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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
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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.
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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
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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
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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
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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$ress can
fasttrac% an entirely new law.
.1 Thee is aleady limited time fo Congess to pass such
a ne! la! #efore it adourns for the !66 elections.
.) At the 2ey least* !hethe o not Congess !ill -e a-le
to fasttac6 the enact"ent of a ne! oil deegulation la!
consistent !ith the onoa-le CoutJs uling* would depend
on many unforseea#le and uncontrolla#le factors. Aleady*
se2eal state"ents fo" legislatos* senatos and
congess"en ali6e* say that the ne! la! can !ait -ecause
of othe pending legislati2e "attes* etc.
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8. Needless to say* all this !ould tanslate
into tremendous losses for them.
8., And o-2iously* prospective new players cannot and will
not come in.
8. #n top of e2eything* pu#lic interest will su/er . Fistly*
the oil deegulation poga" !ill -edelayed. Secondly* the
prices of petroleum products will #e hi$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
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e5ned petoleu" poducts and estictions on such i"potation that
!ould -e allo!ed only if thee ae shotages
.
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. . !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:
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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.
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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
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of ou people. %etitione
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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
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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
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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
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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(:
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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
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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
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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.
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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
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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. $t is this po2ision !hich does a!ay !ith the -udenso"e
e?uie"ents and pocedues fo the i"potation of petoleu"
poducts 'the "ain i"pedi"ents to the enty of ne! playes in the oil
"a6et(. Bith this po2ision the enty and e3it of co"petitos is "ade
elati2ely easy and fo" this the co"petiti2e "a6et is esta-lished.
The othe e"aining po2isions ae* li6e!ise* su=cient to se2e the
legislati2e !ill. Thee is a"ong othes* sec. "andating the po"otion
of fai tade pactices and sec. +'a( on the pe2ention of catels and
"onopolies.
The point is* e2en !ithout the su-@ect thee po2isions !hat e"ains is
a co"pehensi-le and !o6a-le la!. The in5"ities of so"e pats of
the statute should not taint the !hole !hen these pats could
successfully -e incised.
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$ 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
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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:
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. . .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
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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:
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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
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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
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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
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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.
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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
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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++:
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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 $$ has also 5led .4. No. 10)+)
ede5ning pedatoy picing to focus on pe2enting the do"inantplayes in the industy fo" discouaging ne! entants in the
"a6et.
1G $n his speech -efoe the 0th Annual >eeting of the %hilippine
/cono"ic Society on Dece"-e 1G* 1++)* %esident Fidel P.
Ra"os aptly said: . . . the ecent histoy of econo"ic theoy has
eally -een the do!nfall of one othodo3y afte anothe. The only
theoetical cetainty is that no econo"ic doctine can -e
enga2ed in stone if only -ecause each county is uni?ue in its
chaacte and histoical e3peience. e ?uoted the !ittyo-se2ation of
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1 Fo a "oe geneal study of the ise and fall of econo"ic
theoies li6e the >althusian Theoy of /2olution* Theoy of
Co"paati2e Ad2antage* ;inea Stages Theoies '1+0s to
1+,0s(* Theoies and %attens of Stuctual Change* $ntenational
Dependence Re2olution Theoies '1+0s(* Fee >a6et Counte
Re2olution Theoies '1+80s( and Ne!
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) Today * No2e"-e ,* 1++* p. 8.
), &ee Philippine &tar issue of No2e"-e 1)* 1++.
) %ending -efoe the Congess ae ouse 4ill '.4.( No. 10)0
intoduced -y enando 4. %eeK* .4. No. 10)+) intoduced -yRep. >anuel A. Ro3as $$* .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
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poducts shall -e the sa"e: Provided, further * That
this po2ision "ay -e a"ended only -y an Act of
Congess
8 Loa?uin
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