 8s theep8rt9ent of /in8nce, perfor9ed 8nd pro9ul78ted in the re7ul8r course of business, 8re, unlessdis8pproved or reprob8ted b3 the Chief Executive, presu9ptivel3 the 8cts of the Chief Executive.*he ecret8r3 of /in8nce, 8s such, occupies 8 politic8l position 8nd holds office in 8n 8dvisor3c8p8cit3, 8nd, in the l8n7u87e of *ho98s +efferson, :should be of the PresidentTs boso9 confidence:8nd, in the l8n7u87e of Attorne3-Gener8l Cushin7, is :subect to the direction of the President.:II

&n the present c8se, in 98Fin7 his reco99end8tion to the President on the existence of either of theto conditions, the ecret8r3 of /in8nce is not 8ctin7 8s the 8lter e7o of the President or even her
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subordin8te. &n such inst8nce, he is not subect to the poer of control 8nd direction of the President.2e is 8ctin7 8s the 87ent of the le7isl8tive dep8rt9ent, to deter9ine 8nd decl8re the event uponhich its expressed ill is to t8Fe effect.I6*he ecret8r3 of /in8nce beco9es the 9e8ns or tool b3hich le7isl8tive polic3 is deter9ined 8nd i9ple9ented, considerin7 th8t he possesses 8ll thef8cilities to 78ther d8t8 8nd infor98tion 8nd h8s 8 9uch bro8der perspective to properl3 ev8lu8tethe9. 2is function is to 78ther 8nd coll8te st8tistic8l d8t8 8nd other pertinent infor98tion 8nd verif3 if

8n3 of the to conditions l8id out b3 Con7ress is present. 2is person8lit3 in such inst8nce is inre8lit3 but 8 proection of th8t of Con7ress. *hus, bein7 the 87ent of Con7ress 8nd not of thePresident, the President c8nnot 8lter or 9odif3 or nullif3, or set 8side the findin7s of the ecret8r3 of/in8nce 8nd to substitute the ud79ent of the for9er for th8t of the l8tter.

Con7ress si9pl3 7r8nted the ecret8r3 of /in8nce the 8uthorit3 to 8scert8in the existence of 8 f8ct,n89el3, hether b3 ece9ber @1, !""I, the v8lue-8dded t8x collection 8s 8 percent87e of Grosso9estic Product GPD of the previous 3e8r exceeds to 8nd four-fifth percent !IKD or then8tion8l 7overn9ent deficit 8s 8 percent87e of GP of the previous 3e8r exceeds one 8nd one-h8lfpercent 1OKD. &f either of these to inst8nces h8s occurred, the ecret8r3 of /in8nce, b3 le7isl8tive98nd8te, 9ust sub9it such infor98tion to the President. *hen the 1!K ;A* r8te 9ust be i9posedb3 the President effective +8nu8r3 1, !""6. Tere *o *+e +e%e)to* o4 %e%)te poer bto*%& o4 te +3reto* ) to te e7e3to* o4 ) %). T 3o*ttto*)%%& permb%e.I#Con7ress does not 8bdic8te its functions or undul3 dele78te poer hen it describes h8t ob 9ustbe done, ho 9ust do it, 8nd h8t is the scope of his 8uthorit34 in our co9plex econo93 th8t isfreuentl3 the onl3 83 in hich the le7isl8tive process c8n 7o for8rd.I

As to the 8r7u9ent of petitionersABAKADA GURO P8rt3 'ist,et al.th8t dele78tin7 to the Presidentthe le7isl8tive poer to t8x is contr8r3 to the principle of republic8nis9, the s89e deserves sc8ntconsider8tion. Con7ress did not dele78te the poer to t8x but the 9ere i9ple9ent8tion of the l8.*he intent 8nd ill to incre8se the ;A* r8te to 1!K c89e fro9 Con7ress 8nd the t8sF of thePresident is to si9pl3 execute the le7isl8tive polic3. *h8t Con7ress chose to do so in such 8 98nneris not ithin the province of the Court to inuire into, its t8sF bein7 to interpret the l8.IH

*he insinu8tion b3 petitioners Pi9entel,et al.th8t the President h8s 89ple poers to c8use,

influence or cre8te the conditions to brin7 8bout either or both the conditions precedent does notdeserve 8n3 9erit 8s this 8r7u9ent is hi7hl3 specul8tive. *he Court does not rule on 8lle78tionshich 8re 98nifestl3 conectur8l, 8s these 983 not exist 8t 8ll. *he Court de8ls ith f8cts, notf8ncies4 on re8lities, not 8ppe8r8nces. >hen the Court 8cts on 8ppe8r8nces inste8d of re8lities,ustice 8nd l8 ill be short-lived.

B. #he !"< 3ncrease +A# Rate Does /ot 3'pose an Un$air and Unnecessary Additional #a* Burden

Petitioners Pi9entel,et al. 8r7ue th8t the 1!K incre8se in the ;A* r8te i9poses 8n unf8ir 8nd8ddition8l t8x burden on the people. Petitioners 8lso 8r7ue th8t the 1!K incre8se, dependent on 8n3of the ! conditions set forth in the contested provisions, is 89bi7uous bec8use it does not st8te if the;A* r8te ould be returned to the ori7in8l 1"K if the r8tes 8re no lon7er s8tisfied. Petitioners 8lso

8r7ue th8t such r8te is unf8ir 8nd unre8son8ble, 8s the people 8re unsure of the 8pplic8ble ;A* r8tefro9 3e8r to 3e8r.

%nder the co99onprovisos of ections , I 8nd 6 of R.A. No. H@@#, if 8n3 of the to conditions setforth therein 8re s8tisfied, the President sh8ll incre8se the ;A* r8te to 1!K. *he provisions of the l88re cle8r. &t does not provide for 8 return to the 1"K r8te nor does it e9poer the President to sorevert if, 8fter the r8te is incre8sed to 1!K, the ;A* collection 7oes belo the !Iof the GP of theprevious 3e8r or th8t the n8tion8l 7overn9ent deficit 8s 8 percent87e of GP of the previous 3e8rdoes not exceed 1OK.


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*herefore, no st8tutor3 construction or interpret8tion is needed. Neither c8n conditions or li9it8tionsbe introduced here none is provided for. Reritin7 the l8 is 8 forbidden 7round th8t onl3 Con7ress983 tre8d upon.6"

*hus, in the 8bsence of 8n3 provision providin7 for 8 return to the 1"K r8te, hich in this c8se theCourt finds none, petitioners5 8r7u9ent is, 8t best, purel3 specul8tive. *here is no b8sis for

petitioners5 fe8r of 8 fluctu8tin7 ;A* r8te bec8use the l8 itself does not provide th8t the r8te should7o b8cF to 1"K if the conditions provided in ections , I 8nd 6 8re no lon7er present. *he rule isth8t here the provision of the l8 is cle8r 8nd un89bi7uous, so th8t there is no occ8sion for thecourtTs seeFin7 the le7isl8tive intent, the l8 9ust be t8Fen 8s it is, devoid of udici8l 8ddition orsubtr8ction.61

Petitioners 8lso contend th8t the incre8se in the ;A* r8te, hich 8s 8lle7edl3 8n incentive to thePresident to r8ise the ;A* collection to 8t le8st ! Iof the GP of the previous 3e8r, should beb8sed on fisc8l 8deu8c3.

Petitioners obviousl3 overlooFed th8t incre8se in ;A* collection is not theonlycondition. *here is8nother condition, i.e., the n8tion8l 7overn9ent deficit 8s 8 percent87e of GP of the previous 3e8r

exceeds one 8nd one-h8lf percent 1 OKD.

Respondents expl8ined the philosoph3 behind these 8ltern8tive conditionsJ

1. ;A*GP R8tio U !.K

*he condition set for incre8sin7 ;A* r8te to 1!K h8ve econo9ic or fisc8l 9e8nin7. &f ;A*GP isless th8n !.K, it 9e8ns th8t 7overn9ent h8s e8F or no c8p8bilit3 of i9ple9entin7 the ;A* or th8t;A* is not effective in the function of the t8x collection. *herefore, there is no v8lue to incre8se it to1!K bec8use such 8ction ill 8lso be ineffectu8l.

!. N8t5l Gov5t eficitGP U1.IK

*he condition set for incre8sin7 ;A* hen deficitGP is 1.IK or less 9e8ns the fisc8l condition of7overn9ent h8s re8ched 8 rel8tivel3 sound position or is to8rds the direction of 8 b8l8nced bud7etposition. *herefore, there is no need to incre8se the ;A* r8te since the fisc8l house is in 8 rel8tivel3he8lth3 position. (therise st8ted, if the r8tio is 9ore th8n 1.IK, there is indeed 8 need to incre8sethe ;A* r8te.6!

*h8t the first condition 89ounts to 8n incentive to the President to incre8se the ;A* collection doesnot render it unconstitution8l so lon7 8s there is 8 public purpose for hich the l8 8s p8ssed,hich in this c8se, is 98inl3 to r8ise revenue. &n f8ct, $iscal ade=uacy dict8ted the need for 8 r8ise inrevenue.

*he principle of fisc8l 8deu8c3 8s 8 ch8r8cteristic of 8 sound t8x s3ste9 8s ori7in8ll3 st8ted b3Ad89 9ith in his &anons o$ #a*ation1##6D, 8sJ

&;. Ever3 t8x ou7ht to be so contrived 8s both to t8Fe out 8nd to Feep out of the pocFets of thepeople 8s little 8s possible over 8nd 8bove h8t it brin7s into the public tre8sur3 of the st8te.6@

&t si9pl3 9e8ns th8t sources of revenues 9ust be 8deu8te to 9eet 7overn9ent expenditures 8ndtheir v8ri8tions.6


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*he dire need for revenue c8nnot be i7nored. (ur countr3 is in 8 u879ire of fin8nci8l oe. urin7the Bic89er8l Conference Co99ittee he8rin7, then /in8nce ecret8r3 Purisi98 bluntl3 depicted thecountr35s 7loo93 st8te of econo9ic 8ff8irs, thusJ

/irst, let 9e expl8in the position th8t the Philippines finds itself in ri7ht no. >e 8re in 8 positionhere H" percent of our revenue is used for debt service. o, for ever3 peso of revenue th8t e

currentl3 r8ise, H" 7oes to debt service. *h8t5s interest plus 89ortiM8tion of our debt. o cle8rl3, thisis not 8 sust8in8ble situ8tion. *h8t5s the first f8ct.

*he second f8ct is th8t our debt to GP level is 83 out of line co9p8red to other peer countries th8tborro 9one3 fro9 th8t intern8tion8l fin8nci8l 98rFets. (ur debt to GP is 8pproxi98tel3 eu8l toour GP. A78in, th8t shos 3ou th8t this is not 8 sust8in8ble situ8tion.

*he third thin7 th8t &5d liFe to point out is the environ9ent th8t e 8re presentl3 oper8tin7 in is not 8sbeni7n 8s h8t it used to be the p8st five 3e8rs.

>h8t do & 9e8n b3 th8tL

&n the p8st five 3e8rs, e5ve been lucF3 bec8use e ere oper8tin7 in 8 period of b8sic8ll3 7lob8l7roth 8nd lo interest r8tes. *he p8st fe 9onths, e h8ve seen 8n inchin7 up, in f8ct, 8 r8pidincre8se in the interest r8tes in the le8din7 econo9ies of the orld. And, therefore, our 8bilit3 toborro 8t re8son8ble prices is 7oin7 to be ch8llen7ed. &n f8ct, ulti98tel3, the uestion is our 8bilit3 to8ccess the fin8nci8l 98rFets.

>hen the President 98de her speech in +ul3 l8st 3e8r, the environ9ent 8s not 8s b8d 8s it is no,8t le8st b8sed on the forec8st of 9ost fin8nci8l institutions. o, e ere 8ssu9in7 th8t r8isin7 "billion ould put us in 8 position here e c8n then convince the9 to i9prove our 8bilit3 to borro 8tloer r8tes. But conditions h8ve ch8n7ed on us bec8use the interest r8tes h8ve 7one up. &n f8ct, ustithin this roo9, e tried to 8ccess the 98rFet for 8 billion doll8rs bec8use for this 3e8r 8lone, thePhilippines ill h8ve to borro billion doll8rs. (f th8t 89ount, e h8ve borroed 1.I billion. >e

issued l8st +8nu8r3 8 !I-3e8r bond 8t H.# percent cost. >e ere tr3in7 to 8ccess l8st eeF 8nd the98rFet 8s not 8s f8vor8ble 8nd up to no e h8ve not 8ccessed 8nd e 9i7ht pull b8cF bec8usethe conditions 8re not ver3 7ood.

o 7iven this situ8tion, e 8t the ep8rt9ent of /in8nce believe th8t e re8ll3 need to front-end ourdeficit reduction. Bec8use it is deficit th8t is c8usin7 the incre8se of the debt 8nd e 8re in h8t ec8ll 8 debt spir8l. *he 9ore debt 3ou h8ve, the 9ore deficit 3ou h8ve bec8use interest 8nd debtservice e8ts 8nd e8ts 9ore of 3our revenue. >e need to 7et out of th

ABAKADA vs Purisima, En Banc G.R. No. 168056 September 1, 2005

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Transcript of ABAKADA vs Purisima, En Banc G.R. No. 168056 September 1, 2005