e118 tatad vs secretary of doe

8/18/2019 E118 Tatad vs Secretary of DOE

1/40

FACTS:

The petitions challenge the constitutionality of RA No. 8180 entitled “An Act

Deegulating the Do!nstea" #il $ndusty and Fo #the %uposes.& The

deegulation pocess has t!o phases: 'a( the tansition phase 'Aug. 1)*

1++,( and the '-( full deegulation phase 'Fe-. 8* 1++ though /# No. )(.

Sec. 1 of RA No. 8180 constitutes an undue delegation of legislati2e po!e

to the %esident and the Sec. of /negy -ecause it does not po2ide a

dete"inate o dete"ina-le standad to guide the /3ecuti2e 4anch in

dete"ining !hen to i"ple"ent the full deegulation of the do!nstea" oil

industy* and the la! does not po2ide any speci5c standad to dete"ine

!hen the pices of cude oil in the !old "a6et ae consideed to -e

declining no !hen the e3change ate of the peso to the 7S dolla is

consideed sta-le.

$ssue:

!n the po2isions of RA No. 8180 and /# No. ) is unconstitutional.

su-9issue: 'a( !n sec. 1 2iolates the constitutional pohi-ition on undue

delegation of po!e* and '-( !n the /3ecuti2e "isapplied RA No. 8180 !hen

it consideed the depletion of the #%SF fund as facto in fully deegulating

the do!nstea" oil industy in Fe-. 1++.

/;DR7;$N


2/40

8180 !hen it co0nsideed the e3taneous facto of depletion of the #%SF

fund. The /3ecuti2e is -eeft of any ight to alte eithe -y su-taction o

addition the standads set in RA No. 8180 fo it has no po!es to "a6e la!s.


3/40

Repu-lic of the %hilippines

SUPREME COURT>anila

/N 4ANC

G.R. No. 124360 December 3, 1997

FRANCSCO S. TATAD, petitione*2s.

T!E SECRETAR" OF T!E DEPARTMENT OF ENERG" AND T!ESECRETAR" OF T!E DEPARTMENT OF FNANCE, espondents.

G.R. No. 127#67 December 3, 1997EDCE$ C. $AGMAN, %O&ER P. ARRO"O, ENR'UE GARCA, (G)ERTOTA*ADA, F$AG !UMAN RG!TS FOUNDATON, NC., FREEDOM FROMDE)T COA$TON +FDC, SAN$A&AS, petitiones*2s.

!ON. RU)EN TORRES, - /- cc- /e E5ec-e Secrer,!ON. FRANCSCO 8RA", - /- cc- /e Secrer o Eer:,CA$TE; P/-


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/3ecuti2e #de No. +) is not a "isapplication of Repu-lic Act No.

8180

$$

Sections '-(* , and +'-( of Repu-lic Act No. 8180 do not conta2enesection 1+* Aticle E$$ of the Constitution and

$$$

Sections '-(* , and +'-( of R.A. No. 8180 do not pe"eate the essence

of the said la! hence thei nullity !ill not 2itiate the othe pats

theeof.

$n thei >otion fo Reconsideation* the inte2enos ague:

).1.1 The total nulli5cation of Repu-lic Act No. 8180 estoes the

dispopotionate ad2antage of the thee -ig oil 5"s Calte3* Shell

and %eton o2e the s"all oil 5"s

).1.) The total nulli5cation of Repu-lic Act No. 8180 disa"s the ne!

entants and seiously cipples thei capacity to co"pete and go!

and

).1. 7lti"ately the total nulli5cation of Repu-lic Act. No. 8180

e"o2es su-stantial* al-eit i"pefect* -aies to "onopolistic

pactices and unfai co"petition and tade pactices ha"ful not onlyto "o2ant9inte2enos -ut also to the pu-lic in geneal.

$n his %atial >otion fo Reconsideation* 2 petitione


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of this facto did not 2iolate the ule that the e3ecise of delegated po!e

"ust -e done stictly in accod !ith the standad po2ided in the la!. They

contend that the ule pohi-its the /3ecuti2e fo" su-tacting -ut not fo"

adding to the standad set -y Congess. This hai splitting is a steile atte"pt

to "a6e a distinction !hen thee is no diIeence. The choice and cafting of

the standad to guide the e3ecise of delegated po!e is pat of thela!"a6ing pocess and lies !ithin the e3clusi2e @uisdiction of Congess. The

standad cannot -e alteed in any !ay -y the /3ecuti2e fo the /3ecuti2e

cannot "odify the !ill of the ;egislatue. To -e sue* pu-lic espondents do

not cite any authoity to suppot its stange thesis fo thee is none in ou

@uispudence.

The pu-lic espondents ne3t ecycle thei agu"ents that sections '-(* ,

and +'-( of R.A. No. 8180 do not conta2ene section 1+* Aticle E$$ of the

Constitution. 3 They eiteate that the GH taiI diIeential !ould encouage

the constuction of ne! e5neies !hich !ill -ene5t the county fo theyFilipino la-o and goods. Be ha2e e@ected this su-"ission fo a eality chec6

!ill e2eal that this GH taiI diIeential gi2es a decisi2e edge to the e3isting

oil co"panies e2en as it constitutes a su-stantial -aie to the enty of

pospecti2e playes. Be do not agee !ith the pu-lic espondents that thee

is no e"piical e2idence to suppot this uling. $n the ecent heaing of the

Senate Co""ittee on /negy chaied -y Senato Feddie Be--* it !as

esta-lished that the GH taiI diIeential on cude oil and e5ned petoleu"

i"potation gi2es a )09centa2o pe lite ad2antage to the thee -ig oil

co"panies o2e the ne! playes. $t !as also found that said taiI diIeential

se2es as a potecti2e shield fo the -ig oil co"panies. 4

No do !e appo2epu-lic espondentsJ su-"ission that the enty of ne! playes afte

deegulation is poof that the GH taiI diIeential is not a hea2y

disincenti2e. Acting as the "outhpiece of the ne! playes* pu-lic

espondents e2en la"ent that unfotunately* the oppotunity to get the

ans!e ight fo" the JhosesJ "outhJ eluded this onoa-le Cout since

none of the ne! playes supposedly ad2esely aIected -y the assailed

po2isions ca"e fo!ad to 2oice thei position. ? They need not continue

thei la"entation. The ne! playes epesented -y /asten %etoleu"*

Seasoil %etoleu" Copoation* Su-ic 4ay Disti-ution* $nc.* TBA $nc.* and

Du-%hil


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ne! playes the"sel2es conside the GH taiI diIeential in R.A. No. 8180 as

oppessi2e and should -e nulli5ed.

To gi2e thei agu"ent a ne! spin* pu-lic espondents ty to @ustify the GH

taiI diIeential on the gound that thee is a su-stantial diIeence -et!een

a e5ne and an i"pote @ust as thee is a diIeence -et!een a! "ateialand 5nished poduct. #-2iously* the eIot is "ade to de"onstate that the

une?ual taiI does not 2iolate the une?ual potection clause of the

Constitution. The eIot only po2es that the pu-lic espondents ae still

loo6ing at the issue of taiI diIeential fo" the !ong end of the telescope.

#u Decision did not hold that the GH taiI diIeential infinged the e?ual

potection clause of the Constitution e2en as this !as contended -y

petitione Tatad. # Rathe* !e held that said taiI diIeential su-stantially

occluded the enty point of pospecti2e playes in the do!nstea" oil

industy. Be futhe held that its ine2ita-le esult is to e3clude fai and

eIecti2e co"petition and to enhance the "onopolistsJ a-ility to ta"pe !iththe "echanis" of a fee "a6et. This consideation is -asic in anti9tust suits

and cannot -e eoded -y -ela-oing the inapplica-le pinciple in ta3ation

that diIeent things can -e ta3ed diIeently.

The pu-lic espondents tenaciously defend the 2alidity of the "ini"u"

in2entoy e?uie"ent. They a2e that the e?uie"ent !ill not pe@udice ne!

playes . . . duing thei 5st yea of opeation -ecause they do not ha2e yet

annual sales fo" !hich the e?uied "ini"u" in2entoy "ay -e

dete"ined. Co"pliance !ith such e?uie"ent on thei second and

succeeding yeas of opeation !ill not -e di=cult -ecause the putting up ofstoage facilities in popotion to the 2olu"e of thei -usiness -eco"es an

odinay and necessay -usiness undeta6ing @ust as the case of i"potes of

5nished poducts in othe industies. 9 The contention is an old one although

it is pu2eyed !ith a ne! lipstic6. The contention cannot con2ince fo as !ell

aticulated -y petitione


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%u-lic espondents still "aintain that the po2ision on pedatoy picing does

not oIend the Constitution. Again* thei agu"ent is not fesh though

e"-ellished !ith citations of cases in the 7nited States sustaining the

2alidity of sales9-elo!9costs statutes. 11 A ?uic6 loo6 at these A"eican cases

!ill sho! that they ae inapplica-le. R.A. No. 8180 has a diIeent cast. As

discussed* its po2isions on taiI diIeential and "ini"u" in2entoy eectedhigh -aies to the enty of pospecti2e playes e2en as they aised thei

ne! i2alsJ costs* thus ceating the clea dange that the deegulated "a6et

in the do!nstea" oil industy !ill not opeate unde an at"osphee of fee

and fai co"petition. $t is cetain that lac6 of eal co"petition !ill allo! the

pesent oil oligopolists to dictate pices*12 and can entice the" to engage in

pedatoy picing to eli"inate i2als. The fact that R.A. No. 8180 pohi-its

pedatoy picing !ill not dissol2e this clea dange. $n tuth* its de5nition of

pedatoy picing is too loose to -e eal deteent. Thus* one of the la!Js

pincipal authos* Congess"an Dante #. Tinga 5led .4. No. 100 !hee he

ac6no!ledged in its e3planatoy note that the de5nition of pedatoy picing. . . needs to -e tightened up paticulaly !ith espect to the de5niti2e

-ench"a6 pice and the speci5c anti9co"petiti2e intent. The de5nition in

the -ill at hand !hich !as ta6en fo" the Aeeda9Tune test in the 7nited

States on pedatoy picing esol2es the ?uestions. Follo!ing the "oe

eIecti2e Aeeda9Tune test* Congess"an Tinga has poposed to ede5ne

pedatoy picing* viz .: %edatoy picing "eans selling o oIeing to sell any

oil poduct at a pice -elo! the a2eage 2aia-le cost fo the pupose of

destoying co"petition* eli"inating a co"petito o discouaging a

co"petito fo" enteing the "a6et. 13 $n light of its loose chaacteiKation

in R.A. 8180 and the la!Js anti9co"petiti2e po2isions* !e held that thepo2ision on pedatoy picing is constitutionally in5"ed fo it can -e

!ielded "oe successfully -y the oil oligopolist. $ts cu"ulati2e eIect is to

add to the asenal of po!e of the do"inant oil co"panies. Fo as stuctued*

it has no "oe than the stength of a spide !e- it can catch the !ea6 -ut

cannot catch the stong it can stop the s"all oil playes -ut cannot stop the

-ig oil playes fo" engaging in pedatoy picing.

%u-lic espondents insist on thei thesis that the cases at -a actually assail

the !isdo" of R.A. No. 8180 and that this Cout should efain fo"

e3a"ining the !isdo" of legislations. They contend that R.A. No. 8180in2ol2es an econo"ic policy !hich this Cout cannot e2ie! fo lac6 of po!e

and co"petence. To stat !ith* no school of scholas can clai" any

infalli-ility. istoians !ith unde5led leaning ha2e chonicled 14 o2e the

yeas the disgace of "any econo"ists and the fall of one econo"ic dog"a

afte anothe. 4e that as it "ay* the Cout is a!ae that the pinciple of

sepaation of po!es pohi-its the @udiciay fo" intefeing !ith the policy

setting function of the legislatue. 1? Fo this eason !e italiciKed in ou


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Decision that the Cout did not e2ie! the !isdo" of R.A. No. 8180 -ut its

co"pati-ility !ith the Constitution the Cout did not annul the econo"ic

policy of deegulation -ut 2itiated its aspects !hich oIended the

constitutional "andate on fai co"petition. $t is -eyond de-ate that the

po!e of Congess to enact la!s does not include the ight to pass

unconstitutional la!s. $n 5ne* the Cout did not usup the po!e of theCongess to enact la!s -ut "eely dischaged its -ounden duty to chec6 the

constitutionality of la!s !hen challenged in appopiate cases. #u Decision

annulling R.A No. 8180 is @usti5ed -y the pinciple of chec6 and -alance.

Be hold that the po!e and o-ligation of this Cout to pass upon the

constitutionality of la!s cannot -e defeated -y the fact that the challenged

la! caies seious econo"ic i"plications. This Cout has stuc6 do!n la!s

a-idging the political and ci2il ights of ou people e2en if it has to oIend

the othe "oe po!eful -anches of go2en"ent. Thee is no eason !hy

the Cout cannot sti6e do!n R.A. No. 8180 that 2iolates the econo"ic ightsof ou people e2en if it has to -idle the li-ety of -ig -usiness !ithin

easona-le -ounds. $n Alalayan vs. National Power Corporation 16 the Cout*

spea6ing thu >. Chief Lustice /ni?ue >. Fenando* held:

). No is petitione any"oe successful in his plea fo the nulli5cation

of the challenged po2ision on the gound of his -eing depi2ed of the

li-ety to contact !ithout due pocess of la!.

$t is to -e ad"itted of couse that popety ights 5nd shelte in speci5c

constitutional po2isions* one of !hich is the due pocess clause. $t ise?ually cetain that ou funda"ental la! fa"ed at a ti"e of suging

unest and dissatisfaction* !hen thee !as the fea e3pessed in "any

?uates that a constitutional de"ocacy* in 2ie! of its co""it"ent to

the clai"s of popety* !ould not -e a-le to cope eIecti2ely !ith the

po-le"s of po2ety and "isey that unfotunately aMict so "any of

ou people* is not suscepti-le to the indict"ent that the go2en"ent

theein esta-lished is i"potent to ta6e the necessay e"edial

"easues. The fa"es sa! to that. The !elfae state concept is not

alien to the philosophy of ou Constitution. $t is i"plicit in ?uite a fe! of

its po2isions. $t su=ces to "ention t!o.

Thee is the clause on the po"otion of social @ustice to ensue the

!ell9-eing and econo"ic secuity of all the people* as !ell as the

pledge of potection to la-o !ith the speci5c authoity to egulate the

elations -et!een lando!nes and tenants and -et!een la-o and

capital. This paticulaiKed efeence to the ights of !o6ing "en

!hethe in industy and agicultue cetainly cannot peclude attention


9/40

to and concen fo the ights of consu"es* !ho ae the o-@ects of

solicitude in the legislation no! co"plained of. The police po!e as an

atti-ute to po"ote the co""on !eal !ould -e diluted considea-ly

of its each and eIecti2eness if on the "ee plea that the li-ety to

contact !ould -e esticted* the statute co"plained of "ay -e

chaacteiKed as a denial of due pocess. The ight to popety cannot-e pessed to such an uneasona-le e3te"e.

$t is undestanda-le though !hy -usiness entepises* not unnatually

e2incing lac6 of enthusias" fo police po!e legislation that aIect

the" ad2esely and estict thei po5ts could pedicate alleged

2iolation of thei ights on the due pocess clause* !hich as intepeted

-y the" is a -a to egulatoy "easues. $n2aia-ly* the esponse fo"

this Cout* fo" the ti"e the Constitution !as enacted* has -een fa

fo" sy"pathetic. Thus* duing the Co""on!ealth* !e sustained

legislations po2iding fo collecti2e -againing* secuity of tenue*"ini"u" !ages* co"pulsoy a-itation* and tenancy egulation.

Neithe did the o-@ections as to the 2alidity of "easues egulating the

issuance of secuities and pu-lic se2ices pe2ail.

The Constitution ga2e this Cout the authoity to sti6e do!n all la!s that

2iolate the Constitution. 17 $t did not e3e"pt fo" the each of this authoity

la!s !ith econo"ic di"ension. A )09)0 2ision !ill sho! that the gant -y the

Constitution to this Cout of this all i"potant po!e of e2ie! is !itten

!ithout any 5ne pint.

The next issue is !hethe the Cout should only declae as unconstitutional

the po2isions of R.A. No. 8180 on GH taiI diIeential* "ini"u" in2entoy

and pedatoy picing.

%ositing the a="ati2e 2ie!* petitioner Garcia poIeed the follo!ing

agu"ents:

. 4egging the 6ind indulgence and -enign patience of the Cout* !e

hu"-ly su-"it that the unconstitutionality of the afoe"entioned

po2isions of R.A. No. 8180 implies that the other provisions are

constitutional. Thus, said constitutional provisions of R. A. No. !"

may and can very well #e spared.

.1 Bith the sti6ing do!n of ulti"ately full

deegulation* we will simply $o #ac% to the transition

period under R. A. !" which will continue until Con$ress

enacts an amendatory law for the start of full oil


10/40

dere$ulation in due time* !hen fee "a6et foces ae

aleady in place. $n tun* the monthly automatic price

control mechanism #ased on &in$apore Posted Prices

'&PP(!ill -e e2i2ed. The ener$y Re$ulatory )oard '*R)(,

which still exist, would re-ac+uire urisdiction and would

easily compute the monthly price ceilin$, #ased on &PP, ofeach and every petroleum fuel product * eIecti2e upon

5nality of this CoutJs fa2oa-le esolution on this "otion

fo patial econsideation.

.) 4est of all* the oil dere$ulation can continue

uninterrupted without the three other assailed provisions,

namely, the . tari/ di/erential, predatory pricin$ and

minimum inventory .

,. Be futhe hu"-ly su-"it that a fa2oa-le esolution on this "otionfo patial econsideation would #e consistent with pu#lic interest .

,.1 $n conse?uence* ne! playes that ha2e aleady co"e

in can uninterruptedly continue their operations more

competitively and #ullishly with an even playin$ 0eld.

,.) Futhe* an e2en playing 5eld will attract many more

new players to come in in a much shorter time.

,. Coespondingly* Con$ress does not anymore have to

pass a new dere$ulation law, thus it can immediately

concentrate on ust amendin$ R. A. No. !" to a#olish the

1P&2 * on the go2en"entJs assu"ption that it is necessay

to do so. %aenthetically* it is neithe coect no fai fo

high go2en"ent o=cials to citiciKe and -la"e the

onoa-le Cout on the 1P&2, considerin$ that said 1P&2 is

not inherent in nor necessary to the transition period and

may #e removed at any time.

,.G $n as "uch as R.A. No. 8180 !ould continue to -e in

place 'sans its unconstitutional po2isions(* only the

Comprehensive Tax Reform Pac%a$e 'CTRP( would #e

needed for the country to exit from 342 #y 5ecem#er

!667.

. The Cout* in declaing the entie R.A. No. 8180 unconstitutional*

!as e2idently e3pecting that Congess can fasttac6 the !iting of a


11/40

ne! la! on oil deegulation in accod !ith the Constitution 'Decision

p. 8( o!e2e* it is very pro#lematic, to say the least, if Con$ress can

fasttrac% an entirely new law.

.1 Thee is aleady limited time fo Congess to pass such

a ne! la! #efore it adourns for the !66 elections.

.) At the 2ey least* !hethe o not Congess !ill -e a-le

to fasttac6 the enact"ent of a ne! oil deegulation la!

consistent !ith the onoa-le CoutJs uling* would depend

on many unforseea#le and uncontrolla#le factors. Aleady*

se2eal state"ents fo" legislatos* senatos and

congess"en ali6e* say that the ne! la! can !ait -ecause

of othe pending legislati2e "attes* etc.


12/40

8. Needless to say* all this !ould tanslate

into tremendous losses for them.

8., And o-2iously* prospective new players cannot and will

not come in.

8. #n top of e2eything* pu#lic interest will su/er . Fistly*

the oil deegulation poga" !ill -edelayed. Secondly* the

prices of petroleum products will #e hi$her #ecause of

price ceilin$s #ased on transfer prices of imported crude.

+. Bhen it passed R.A. No. 8180* Congess po2ided

a safe$uard against the possi-ility that any of its po2isions could -e

declaed unconstitutional* thus the separa#ility clause theeof* !hich

the Cout noted 'Decision* p. )+(. Be hu"-ly su-"it that this is

another reason to $rant this motion for partial reconsideration.

$n his Supple"ent to 7gent >otion fo %atial Reconsideation* petitione


13/40

e5ned petoleu" poducts and estictions on such i"potation that

!ould -e allo!ed only if thee ae shotages

.


14/40

. . !ould play a li"ited and "inisteial ole of co"puting the "onthly pice

ceiling of each and e2ey petoleu" fuel poduct* using the auto"atic picing

fo"ula. Bhile the #%SF !ould etun* this co2eage !ould -e li"ited to

"onthly pice inceases in e3cess of %0.0 pe lite.

Be ae not i"pessed -y petitione ach 1++ has aleady co"e to pass. >ach

1++ is not an a-itay date. 4y that date* the tansition peiod has ended

and it !as e3pected that the people !ould ha2e ad@usted to the ole of

"a6et foces in shaping the pices of petoleu" and its poducts. The choice

of >ach 1++ as the date of full deegulation is a @udg"ent of Congess andits @udg"ent call cannot -e i"pugned -y this Cout.

Be co"e to the su-"ission that the po2isions on GH taiI diIeential*

"ini"u" in2entoy and pedatoy picing ae sepaa-le fo" the -ody of

R.A. No. 8180* and hence* should alone -e declaed as unconstitutional. $n

ta6ing this position* the "o2ants ely hea2ily on the sepaa-ility po2ision of

R.A. No. 8180. Be cannot a=" the "o2ants fo the dete"ine !hethe o

not a paticula po2ision is sepaa-le* the couts should conside the intent

of the legislatue. $t is tue that the "ost of the ti"e* such intent is

e3pessed in a sepaa-ility clause stating that the in2alidity ounconstitutionality of any po2ision o section of the la! !ill not aIect the

2alidity o constitutionality of the e"ainde. Nonetheless* the sepaa-ility

clause only ceates a presumption that the act is se2ea-le. 3t is merely an

aid in statutory construction. 3t is not an inexora#le command. 1# A

separa#ility clause does not clothe the valid parts with immunity from the

invalidatin$ e/ect the law $ives to the insepara#le #lendin$ of the #ad with

the $ood. The separa#ility clause cannot also #e applied if it will produce an

a#surd result . 19 3n sum, if the separation of the statute will defeat the intent

of the le$islature, separation will not ta%e place despite the inclusion of a

separa#ility clause in the law.

20

$n the case of the Repu-lic Act No. 8180* the unconstitutionality of the

po2isions on taiI diIeential* "ini"u" in2entoy and pedatoy picing

cannot -ut esult in the unconstitutionality of the entie la! despite its

sepaa-ility clause. These po2isions cannot -e stuc6 do!n alone fo they

!ee the ones intended to cay out the policy of the la! e"-odied in section

) theeof !hich eads:


15/40

Sec. ). Declaation of %olicy $t shall -e the policy of the State to

deegulate the do!nstea" oil industy to foste a tuly co"petiti2e

"a6et !hich can -ette achie2e the social policy o-@ecti2es of fai

pices and ade?uate* continuous supply of en2ion"entally9clean and

high9?uality petoleu" poducts.

They actually set the stage fo the egi"e of deegulation !hee go2en"ent

!ill no longe inte2ene in 53ing the pice of oil and the opeations of oil

co"panies. $t is conceded that the success of deegulation lies in a tuly

co"petiti2e "a6et and thee can -e no co"petiti2e "a6et !ithout the

easy enty and e3it of co"petitos. No less than President 2idel

9 . Ramos ecogniKed this "ati3 !hen he declaed the need is to . . . ecast

ou la!s on tust* "onopolies* oligopolies* catels and co"-inations in@uious

to pu-lic !elfae to estoe co"petition !hee it has disappeaed and to

pese2e it !hee it still e3ists. 3n a word, we need to perpetuate competition

as a system to re$ulate the economy and achieve $lo#al product +uality . 21

Be held in ou Decision that the po2isions on GH taiI diIeential* "ini"u"

in2entoy and pedatoy picing ae anti9co"petition* and they ae the 6ey

po2isions of R.A. No. 8180. Bithout these po2isions in place* Congess

could not ha2e deegulated the do!nstea" oil industy. Conside the GH

taiI diIeential on cude oil and e5ned petoleu". 4efoe R.A. No.

8180* 22 thee !as a ten9point diIeence -et!een the taiI i"posed on cude

oil and that on e5ned petoleu". Section '-( of R.A. No. 8180 lo!eed the

diIeence to fou -y i"posing a H taiI on cude oil and a H taiI on

e5ned petoleu". Be uled* ho!e2e* that this educed taiI diIeential isunconstitutional fo it still posed a su-stantial -aie to the enty of ne!

playes and enhanced the "onopolistic po!e of the thee e3isting oil

co"panies. The uling that the GH diIeential is unconstitutional !ill

unfotunately e2i2e the 10H taiI diIeential of the TaiI and Custo"s

Code. The high 10H taiI diIeential !ill cetainly gi2e a -igge edge to the

thee e3isting oil co"panies* !ill fo" an insupea-le -aie to pospecti2e

playes* and !ill di2e out of -usiness the ne! playes. Thus* thee can -e no

?uestion that Congess !ill not allo! deegulation if the taiI is 10H on

cude oil and )0H on e5ned petoleu". To decee the patial

unconstitutionality of R.A. No. 8180 !ill -ing a-out an a-sudity a fullydeegulated do!nstea" oil industy !hee go2en"ent is i"potent to

egulate un a!ay pices* !hee the oil oligopolists can engage in

cateliKation !ithout co"petition* !hee pospecti2e playes cannot co"e in*

and !hee ne! playes !ill close shop.

Be also e@ect the agu"ent that the -ills pending in Congess "eely see6

to e"edy the patial defects of R.A No. 8180* and that this is poof that R.A.


16/40

No. 8180 can -e declaed unconstitutional "inus its oIensi2e po2isions. Be

efeed to the pending -ills in Congess in ou Decision only to sho! that

Congess itself is a!ae of the 2aious defects of the la! and not to po2e the

insepaa-ility of the oIending po2isions fo" the -ody of R.A. No. 8180. To

-e sue* "o2ants e2en o2eloo6ed the fact that esolutions ha2e -een 5led in

-oth ouse of Congess calling fo a total review of R.A. No. 8180.

The "o2ants !an that ou Decision !ill tho! us -ac6 to the undesia-le

egi"e of egulation. They e"phasiKe its penicious conse?uences the

e2i2al of the 10H taiI diIeential !hich !ill !ipe out the ne! playes* the

etun of the #%SF !hich is too -udenso"e to go2en"ent* the

unsatisfactoy sche"e of pice egulation -y the /R4* etc. To stess again* it

is not the !ill of the Cout to etun e2en te"poaily to the egi"e of

egulation. $f !e etun to the egi"e of egulation* it is -ecause it is the

ine2ita-le conse?uence of the enact"ent -y Congess of an unconstitutional

la!* R.A. No. 8180. $t is settled @uispudence that the declaation of a la! asunconstitutional e2i2es the la!s that it has epealed. Stated othe!ise* an

unconstitutional la! etuns us to the status +uo anteand this etun is

-eyond the po!e of the Cout to stay. :nder our scheme of $overnment,

however, the remedy to prevent the revival of an unwanted status +uo ante

or stop its continuation #y immediately enactin$ the necessary remedial

le$islation. Be e"phasiKe that in the cases at -a* the Cout did not

conde"n the econo"ic policy of deegulation as unconstitutional. $t "eely

held that as cafted* the la! uns counte to the constitutional po2ision

calling fo fai co"petition. 23 Thus* thee is no i"pedi"ent in e9enacting

R.A. No. 8180 "inus its po2isions !hich ae anti9co"petition. The Coutagees that ou etun to the egi"e of egulation has penicious

conse?uences and it specially sy"phatiKes !ith the inte2enos. 4e that as it

"ay* the Cout is po!eless to pe2ent this etun @ust as it is po!eless to

epeal the 10H taiI diIeential of the TaiI Code. $t is Congess that can

gi2e all these e"edies. 24

%etitione


17/40

of ou people. %etitione


18/40

supe"acy of the Constitution not !ith a "ee !ish-one -ut !ith a

-ac6-one that should neithe -end no -ea6.

$N P$/B B/R/#F* the >otions fo Reconsideation of the pu-lic espondents

and of the inte2enos as !ell as the %atial >otion fo Reconsideation of

petitione /ni?ue


19/40

of the la!* fee fo" the taint of unconstitutionality* should e"ain in

foce and eIect in 2ie! of the sepaa-ility clause contained theein. 1

;et "e e3plain. A sepaa-ility clause states that if fo any eason* any

section o po2ision of the statute is held to unconstitutional o

'in2alid(* the othe section's( o po2ision's( of the la! shall not -eaIected thee-y. 2 $t is a legislati2e e3pession of intent that the nullity

of one po2ision shall not in2alidate the othe po2isions of the act.

Such a clause is not* ho!e2e* contolling and the cout "ay* in spite

of it* in2alidate the !hole statute !hee !hat is left* afte the 2oid pat*

is not co"plete and !o6a-le. 3

The ules on statutoy constuction* thus* pesci-e that:

The geneal ule is that !hee pat of a statute is 2oid as

epugnant to the Constitution* !hile anothe pat is 2alid* the2alid potion* if sepaa-le fo" the in2alid* "ay stand and -e

enfoced. The pesence of a sepaa-ility clause in a statute

ceates the pesu"ption that the legislatue intended

sepaa-ility* athe than co"plete nullity* of the statute. To

@ustify this esult* the 2alid potion "ust -e so fa independent of

the in2alid potion that it is fai to pesu"e that the legislatue

!ould ha2e enacted it -y itself if it had supposed that it could not

constitutionally enact the othe. /nough "ust e"ain to "a6e a

co"plete* intelligi-le* and 2alid statute* !hich caies out the

legislati2e intent. The 2oid po2isions "ust -e eli"inated !ithoutcausing esults aIecting the "ain pupose of the act in a "anne

contay to the intention of the legislatue. The language used in

the in2alid pat of the statute can ha2e no legal eIect o e=cacy

fo any pupose !hatsoe2e* and !hat e"ains "ust e3pess the

legislati2e !ill independently of the 2oid pat* since the cout has

no po!e to legislate.

The e3ception to the geneal ule is that !hen the pats of a

statute ae so "utually dependent and connected* as conditions*

consideations* induce"ents* o co"pensations fo each othe*

as to !aant a -elief that the legislatue intended the" as a

!hole the nullity of one pat !ill 2itiate the est. $n "a6ing the

pats of the statute dependent* conditional* o connected !ith

one anothe* the legislatue intended the statute to -e caied

out as a !hole and !ould not ha2e enacted it if one pat is 2oid*

in !hich case if so"e pats ae unconstitutional* all the othe


20/40

po2isions thus dependent* conditional* o connected "ust fall

!ith the". 4

o!e2e* in the instant case* the e3ception athe than the geneal

ule !as applied. The "a@oity opinion enunciated* thus:

. . .This sepaa-ility clause not !ithstanding* !e hold that the

oIending po2isions of R.A. No. 8180 so pe"eate its essence

that the entie la! has to -e stuc6 do!n. The po2isions on taiI

diIeential* in2entoy and pedatoy picing ae a"ong the

pincipal pops of R.A. No. 8180. Congess could not ha2e

deegulated the do!nstea" oil industy !ithout these

po2isions. 7nfotunately* contay to thei intent* these

po2isions on taiI diIeential* in2entoy and pedatoy picing

inhi-it fai co"petition* encouage "onopolistic po!e and

intefee !ith the fee inteaction of "a6et foces. . . .?

$ -eg to disagee.

The thee po2isions declaed 2oid ae se2ea-le fo" the "ain statute

and thei e"o2al theefo" !ould not aIect the 2alidity and

enfocea-ility of the e"aining po2isions of the said la! R.A. No. 8180*

sans the constitutionally in5"ed potions* e"ains co"plete in itself*

sensi-le* capa-le of -eing e3ecuted and !holly independent of 'those(

!hich 'ae( e@ected. 6 $n othe !ods* despite the eli"ination of so"e

of its pats* the la! can still stand on its o!n.

The cucial test is to dete"ine if e3pulsion of the assailed po2isions

cipples the !hole statute* so "uch so* that it is no longe e3pessi2e

of the legislati2e !ill and could no longe cay out the legislati2e

pupose.

The pincipal intent of R.A. No. 8180 is to open the countyJs oil "a6et

to fai and fee co"petition and the thee po2isions ae assailed

pecisely -ecause they ae anti9co"petition and they o-stuct the

enty of ne! playes. Theefoe* in ode to "a6e the deegulation la!

!o6* it is i"peati2e that the anti9co"petition po2isions found theein

-e ta6en out. $n othe !ods* it is only though the sepaation of

these po2isions that the deegulation la! -e a-le to fully ealiKe its

o-@ecti2e.

Ta6e the taiI po2ision fo instance. The epudiation of the taiI

diIeential !ill not e2i2e the 10H and )0H taiI ates. Bhat is -eing


21/40

discaded is the diIeential not the taiI itself* hence* the e"o2al of

the GH diIeential !ould esult in the i"position of a single unifo"

taiI ate on the i"potation of -oth cude oil and e5ned petoleu"

poducts at H as distinctly and deli-eately set in sec. '-( of R.A. No.

8180 itself. The taiI po2ision !hich* ad"ittedly* is a"ong the

pincipal pops of R.A. No. 8180 e"ains intact in su-stance and theeli"ination of the taiI diIeential !ould* in eIect* tansfo" it into

one of the statuteJs 2ouchsa5ng po2isions* a tool to eIecti2ely cay

out the legislati2e intent of fosteing a tuly co"petiti2e "a6et.

Thee is no ?uestion that the legislatue intended a single unifo" taiI

ate fo i"poted cude oil and i"poted petoleu" poducts. This is

o-2ious fo" the proviso contained in Sec. '-( 7 of R.A. No. 8180

!hich speci5cally states that:

. . . %o2ided* That -eginning on Lanuay 1* )00G the taiI ate oni"poted cude oil and e5ned petoleu" poducts shall -e the

sa"e: Provided, further * That this po2ision "ay -e a"ended

only -y an Act of Congess.

although said proviso e?ualiKing the taiI ate ta6es eIect on Lanuay

1* )00G. o!e2e* the nulli5cation of the taiI diIeential endes the

pospecti2e eIecti2ity of the ate e?ualiKation iele2ant and

supeQuous. Natually* thee !ould no longe -e any -asis fo

postponing the le2eling of the taiI ate to a late date. The po2ision

that the taiI ate shall -e e?ualiKed on Lanuay 1* )00G is pe"ised onthe 2alidity of the taiI diIeential* !ithout !hich thee is nothing to

e?ualiKe. Stated diIeently* the i"position of a single unifo" taiI

ate on i"poted cude oil and i"poted petoleu" poducts is to ta6e

eIect i""ediately. A diIeent !ay of intepeting the la! !ould -e

less than faithful to the legislati2e intent to enhance fee co"petition

in the oil industy fo the pupose of o-taining fai pices fo high9

?uality petoleu" poducts.

The po2ision e?uiing a "ini"u" in2entoy !as si"ilaly found -y

the "a@oity to -e anti9co"petition. $ts e3clusion* theefoe* !ould not

ha2e any deleteious eIect on the oil deegulation la!. #n the

contay* the essence of R.A. No. 8180* !hich is fee and fai

co"petition* is pese2ed.

The sa"e ationale applies to the po2ision concening pedatoy

picing and "ay -e su-su"ed 'at least in the "eanti"e pending the

a"end"ent of the la!( unde Sec. + 'a(:


22/40

Sec. +. %ohi-ited Acts. To ensue fai co"petition and pe2ent

catels and "onopolies in the do!nstea" oil industy* the

follo!ing acts ae hee-y pohi-ited:

a( CateliKation !hich "eans any agee"ent*

co"-ination o conceted action -y e5nes andoi"potes o thei epesentati2es to 53 pices*

estict outputs o di2ide "a6ets* eithe -y poducts

o -y aeas* o allocating "a6ets* eithe -y poducts

o -y aeas* in estaint of tade o fee co"petition

and

333 333 333

The ans!e is not the !holesale e@ection of R.A. No. 8180. To sti6e

do!n the !hole statute !ould go against the 2ey ideal that oucounty is sti2ing fo. The goal is to unshac6le the oil industy fo" the

estaints of egulation. To declae R.A. No. 8180 2oid in its entiety

!ould -ing us -ac6 to !hee !e stated. Bose* as pointed out -y the

e"inent constitutionalist* Loa?uin


23/40

e2aluate the application against the opposition. This ule "ade it

possi-le fo the -ig playes to -loc6 the e3pansion of co"peting

facilities. #

These -aies !ee eadicated -y R.A. No. 8180* as e3pessly

"andated in Sec. 'a( theeof:

Sec. . ;i-ealiKation of Do!nstea" #il $ndusty and TaiI

Teat"ent a( Any la! to the contay not!ithstanding* any

peson o entity "ay i"pot o puchase any ?uantity of cude oil

and petoleu" poducts fo" a foeign o do"estic souce* lease

o o!n and opeate e5neies and othe do!nstea" oil facilities

and "a6et such cude oil and petoleu" poducts eithe in a

geneic na"e o its o!n tade na"e* o use the sa"e fo his o!n

e?uie"ent: %o2ided. That any peson o entity !ho shall

engage in any such acti2ity shall gi2e pio notice theeof to theD#/ fo "onitoing puposes: Provided further * That such notice

shall not e3e"pt such peson o entity fo" secuing ceti5cates

of ?uality* health and safety and en2ion"ental cleaance fo"

the pope go2en"ental agencies: Provided, furthermore* That

such peson o entity shall* fo "onitoing puposes* epot to the

D#/ his o its e2ey i"potatione3potation Provided, 0nally *

That all oil i"potations shall -e in accodance !ith the 4asel

Con2ention.

333 333 333

The nulli5cation of the !hole la! !ould* theefoe* considea-ly

@eopadiKe the chances of the ne! entants to su2i2e and e"ain

co"petiti2e in the "a6et.

As a conse?uence theeof* /asten %etoleu" Cop.* Seaoil %etoleu"

Cop.* Su-ic 4ay Disti-ution* $nc.* TBA* $nc. and Du-phil


24/40

unconstitutionality is patial* that is* only the thee '( anti9co"petition

po2isions should -e declaed 2oid. %u-lic espondents* thus* opine:

Thus* e2en assu"ing that the assailed po2isions ae

constitutionally defecti2e* they cannot -e that contagious as to

infect o conta"inate the othe 2alid pats of the la! !hich aeco"plete in the"sel2es* o capa-le of -inging a-out the full

deegulation of the oil industy.

To apply the e3ception to the geneal ule of sepaa-ility !ill

e?uie a clea and o2e!hel"ing de"onstation !hich !ill ease

any and all dou-ts on the unconstitutionality of R.A. 8180.

>oeo2e* the sepaa-le and independent chaacte of the

assailed po2isions "ay -e infeed fo" the 2aious -ills 5led -y

leading legislatos !hich* as noted -y the onoa-le Cout* see6the epeal of this odious and oIensi2e po2isions in R.A. No.

8180. $n fact* the oiginal as !ell as the 5nal 2esions of the

ouse 4ill ),G and Senate 4ill No. 1)* !hich late -eca"e

R.A. No. 8180* did not contain any taiI diIeential.

The foegoing instances clealy de"onstate that the assailed

po2isions !ee indeed sepaa-le and independent of the othe

po2isions of R.A. 8180 and Congess did not conside the sa"e

to -e that indispensa-le* !ithout !hich Congess !ould not ha2e

passed R.A. 8180 into la!.

10

The pu-lic need not fea that pices of petoleu" poducts* paticulaly

gasoline* !ill soa if R.A. No. 8180 is declaed only patially

unconstitutional. The oil deegulation la! itself po2ides ade?uate

safeguads that !ould eIecti2ely a2et and peclude such a die

scenaio. Fo instance* Sec. 8 of the said la! po2ides that:

333 333 333

Any epot fo" any peson of an uneasona-le ise in the pices

of petoleu" poducts shall -e i""ediately acted upon. Fo thispupose* the ceation of a Depat"ent of /negy 'D#/(

Depat"ent of Lustice 'D#L( Tas6 Foce is hee-y "andated to

dete"ine the "eits of the epot and the initiate the necessay

actions !aanted unde the cicu"stances to pe2ent

cateliKation* a"ong othes.


25/40

The la! also tas6s the Depat"ent of /negy 'D#/( to ta6e all

"easues to po"ote fai tade and to pe2ent cateliKation*

"onopolies and co"-inations in estaint of tade and any unfai

co"petition* as de5ned in Aticles 18,* 188 and 18+ of the Re2ised

%enal Code* in the do!nstea"s oil industy. The D#/ shall continue to

encouage cetain pactices in the oil industy !hich se2e the pu-licinteest and ae intended to achie2e e=ciency and cost eduction*

ensue continuous supply of petoleu" poducts* o enhance

en2ion"ental potection. These pactices "ay include -oo!9and9

loan agee"ents* ationaliKed depot opeations* hospitality

agee"ents* @oint tan6e and pipeline utiliKation* and @oint actions on

oil spill contol and 5e pe2ention. 11

;i6e!ise* the D#/ is endo!ed !ith "onitoing po!es as a"ended in

Sec. , of R.A. No. 8180:

Sec. 8. >onitoing. The D#/ shall "onito and pu-lish daily

intenational oil pices to ena-le the pu-lic to dete"ine !hethe

cuent "a6et oil pices ae easona-le. $t shall li6e!ise "onito

the ?uality of petoleu" poducts and stop the opeation of

-usinesses in2ol2ed in the sale of petoleu" poducts !hich do

not co"ply !ith the national standads of ?uality. The 4ueau of

%oduct Standads '4%S(* in coodination !ith D#/* shall set

national standads of ?uality that ae aligned !ith the

intenational standadspotocols of ?uality.

The D#/ shall "onito the e5ning and "anufactuing pocesses

of local petoleu" poducts to ensue that clean and safe

'en2ion"ent and !o6e9-enign( technologies ae applied. This

shall also apply to the pocess of "a6eting local and i"poted

petoleu" poducts.

The D#/ shall "aintain in a peiodic schedule of pesent and

futue total industy in2entoy of petoleu" poducts fo the

pupose of dete"ining the le2el of supply. To i"ple"ent this* the

i"potes* e5nes* and "a6etes ae hee-y e?uied to su-"it

"onthly to the D#/ thei actual and po@ected i"potations* local

puchases* sales ando consu"ption* and in2entoy on a pe

cudepoduct -asis.

333 333 333


26/40

Re2eting to a egulated oil industy* e2en if only fo a shot peiod

!hile the legislatue fasttac6s the passage of a ne! oil deegulation

la! 'the feasi-ility of !hich e"ains a -ig if( defeats the !hole

pupose and only succeeds in etading the countyJs econo"ic go!th.

R.A. No. 8180 is a -old and pogessi2e piece of legislation. $t "ust -egi2en a chance to !o6 and po2e its !oth. Thus* the -ette solution is

to etain the foundations of the la! and lea2e it to Congess to pass

the necessay a"end"ents and enact the appopiate suppoting

legislation to fotify R.A. No. 8180.

$n 2ie! of the foegoing* $ 5nd "yself una-le to concu !ith the

"a@oityJs thesis that the thee assailed po2isions cannot -e stuc6

do!n alone fo they !ee the ones intended to cay out the policy of

'R.A. No. 8180( and that !ithout these po2isions in place. Congess

could not ha2e deegulated the do!nstea" oil industy. As $ ha2epe2iously pointed out* the afoe"entioned po2isions !ee declaed

unconstitutional pecisely -ecause they !ee found to -e anti9

co"petition. o! can anti9co"petition po2isions* theefoe* ha2e any

place in a la! !hose goal is to po"ote and achie2e fai and fee

co"petition

The oil deegulation la! !as not -uilt upon and do not cente on the

po2isions on taiI diIeential* "ini"u" in2entoy e?uie"ent and

pedatoy picing. These ae not the only po2isions of R.A. No. 8180

intended to i"ple"ent the legislati2e intent as e3pessed in sec. )theeof. The heat and soul of R.A. No. 8180 is e"-odied is sec. 'a(

aptly entitled ;i-ealiKation of Do!nstea" #il $ndusty and TaiI

Teat"ent. $t is this po2ision !hich does a!ay !ith the -udenso"e

e?uie"ents and pocedues fo the i"potation of petoleu"

poducts 'the "ain i"pedi"ents to the enty of ne! playes in the oil

"a6et(. Bith this po2ision the enty and e3it of co"petitos is "ade

elati2ely easy and fo" this the co"petiti2e "a6et is esta-lished.

The othe e"aining po2isions ae* li6e!ise* su=cient to se2e the

legislati2e !ill. Thee is a"ong othes* sec. "andating the po"otion

of fai tade pactices and sec. +'a( on the pe2ention of catels and

"onopolies.

The point is* e2en !ithout the su-@ect thee po2isions !hat e"ains is

a co"pehensi-le and !o6a-le la!. The in5"ities of so"e pats of

the statute should not taint the !hole !hen these pats could

successfully -e incised.


27/40

$ also ta6e e3ception to the "a@oityJs o-se2ation that . . . a patial

declaation of unconstitutionality of R.A. No. 8180 !ill -ing a-out a

fully deegulated do!nstea" oil industy !hee go2en"ent !ill -e

i"potent to egulate un a!ay pices* !hee the oil oligopolists can

engage in cateliKation !ithout co"petition* !hee pospecti2e playes

cannot co"e in* and !hee ne! playes !ill close shop. . . As $ ha2eealie discussed* R.A. No. 8180 has a"ed the go2en"ent !ith

ade?uate "easues to deal !ith the a-o2e po-le"s* should any of

these aise. The i"ple"entation* theefoe* of R.A. No. 8180 'sans the

2oid po2isions( is not an a-sudity* on the contay as sho!n a-o2e* it

is the sensi-le thing to do.

ACC#RD$N


28/40

aIected thee-y. 2 $t is a legislati2e e3pession of intent that the nullity

of one po2ision shall not in2alidate the othe po2isions of the act.

Such a clause is not* ho!e2e* contolling and the cout "ay* in spite

of it* in2alidate the !hole statute !hee !hat is left* afte the 2oid pat*

is not co"plete and !o6a-le. 3

The ules on statutoy constuction* thus* pesci-e that:

The geneal ule is that !hee pat of a statute is 2oid as

epugnant to the Constitution* !hile anothe pat is 2alid* the

2alid potion* if sepaa-le fo" the in2alid* "ay stand and -e

enfoced. The pesence of a sepaa-ility clause in a statute

ceates the pesu"ption that the legislatue intended

sepaa-ility* athe than co"plete nullity* of the statute. To

@ustify this esult* the 2alid potion "ust -e so fa independent of

the in2alid potion that it is fai to pesu"e that the legislatue!ould ha2e enacted it -y itself if it had supposed that it could not

constitutionally enact the othe. /nough "ust e"ain to "a6e a

co"plete* intelligi-le* and 2alid statute* !hich caies out the

legislati2e intent. The 2oid po2isions "ust -e eli"inated !ithout

causing esults aIecting the "ain pupose of the act in a "anne

contay to the intention of the legislatue. The language used in

the in2alid pat of the statute can ha2e no legal eIect o e=cacy

fo any pupose !hatsoe2e* and !hat e"ains "ust e3pess the

legislati2e !ill independently of the 2oid pat* since the cout has

no po!e to legislate.

The e3ception to the geneal ule is that !hen the pats of a

statute ae so "utually dependent and connected* as conditions*

consideations* induce"ents* o co"pensations fo each othe*

as to !aant a -elief that the legislatue intended the" as a

!hole the nullity of one pat !ill 2itiate the est. $n "a6ing the

pats of the statute dependent* conditional* o connected !ith

one anothe* the legislatue intended the statute to -e caied

out as a !hole and !ould not ha2e enacted it if one pat is 2oid*

in !hich case if so"e pats ae unconstitutional* all the othe

po2isions thus dependent* conditional* o connected "ust fall

!ith the". 4

o!e2e* in the instant case* the e3ception athe than the geneal

ule !as applied. The "a@oity opinion enunciated* thus:


29/40

. . .This sepaa-ility clause not !ithstanding* !e hold that the

oIending po2isions of R.A. No. 8180 so pe"eate its essence

that the entie la! has to -e stuc6 do!n. The po2isions on taiI

diIeential* in2entoy and pedatoy picing ae a"ong the

pincipal pops of R.A. No. 8180. Congess could not ha2e

deegulated the do!nstea" oil industy !ithout thesepo2isions. 7nfotunately* contay to thei intent* these

po2isions on taiI diIeential* in2entoy and pedatoy picing

inhi-it fai co"petition* encouage "onopolistic po!e and

intefee !ith the fee inteaction of "a6et foces. . . . ?

$ -eg to disagee.

The thee po2isions declaed 2oid ae se2ea-le fo" the "ain statute

and thei e"o2al theefo" !ould not aIect the 2alidity and

enfocea-ility of the e"aining po2isions of the said la! R.A. No. 8180*sans the constitutionally in5"ed potions* e"ains co"plete in itself*

sensi-le* capa-le of -eing e3ecuted and !holly independent of 'those(

!hich 'ae( e@ected. 6 $n othe !ods* despite the eli"ination of so"e

of its pats* the la! can still stand on its o!n.

The cucial test is to dete"ine if e3pulsion of the assailed po2isions

cipples the !hole statute* so "uch so* that it is no longe e3pessi2e

of the legislati2e !ill and could no longe cay out the legislati2e

pupose.

The pincipal intent of R.A. No. 8180 is to open the countyJs oil "a6et

to fai and fee co"petition and the thee po2isions ae assailed

pecisely -ecause they ae anti9co"petition and they o-stuct the

enty of ne! playes. Theefoe* in ode to "a6e the deegulation la!

!o6* it is i"peati2e that the anti9co"petition po2isions found theein

-e ta6en out. $n othe !ods* it is only though the sepaation of

these po2isions that the deegulation la! -e a-le to fully ealiKe its

o-@ecti2e.

Ta6e the taiI po2ision fo instance. The epudiation of the taiI

diIeential !ill not e2i2e the 10H and )0H taiI ates. Bhat is -eing

discaded is the diIeential not the taiI itself* hence* the e"o2al of

the GH diIeential !ould esult in the i"position of a single unifo"

taiI ate on the i"potation of -oth cude oil and e5ned petoleu"

poducts at H as distinctly and deli-eately set in sec. '-( of R.A. No.

8180 itself. The taiI po2ision !hich* ad"ittedly* is a"ong the

pincipal pops of R.A. No. 8180 e"ains intact in su-stance and the


30/40

eli"ination of the taiI diIeential !ould* in eIect* tansfo" it into

one of the statuteJs 2ouchsa5ng po2isions* a tool to eIecti2ely cay

out the legislati2e intent of fosteing a tuly co"petiti2e "a6et.

Thee is no ?uestion that the legislatue intended a single unifo" taiI

ate fo i"poted cude oil and i"poted petoleu" poducts. This iso-2ious fo" the proviso contained in Sec. '-( 7 of R.A. No. 8180

!hich speci5cally states that:

. . . %o2ided* That -eginning on Lanuay 1* )00G the taiI ate on

i"poted cude oil and e5ned petoleu" poducts shall -e the

sa"e: Provided, further * That this po2ision "ay -e a"ended

only -y an Act of Congess.

although said proviso e?ualiKing the taiI ate ta6es eIect on Lanuay

1* )00G. o!e2e* the nulli5cation of the taiI diIeential endes thepospecti2e eIecti2ity of the ate e?ualiKation iele2ant and

supeQuous. Natually* thee !ould no longe -e any -asis fo

postponing the le2eling of the taiI ate to a late date. The po2ision

that the taiI ate shall -e e?ualiKed on Lanuay 1* )00G is pe"ised on

the 2alidity of the taiI diIeential* !ithout !hich thee is nothing to

e?ualiKe. Stated diIeently* the i"position of a single unifo" taiI

ate on i"poted cude oil and i"poted petoleu" poducts is to ta6e

eIect i""ediately. A diIeent !ay of intepeting the la! !ould -e

less than faithful to the legislati2e intent to enhance fee co"petition

in the oil industy fo the pupose of o-taining fai pices fo high9?uality petoleu" poducts.

The po2ision e?uiing a "ini"u" in2entoy !as si"ilaly found -y

the "a@oity to -e anti9co"petition. $ts e3clusion* theefoe* !ould not

ha2e any deleteious eIect on the oil deegulation la!. #n the

contay* the essence of R.A. No. 8180* !hich is fee and fai

co"petition* is pese2ed.

The sa"e ationale applies to the po2ision concening pedatoy

picing and "ay -e su-su"ed 'at least in the "eanti"e pending the

a"end"ent of the la!( unde Sec. + 'a(:

Sec. +. %ohi-ited Acts. To ensue fai co"petition and pe2ent

catels and "onopolies in the do!nstea" oil industy* the

follo!ing acts ae hee-y pohi-ited:


31/40

a( CateliKation !hich "eans any agee"ent*

co"-ination o conceted action -y e5nes ando

i"potes o thei epesentati2es to 53 pices*

estict outputs o di2ide "a6ets* eithe -y poducts

o -y aeas* o allocating "a6ets* eithe -y poducts

o -y aeas* in estaint of tade o fee co"petitionand

333 333 333

The ans!e is not the !holesale e@ection of R.A. No. 8180. To sti6e

do!n the !hole statute !ould go against the 2ey ideal that ou

county is sti2ing fo. The goal is to unshac6le the oil industy fo" the

estaints of egulation. To declae R.A. No. 8180 2oid in its entiety

!ould -ing us -ac6 to !hee !e stated. Bose* as pointed out -y the

e"inent constitutionalist* Loa?uin


32/40

These -aies !ee eadicated -y R.A. No. 8180* as e3pessly

"andated in Sec. 'a( theeof:

Sec. . ;i-ealiKation of Do!nstea" #il $ndusty and TaiI

Teat"ent a( Any la! to the contay not!ithstanding* any

peson o entity "ay i"pot o puchase any ?uantity of cude oiland petoleu" poducts fo" a foeign o do"estic souce* lease

o o!n and opeate e5neies and othe do!nstea" oil facilities

and "a6et such cude oil and petoleu" poducts eithe in a

geneic na"e o its o!n tade na"e* o use the sa"e fo his o!n

e?uie"ent: %o2ided. That any peson o entity !ho shall

engage in any such acti2ity shall gi2e pio notice theeof to the

D#/ fo "onitoing puposes: Provided further * That such notice

shall not e3e"pt such peson o entity fo" secuing ceti5cates

of ?uality* health and safety and en2ion"ental cleaance fo"

the pope go2en"ental agencies: Provided, furthermore* Thatsuch peson o entity shall* fo "onitoing puposes* epot to the

D#/ his o its e2ey i"potatione3potation Provided, 0nally *

That all oil i"potations shall -e in accodance !ith the 4asel

Con2ention.

333 333 333

The nulli5cation of the !hole la! !ould* theefoe* considea-ly

@eopadiKe the chances of the ne! entants to su2i2e and e"ain

co"petiti2e in the "a6et.

As a conse?uence theeof* /asten %etoleu" Cop.* Seaoil %etoleu"

Cop.* Su-ic 4ay Disti-ution* $nc.* TBA* $nc. and Du-phil


33/40

Thus* e2en assu"ing that the assailed po2isions ae

constitutionally defecti2e* they cannot -e that contagious as to

infect o conta"inate the othe 2alid pats of the la! !hich ae

co"plete in the"sel2es* o capa-le of -inging a-out the full

deegulation of the oil industy.

To apply the e3ception to the geneal ule of sepaa-ility !ill

e?uie a clea and o2e!hel"ing de"onstation !hich !ill ease

any and all dou-ts on the unconstitutionality of R.A. 8180.

>oeo2e* the sepaa-le and independent chaacte of the

assailed po2isions "ay -e infeed fo" the 2aious -ills 5led -y

leading legislatos !hich* as noted -y the onoa-le Cout* see6

the epeal of this odious and oIensi2e po2isions in R.A. No.

8180. $n fact* the oiginal as !ell as the 5nal 2esions of the

ouse 4ill ),G and Senate 4ill No. 1)* !hich late -eca"eR.A. No. 8180* did not contain any taiI diIeential.

The foegoing instances clealy de"onstate that the assailed

po2isions !ee indeed sepaa-le and independent of the othe

po2isions of R.A. 8180 and Congess did not conside the sa"e

to -e that indispensa-le* !ithout !hich Congess !ould not ha2e

passed R.A. 8180 into la!. 10

The pu-lic need not fea that pices of petoleu" poducts* paticulaly

gasoline* !ill soa if R.A. No. 8180 is declaed only patiallyunconstitutional. The oil deegulation la! itself po2ides ade?uate

safeguads that !ould eIecti2ely a2et and peclude such a die

scenaio. Fo instance* Sec. 8 of the said la! po2ides that:

333 333 333

Any epot fo" any peson of an uneasona-le ise in the pices

of petoleu" poducts shall -e i""ediately acted upon. Fo this

pupose* the ceation of a Depat"ent of /negy 'D#/(

Depat"ent of Lustice 'D#L( Tas6 Foce is hee-y "andated to

dete"ine the "eits of the epot and the initiate the necessay

actions !aanted unde the cicu"stances to pe2ent

cateliKation* a"ong othes.

The la! also tas6s the Depat"ent of /negy 'D#/( to ta6e all

"easues to po"ote fai tade and to pe2ent cateliKation*

"onopolies and co"-inations in estaint of tade and any unfai


34/40

co"petition* as de5ned in Aticles 18,* 188 and 18+ of the Re2ised

%enal Code* in the do!nstea"s oil industy. The D#/ shall continue to

encouage cetain pactices in the oil industy !hich se2e the pu-lic

inteest and ae intended to achie2e e=ciency and cost eduction*

ensue continuous supply of petoleu" poducts* o enhance

en2ion"ental potection. These pactices "ay include -oo!9and9loan agee"ents* ationaliKed depot opeations* hospitality

agee"ents* @oint tan6e and pipeline utiliKation* and @oint actions on

oil spill contol and 5e pe2ention. 11

;i6e!ise* the D#/ is endo!ed !ith "onitoing po!es as a"ended in

Sec. , of R.A. No. 8180:

Sec. 8. >onitoing. The D#/ shall "onito and pu-lish daily

intenational oil pices to ena-le the pu-lic to dete"ine !hethe

cuent "a6et oil pices ae easona-le. $t shall li6e!ise "onitothe ?uality of petoleu" poducts and stop the opeation of

-usinesses in2ol2ed in the sale of petoleu" poducts !hich do

not co"ply !ith the national standads of ?uality. The 4ueau of

%oduct Standads '4%S(* in coodination !ith D#/* shall set

national standads of ?uality that ae aligned !ith the

intenational standadspotocols of ?uality.

The D#/ shall "onito the e5ning and "anufactuing pocesses

of local petoleu" poducts to ensue that clean and safe

'en2ion"ent and !o6e9-enign( technologies ae applied. Thisshall also apply to the pocess of "a6eting local and i"poted

petoleu" poducts.

The D#/ shall "aintain in a peiodic schedule of pesent and

futue total industy in2entoy of petoleu" poducts fo the

pupose of dete"ining the le2el of supply. To i"ple"ent this* the

i"potes* e5nes* and "a6etes ae hee-y e?uied to su-"it

"onthly to the D#/ thei actual and po@ected i"potations* local

puchases* sales ando consu"ption* and in2entoy on a pe

cudepoduct -asis.

333 333 333

Re2eting to a egulated oil industy* e2en if only fo a shot peiod

!hile the legislatue fasttac6s the passage of a ne! oil deegulation

la! 'the feasi-ility of !hich e"ains a -ig if( defeats the !hole

pupose and only succeeds in etading the countyJs econo"ic go!th.


35/40

R.A. No. 8180 is a -old and pogessi2e piece of legislation. $t "ust -e

gi2en a chance to !o6 and po2e its !oth. Thus* the -ette solution is

to etain the foundations of the la! and lea2e it to Congess to pass

the necessay a"end"ents and enact the appopiate suppoting

legislation to fotify R.A. No. 8180.

$n 2ie! of the foegoing* $ 5nd "yself una-le to concu !ith the

"a@oityJs thesis that the thee assailed po2isions cannot -e stuc6

do!n alone fo they !ee the ones intended to cay out the policy of

'R.A. No. 8180( and that !ithout these po2isions in place. Congess

could not ha2e deegulated the do!nstea" oil industy. As $ ha2e

pe2iously pointed out* the afoe"entioned po2isions !ee declaed

unconstitutional pecisely -ecause they !ee found to -e anti9

co"petition. o! can anti9co"petition po2isions* theefoe* ha2e any

place in a la! !hose goal is to po"ote and achie2e fai and fee

co"petition

The oil deegulation la! !as not -uilt upon and do not cente on the

po2isions on taiI diIeential* "ini"u" in2entoy e?uie"ent and

pedatoy picing. These ae not the only po2isions of R.A. No. 8180

intended to i"ple"ent the legislati2e intent as e3pessed in sec. )

theeof. The heat and soul of R.A. No. 8180 is e"-odied is sec. 'a(

aptly entitled ;i-ealiKation of Do!nstea" #il $ndusty and TaiI

Teat"ent. $t is this po2ision !hich does a!ay !ith the -udenso"e

e?uie"ents and pocedues fo the i"potation of petoleu"

poducts 'the "ain i"pedi"ents to the enty of ne! playes in the oil"a6et(. Bith this po2ision the enty and e3it of co"petitos is "ade

elati2ely easy and fo" this the co"petiti2e "a6et is esta-lished.

The othe e"aining po2isions ae* li6e!ise* su=cient to se2e the

legislati2e !ill. Thee is a"ong othes* sec. "andating the po"otion

of fai tade pactices and sec. +'a( on the pe2ention of catels and

"onopolies.

The point is* e2en !ithout the su-@ect thee po2isions !hat e"ains is

a co"pehensi-le and !o6a-le la!. The in5"ities of so"e pats of

the statute should not taint the !hole !hen these pats could

successfully -e incised.

$ also ta6e e3ception to the "a@oityJs o-se2ation that . . . a patial

declaation of unconstitutionality of R.A. No. 8180 !ill -ing a-out a

fully deegulated do!nstea" oil industy !hee go2en"ent !ill -e

i"potent to egulate un a!ay pices* !hee the oil oligopolists can


36/40

engage in cateliKation !ithout co"petition* !hee pospecti2e playes

cannot co"e in* and !hee ne! playes !ill close shop. . . As $ ha2e

ealie discussed* R.A. No. 8180 has a"ed the go2en"ent !ith

ade?uate "easues to deal !ith the a-o2e po-le"s* should any of

these aise. The i"ple"entation* theefoe* of R.A. No. 8180 'sans the

2oid po2isions( is not an a-sudity* on the contay as sho!n a-o2e* itis the sensi-le thing to do.

ACC#RD$Notion fo Reconsideation of pu-lic espondents* p. .

, >otion fo Reconsideation9in9inte2ention* p. ).

Thei paye states

333 333 333

Bheefoe* "o2ants9inte2enos* though undesigned counsel*

espectfully pay that this onoa-le Cout en #anc* econside

its Decision of 0 No2e"-e 1++:


37/40

1( -y li"iting nulli5cation to the po2ision on pedatoy picing in

Section +'-( and on in2entoy e?uie"ent in Section ,

)( -y etaining the nulli5cation of the taiI diIeential in Section

'-( -ut not estoing the 10H oil taiI diIeential unde the old

egi"e and

( >o2ants9inte2enos futhe pay fo othe @ust and e?uita-le

"easues of elief in the pe"ises.

8 &ee %etition in otion fo Reconsideation* pp. )9)G.

10 %etitione otion fo Reconsideation* p. 1G.

11 >otion fo Reconsideation* pp. )89)+.

1) Anti9co"petiti2e /3clusion: Raising Ri2alsJ Costs to Achie2e

%o!e #2e %ice* ale ;.L. Pol. +,* No. )* Dece"-e 1+8,* pp.

)0+9)+ >onopoliKation -y Raising Ri2alsJ Cost: The Standad

#il Case* The Lounal of ;a! and /cono"ics* Pol. +* No. 1* Apil

1++,* pp. 19G8.

1 Congess"an >anuel A. Ro3as $$ has also 5led .4. No. 10)+)

ede5ning pedatoy picing to focus on pe2enting the do"inantplayes in the industy fo" discouaging ne! entants in the

"a6et.

1G $n his speech -efoe the 0th Annual >eeting of the %hilippine

/cono"ic Society on Dece"-e 1G* 1++)* %esident Fidel P.

Ra"os aptly said: . . . the ecent histoy of econo"ic theoy has

eally -een the do!nfall of one othodo3y afte anothe. The only

theoetical cetainty is that no econo"ic doctine can -e

enga2ed in stone if only -ecause each county is uni?ue in its

chaacte and histoical e3peience. e ?uoted the !ittyo-se2ation of


38/40

1 Fo a "oe geneal study of the ise and fall of econo"ic

theoies li6e the >althusian Theoy of /2olution* Theoy of

Co"paati2e Ad2antage* ;inea Stages Theoies '1+0s to

1+,0s(* Theoies and %attens of Stuctual Change* $ntenational

Dependence Re2olution Theoies '1+0s(* Fee >a6et Counte

Re2olution Theoies '1+80s( and Ne!


39/40

) Today * No2e"-e ,* 1++* p. 8.

), &ee Philippine &tar issue of No2e"-e 1)* 1++.

) %ending -efoe the Congess ae ouse 4ill '.4.( No. 10)0

intoduced -y enando 4. %eeK* .4. No. 10)+) intoduced -yRep. >anuel A. Ro3as $$* .4. No. 100 intoduced -y Rep.

>iguel ;. Ro"eo* .4. No. 100+ intoduced -y Rep. >acial C.

%unKalan* L.* .4. No. 101 intoduced -y Rep. ;eopoldo /. San

4uena2entua* .4. No. 100) intoduced -y Rep. Dante #.

Tinga* Senate 4ill 'S.4.( No. ), intoduced -y Sen. Al-eto


40/40

poducts shall -e the sa"e: Provided, further * That

this po2ision "ay -e a"ended only -y an Act of

Congess

8 Loa?uin

e118 tatad vs secretary of doe

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