ASEAN Law Association, Legal Systems in ASEAN - Philippines

CHAPTER 1
Historical Overview
Introduction
The Philippines, an archipelago of 7,107 islands (about 2,000 of which are

inhabited), with a land area of 115,600 sq m, has a population of 76.5 m. Some
87 major dialects are spoken all over the islands. English and Filipino are the
official languages with English as the language of instruction in higher education.
According to the 2000 census, the functional literacy rate is 83.8%. Agriculture
constitutes the largest single sector of the economy. The country has a total
labour force of 64.5%.
The Philippine legal system is aptly described as a blend of customary

usage, and Roman (civil law) and Anglo-American (common law) systems. The
civil law operates in areas such as family relations, property, succession, contract
and criminal law while statutes and principles of common law origin are evident in
such areas as constitutional law, procedure, corporation law, negotiable
instruments, taxation, insurance, labour relations, banking and currency. In
some Southern parts of the islands, Islamic law is observed.
This particular legal system is the result of the immigration of Muslim

Malays in the fourteenth century and the subsequent colonization of the islands
by Spain and the United States.
Historical Background
Philippine legal history may be categorized according to the various periods in

the political history of the country: the pre-Spanish period (pre 1521); the
Spanish regime (1521-1898); the Philippine Republic of 1898; the American
regime (1898-1935); the Commonwealth era (1935-1946); the Japanese
occupation (1941-1944); the Period of the Republic (1946-1972); the Martial Law
Period (1972-1986); and the continuation of the Republic.
Pre-Spanish Period
Historians have shown conclusively that the early Filipinos lived in numerous
independent communities called barangays under various native rules which
were largely customary and unwritten. Evidence points to the existence of two
codes, namely, the Maragtas Code issued by Datu Sumakwel of Panay Island
some time between 1200 and 1212 AD and the Penal Code of Kalantiao issued
1
by a datu of that name in 1433. however, there are some historians who
question the existence of these codes.
These customary laws dealt with subjects such as family relations,

inheritance, divorce, usury, partnerships, loans, property rights, barter and sale,
and crime and punishment. The penal law distinguished between felonies and
misdemeanors, recognized a distinction between principal and accomplice in
matters of criminal liability, and had an idea of the existence of qualifying and
mitigating circumstances, as well as recidivism as an aggravating circumstance.1
Like many ancient societies, trial by ordeal was practiced in the barangay.
The Spanish Regime
The arrival of Ferdinand Magellan in the Philippines on 16 March 1521 presaged

a new era in the history of Philippine law.
Spanish laws and codes were extended to the Philippines either expressly
by royal decrees or by implication through the issuance of special laws for the
islands. The most prominent of these laws and codes were the Fuero Juzgo,
Fuero Real, Las Siete Partidas, Las Leyes de Toros, Nueva Recopilacion de Las
Leyes de Indias, which contained all the laws then in force in the Spanish
colonies and the Novisima Recopilacion, which comprised all the laws from the
fifteenth century up to 1805.2
At the end of Spanish rule in the Philippines, the following codes and
special laws were in force in the country: the Codigo Penal de 1870 which was
extended to the islands in 1887; the Ley Provisional para la Aplicaciones de las
Disposiciones del Codigo Penal en las Islas Filipinas in 1888; the Ley de
Enjuiciamiento Criminal (Code of Criminal Procedure of 1872, which was
extended in 1888); Ley de Enjuiciamiento Civil (Code of Civil Procedure of 1856);
Codigo de Comercio (Code of Commerce of 1886); Codigo Civil de 1889 (except
the portion relating to marriage); the Marriage Law of 1870; the Ley Hipotecaria
(Mortgage Law of 1861, which was extended in 1889); the Ley de Minas (Mining
Law of 1859); the Ley Notarial de 1862; the Railway Law of 1877; the Law of
Foreigners for Ultramarine Provinces of 1870; and the Code of Military Justice.3
The Philippine Republic of 1898
By 1872, the Filipinos had revolted against Spain because of the abuses
committed by the Spanish authorities and friars. The revolution spread so rapidly
that on 12 June 1898, the independence of the Philippines was proclaimed by
General Emilio Aguinaldo. A Revolutionary Congress was convened on 15
September 1898, and on 20 January 1899, the Malolos Constitution was
1
T Agoncillo & M Guerrero History of the Filipino People (4th edn, 1973) pp 46-7.
2
M Gamboa An Introduction to Philippine Law (7th edn, 1969) pp 69-70.
3
Ibid., p 71.
2
approved.4 This Constitution proclaimed popular sovereignty and enumerated
the fundamental civil and political rights of the individual. At the time of its
proclamation, the Republic exercised, albeit briefly, de facto authority, although
this came to an end upon the coming of the Americans.
The American Era and the Commonwealth
The end of the Spanish-American War, which was followed by the signing of the
Treaty of Paris on 10 December 1898, paved the way for the cession of the
Philippines to the United States. Upon the establishment of American
sovereignty, the political laws of the Philippines were totally abrogated and
Spanish laws, customs and rights of property inconsistent with the US
Constitution and with American principles and institutions were superseded. The
government operated under different organic laws, namely, President
MacKinleys Instructions to the Second Philippine Commission on 07 April 1900;
the Spooner Amendment of 1901; the Philippine Bill of 1902; the Jones Law of
1916 and the Tydings-MacDuffie Law of 1934.5 Pursuant to the Tydings-
MacDuffie Law, a Commonwealth government was to be established for a
transitional period of ten years before independence could be granted. Likewise,
it granted to the Filipinos a right to formulate their own Constitution. In due
course, a constitution was approved on 8 February 1935 which was signed by
US President Franklin D Roosevelt on 23 March 1935 and ratified at a plebiscite
held on 14 May 1935, voters went to the polls to elect the first set of executive
and legislative officials led by President Manuel L. Quezon and Vice-President
Sergio Osmea.
The Japanese Occupation
On 08 December 1941, the Philippines was invaded by Japanese forces and was
occupied until 1944. during the three-year military rule, a 1943 Constitution was
drafted and ratified by a special national convention of the Kapisanan sa
Paglilingkod ng Bagong Pilipinas (KALIBAPI),6 which led to the establishment of
the short-lived Japanese-sponsored republic headed by President Jose P Laurel.
During the Japanese occupation, the Commonwealth, then in exile,

functioned in Washington DC from 13 May 1942 to 03 October 1944 until its re-
establishment in Manila on 28 February 1945 by President Sergio Osmea.
The Philippine Republic, 1946-1972
The inauguration of the Philippine Republic on 04 July 1946 marked the

culmination of the Filipinos 300 years of struggle for freedom. The 1935
Constitution served as the fundamental law with the executive power being
4
T Agoncillo, Malolos The Crisis of the Republic (1960) p 306.
5
V Sinco Philippine Political law (11th edn, 1962) p 85.
6
Agoncillo & Guerrero p 456.
3
vested in the President, the legislative power in the bicameral Congress of the
Philippines and the judicial power in the Supreme Court and inferior courts
established by law.
In the beginning, efforts of the government were geared towards economic

rehabilitation and the preservation of peace and order. Due to the widespread
agitation for reforms in the legal and political arenas, Congress adopted
Resolution of Both Houses (RBH) No 2, as amended by RBH No 4, calling for a
Constitutional Convention to propose amendments to the Constitution on 16
March. The resolution was implemented by Republic Act No 6132 and approved
on 24 August 1970. Pursuant to its provisions, the election of 320 delegates was
held on 10 November 1970.
The Constitutional Convention met on 01 June 1971 and it took its

members 17 months to draft a new Constitution. While the Convention was in
session, President Ferdinand E Marcos, acting in accordance with the provisions
of the 1935 Constitution, placed the entire Philippines under Martial Law.7 On 29
November 1972, the Constitutional Convention completed its work. The draft of
the new Constitution was submitted to the Filipino people through citizens
assemblies8 and was ratified on 17 January 1973.9 Proclamation No 110410 was
issued on the same day declaring the continuation of martial law.
The Martial Law Period
The 1973 Constitution established a parliamentary form of government and

introduced the merger of executive and legislative powers. The Chief Executive,
the Prime Minister, was elected by a majority of all the members of the National
Assembly from amongst themselves11 and could be dismissed by electing a
successor Prime Minister.12 On the other hand, the Prime Minister had the
power to advise the President to dissolve the National Assembly and call for a
general election.13 The President was reduced to being a symbolic head of
state.14
This parliamentary form of government was never implemented. The

Transitory Provisions of the 1973 Constitution, which provided for a transition
7
Proclamation No 1081, s 1972, 68 OG 7624 (September 1972).
8
Created by Presidential Decree No 86 (1972), 69 OG 227 No 2 (08 January 1973).
9
Proclamation No 1102, s 197, 69 OG 592 (January 1973). The validity of this proclamation was
questioned in five petitions often referred to as Javellana v Executive Secretary et al GR Nos L-36164-65,
36142, 36236, and 36283, 31 March 1973, wherein the Supreme Court dismissed the petitions and
indicated in the dispositive portion that there is no further judicial obstacle to the New Constitution being
considered in force and effect.
10
69 OG 592-3 (January 1973).
11
Constitution (1973), art IX, s 3.
12
Constitution (1973), art VIII, s 13(1
13
Constitution (1973), art VIII, s 13(2).
14
Constitution (1973), art VIII, s 1.
4
from the old presidential form of government to a parliamentary system,
specifically made the proclamation, decrees and acts of the incumbent President
part of the law of the land15 and at the same time empowered the President to
initially convene the interim National Assembly which was never effected.16 By
amendments to the Constitution in October 1976,17 however, the powers of the
incumbent President were maintained and augmented and an Interim Batasang
Pambansa (interim legislature) was created, having the same powers as a
regular legislative body. In Amendment No 3, the powers of the President and
Prime Minister were merged in the then incumbent President (Ferdinand E
Marcos), who immediately became a member of the Interim Batasang
Pambansa. Because of these Amendments, he occupied the positions of
President and Prime Minister, which arrangement was to last only during the
transition period or until the members of the regular legislature shall have been
elected. Under Amendment No 6, the President was also empowered to
continue to exercise legislative powers until martial law shall have been lifted. If
in his judgment, there exists a grave emergency or threat or imminence thereof,
or whenever the Interim Batasang Pambansa or the regular National Assembly
fails or is unable to act adequately on any matter for any reason that in his
judgment requires immediate action, he may, in order to meet the exigency,
issue the necessary decrees, orders or letters of instructions which shall form
part of the law of the land.18
Likewise, Amendment No 7 stipulated the continuance of the barangays

(smallest political subdivision) and sanggunians (councils) and the use of
referenda to ascertain the will of the people regarding important matters, whether
of national or local interest.
On 07 April 1978, 160 regional representatives apportioned among the 13

regions of the country were elected to the Interim Batasang Pambansa while 14
members representing the youth, agriculture, labour and industrial labour sectors
were chosen on 27 April 1978. the Interim Batasang Pambansa convened on 12
June 1978 with a total membership of 192.
15
Constitution (1973), art XVII, s 3(2). Various presidential decrees dealt with government
reorganization, education, economic development, monetary and financial reforms, development and
manpower development and social services.
16
Constitution (1973), art XVII, s 3(1). The validity of the Presidents refusal to convene the
Interim National Assembly and his power to promulgate proclamations, orders and decrees during the
Martial Law Period were some of the issues raised in Aquino v Commission on Elections GR No 40004, 31
January 1975, 62 SCRA 275 (1975). The Supreme Court affirmed the power of the President to issue
decrees and orders and held that the New Constitution gave the President the discretion as to when to
convene the Interim National Assembly.
17
On 16-17 October, the people, in a Referendum Plebiscite, ratified the Amendments to the 1973
Constitution which took effect on 27 October 1976 under Proclamation No 1595 (1976), 76 OG 4095 (June
1980).
18
The validity of Amendment No 6 was questioned and sustained by the Supreme Court in
Legaspi v Minister of Finance GR No L-58289, 24 July 1982, 115 SCRA 418 (1982).
5
The 1973 Constitution was subsequently amended in 198019 and 1981.20
The 1980 Amendments increased the retirement age of Supreme Court judges
from 65 to 70 years. The 1981 Amendments introduced a modified form of
presidential/parliamentary system. The President, who was the head of state
and chief executive of the Republic, was directly elected by the people for a term
of six years.21 There was a Prime Minister who was elected by a majority of the
Batasang Pambansa upon nomination of the President.22 He was head of the
Cabinet and had supervision of all ministries.23 Together with the Cabinet, he
was responsible to the Batasang Pambansa for the programme of the
government, approved by the President.24 The Batasan could withdraw its
confidence from the Prime Minister and the latter could seek a popular vote of
confidence on fundamental issues and request the President to dissolve the
legislature.25 There was also an Executive Committee designated by the
President, composed of the Prime Minister as Chairman and not more than 14
members, at least half of whom were members of the Batasang Pambansa.26 It
was charged with assisting the President in the exercise of his powers and
functions and in the performance of his duties. The other 1981 Amendments
included the composition of the Batasang Pambansa; the qualification of its
members; their term of office and the setting up of the first regular elections in
1984; electoral reforms on the accreditation of political parties and change of
political party affiliation; and the provision that a natural-born citizen of the
Philippines who had lost his Philippine citizenship could be a transferee of private
land for residential purposes. According to one constitutionalist, although the
1973 Constitution classified governmental powers into the three areas of the
executive, legislative, and judiciary, the separation of powers and its corollary
rule of non-delegation of power were neither well-defined nor strictly observed.27
Martial Law was lifted on 17 January 1981, and military tribunals were
abolished by Proclamation No 2045.28
A presidential election was held on 16 June 1981 and President Marcos

was again re-elected. In his inaugural address on 30 June 1981, he proclaimed
the birth of the Fourth Republic under the New Constitution, as amended.
19
See art X, s 7 wherein the retirement age of members of the Supreme Court and judges of
inferior courts was changed from 65 years to 70 years of age. This was ratified in a plebiscite held on 30
January 1980 and its results announced in Proclamation No 1959.
20
The plebiscite was held and ratified on 07 April 1981, the result of which was announced in
Proclamation No 2077 (1981).
21
Constitution (1973), art VII, ss 1 & 3.
22
Constitution (1973), art IX, s 1, para 2.
23
24
25
Constitution (1973), art VIII, s 13.
26
27
IR Cortes Philippine Administrative Law: Cases and Materials (2nd rev edn, 1984) p 26.
28
77 OG 441 (January 1981).
6
The assassination of former Senator Benigno S Aquino, on 21 August
1983, triggered mass demonstrations and an economic crisis which paved the
way to another set of amendments to the 1973 Constitution.29 The 1984
Amendments consisted of the following:
(1) the establishment of a different mode of presidential succession with the

creation of the Office of the Vice-President and the abolition of the
Executive Committee;
(2) the apportionment of representation in the Batasang Pambansa by

province, city, and by districts in Metropolitan Manila, instead of by region;
(3) the grant, as an additional mode for the acquisition of public lands and that
the agrarian reform programme may include the grant or distribution of
alienable public lands to qualified tenants, farmers and other landless
citizens; and
(4) making the State undertake an urban land reform and social housing
programme for the homeless, landless, and the low-income resident
citizens.
On 14 May 1984, elections were held for the 183 elective seats in the 200-
member Batasang Pambansa. The legislature convened on 23 July 1984.
An impeachment resolution was filed by 57 members of the opposition

against President Marcos but this was dismissed by the Batasan Committee on
Justice for not being sufficient in form and substance to warrant further
consideration.
On 03 November 1985, President Marcos announced the calling of a

special presidential election and for which the Batasang Pambansa set 7
February 1986 as the date of the so-called snap election. Corazon C Aquino
and Salvador H Laurel as presidential and vice-presidential candidates were
pitted against President Marcos and Arturo M Tolentino. The election on 7
February emerged as the most anomalous poll ever held in the country with
widespread incidents of stuffed ballots, election returns snatchings, harassments,
mauling, and vote-buying with 10% of Metropolitan Manila voters being
disenfranchised. Despite an awakened and vigilant citizenry working through the
NAMFREL (National Movement for Free Elections), whose count gave Aquino a
wide lead of one million, the Batasang Pambansa declared Marcos and Tolentino
to be the winners. Subsequent events led to an Armed Forces mutiny and the
four-day people-power revolution, which resulted in the ousting of President
Marcos from the Philippines on 25 February 1986.
29
The Plebiscite was held on 27 January 1984 pursuant to Batas Pambansa Blg 643 (1984), 80
OG 4732 No 36 (03 September 1984).
7
The Continuation of the Republic
When Corazon C Aquino took her oath of office as President on 25 February

1986, Proclamation No 130 was issued wherein she declared that she and her
Vice-President were taking power in the name and by the will of the Filipino
people on the basis of the clear sovereign will of the people expressed in the
election of 07 February 1986.31 The new government came into power not in
accordance with the procedure outlined in the 1973 Constitution but as explicitly
stated in the preamble to Proclamation No 3 which stated that the new
government was installed through a direct exercise of the power of the Filipino
people assisted by units of the New Armed Forces of the Philippines and that
this heroic action of the people was done in defiance of the provisions of the
1973 Constitution, as amended. The Provisional Constitution,32 otherwise
known as the Freedom Constitution, adopted in toto the provisions of Article I
(National Territory), Article III (Citizenship), Article IV (Bill of Rights), Article V
(Duties and Obligations of Citizens), and Article VI (Suffrage) of the 1973
Constitution, as amended. Other provisions, such as Article II (Declaration of
Principles and State Policies), Article VII (The President), Article X (The
Judiciary), Article XI (Local Governments), Article XII (The Constitutional
Commission), Article XIII (Accountability of Public Officers), Article XIV (The
National Economy and Patrimony of the Nation), and Article XV (General
Provisions) were adopted insofar as they were not inconsistent with the
provisions of the Proclamation, while Articles VIII, IX, XVI and XVII were deemed
to be superseded.33
Under the Provisional Commission, all existing laws, decrees, executive

orders, proclamations, letters of instructions and other executive issuances, not
inconsistent with this Proclamation, were to remain operative until amended,
modified or repealed by the President or the regular legislative body to be
established under a new Constitution.34 The President continued to exercise
legislative power.35
Pursuant to Article V of the Provisional Constitution, the Constitutional

Commission was constituted under Proclamation No 936 composed of 48
members with the task of drafting a Constitution in as short a period as may be
30
82 OG 1236 (03 March 1986).
31
The legitimacy of the Aquino government was questioned in Lawyers League for a Better
Philippines v Aquino and other cases, GR Nos 73748, 73972 and 73990, 22 May 1986 where the Supreme
Court dismissed in a resolution because the legitimacy of the Aquino government is not a justiciable
matter of which the people of the Philippines are the judge. And the people have made the judgment. They
have accepted the government of President Corazon C Aquino which is in effective control of the entire
country so that it is not merely a de facto government but is in fact a law a de jure government.
32
Proclamation No 3, dated 25 March 1986, 82 OG 1567 (31 March 1986).
33
Article I, ss 1-3.
34
Article IV, s 1.
35
Article II, s 1.
36
Dated 23 April 1986, 82 OG 1887 (28 April 1986).
8
consistent with the need to hasten the return of normal constitutional
government.37 After 133 days of work by a vote of 45 to 2, the proposed new
Constitution, consisting of a preamble, 18 articles and 321 sections, was
submitted to the President on 15 October 1986. it was ratified by the people in a
plebiscite held on 02 February 1987. By its very nature, the Provisional
Constitution as well as the revolutionary government which operated it, self-
destructed upon the ratification and effectivity of the New Constitution since the
incumbent President and Vice-President elected in the 07 February 1986
electoral exercise were provided a six-year term of office until 30 June 1992
under the Transitory Provisions.38 The Congressional elections were scheduled
to be held on 11 May 1987.39 The incumbent President continued to exercise
legislative powers until the first Congress was set to be convened. Despite
several coups, President Aquino completed her term under the 1987
Constitution. Elections were held on 11 May 1992 and Fidel V Ramos was
elected President.
He was succeeded by Joseph Ejercito Estrada after the 11 may 1998

elections. In view of the expos of Governor Luis Singson, the Senate opened
the impeachment trial of President Estrada on 20 November 2000. as a result of
the 11-10 vote by the Senator-judges against the opening of the second
envelope which contained evidence, there was spontaneous outburst of anger
that hit the streets wherein public prosecutors withdrew their appearances
followed by other public officers from the Cabinet. These actions and people
power held to his resignation.40 President Gloria M Arroyo took her oath as
President on 20 January 2001 and was reelected on 11 May 2004.
37
Section 2 of Proclamation No 9, 1986.
38
Constitution (1987), art XVIII, s 5.
39
Executive Order No 134, dated 27 February 1987, 83 OG 788 (March 1987).
40
Cf Estrada v Disierto, GR Nos 146710-15, 146738, 02 March 2001, 353 SCRA 452 (2001).
9
CHAPTER 2
SOURCES OF LAW
The main sources of Philippine law are the Constitution, statutes, treaties and
conventions, and judicial decisions. The Constitution is the fundamental law of
the land and as such, it is authority of the highest order against which no other
authority can prevail. Every official action, to be valid, must conform to it. On the
other hand, statutes are intended to supply the details which the Constitution,
because of its nature, must leave unprovided for. The statutes of the Philippines
are numerous and varied in their contents. They are intended to provide rules
and regulations which will govern the conduct of people in the face of ever-
changing conditions.
Having the same force of authority as legislative enactments are the

treaties which the Philippines enters into with other states. A treaty has been
defined as a compact made between two or more independent nations with a
view to the public welfare.1 As a member of the family of nations, the Philippines
is a signatory to and has concluded numerous treaties and conventions.
Philippine law is also derived from cases because the Civil Code provides
that judicial decisions applying to or interpreting the laws or the Constitution shall
form a part of the legal system of the Philippines.2 Only decisions of its Supreme
Court establish jurisprudence and are binding on all other courts.3 Thus, these
decisions assume the same authority as the statutes to which they apply or
interpret and until authoritatively abandoned, necessarily become, to the extent
that they are applicable, the criteria which must control the actuations not only of
those called upon to abide thereby but also of those duty-bound to enforce
obedience thereto.4
To a certain extent, customary law forms part of the Filipino legal heritage
because the 1987 Constitution provides that the State shall recognise, respect,
and protect the rights of indigenous cultural communities to preserve and
develop their cultures, traditions and institutions.5 This was true even as early as
1899 because the old Civil Code provided that where no statute is exactly
applicable to the point in controversy, the custom of the place shall be applied,
and in the absence thereof, the general principles of law.6 Although this
1
See Adolfo v Court of First Instance, GR No 30650, July 1970, 34 SCRA 169 (1970).
2
Article 8.
3
Miranda v Imperial, 77 Phil 1066 (1947).
4
Caltex (Phil) Inc v Palomar, GR No 19650, 29 September 1966, 18 SCRA 247, 257 (1966).
5
Article XIV, S 17.
6
Article 6, para 2.
1
provision was discarded in the new Civil Code7 which took effect in 1950. It is
believed that the judge may still apply the custom of the place or, in its default,
the general principles of law in the absence of any statute governing the point in
controversy; otherwise the provision of the same Code which requires him to
decide every case even where there is no applicable statute would prove to be a
veritable enigma.8 The Civil Code also provides that customs which are contrary
to law, public order or public policy shall not be countenanced, and a custom
must be proved as a fact according to the rules of evidence.9 Thus, Philippine
law takes cognizance of customs which may be considered as supplementary
sources of the law.
Philippine Statutes
The statutes of the Philippines are found in the various enactments of the
Philippine legislature since its creation in 1900. from the establishment of the
American civil government in 1900 to 1935, there were 4,275 laws passed by the
Philippine Commission and its bicameral successor, the Philippine Legislature.
The Commonwealth period witnessed the enactment of 733 statutes while 6,635
Republic Acts were legislated from 04 July 1946 to 21 September 1972. during
the martial law period, a total of 2,035 Presidential Decrees were promulgated as
of 20 February 1986. A total of 302 Executive Orders have been issued by
President Corazon C Aquino. Congress convened on 27 July 1987 and has
enacted 9,338 Republic Acts to date. Thus, there has been a total of 17,574
statutes since 1900.
There are 29 codes in force today; (1) Civil Code;10 (2) Revised Penal
Code;11 (3) Code of Commerce (1888);12 (4) Administrative Code;13 (5) National
Internal Revenue Code;14 (6) Election Code;15 (7) Tariff and Customs Code;16 (8)
Code of Agrarian Reforms;17 (9) Land Transportation and Traffic Code;18 (10)
National Building Code;19 (11) Revised Forestry Code;20 (12) Cooperative
7
Rep Act No 386 (1950).
8
MJ Gamboa An Introduction to Philippine Law (7th edn, 1969) pp 14-15; CIVIL CODE, art 9
which provides no judge or court shall decline to render judgment by reason of the silence, obscurity or
insufficiency of the laws.
9
Articles 11 & 12.
10
Rep Act No 386 (1950), as amended.
11
Act No 3815 (1932), as amended.
12
A considerable part of this Code has been expressly repealed and superseded by later legislation.
13
Executive Order No 292 dated 25 July 1987, as amended. Despite its repealing clause, there are
provisions in the Rev Adm Code of 1917 which were not reproduced in this Code.
14
Presidential Decree No 1158 (1977), as amended.
15
Batas Pambansa Blg 881 (1984).
16
17
18
Rep Act No 4136 (1964), 61 OG 2168 (14 April 1965).
19
20
2
Code;21 (13) Labour Code;22 (14) National Code of Marketing Breastmilk
Substitutes;23 (15) Insurance Code;24 (16) Child and Youth Welfare Code;25 (17)
Sanitation Code;26 (18) Water Code;27 (19) Philippine Environment Code;28 (20)
Muslim Code of Personal Laws;29 (21) Fire Code;30 (22) Coconut Industry
Code;31 (23) Corporation Code;32 (24) Omnibus Investments Code of 1987;33
(25) State Auditing Code;34 (26) Local Government Code;35 (27) the Family
Code;36 (28) Philippine Fisheries Code of 1998;37 (29) Intellectual Property
Code;38 and (30) the Securities Regulation Code.39
The following is a summary of some of the basic codes.
The Code of Commerce
The Code of Commerce became effective on 01 December 1888. largely taken

from the Spanish Code of Commerce of 1885, with some modifications to suit
local conditions, it has been so modified by several extensive amendments by
special commercial laws such as the Corporation Code,40 Insolvency Law,41
Chattel Mortgage Law,42 Negotiable Instruments Act,43 Warehouse Receipts
Act,44 Revised Securities Act,45 Trademark Law,46 Central Bank Act,47 General
Banking Law,48 and the Omnibus Investments Code,49 that only a bare outline of
21
Rep Act No 6938 (1990).
22
23
Executive Order No 51 (1986).
24
Presidential Decree No 612 (1974). All insurance laws have been consolidated by Presidential
Decree No 1460 (1978), as amended.
25
Presidential Decree No 603 (1975), as amended by Presidential Decree No 1179 (1979) and
Executive Order No 91 (1986), 83 OG 92 (January 1987).
26
Presidential Decree No 856 (1975), 79 OG 2732 (May 1983).
27
Presidential Decree No 1067 (1976), 73 OG 3554 (11 May 1977).
28
Presidential Decree No 1152 (1977), 73 OG 7363 (August 1977).
29
Presidential Decree No 1083 (1979), 73 OG 4038 (May 1977).
30
Presidential Decree No 1185 (1977), 73 OG 10292 (October 1977).
31
Batas Pambansa Blg 61 (1980), 76 OG 2342 No 15 (April 1980).
32
Batas Pambansa Blg 68 (1980), 76 OG 4955 (July 1980).
33
34
Presidential Decree No 1445 (1978), 74 OG 6111 (August 1978).
35
Rep Act No 7160 (1991).
36
Executive Order No 209 (1987), as amended.
37
Rep Act No 8550 (1998).
38
Rep Act No. 8293 (1997).
39
Rep Act No 8799 (19__)
40
Batas Pambansa Blg 68 (1980).
41
Act No 1596 (1909).
42
Act No 1508 (1906).
43
Act No 2031 (1911).
44
Act No 2137 (1912).
45
Batas Pambansa Blg 178 (1982), 78 OG 6437 (November 1982).
46
Com Act No 83 (1937), as amended.
47
48
49
Executive Order No 226 (1987), 83 OG 3422-07 (July 1987).
3
the original code remains. Its unrepealed portions define the qualifications of
merchants and acts of commerce in general, letters of credit, joint accounts,
mercantile registry and bookkeeping.
The Corporation Code
The main forms of business organizations in the Philippines are sole

proprietorships,50 partnerships,51 and corporations.52 The Securities and
Exchange Commission (SEC) administers the corporation law and registers
corporations, branch offices and partnerships. For sole proprietorships, the
prerequisites include registering the business name with the Bureau of Domestic
Trade and obtaining a permit from the city, municipality or province where the
business is to be located and the payment of a registration fee and a privilege
tax. For the registration of a corporation, the major SEC requirements are:
(1) there must be 5 to 15 directors and a majority should be residents of the

Philippines;53
(2) 25% of the proposed capitalization must be subscribed and 25% of the
subscription paid;54
(3) the directors must be stockholders and at least two directors and the
secretary must be residents of the Philippines.55
A corporation may exist for a period not exceeding 50 years, unless sooner
dissolved or extended and not exceeding 50 years in any single instance.56
Management of a corporation is vested in a board of directors. The

majority of the directors of all corporations organized under the Corporation Code
must be residents of the Philippines. At all elections of directors, the owners of
majority of outstanding capital stock, or if there be no capital stock, the majority
of members entitled to vote must be present. Cumulative voting is provided for.
Every director must own at least one share to qualify as director. No person
convicted by a final judgment of an offence punishable by imprisonment for a
period not exceeding six years, or a violation of the Corporation Code, committed
within five years prior to date of election, qualifies as a director or officer of a
corporation. Officers which corporations must elect at organization meetings are
the president, treasurer and secretary. Only the president is required to be a
director of the corporation. Any two or more positions may be held concurrently
by the same person, except that no one shall act as president and secretary or
president and treasurer at the same time.
50
Act No 3883 (1931), as amended by Act No 4147 (1934) and Rep Act No 863 (1953).
51
CIVIL CODE, arts 1767-1867.
52
Batas Pambansa Blg 68 (1980), otherwise known as the Corporation Code.
53
Corporation Code, s 14(6).
54
Corporation Code, s 14.
55
56
4
Every corporation incorporated under the Corporation Code has the power
and capacity:
(1) to sue and be sued in its corporate name;

(2) for succession by its corporate name for a period of time stated in its
articles of incorporation and certificate of incorporation;
(3) to adopt and use a corporate seal;
(4) to amend its articles of incorporation;
(5) to adopt by-laws, not contrary to law, morals, or public policy, and to
amend or repeal the same;
(6) in case of stock corporations, to issue or sell stocks to subscribers and to
sell treasury stocks and to admit members to the corporation if it is a non-
stock corporation;
(7) to purchase, receive, take or grant, hold, convey, sell, lease, pledge,
mortgage and otherwise deal with such real and personal property,
including securities and bonds of other corporations, as the transaction of
the lawful business of a corporation may reasonably require;
(8) to adopt a plan of merger or consolidation;
(9) to make reasonable donations, including those for public welfare, or for
charitable, cultural or similar purposes, provided that no corporation,
domestic or foreign, gives donations in aid of any political party or
candidate;
(10) to establish pension, retirement, and other plans for the benefit of its
directors, trustees, officers and employees;
(11) to exercise such other powers as may be essential to carry out its purpose
or purposes;
(12) to increase or decrease its capital stock;
(13) to incur, create or increase bonded indebtedness;
(14) to sell or otherwise dispose of all or substantially all of its assets;
(15) to invest corporate funds in another corporation or business or for any
other purposes;
(16) to declare dividends, cash, stock or property;
(17) to acquire its own shares;
(18) to extend or shorten its corporate term; and
(19) to enter into management contracts.
One or more stockholders of a stock corporation may create a voting trust for the
purpose of conferring upon a trustee or trustees the right to vote and other rights
pertaining to shares for a period not exceeding five years at any one time,
provided that in case of a voting trust required as condition in loan agreement,
the voting trust may be for a period not exceeding five years but shall
automatically expire upon full payment of the loan. No voting trust shall be
entered into for the purpose of circumventing the law against monopolies and
illegal combinations in restraint of trade or used for purposes of fraud.
5
Boards of directors of stock corporations may declare dividends out of
unrestricted retained earnings which shall be payable in cash, property or stock
to all stockholders on the basis of outstanding stock held by them.
Stock corporations are prohibited from retaining surplus profits in excess

of 100% of their paid in capital stock, except:
(1) when justified by corporate expansion projects or programmes approved

by the board of directors;
(2) when the corporation is prohibited under any loan agreement with any
financial institution or creditor, whether local or foreign, from declaring
dividends without its/his consent; or
(3) when it can be clearly shown that such a retention is necessary under
special circumstances.
Non-stock corporations are those where no part of its income is distributable as

dividends to its members, trustees, or officers. Any profit which non-stock
corporations may obtain shall be used for the furtherance of the purpose or
purposes for which the corporation was organized. Provisions governing stock
corporations, when pertinent, are applicable to non-stock corporations. Non-
stock corporations may be formed for charitable, religious, educational,
professional, cultural, fraternal, literary, scientific, social, civil service, or similar
purposes, like trade, industry, agriculture, or any combination thereof.
The right of members to vote may be limited, broadened or denied to the

extent specified in the articles of incorporation or by-laws. Membership in a non-
stock corporation, and all rights arising therefrom, is non-transferable.
Termination of membership extinguishes all rights of the member in corporation
or in its property.
Under Philippine law, a foreign corporation is one which is incorporated

according to the law of a country other than the Philippines whose laws allow
Filipino citizens and corporations to do business in its own country.57 It must be
duly licensed by the SEC in order to do business in the Philippines or to maintain
any suit in its courts.58 However, there have been instances where a foreign
corporation which has never done any business in the Philippines and which is
unlicensed and unregistered to do business here has, nevertheless, been
allowed to sue in the Philippine courts. This has been allowed where the
corporation is widely and favourably known in the Philippines through the use of
its products bearing its corporate and trade name. they have been allowed to
maintain an action to restrain residents and inhabitants of the Philippines from
organizing a corporation bearing the same name as the foreign corporation,
57
58
Corporation Code, s 125; Omnibus Investments Code, arts 69 and 70.
6
when it appeared that they had personal knowledge of the existence of such a
foreign corporation, and it was apparent that the purpose of the proposed
corporation was to deal and trade in the same goods as those of the foreign
corporation.59
Civil Law
The Civil Code60 was drafted by a Code Commission and came into effect on 01
July 1950, replacing the Spanish Civil Code of 1889. it is divided into four books
Persons, Property, Different Modes of Acquiring Ownership, and Obligations
and Contracts. Containing 2,270 articles as compared with 1,976 articles of the
old Code, approximately 25% are preserved entirely from the old Code while
32% are amended articles and 43% are entirely new provisions. It includes new
rules aimed at incorporating Filipino customs and new rights and causes of
action such as civil actions for obstruction of civil liberty, moral and nominal
damages.
Some of the important changes made by the Civil Code were the
elimination of absolute divorce and the dowry; the creation of judicial or
extrajudicial family homes; a chapter on Human Rights; the provisions on the
quieting of title and the creation of new easements; the holographic will has been
revived; the successional rights of the surviving spouse and of illegitimate
children have been increased; defective contracts have been reclassified while
new quasi-contracts have been created; a new chapter on reformation of
contracts; and some implied trusts have been created.
The Family Code of the Philippines came into effect on 03 August 1988.61
It amended the Civil Code provisions on marriage and the family. Some of the
more important changes introduced in the said Code were the grounds for
annulment of marriage which now includes psychological incapacity to comply
with the essential marital obligations.62 It also allows Filipinos, married to
foreigners who later obtain a divorce abroad, to remarry under Philippine Law.63
The Family Code has also changed the property relations between the spouses
from that of a conjugal partnership of gains to an absolute community of property
in the absence of stipulation in the marriage settlements.64 The classification of
children has been also simplified into legitimate and illegitimate and adopted.65
59
Western Equipment & Supply Co v Reyes 51 Phil 115 (1927); American Wire & Cable Co v
Director of Patents GR No 26557, 18 February 1970, 31 SCRA 544 (1970); Converse Rubber Corp v
Jacinto Rubber & Plastics Co Inc GR Nos 27425 & 30505, 28 April 1980, 97 SCRA 158 (1980); La
Chemise Lacoste SA v Fernandez GR Nos 63796-97, 21 May 1984, 129 SCRA 373 (1983); Converse
Rubber Corp v Universal Rubber Products & Evalle GR No 27906, 08 January 1987.
60
Rep Act No 386 (1950).
61
Executive Order No 209 (1988), as amended by Executive Order No 227.
62
Executive Order No 209 (1988), art 36.
63
64
Executive Order No 209 (1988), arts 88 & 91.
65
Family Code, art 163.
7
The Child and Youth Welfare Code which took effect on 10 June 197566
amended certain portions of the Civil Code. It is applied to persons below 21
years of age, except those emancipated in accordance with law. Some of its
important features include the rights and responsibilities of the child; parental
authority; adoption; the rights, duties and liabilities of parents; foster care; youth
welfare; the special categories of children; and the treatment given to the youthful
offender. Republic Act No 7610 (1992), otherwise known as the Special
Protection of Children Against Child Abuse, Exploitation and Discrimination Act
implements the United Nations Convention on the Rights of the Child, which was
ratified by the Philippines in July 1990.
The Code of Muslim Personal Laws of the Philippines67 promulgated on

04 February 1977, illustrates the governments concern for the customs,
traditions, beliefs and interests of the national cultural communities. Recognizing
the legal system of the Filipino Muslims and seeking to make Islamic institutions
more effective, this code deals with marriage (nikah), divorce (talaq), paternity
and filiation, support (nafaqa), parental authority, civil registry, succession and
the sharia courts; jurisdiction for the adjudication, settlement and delivery of legal
opinions.
Labour Code
The Labour Code revises and consolidates labour and social laws to afford
protection to workers, promote employment and human resources development
and ensure industrial peace based on social justice.68 It is divided into seven
books.
Book I is entitled Pre-Employment and deals with recruitment and

placement of workers and the employment of non-resident aliens.
Book II is entitled Human Resources Development and deals with the

national manpower development programme, apprenticeship, leaners and
handicapped workers.69
Book III is entitled Conditions of Employment and deals with hours of

work, weekly rest periods and wages, as well as provisions for the employment
of women, minors househelpers and homeworkers.70 The normal hours of work
of any employee shall not exceed eight hours a day with 60 minutes time off for
their regular meals. Work performed beyond the eight hours merits additional
compensation equivalent to his regular wage plus at least 25% thereof.
66
Presidential Decree No 603 (1974).
67
68
Presidential Decree No 442 (1974), as amended
69
Presidential Decree No 442 (1974), arts 43-81.
70
Presidential Decree No 442 (1974), arts 82-155.
8
Employees enjoy a rest period of not less than 24 consecutive hours after every
six consecutive work days. Although the employer determines the weekly rest
day, he is required to respect the preference of employees as to their weekly rest
day when such preference is based on religious grounds. Usually, work
performed on a rest day, such as a Sunday or holiday, shall be paid an additional
compensation of at least 30% of his regular wage. However, where the collective
bargaining agreement or other applicable employment contract stipulates the
payment of a higher premium, then the employer shall pay such a higher rate.71
Every worker shall be paid his regular daily wage during regular holidays, except
in retail and service establishments regularly employing less than ten workers.
The employer may require an employee to work on any holiday but such
employees shall be paid a compensation equivalent to twice their regular rate.
Holidays include New years Day, Maundy Thursday, Good Friday, 09 April, 01
May, 12 June, 04 July, 30 November, and 25 and 30 December.72 Every
employee who has rendered at least one year of service is entitled to a yearly
service incentive leave of five days leave with pay.73
The minimum wage rates for agricultural and non-agricultural employees

and workers in each and every region of the country are those prescribed by the
Regional Tripartite Wages and Productivity Board according to relevant factors.74
Book IV is entitled Health, Safety and Social Welfare Benefits and deals
with medical, dental and occupational safety, employees compensation and the
State Insurance Fund, Medicare and adult education.75 The Social Security Act
provides for retirement, death, disability and sickness benefits. Coverage is
compulsory for all employees from the date of their employment and for
employers from their first day of operation. Also covered are all self-employed
persons earning P1,800 or more per annum. Its applicability to certain groups of
self-employed is determined by the Social Security Commission under such rules
and regulations as it may prescribe. Philippine citizens recruited by foreign-
based employers for employment abroad may be covered by the Social Security
System (SSS) on a voluntary basis.76 On the other hand, the government
employees are covered by the Government Service Insurance System (GSIS).
The National Health Insurance Program covers all Filipinos.77
Book V is entitled Labour Relations and covers the National Labour

Relations Commission, the Bureau of Labour Relations, Labour organizations,
unfair labour practices, collective bargaining and the administration of
agreements, strikes and lockouts, foreign involvement in trade union activities
71
Presidential Decree No 442 (1974), arts 83, 85, 87, 91, & 93.
72
Presidential Decree No 442 (1974), art 94.
73
74
Presidential Decree No 442 (1974), art 99, as amended by Rep Act No 6727 (1989).
75
Presidential Decree No 442 (1974), Arts 156-210.
76
Rep Act No 7875 (1995) as amended by Rep. Act No 9241 (2004).
77
9
and special provisions.78 The National Labour Relations Commission was
established in the Department of Labour and Employment, is composed of a
chairman and five members representing employers, four members representing
the public, and five members representing employees. The Commission
exercises appellate jurisdiction over all cases decided by labour arbiters.79
The labour arbiters exercise exclusive jurisdiction to hear and decide

within 30 calendar days of submission for decision, without extension, the
following matters:
(1) unfair labour practice cases;

(2) termination disputes;
(3) if accompanied by a claim for reinstatement, those cases that workers
may file regarding wages, rates of pay, hours of work and other terms and
conditions of employment;
(4) claims for actual, moral, exemplary, and other forms of damages arising
from employer-employee relations;
(5) cases arising from any violation of article 264 of the Labour Code,
including questions involving the legality of strikes and lockouts; and
(6) except for employees compensation, social security, medicare and
maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding P5,000.
Cases arising from the interpretation or implementation of the collective

bargaining agreement (CBA) and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the labour
arbiter by referring them to the grievance machinery and voluntary arbitration, as
may be provided for in agreements.80
All persons employed in commercial, industrial and agricultural

enterprises, including religious, charitable, medical, or educational institutions,
whether operating for profit or not, have the right to self-organisation and to form,
join, or assist in labour organizations of their choosing for the purpose of
collective bargaining.81 Exempted from joining are managerial employees,
government employees from agencies established by law,82 and members of co-
operatives.83
Parties to a CBA will include in the agreement, provisions that will ensure
the mutual observance of its term and conditions. The CBA should contain the
78
Com Act No 186 (1936), as amended.
79
LABOUR CODE, art 213, as amended.
80
81
82
LABOUR CODE, arts 244 * 245, as amended.
83
Benguet Electric Co-operative Inc v Calleja GR No 79025, 29 December 1989, 180 SCRA 740
(1989).
10
machinery for the adjustment and resolution of grievances arising from the
interpretation or implementation of their CBA and those arising from the
interpretation or enforcement of company personnel policies. If grievances are
not settled within seven calendar days of submission, they are automatically
referred to voluntary arbitration as prescribed in the CBA. The voluntary
arbitration or panel of voluntary arbiters have exclusive jurisdiction to hear and
decide all unresolved grievances arising from the interpretation or
implementation of the CBA or company personnel policies. Violations of a CBA,
except those which are gross in character, shall no longer be treated as unfair
labour practice but are resolved as grievances under the CBA. The award or
decision of the voluntary arbitrator is final and executory after ten calendar days
from receipt of the copy of the award or decision by the parties.84 Appeals can
be made to the Court of Appeals85 and only to the Supreme Court by certiorari on
questions of law.
Book VI is entitled Post-Employment and deals with security of tenure,

regular, casual and probationary employment, termination by employer or
employee, closure of establishments and reduction of personnel, and retirement
from service.86
Book VII contains the Transitory and Final Provisions which includes
panel provisions as well as prescription of offences and claims.87
84
LABOUR CODE, arts 260-262, as amended, (A) & (B).
85
St. Martin Funeral Home v NLRC GR No 130866, 16 September 1998.
86
LABOUR CODE, arts 278-287, as amended.
87
LABOUR CODE, arts 288-302, as amended.
11
CHAPTER 3
Government and the State
The New Charter is described as pro-life, pro-people, pro-poor, pro-Filipino and

anti-dictatorship.1 It is pro-life because it bans nuclear weapons, protects the
unborn from the moment of conception, abolishes the death penalty except in
extreme cases when the Congress may reimpose it, and protects the family as a
basic autonomous social institution.2 It is considered pro-people because it
includes policies to promote peoples welfare, i.e. a just and humane social order,
adequate social services, protection for the right to health and to a balanced and
healthy ecology and gives priority to education; it allows greater participation by
the people in government through the free and open party system, sectoral
representation, peoples organizations, and the institution of the processes of
initiative and referendum in law-making and constitutional amendment.3 It is pro-
poor because there are socio-economic policies that alleviate the plight of the
under-privileged, and promote social justice.4 It is pro-Filipino because there are
provisions for Filipino control of the economy, educational institutions, mass-
media and advertising and public utilities; reservation of certain areas of
investments for Filipinos if it is in the national interest, and in the practice of all
professions; a Filipino national language and the preservation of a Filipino
national culture.5 It is anti-dictatorship because it puts limitations on the powers
of the President and strengthens the powers of the Congress and the Judiciary,
thus, preventing the consolidation of powers in any one person or branch of
government.6
Although it is basically patterned after the 1973 Constitution, the 1987

Constitution consists of 100 new sections which primarily deal with social justice,
the national economy, family rights, education and human resources, the
Commission on Human Rights and the autonomous regions.7 However, the
same basic principles underlying the previous constitutions are still found in the
new Constitution, among which are:
1
Philippine Constitutional Commission of 1986; Primer The Constitution of the Republic of the
Philippines (1986) p 26.
2
1987 CONST; Article II, ss 7, 12; art III, s 19(1); Rep Act No 7659 (1993) reimposed the death
penalty for certain heinous crimes.
3
Article II, ss 5,9,10, 11, 15, 16 and 17; art VI, s 5; art XIII, ss 15-16; art IX-C, ss 5,8; art X, ss 3
and 9; and art XVII, s 2.
4
Article II, ss 9-11, 18-23; arts XIII and XIV.
5
Articles XII, XIV, ss 4(2), 6-9, 12, 14-18.
6
Article VII, ss 16, 18-21.
7
Article II, ss 9, 10; art XII, ss 1-2; art XII, ss 1-22; art XV, ss 1-4; art IV, ss 1-19; art XIII, ss 17-
19; and art X, ss 15-21.
1
(1) a declaration of a republican state and sovereignty of the people;8
(2) a renunciation of war as an instrument of national policy;9
(3) the supremacy of civilian authority over the military;10
(4) the separation of Church and State;11
(5) the guarantee of the bill of rights;12
(6) the rule of the majority;
(7) government through suffrage;13
(8) the separation of powers;14
(9) the independence of the judiciary;15
(10) local autonomy is ensured;16
(11) the accountability of public officers;17
(12) the non-suability of the State;18 and
(13) the nationalization of natural resources and other enterprises affected with
the public interest.19
Structure of the Government
The government of the Philippines is republican in form and under a presidential

system as distinguished from the parliamentary system under the 1973
Constitution. It is a unitary, centralized government with the principle of
separation of powers as a basic feature. This means that there is a division of
the functions of government into three distinct classes: the executive, the
legislative, and the judicial departments; and in the exercise of the functions
allotted to each department under the Constitution, each department is supreme,
coordinate and coequal with the others.20 Any acts of one in usurpation of the
others or, in excess of the powers granted to it by the Constitution, are invalid.
While the three are independent of one another, they form an interdependent unit
as far as may be necessary to carry out the work of the government. There is
also the system of checks and balances wherein the Constitution gives each
department certain powers by which it may definitely restrain the others from
exceeding their authority.21
The Executive
8
Article II, s 1.
9
Article II, s 2.
10
Article II, s. 3.
11
Article II, s 6.
12
Article III, ss 1-22.
13
Article V, ss 1 and 2.
14
Article VI, s 1; art VII, s 1; and art VIII, s 1.
15
Article VIII, ss 1-2 and 3.
16
Article II, s 25 and art X, s 2.
17
Article XI, s 1.
18
Article XVI, s 3.
19
Article XII, ss 2-4, 10 and 12.
20
V Sinco, p 128.
21
V Sinco, p. 132.
2
The 1987 Constitution vests the executive power in a President22 who has control
of all the executive departments, bureaus and offices;23 exercises general
supervision over local governments;24 and ensures that the laws are faithfully
executed.25 It vests the President with powers of Commander-in-Chief of all the
armed forces of the Philippines and empowers this office, under certain
circumstances and conditions, to suspend the privilege of the writ of habeas
corpus or place the Philippines under martial law for a limited period. A state of
martial law does not suspend the operation of the Constitution, nor supplant the
functioning of the civil courts or legislative assemblies, nor authorize the
conferment of jurisdiction on military courts and agencies over civilians where
civil courts are able to function, nor automatically suspend the privilege of the
writ. Likewise, the suspension of the privilege of the writ applies only to persons
judicially charged for rebellion or offences inherent in or directly connected with
an invasion.26
The other powers of the President include: the authority to nominate and
appoint, with the consent of the Commission on Appointments, the heads of the
executive departments, ambassadors, other public ministers and consuls, or
officers of the armed forces from the rank of colonel or naval captain, and other
officers whose appointments are vested in the Presidency under the Constitution
and by law;27 the authority to contract or guarantee foreign loans on behalf of the
Republic but only with the prior concurrence of the Monetary Board and subject
to such limitations as may be provided by law;28 to grant reprieves, commutations
and pardons, and remit fines and forfeitures after conviction by final judgment,
except in cases of impeachment; and to grant amnesty with the concurrence of
the majority of all the Members of the Congress.29
The President also participates in the legislative process because a bill

passed by the Congress does not become a law unless he approves it. If he
vetoes the bill, it could still become a law if two-thirds of all the Members of each
House reconsider and approve such bill.30
Both the President and Vice-President are elected by direct vote of the
people for a term of six years. The President is not eligible for any re-election
whereas the Vice-President can serve for not more than two successive terms.31
In case of death, permanent disability, removal from office, or resignation of the
President during his term, the Vice-President becomes President and serves the
22
Article VII, s 1.
23
Article VII, s 17.
24
Article X, s 4.
25
Article VII, s 17.
26
Article VII, s 18.
27
Article VII, s 16.
28
Article VII, s 20.
29
Article VII, s 19.
30
Article VI, s 27(1).
31
Article VII, s 4.
3
unexpired term. Where there is no President or Vice-President, the President of
the Senate, or in case of his inability, the Speaker of the House of
Representatives shall then act as President until the President or Vice-President
shall have been elected and qualified.32
The Legislature
The legislative power is vested in the Congress of the Philippines, a bicameral

body composed of the Senate and House of Representatives, except o the
extent reserved to the people by the provision on initiative and referendum.33
The Senate is composed of 24 Senators who are elected at large for a term of six
years and for not more than two consecutive terms.34 The House of
Representatives is composed of at most 250 members, 20% of whom are
elected through the party-list system and from the sectors for the first three terms
while the rest are elected by legislative district.35 The members of the House of
Representatives are elected for a term of three years but must not serve for more
than three consecutive terms.36
Upon assumption of office, all members of Congress must make a full

disclosure of their financial or business interests. They must notify the House of
any potential conflict of interest which may arise from the filing of proposed
legislation of which they are authors.37 Other prohibitions are:
(1) the appearance as counsel before any court of justice or before the
Electoral Tribunals or quasi-judicial or administrative bodies;
(2) any financial interest in any contract with the government or special
privilege granted by it directly or indirectly or intervening in any matter
before any office of the government for pecuniary benefit or where the
Member may be called upon to act on account of his office.
(3) an appointment to any office or employment in the government, or any of
its subdivisions, agencies or instrumentalities including government-
owned or controlled corporations without forfeiting his seat; and
(4) an appointment to any office which may have been created or
emoluments thereof being increased during the term he was elected for.38
32
Article VII, ss 7-8.
33
Article VI, s 1.
34
Article VI, ss 4-5.
35
Article VI, s 5(1) and (2). The sectors mentioned are from labour, peasant, urban poor,
indigenous cultural communities, women, youth and such other sectors as may be provided by law, except
the religious sector.
36
Article VI, s 7.
37
Article VI, s 12.
38
Article VI, ss 13-14.
4
Congressional representatives enjoy parliamentary immunity for all offences
punishable by not more than six years imprisonment when Congress is in
session.39
The Congress convenes once every year on the fourth Monday of July for
its regular session, unless a different date is fixed by law, and continues to be in
session for such number of days as it may determine until 30 days before the
opening of its next regular session.40 A majority of each House constitutes a
quorum to do business but a smaller number may adjourn from day to day and
may compel the attendance of absent members in such manner and under such
penalties as the House may provide. Either House may adjourn for not more
than three days but it cannot adjourn for a longer period or to some other place
than that in which the two Houses are sitting.41 Each House, by a majority vote
of all its respective members, elects the Senate President and the Speaker and
other officers who hold their office at the pleasure of their respective members.42
Each House determines its rules of procedure, punishes its members for
disorderly behaviour, and with the concurrence of two-thirds of all its members,
may suspend a member for a period not exceeding 60 days or expel him.43 Each
House has an Electoral Tribunal composed of nine members, three of whom
shall be Justices of the Supreme Court, to be designated by the Chief Justice,
with the Senior Justice as the Chairman and the remaining Justices as members
of the Senate or House, as the case may be, who are chosen on the basis of
proportional representation from the political parties or organizations registered
under the party-list system represented therein.44
The Party-List System Act45 establishes a mechanism of proportional

representation in the election of representatives to the House from national,
regional, or sectoral parties or organizations or coalitions registered with the
Commission on Elections. The party-list representatives shall constitute twenty
per centum (20%) of the total member of the members of the House of
Representatives including those under the party-list.46 In determining the
allocation of seats for the second vote, the parties shall be ranked from the
highest to the lowest based on the number of votes they garnered during the
elections. The parties, organizations and coalitions receiving at least two percent
(2%) of the votes shall be entitled to one seat each and if they garnered more
than two percent, they shall be entitled to additional seats in the proportion to
their total number of votes but not more than three seats.47
39
Article VI, s 11.
40
Article VI, s 15.
41
42
43
44
Article VI, s 17.
45
Rep Act No 7941 (1994).
46
Id, s 11.
47
Id.
5
The Constitution has revived the Commission on Appointments, which
was constituted under the 1935 Constitution, to consider the nominations made
by the President to the more important positions in the government.48 The
Commission comprises the President of the Senate as ex officio Chairman, 12
Senators and 12 Members of the House of Representatives, elected by each
House on the basis of proportional representation from the political parties
registered under the party-list system. Nominations submitted to it should be
acted upon within 30 session-days from their submission.
Although the legislative power of the Congress is wide in its scope, it is not
unlimited. Such limitations may either be substantive or formal, implied or
express. The Bill of Rights contains express, specific limitations while specific,
substantive limitations are found in certain provisions: the sole power to declare
the existence of a state of war for which the concurrence of two-thirds majority in
joint session voting separately must be obtained; the rule of taxation shall be a
uniform and equitable but progressive system; public money or property must not
be appropriated for religious purposes; no law granting a title of royalty or nobility
shall be enacted; no law can increase the appellate jurisdiction of the Supreme
Court, as provided in the Constitution, without its advice and consent; no law
shall be passed authorizing any transfer of appropriations except as provided for
in the Constitution; and that charitable institutions, churches and personages or
convents, non-profit cemeteries and all lands, buildings and improvements,
actually, directly, and exclusively used for religious, charitable, or educational
purposes shall be exempt from taxation.49 Of course, there are implied
substantive limitations inherent in the nature and character of the government,
such as the prohibition against the passage of irrepealable laws and the
prohibition against the delegation of legislative authority.
Formal limitations refer to the procedural requirements in the enactment of

legislation and the form and content therein. Every bill passed by the Congress
shall embrace only one subject, which has to be expressed in its title. No bill
passed by either House becomes a law unless it has passed three readings on
separate days, and printed copies of it in its final form have been distributed to
Members three days before its passage, except when the President certifies to
the necessity of its immediate enactment to meet a public calamity or
emergency. Upon the last reading of a bill, no amendment is allowed and the
vote is taken immediately thereafter and the yeas and nays entered in the
journal.50 Every bill passed by Congress has to be presented to the President for
approval. If he approves it, he signs the bill and it becomes a law. If he vetoes it,
he has to return the bill to the House where it originated, together with his
objections. The bill undergoes the same procedure but has to obtain an approval
of two-thirds of all the Members in each House in order to become law. For
48
Article VI, s 18; Constitution (1935), art VI, s 12.
49
Article VI, ss 23, 25(5), 28-31.
50
Article VI, ss 279(1) & (2).
6
appropriation, revenue or tariff bills, the presidential veto of any particular item or
items does not affect any item or items to which he does not object.
It should be noted that pursuant to article 2 of the Civil Code, laws shall
take effect after fifteen days following the completion of their publication in the
Official Gazette unless it is otherwise provided. According to the Supreme
Court, the clause unless it is otherwise provided refers to the date of effectivity
and not to the requirement of publication itself, which cannot in any event be
omitted. The clause does not mean that the legislature may make the law
effective immediately upon approval, or any other date, without its previous
publication. Publication is indispensable in every case, but the legislature may,
in its discretion, provide that the usual 15-day period shall be shortened or
extended.51 This provision has been subsequently amended by section 18 of
Executive Order No 200, dated 18 June 1987 and adopted in Executive Order No
292 which promulgated the Administrative Code of 1987 to include publication in
a newspaper of general circulation.
Other specific formal areas of limitations include: all appropriations,

revenue or tariff bills, bills authorizing an increase of the public debt, bills of local
application and private bills which must originate exclusively in the House of
Representatives; the Congress may not increase the appropriations
recommended by the President for the operation of the government as specified
in the budget; no provision or enactment shall be embraced in the general
appropriations bill unless it relates specifically to some particular specified
appropriations; the procedure in approving appropriations for the Congress shall
strictly follow the procedure for approving appropriations for other departments
and agencies; and a special appropriation bill shall specify the purpose for which
it is intended and shall be supported by funds actually available as certified by
the National Treasurer, or to be raised by a corresponding revenue proposal.52
The Judiciary
The judicial system of the Philippines consists of a hierarchy of courts with the
Supreme Court53 at the apex. Under the Judicial Reorganisation Act,54 the other
courts are: (a) one Court of Appeals (CA)55 (b) Regional Trial Courts (RTCs)
51
Taada v Tuvera GR No 63915, 24 April 1985, 136 SCRA 27 (1985); Resolution, 29 December
1986, 146 SCRA 446 (1986).
52
Article VI, ss 24 and 25.
53
Article VIII, s 1.
54
Batas Pambansa Blg 129 (1980). The constitutionality of this law was challenged and upheld
by the Supreme Court in the case of De law Llana v. Alba G.R No 57883, 12 March 1982, 112 SCRA 294
(1982).
55
Batas Pambansa Blg 129 (1980), s 3, as amended by Executive Order No 33 (1986) and Rep
Act No 8246 (1996).
7
divided into 13 judicial regions, composing a total of 950 branches; and (c) 82
Metropolitan Trial Courts (MeTTCs), 124 Municipal Trial Courts in Cities
(MTCCs) and 438 Municipal Trial Courts (MTCs) and 480 Municipal Circuit Trial
Courts (MCTCs). For Muslims, there are 51 sharia circuit and five sharia district
courts.56 Aside from these tribunals, there are special courts, namely, the Family
Courts57, the Court of Appeals58 and the Sandiganbayan.59
The Supreme Court
The Supreme Court is composed of a Chief Justice and 14 Associate Justices

who sit or at its discretion, in divisions of three, five or seven members.60 Cases
that are heard and decided by the Supreme Court en banc are those involving
the constitutionality of a treaty, executive agreement or law; and such cases as
required under the Rules of Court, including those involving the constitutionality,
application, or operation of presidential decrees, proclamations, orders,
instructions, ordinances, and other regulations. These cases are decided with
the concurrence of a majority of the members who actually take part in the
deliberations on the issues of the case and vote thereon.61 Cases or matters
heard by a division are decided with the concurrence of a majority of the
members who actually took part in the deliberations on the issues of the case
and voted thereon, and in no case, without the concurrence of at least three of
such Members. When the required number is not obtained, the cases are
decided en banc. No doctrine or principle of law laid down by the Court in a
decision rendered en banc or in division may be modified or reversed except by
the Court sitting en banc.62
Under the Constitution, the Supreme Court exercises original jurisdiction

over cases affecting ambassadors, other public ministers and consuls, and over
petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.63 The Supreme Court has the power to review and revise, reverse,
modify or affirm on appeal, as the law or the Rules of Court may provide, final
judgments and decrees of inferior courts in:
56
Presidential Decree No 1083 (1977), 73 OG 4638 No 20 (16 May 1977); Rep Act No 6734
(1989), art IX, s 2 created the Sharia Appellate Court but has not yet been operationalised.
57
Created by Rep Act No 8369 (1997) but such courts have not been organized. Instead, the
Supreme Court designated certain RTCs as Family Courts.
58
Rep Act No 1125 (1954) as amended by Rep Act No 9282 (2004) which expanded its
jurisdiction and elevated its rank to the level of a collegiate court.
59
Presidential Decree No 1486 (1978), 74 OG 10890 No 50 (11 December 1978), art XI, s 4 of the
1987 Constitution provides that it shall continue to function and exercise its jurisdiction as now or
hereafter may be provided by law; Rep Act No 7975 (1995) enlarged the court with 5 divisions and Rep
Act No 8249 (1997) enlarging its jurisdiction.
60
Article VIII, s 4(1).
61
62
63
8
(1) all cases in which the constitutionality or validity of any treaty, international
or executive agreement, law, presidential decree, proclamation, order,
instruction, ordinance, or regulation is in question;
(2) all cases involving the legality of any tax, impost, assessment, or toll or
any penalty imposed in relation thereto;
(3) all cases in which the jurisdiction of any lower court is in issue;
(4) all criminal cases in which the penalty imposed is reclusion perpetua or
higher;
(5) all cases in which only an error or question of law is involved.64
Any decision, order or ruling of the Civil Service Commission, Commission on

Elections or the Commission on Audit may be brought to the Supreme Court on
certiorari by the aggrieved party within 30 days from a receipt of a copy thereof.65
Under special laws, the Supreme Court is vested with exclusive jurisdiction to
review decisions of the Land Transportation Franchising and Regulatory Board
and the National Telecommunications Commission, whose functions were
formerly exercised by the Public Service Commission,66 the National
Electrification Administration67 and the Securities and Exchange Commission.68
The Supreme Court, sitting en banc, is the sole judge of all contests
relating to the election, returns, and qualifications of the President or Vice-
President, and may promulgate its rules for this purpose.69
The Supreme Court also has the power to promulgate rules concerning
the protection and enforcement of constitutional rights, pleadings, practice and
procedure in all courts, admission to the practice of law, the Integrated Bar, and
legal assistance for the underprivileged. Such rules shall provide a simplified
and inexpensive procedure for the speedy disposition of cases, shall be uniform
for all courts of the same grade, and shall not diminish, increase, or modify
substantive rights.70 It may order a change of venue or place of trial to avoid a
miscarriage of justice.71 It may temporarily assign judges of lower courts to other
stations as the public interest may require, but such temporary assignment shall
not exceed six months without the consent of the judge concerned.72 The
Supreme Court exercises administrative supervision over all courts and its
personnel.73 En banc, it has the power to discipline judges of the lower courts, or
64
65
Article IX-A, s 7.
66
Com Act No 146 (1936), as amended, s 35. Executive Order No 202, dated 19 June 1987, 83
OG 3122B (July 1987).
67
Presidential Decree No 269 (1973), s 59, 60 OG 7485 (August 1973).
68
Presidential Decree No 902-A (1976), as amended, s 6, 72 OG 4156 (19 April 1976).
69
Article VII, s 4, last para.
70
Article VIII, s 5(5). Se People v Gutierrez GR Nos 32282-83, 26 November 1970, 36 SCRA
172 (1970).
71
Article VIII, s 5(4). See People v Gutierrez GR Nos 32282-83, 26 November 1970, 36 SCRA
172 (1970).
72
73
Article VIII, s 6.
9
order their dismissal by a vote of a majority of the Members who actually took
part in the deliberations on the issues in the case and voted on them.74
The Court of Appeals
The Court of Appeals consists of a Presiding Justice and 68 Associate Justices.75

It exercises its powers, functions and duties through 23 divisions, each division
being composed of three members. The Court may sit en banc only for the
purpose of exercising its administrative, ceremonial or other non-adjudicatory
functions.76
The Court of Appeals has permanent stations in the City of Manila (17
divisions), Cebu City (3 divisions), and Cagayan de Oro City (4 divisions).
Whenever demanded by public interest or whenever justified by an increase in
case load, the Supreme Court may authorize any division of the Court to hold
sessions periodically, or for such periods and at such places that the Supreme
Court may determine for the purpose of hearing and deciding cases. Trials or
hearings in the Court of Appeals must be continuous and must be completed
within three months unless extended by the Chief Justice of the Supreme Court.
A majority of the actual members of the Court constitutes a quorum for its
session en banc. Three members constitute a quorum for the sessions of a
division. The unanimous vote of three members of a division is necessary for the
pronouncement of a decision or final resolution, which shall be reached by
consultation, before the writing of the opinion by any member of the division. In
the event that the three members do not reach a unanimous vote, the President
Justice requests the raffle committee of the Court for the designation of additional
justices to sit temporarily with them, forming a special division of five members.
The concurrence of a majority of such a division is necessary for the
pronouncement of a decision or final resolution.77
The Court of Appeals exercises;
(1) original jurisdiction to issue writs of mandamus, prohibition, certiorari,

habeas corpus and quo warranto, and auxiliary writs or processes,
whether or not in aid of its appellate jurisdiction;
(2) exclusive jurisdiction over actions for annulment of judgments of Regional
Trial Courts; and
(3) exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-judicial
74
Article X, s 7.
75
Batas Pambansa Blg 129 (1980), as amended by Executive Order No. 33 (1986) and Rep Act
No 8246 (1996).
76
Batas Pambansa Blg 129 (1980), as amended by Executive Order No. 33 (1986), s 4.
77
Batas Pambansa Blg 129 (1980), as amended by Executive Order No. 33 (1986), s 11.
10
agencies, instrumentalities, boards or commissions, except those falling
within the appellate jurisdiction of the Supreme Court.78
Whenever demanded by public interest, or whenever justified by an increase in

case load, the Supreme Court, upon its own initiative or upon recommendation of
the Presiding Justice of the Court of Appeals, may authorize any division of the
court to hold periodically for such periods at such places as the Supreme Court
may determine for the purpose of hearing and deciding cases.79 The Court of
Appeals has the power to receive evidence and perform any and all acts
necessary to resolve factual issues raised in cases falling within its original
jurisdiction, such as actins for the annulment of a judgment of a regional trial
court and cases falling within its appellate jurisdiction wherein a motion for a new
trial is based only on the ground of newly discovered evidence.80
Regional Trial Courts
The Philippines is divided into 13 judicial regions with one Regional Trial Court
for each region.81 Each Regional Trial Court has several branches. Regional
Trial Courts exercise exclusive original jurisdiction:
(1) in all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
(2) in all civil actions which involve the title to, or possession of, real property,
or any interest therein, where the assessed value of the property involved
exceeds P20,000 or for civil actions in Metropolitan Manila, where such
value exceeds P50,000, except actions for forcible entry into and the
unlawful detaining of lands or buildings, original jurisdiction over which is
conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts;
(3) in all actions in admiralty and maritime jurisdiction where the demand or
claim exceeds P200,000 or in Metropolitan Manila where such gross value
exceeds P400,000;82
(4) in all matters of probate, both testate and intestate, where the gross value
of the estate exceeds P200,000.00 or in Metropolitan Manila where such
gross value exceeds P400,000.00;83
78
Rep Act No 5434 (1968); Batas Pambansa Blg 129 (1980), s 29. See Rules of Court, Rule 43.
79
Rep Act No 8246 (1996), s 3.
80
Batas Pambansa Blg 129 (1980), as amended by Executive Order No 33 (986), s 9, 2nd para.
81
Batas Pambansa Blg 129 (1980), s 13. For territorial area of a branch, see ss 17 & 18.
82
The jurisdiction amounts have been adjusted pursuant to s 5, Rep Act No 7691, which provides:
Sec. 5.- After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec.
19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg 129 as amended by this Act, shall be adjusted to
Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be
adjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of
Metro Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the
effectivity of this Act to Four hundred thousand pesos (P400,000.00). According to Circular No. 21-99
dated 15 April 1999 issued by the Office of the Court Administrator, the first adjustment of the
jurisdictional amounts took effect on 20 March 1999.
11
(5) in all actions involving the contract of marriage and marital relations;84
(6) in all cases not within the exclusive jurisdiction of any court, tribunal,
person or body exercising judicial or quasi-judicial functions;
(7) in all civil actions and special proceedings falling within the exclusive
original jurisdiction of a Juvenile and Domestic Relations Court and of the
Courts of Agrarian Relations as now provided for by law;85 and
(8) in all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorneys fees, litigation expenses, and costs or the value
of the property in controversy, amounts to more than P200,000.00 or, in
such other cases in Metropolitan Manila, where the demand, exclusive of
the abovementioned items exceed P400,000.00.86
Pursuant to Section 5 of the Securities Regulation Code,87 the RTC has

jurisdiction over all cases involving the following controversies formerly under the
exclusive jurisdiction of the Securities and Exchange Commission under
Presidential Decree No. 902-A,88 namely:
(1) devices or schemes employed by, or any acts of, the Board of Directors,
business associations, its officers or partners, amounting to fraud and
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, members of associations or
organizations registered with the Commission;
(2) controversies arising out of intracorporate or partnership relations,
between and among stockholders, members, or associates; between any
and/or all of them and the corporation, partnership, or association of which
they are stockholders, members or associates, respectively; and between
such corporation, partnership or association and the state insofar as it
concerns their individual franchise or right to exist as such entity;
(3) controversies in the election or appointments of directors, trustees, officers
or managers of such corporation, partnerships or associations.
In criminal cases, the Regional Trial Court has exclusive original

jurisdiction over the following:
(1) all criminal cases not within the exclusive jurisdiction of any other courts,
tribunals, or bodies;
(2) all criminal cases involving offenses where the imposable penalty is
imprisonment exceeding 6 years, irrespective of the amount of fine, and
83
Ibid.
84
Jurisdiction transferred to the Family Courts under Rep Act No 8369 (1997).
85
Executive Order No 229 (1987) divested the RTCs of such jurisdiction. See also Rep Act No
6657 (1988), s 50 but under s 56, an RTC designated as a special agrarian court at least in each province
has special exclusive jurisdiction over (a) all petitions for determination of just compensation to
landowners; and (b) the prosecution of all criminal offenses under the Act.
86
Batas Pambansa Blg 129 (1980), s 19 as amended by Rep Act No 7691 (1994).
87
Rep Act No 8799 (2000).
88
SEC Reorganization Act.
12
regardless of other imposable accessory or other penalties, including the
civil liability arising from such offenses or predicated thereon, irrespective
of the kind, nature, value or amount thereof;
(3) all criminal cases committed in relation to their office by public officials and
employees, including those employed in government-owned or controlled
corporations, and by private individuals charged as co-principals,
accomplices or accessories, where none of the principal accused are
occupying positions corresponding to salary grade 27 or higher, as
prescribed in RA 6758, or are PNP officers occupying the rank of
superintendent or higher, or their equivalent, or are, otherwise, not any of
those enumerated in Sec. 4, PD 1606, as amended, if the imposable
penalty is imprisonment exceeding six (6) years, irrespective of the
amount of fine, and regardless of other imposable accessory or other
penalties, including the civil liability arising from such offenses or
predicated thereon, irrespective of the kind, nature, value or amount
thereof.89
The Regional Trial Court also exercises original jurisdiction in the issuance
of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunctions which may be enforced in any part of their respective regions and90 in
actions affecting ambassadors and other public ministers and consuls.91 It has
appellate jurisdiction over all cases decided by the Metropolitan Trial Courts
(MeTTCs), Municipal Trial Courts (MTCs), and Municipal Circuit Trial Courts
(MCTCs).92 However, decisions, final orders and resolutions of the MTCs in the
exercise of delegated jurisdiction should be appealed directly to the Court of
Appeals as in appeals from Regional Trial Courts to the Court of Appeals.93
Metropolitan and Municipal Trial Courts
There is a Metropolitan Trial Court in each metropolitan area established by law,

a municipal trial court in each of the other cities or municipalities and a municipal
circuit trial court in each circuit comprising such cities and/or municipalities as are
grouped together pursuant to law.94 These courts exercise exclusive original
jurisdiction over all violations of city or municipal ordinances committed within
their respective territorial jurisdictions and have exclusive original jurisdiction over
all offences punishable with imprisonment not exceeding six years, irrespective
of the amount of fine, and regardless of other impossible accessory or other
penalties, including the civil liability arising from such offences or predicated
thereon, irrespective of kind, nature, value or amount thereof provided, however,
that in offences involving damage to property through criminal negligence, they
89
Pres Decree No 1606 (1978), s 4, as amended by Rep Act No 7975 (1995), s 2.
90
The jurisdiction to issue writs of certiorari, prohibition, mandamus, and habeas corpus is
concurrent with the Supreme Court, Court of Appeals and Sandiganbayan.
91
Batas Pambansa Blg 129 (1980), s 21.
92
93
Batas Pambansa Blg 129 (1980), as amended by Rep Act No 7691 (1994), s 4.
94
13
have exclusive original jurisdiction thereof.95 They have exclusive original
jurisdiction over civil actions and probate proceedings both testate and intestate,
including the grant of provisional remedies in proper cases, where the value of
the property, estate, or the amount of the demand does not exceed P200,000.00
or in Metropolitan Manila where such personal property or amount of the demand
does not exceed P400,000.00, exclusive of interest, damages of whatever kind,
attorneys fees, litigation expenses and costs, the amount which must be
specifically alleged, provided that, interest damages of whatever kind, attorneys
fees, litigation expenses where there are several claims or causes of action
between the same or different parties, embodied in the same complaint, the
amount of the demand shall be the totality of the claims in all the causes of
action, irrespective of whether the causes of action arose out of the same or
different transactions. These courts also have exclusive original jurisdiction over
cases of forcible entry and unlawful detainer, provided that when, in such cases,
the defendant raises the question of ownership in his pleadings and the question
of possession cannot be resolved without deciding the issue of ownership, the
issue of ownership is resolved only to determine the issue of possession.
Finally, they have exclusive original jurisdiction in all civil actions which involve
title to, or possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed P20,000.00
or, in civil actions in Metropolitan Manila, where such assessed value does not
exceed P50,000.00 exclusive of interest, damages of whatever kind, attorneys
fees, litigation expenses and costs, provided that in cases of land not declared
for taxation purposes, the value of such property shall be determined by the
assessed value of the adjacent lots.96
The Supreme Court may assign these courts to hear and determine
cadastral or land registration cases covering lots where there is no controversy or
opposition, or contested lots where the value of which does not exceed
P100,000.00, such value which can be ascertained by an affidavit of the
claimant, or an agreement by various claimants or the corresponding tax
declaration.97
The Family Courts
Republic Act No. 8369 created the Family Courts in 1997 which mandates that it
shall be established in every province and city in the country. In case where the
city is the capital of the province, the Family Court will be established in the
Municipality which has the highest population.98 However, pending the
establishment of such Family Courts, the Supreme Court has designated from
95
Batas Pambansa Blg 129 (1980), s 32, as amended by Rep Act No 7691 (1994).
96
Batas Pambansa Blg 129 (1980), ss 32 & 33, as amended by Rep Act No 7691 (1994).
97
Section 34, as amended by Rep Act No 7691 (1994).
98
Sec. 3.
14
among the branches of the Regional Trial Courts at least one Family Court in
each city and in such other places as it may deem necessary.99
Family Courts have exclusive original jurisdiction to hear and decide the
following cases:100 (a) criminal cases where one of the accused is below
eighteen years of age but not less than nine years of age or where one or more
of the victims is a minor at the time of the commission of the offense; (b) petitions
for guardianship, custody of children, habeas corpus in relation to the latter; (c)
petitions for adoption of children and the revocation thereof; (d) complaints for
annulment of marriage, declaration of nullity of marriage and those relating to
marital status and property relations of husband and wife or those living together
under different states and agreements, and petitions for dissolution of conjugal
partnership of gains; (e) petitions for support and/or acknowledgment; (f)
summary of judicial proceedings brought under the provisions of the Family
Code; (g) petitions for declaration of status of children as abandoned, dependent
or neglected children; the suspension, termination or restoration of parental
authority and other cases cognizable under Presidential Decree No. 603,
Executive order No. 56, series of 1986, and other related laws; (h) petitions for
the constitution of the family home; (i) cases against minors cognizable under the
Dangerous Drugs Act, as amended; (j) violations of Republic Act No. 7610, as
amended; and (k) cases of domestic violence against women and children.
The Supreme Court has promulgated special rules to address the cases
before the Family Courts. Thus far, the Rules promulgated are: Rule on
Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages; Rule on Legal Separation; Rule on Adoption; Rule on Guardianship of
Minors; Rule on Custody of Minors and Writ of Habeas Corpus in Relation to
Custody of Minors; Rule on Examination of a Child Witness; Rule on
Commitment of Children; Rule on Provisional Orders; and Rule on Violence
Against Women and Children.
Sharia District and Circuit Courts
For the Muslim communities in Mindanao, Sharia District and Circuit Courts have
been established in five special judicial districts, namely, the Province of Sulu;
the Province of Tawi-Tawi; the Provinces of Basilan, Zamboanga del Norte,
Zamboanga del Sur and the cities of Dipolog, Pagadian and Zamboanga; the
Provinces of Lanao del Norte, Lanao del Sur and the cities of Iligan and Marawi;
and the Provinces of Maguindanao, North Cotabato, Sultan Kudarat and the city
of Cotabato.101 The Sharia District Courts have exclusive original jurisdiction
over: all cases involving custody, guardianship, legitimacy, paternity and filiation
arising under the Muslim Code of Personal Laws; all cases involving disposition,
distribution and settlement of the estate of deceased Muslims; petitions for
99
Rep Act No 8369 (1997), s 7.
100
Id, s 5.
101
Presidential Decree No 1083 (1977), 73 OG 4033 (16 May 1977); art 138.
15
declaration of absence and death and for cancellation of entries in the Muslim
Registries; all actions arising from customary contracts between Muslim parties;
all parties for mandamus, prohibition, injunction, certiorari, habeas corpus, and all
other auxiliary writs and processes in the aid of its appellate jurisdiction.102 The
courts also have appellate jurisdiction over all cases tried by the Sharia Circuit
Courts,103 and are of the same category as the RTCs.
On the other hand, Sharia Circuit Courts have exclusive original

jurisdiction over all cases involving offences defined and punished under the
Muslim Code and all cases involving disputes relating to communal properties.
Likewise, all civil actions and proceedings between Muslim parties or disputes
relating to marriage, divorce, betrothal, customary dower (mahr), disposition and
distribution of property upon divorce, maintenance and support and consolatory
gifts (muta) and the restitution of marital rights in accordance with the Muslim
Code are within its exclusive original jurisdiction.104
Republic Act No 6734 (1989)105 created the Sharia Appellate Court but to
date it has not yet been operational.
The Court of Tax Appeals
The Court of Tax Appeals (CTA) has special appellate jurisdiction over:
decisions of the Commissioner of Internal Revenue and the Commissioner of
Customs; decisions involving local tax cases and real property taxes; and
criminal offences of tax laws.106 The CTA is composed of a Presiding Justice
and five Associate Justices and sits en banc or in two divisions to hear cases.107
It is on the same level as the Court of Appeals.
The Sandiganbayan
The 1973 Constitution provided for the creation of a special court known as the
Sandiganbayan which has jurisdiction over criminal and civil cases, involving
graft and corruption practices and other such offences committed by public
officers and employees, including those in government-owned or controlled
corporations in relation to their office, as may be determined by law.108
Implementing this mandate, Presidential Decree No. 1486 created the
Sandiganbayan as a special court of the same level as the Court of Appeals,109
102
Presidential Decree No 1083 (1977), art 143. See also Tamano v. Ortiz GR No 126603, 1998.
103
Presidential Decree No 1083 (1977), art 144(1).
104
105
Organic Act for the Autonomous Region of Muslim Mindanao, art IX, s 2.
106
Rep Act No 1125 (1954), s 7 as amended by Rep Act No 9282 (2004).
107
Rep Act No 1125 (1954), s 2 as amended by Rep Act No 9282 (2004).
108
Article III, s 5.
109
Section 1, para 1, as amended by Presidential Decree No 1606 (1978). The validity of the
decree was upheld in Nuez v Sandiganbayan GR Nos 50581 and 50617, 30 January 1982, 111 SCRA 433
(1982).
16
possessing exclusive jurisdiction over all such criminal cases.110 The 1987
Constitution provides that this anti-graft court shall continue to function and
exercise its jurisdiction.111
Republic Act No 7975 (1995) enlarged the court by creating five divisions
compose of three justices each although five may sit at the same time.112 Its
jurisdiction was expanded to include:
(a) violations of Republic Act No. 3019, as amended or the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter 2, Title VII of
the Revised Penal Code, where one or more of the principal accused are
officials occupying the following positions in government, whether in a
permanent, acting or interim capacity at the time of the commission of the
offense;113
(b) other offences or felonies committed by the public officials mentioned in
subsection (a) committed in relation to their office; and
(c) civil and criminal cases filed pursuant to and in connection with Executive
Order Nos. 1, 2, 14 & 14-A.
In cases where the principal accused are PNP officers occupying the rank
of superintendent or higher, exclusive jurisdiction shall be vested in the proper
Regional Trial Court, Metropolitan Trial Court, and other courts, as the case may
be.114
The Sandiganbayan exercises exclusive appellate jurisdiction on appeals

from the final judgments, resolutions or orders of regular courts where all the
accused are occupying positions lower than Grade 27.115
Judicial and Bar Council
The 1987 Constitution provides a mandate for the creation of a Judicial and Bar
Council under the supervision of the Supreme Court. It is composed of the Chief
Justice of the Supreme Court as ex-officio chairman, the Secretary of Justice,
and a representative of the Integrated Bar, a professor of law, a retired Member
110
111
Art XI, s 4.
112
Sec 3.
113
It refers to officials of the executive branch occupying the positions of regional director and
higher otherwise classified as Grade 27 of Republic Act No 6758, including provincial and city public
officers; officials of the diplomatic service; Philippine Navy and Air Force colonels, and other PNP
officers; city and provincial prosecutors and their assistants; officials and prosecutors of the Office of the
Ombudsman; officers of government-owned or controlled corporations; state universities or educational
institutions; members of Congress and officials therein; members of the judiciary without prejudice to the
provisions of the Constitution; chairman and members of the Constitutional Commission; and all other
national and local officials classified as Grade 27 and higher.
114
Id, s 4.
115
Id.
17
of the Supreme Court, and a representative of the private sector.116 The regular
members of the Council are appointed by the President for a term of four years
with the consent of the Commission on Appointments. The regular members of
the Council receive emoluments, determined by the Supreme Court, and the
appropriations for the Council are provided for in the annual budget of the
Supreme Court.117 The Clerk of Court is the Secretary ex officio of the Council
and keeps a record of its proceedings.118
The Council has the principal function of recommending appointees to the

judiciary and exercises such other functions and duties as may be assigned to it
by the Supreme Court.119 The Council prepares a list of at least three nominees
for every vacancy in the Supreme Court and lower courts from which the
President makes appointments. Such appointments need no confirmation. For
the lower courts, the President has to issue the appointments within 90 days from
the submission of the list.120
CONSTITUTIONAL COMMISSIONS
There are three constitutional commissions created under the 1973 Constitution
which are continued by the 1987 Constitution, namely, the Civil Service
Commission, the Commission on Elections and the Commission on Audit.
Except for the Commission on Elections which is composed of a Chairman

and six Commissioners, the other Commissions are administered by a Chairman
and two Commissioners, who are appointed by the President with the consent of
the Commission on Appointments for a term of seven years without
reappointment.121 Their salaries are fixed by law and cannot be decreased
during their tenure.122
To ensure the independence of the Constitutional Commission, no

member during his tenure shall hold any other office or employment, engage in
the practice of any profession or in the active management or control of any
business which in any way may be affected by the functions of his office, nor be
financially interested, directly or indirectly, in any contract, franchise, or privilege
granted by the government or any of its subdivisions, agencies or
instrumentalities.123 The Commissions enjoy fiscal autonomy, appoint their
116
Constitution, art VII, s 8(1). This has been implemented by Executive Order No 216 dated 10
July 1987, 83 OG 322 (July 1987).
117
118
119
120
Article VIII, s 9.
121
Article IX(B), (C), (D), s 1.
122
Article IX(A), s 3.
123
Article IX(A), s 2.
18
officials and employees and promulgate their own rules concerning pleading and
practice before them.124
The Civil Service Commission
The Civil Service Commission administers the civil service, which embraces
every branch, agency, subdivision and instrumentality of the government,
including government owned or controlled corporations with original charters, and
is the central personnel agency of the Government.125
Appointments in the Civil Service are made only on the basis of merit and
fitness which are determined as far as practicable by competitive examinations
except for positions which are policy-determining, primarily confidential or highly
technical. No officer or employee can be removed or suspended except for just
cause as provided by law.126
The Commission on Elections
The Commission on Elections enforces and administers all laws relating to the
conduct of elections, plebiscites, initiatives, referenda and recalls, registers
political parties, decides administrative questions affecting elections, save those
involving the right to vote, and exercises exclusive original jurisdiction over all
contests relating to elections, returns and qualifications of all elective regional,
provincial and city officials. It also has appellate jurisdiction over all contests
involving elective municipal officials decided by trial courts of general jurisdiction
or involving elective barangay officials decided by trial courts of limited
jurisdiction.127
The Commission on Audit
The Commission on Audit examines, audits, and settles all accounts pertaining to
the revenues and receipts of, and expenditures or use of, funds and property
owned or held in trust by, or pertaining to, the government or any of its
subdivisions, agencies and instrumentalities.128 It has exclusive authority to
define the scope of its audit and establish the techniques and methods required
and promulgate accounting and auditing rules, including the prevention and
disallowance of irregular, unnecessary, excessive, extravagant or
unconscionable expenditures, or the use of government funds and properties.129
It also decides any case brought before it within 60 days from the date of its
submission for resolution and, unless otherwise provided by the Constitution or
124
Article IX(A), ss 4-6.
125
Article IX-B, ss 2-3.
126
Artucke UX-B, ss 2(2) & (3).
127
Article IX-C, s 2.
128
Article IX-D, s 2(1).
129
Article IX-D, s 2(2).
19
by law, its decision or order may be brought before the Supreme Court on
certiorari by the aggrieved party within 30 days from receipt of a copy of the
order.130
The Commission on Human Rights
Under the 1987 Constitution, there is also created an independent office called
the Commission on Human Rights which has been recently constituted under
Executive Order No. 163, dated 06 May 1987, thus abolishing the Presidential
Committee on Human Rights.131 Among its powers and functions are:
(1) the investigation, on its own or on a complaint by any party, of all forms of
human rights violations involving civil and political rights;
(2) to provide appropriate legal measures for the protection of human rights of
all persons within the Philippines, as well as Filipinos residing abroad, and
provide for preventive measures and legal aid services to the
underprivileged whose human rights have been violated or need
protection;
(3) the exercise of visitational powers over jails, prisons, or detention facilities;
(4) the establishment of a continuing programme of research, education and
information to enhance respect for the primacy of human rights and the
recommendation to the Congress of effective measures to promote human
rights and to provide for compensation to victims of violations of human
rights or their families; and
(5) to monitor the Philippine governments compliance with international treaty
obligations on human rights.132
The Ombudsman
The 1987 Constitution emphasizes the concept that public office is a public trust
and so public officers and employees must at all times be accountable to the
people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act
with patriotism and justice and lead modest lives.133 The President, Vice-
President, members of the Supreme Court, members of the Constitutional
Commission and the Ombudsman may be impeached and removed from their
office on conviction of a culpable violation of the Constitution, treason, bribery,
graft and corruption, other high crimes, or betrayal of public trust, while all other
public officers and employees may be removed from office as provided by law.134
However, to reinforce the anti-graft court (the Sandiganbayan), another
independent Office of the Ombudsman was created, composed of the
Ombudsman or Tanodbayan, one overall Deputy and at least one deputy each
130
Article IX-A, s 7.
131
Executive Order No 8, dated 18 March 1986, 82 OG 1485 (24 March 1986).
132
Article XIII, ss 17-19.
133
Article XI, s 1.
134
Article XI, s 2.
20
for Luzon, Visayas and Mindanao with a separate deputy for the Military
establishment.135 As protector of the people, the Tanodbayan and his deputies
are required to act promptly on complaints filed in any form or manner against
public officials or employees and, in appropriate cases, notify the complainants of
the action taken and the result thereof.136
The qualifications of an Ombudsman are: at least forty years of age, of

recognized probity and independence, member of the Philippine Bar, and
engaged for ten years in the practice of law.137 He has a term of seven years
without reappointment.
The Ombudsman can recommend to Congress if a law or regulation is

unfair and unjust.138 He can receive complaints from any source in whatever
form concerning an official act or omission.139 If the evidence of guilt against any
public officer or employee is strong, the Ombudsman may preventively suspend
such officer, not more than six months without pay.140
Local Government
Local government comprises the governments of provinces, cities, municipalities

and barangays, which are the territorial and political subdivisions of the
Philippines.141 By statutory provision, they are considered to be corporate
political bodies, for governmental administration of the affairs of the community
within their territorial boundaries; as incorporated entities, they are classified as
municipal corporations.142 Each municipal corporation is entitled to continuous
succession in its corporate name, it may hold and acquire property, enter into
contracts, sue and be sued, and do such other acts necessary to carry out the
purposes of its organization.143 No unit may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance with the
criteria established in the local government code and subject to the approval of a
majority of the votes cast in a plebiscite in the directly affected units.144
Provinces with respect to component cities and municipalities and cities

and municipalities with respect to component barangays must ensure that the
acts of their component units are within the scope of their prescribed powers and
functions.145 Local government units enjoy local autonomy146 which means that
135
Article XI, s 5.
136
Article XI, s 12.
137
Rep Act No 6770 (1989) otherwise known as the Ombudsman Act of 1989, s 7.
138
Id, s 29.
139
Id, s 26.
140
Id, s 24.
141
Article X, s 1.
142
V Sinco, p 705.
143
V Sinco, p 705.
144
Article X, s 10.
145
Article X, s 4.
21
they enjoy certain powers, such as the power of eminent domain, police power
and taxing power. Each unit has the power to create its own sources of revenue
and to levy taxes, fees and charges subject to such guidelines and limitations as
the Congress may provide, which shall accrue exclusively to the local
governments.147 As far as national taxes are concerned, local government units
have a share as determined by law, which is automatically released to them.
Likewise, they are entitled to an equitable share in the proceeds of the utilization
and development of the national wealth within their respective areas in the
manner provided by law.148
Local government units may group themselves, consolidate or coordinate

their efforts, services, and resources for purposes commonly beneficial to them in
accordance with law.149 The Congress may, by law, create special metropolitan
political subdivisions, subject to a plebiscite in the units directly affected, that will
be limited to providing basic services requiring coordination; but the localities
shall retain their basic autonomy and are entitled to their own local executives
and legislative assemblies.150 All legislative bodies have sectoral representation
as may be prescribed by law.151 For purposes of administrative decentralization
to strengthen the local units and accelerate socio-economic growth and
development of the units, regional development councils or other similar bodies
have to be constituted by the President to be composed of local government
officials, regional heads of the government and other government offices and
representatives from non-governmental organizations within the regions.152
Except for barangay officials, the term of office of the elective local officials
is three years and for not more than three consecutive terms.153 The Local
Government Code of 1991 transformed the local government units into self-
reliant communities by giving them powers to create its own sources of revenue,
ie local taxes and real property taxes and the transfer of basic services and
facilities in the provinces from the executive departments to them.154
The Lupong Tagapayapa
Due to the clogging of dockets in courts, Presidential Decree No 1508 was

promulgated, establishing a system for amicably settling disputes at the
barangay level, popularly known as the Katarungang Pambarangay. This law
was repealed and substantial changes were introduced by sections 399 to 422
and 515 of Republic Act No 7168 (1992), otherwise known as the Local
146
Article X, s 2.
147
Article X, ss 5-6.
148
Article X, s 7.
149
Article X, s 13.
150
Article X, s 11.
151
Article X, s 9.
152
Article X, s 14.
153
Article X, s 8.
154
Rep Act No 7160 (1992).
22
Government Code. All disputes between or amongst persons residing in the
same barangay have to be brought before the Lupong Tagapamayapa of the
barangay except for those disputes where one party is the government or any of
its subdivisions or instrumentalities; where one party is a public officer or
employee and the dispute relates to the performance of his official functions;
offences punishable by imprisonment exceeding one year or a fine exceeding
P5,000; offences where there is no private offended party; where the dispute
involves real property located in different cities or municipalities, unless the
parties otherwise agree; disputes involving parties who actually reside in
barangays of different cities or municipalities, except where such barangay units
adjoin each other and the parties agree to submit their differences to amicable
settlement by an appropriate lupon; disputes where urgent legal action is
necessary to prevent injustice from being committed or further continued,
specifically criminal cases where the accused is in police custody or under
detention; petitions for habeas corpus; actions coupled with provision remedies;
actions which may be barred by the Statute of Limitations, disputes arising from
Comprehensive Agrarian Reform Law; labour disputes arising from employer-
employee relations; actions to amend judgments upon a compromise; and such
other classes of dispute which the President may determine to be in the interest
of justice, or upon the recommendation of the Secretary of Justice.
The court, in which non-criminal cases not falling within the authority of the
lupon are filed, may, at any time before trial, motu proprio refer the case to the
lupon concerned for amicable settlement. No complaint, petition, action or
proceeding involving any matter within the authority of the lupon shall be filed or
instituted directly in court or any other government office for adjudication unless
there has been a confrontation before the lupon chairman or pangkat as certified
by the lupon that no conciliation or settlement has been reached.155 The
exceptions to this rule are cases where the accused is under detention or where
a person has otherwise been deprived of personal liberty, calling for habeas
corpus proceedings, or actions coupled with provisional remedies, or where the
action may otherwise be barred by the Statute of Limitations.156
Under Section 14 of Republic Act No. 9262 (2004), the barangay captain
can issue protection orders for acts constituting violence against women and
children effective for a period of fifteen days.
Autonomous Regions
155
Presidential Decree No 1508 (1978), s 6. See Morata v Go GR No 62339, 27 October 1983,
125 SCRA 444 (1983), where the Supreme Court declared that the conciliation process at the barangay
level, as a precondition for filing a complaint in court, is compulsory not only for cases falling under the
exclusive competence of the metropolitan trial courts, but for actions cognizable by the regional trial courts
as well.
156
Presidential Decree No 1508 (1978), s 6, last para.
23
In consonance with the demand for autonomy by Muslims in the Southern
Philippines and some of the leaders of indigenous groups in the Cordilleras, the
1987 Constitution authorized the creation of autonomous regions in Muslim
Mindanao and in the Cordilleras. Republic Act No 6734 (1989), the Organic Act
for the Autonomous Region in Muslim Mindanao was passed. As provided for by
the Constitution, a plebiscite was held with Lanao del Sur, Maguindanao, Tawi-
Tawi and Sulu voting favourably while Marawi City voted no,157 pursuant to
Republic Act No 6766 (1989).
Likewise, with the Organic Act for the Cordillera Autonomous Region, a
plebiscite was held in Benguet, Mt Province, Baguio City, Ifugao, Kalinga-Apayao
and Abra but only Ifugao voted favourably.158
157
Rep Act No 6734 (1989) was held to be valid by the Supreme Court in Abbas v Commission on
Elections GR Nos 89651-89965, 10 November 1989.
158
In Ordillo v Commission on Elections GR No 93054, 04 December 1990, 192 SCRA 100
(1990), the Supreme Court declared the Comelec Resolution, which upheld the creation of the Cordillera
Autonomous Region to be null and void.
24
CHAPTER 4
LEGAL PROCEDURE/ADMINISTRATION OF JUSTICE
INTRODUCTION
There is no trial by jury in the Philippines. The judge determines all questions of
law and fact in a case brought before him. While the Rules of Court provide for
the employment of assessors and commissioners1 to assist the judge in the
determination of the facts, this procedure has rarely been utilized.
The Rules of Court govern the pleadings, practice and procedure before
all courts in the Philippines. These rules consist of four major parts dealing with
civil actions, special proceedings, criminal procedure and evidence.
CRIMINAL PROCEDURE
All criminal actions are commenced either by a complaint or by an information.2

A complaint is a sworn written statement charging a person with an offence,
subscribed to by the offended party, any peace officer or other public officer
charged with the enforcement of the law violated.3 An information is an
accusation in writing charging a person with an offence subscribed to by the
fiscal and filed with the court.4 No complaint or information for an offence
recognizable by the Regional Trial Court can be filed without a preliminary
investigation having been first conducted by a judge, provincial city prosecutor or
a state prosecutor in order to determine if a prima facie case is established by
the evidence presented by both parties.5 The complaint or information shall state
the designation of the offense given by the statute, aver the acts or omissions
constituting the offense, and specify its qualifying and aggravating circumstances
which shall be stated in ordinary and concise language.6 No complaint or
information may be filed or dismissed by an investigating prosecutor without the
prior written authority or approval of the provincial or city prosecutor or chief state
prosecutor and such resolution is appealable to the Secretary of Justice.7
1
RULES OF COURT, Rule 32.
2
REV RULES OF CRIM PROCEDURE, Rule 110, s 5.
3
Id, Rule 110, s 3.
4
Id, Rule 110, s 4.
5
Id, Rule 110, s 5, 1st par.
6
Id, Rule 110, ss 8 & 9.
7
Id, Rule 112, s 4.
1
A preliminary investigation is required to be conducted before the filing of
a complaint or information for an offense where the penalty prescribed by law is
at least 4 years, 2 months and one day without regard to the fine.8
In all criminal prosecutions, the accused is entitled to the following:
(1) to be presumed innocent until the contrary is proved;

(2) to be present and be defended either in person or by an attorney at every
stage of the proceedings, that is, from the arraignment to the promulgation
of the judgment;
(3) to be informed of the nature and cause of the accusation;
(4) to testify as witness on his own behalf;
(5) to be exempt from being a witness against himself;
(6) to confront and cross-examine the witness against him at the trial;
(7) to have compulsory process issued to secure the attendance of witnesses
in his behalf;
(8) to have an expeditious and public trial; and
(9) to have the right of appeal in all cases authorized by law.9
The 1987 Constitution requires that any person under investigation for the
commission of an offence shall have the right to be informed of his right to
remain silent and to have competent and independent counsel, preferably of his
own choice. If the person cannot afford the services of counsel, he must be
provided with one. These rights cannot be waived, except in writing and in the
presence of counsel.10 It also provides that an confession obtained through
torture, force, violence, threat, intimidation or any other means which vitiates the
free will shall be inadmissible in evidence.11
Arrest and Detention
A person can only be arrested when there is a warrant or order for his arrest,
except in certain instances.12 No violence or unnecessary force shall be used in
making an arrest. The person arrested shall not be subject to a greater restraint
than is necessary for his detention.13 Secret detention places, solitary,
confinement, being held incommunicado, or other similar forms of detention are
8
9
Constitution (1987), art III, s 14(2); Id, Rule 115.
10
Article III, s 12(1).
11
Article III, ss 12(1) & (2), as implemented by Rep Act No 7438 (1992). See Magtoto v
Manguera GR Nos 37201-02, 03 March 1975, 56 SCRA 248 (1975) where the Supreme Court stated that
the rights of the accused under the 1973 Constitution should be given a prospective effect.
12
REV RULES OF CRIM PROCEDURE, Rule 113, s 2; Rule 113, Art III, s 2 of the Constitution
provides The right of the people to be secured in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by
the judge after examination under oath or affirmation of the complainant and the witnesses he may produce,
and particularly describing the places to be searched and the persons or things to be seized.
13
Id, Rule 113, s 2, 2nd par.
2
prohibited.14 The employment of physical, psychological, or degrading
punishment against any prisoner or detainee, or the use of substandard or
inadequate penal facilities shall be dealt with by law.15 No person may be
detained solely by reason of his political beliefs and aspirations.16 Likewise, the
1987 Constitution specifies that the law shall provide for penal and civil sanctions
for violations of sections 12 and 17 of Article III as well as compensation to and
rehabilitation of victims of torture or similar practices, and their families.
Pre-Trial
To abbreviate court proceedings, ensure prompt disposition of cases and

decongest court dockets, the Supreme Court laid down in Administrative Circular
No 3-99 dated 15 January 1999 the following guidelines for the observance of
trial judges and clerks of court:
(1) Before arraignment, the Court issues order directing the public prosecutor
to submit the record of the preliminary investigation to the Branch Clerk of
Court. When the accused is under preventive detention, his case shall be
raffled within 3 days from the filing of the complaint. The accused is
arraigned within 10 days of the raffle and the pre-trial of his case within 10
days from arraignment unless a shorter period is provided by law.17
(2) After arraignment, the Court sets the pre-trial conference within 30 days of
arraignment and issues an order: (a) requiring private offended party to
appear thereat for purposes of plea bargaining except for violations of the
Comprehensive Dangerous Drugs Act of 2002 and other matters requiring
his presence;18 (b) referring the case to the Branch Clerk of Court, if
warranted, for a preliminary conference to be set at least 3 days prior to
pre-trial to mark documents or exhibits presented by parties and consider
other matters that may aid in its prompt disposition; and (c) informing the
parties that no evidence shall be allowed to be presented and offered
during the trial other than those identified and marked during pre-trial
except when allowed by the court for good cause. In mediation cases, the
judge shall refer parties and their counsel to the Philippine Mediation
Center unit for purpose of mediation, if available.
(3) During the preliminary conference, the Branch clerk of Court assists the
parties in reaching a settlement of the civil aspect of the case; marks the
documents to be presented as exhibits after comparison, ascertains from
the parties the undisputed facts and admissions on the genuineness and
due execution of the documents marked as exhibits. The proceedings
here shall be recorded in the minutes to be signed by both parties and
counsel.
14
Article III, s 12(2).
15
CONST, Art. III, s 19(2).
16
CONST, Art III, s 8(1).
17
REV RULES OF CRIM PROCEDURE, Rule 116, s 1, as amended.
18
3
(4) During the pre-trial, except for violations of the Comprehensive Dangerous
Drugs Act of 2002, the trial judge must consider plea-bargaining
agreements.19 Where the prosecution and the offended party agree to the
plea offered by the accused, the court shall: (a) Issue an order which
contains the plea bargaining arrived at; (b) proceed to receive the
evidence on the civil aspect of the case; and (c) render and promulgate
judgment of conviction, including the civil liability or damages duly
established by the evidence.20
When plea bargaining fails, the Court scrutinizes every allegation in the
information and documents identified and defines the factual and legal issues.
The specific trial dates are set. All proceedings during the pre-trial are recorded
and reduced in writing and signed by the accused and counsel, otherwise, they
cannot be used against the accused. The minutes and the transcripts of the
proceedings shall be signed by the parties and/or their counsels. A pre-trial
order is also issued by court within 10 days after the termination of the pre-trial
setting forth the facts stipulated, admissions made, evidence marked, the number
of witnesses to be presented and the schedule of trial.21
Arraignment and Trial
The defendant must be arraigned before the court where the complaint or
information has been filed or assigned for trial.22 The defendant must be present
at the arraignment and must personally enter his plea. Both the arraignment and
plea must be recorded, but a failure to enter a record of them does not affect the
validity of proceedings.23 If the defendant refuses to plead, or makes a
conditional plea of guilty, a plea of not guilty shall be entered for him.24
All persons are, before conviction, bailable by sufficient sureties, except

those charged with capital offences if evidence of their guilt is strong. The right
to bail is not impaired even when the privilege of the writ of habeas corpus is
suspended.25 After arraignment, trial may proceed notwithstanding the absence
of the accused provided that he has been duly notified and his failure to appear is
justified.26 If the defendant appears without an attorney, the court must appoint a
counsel de officio to defend him.27
19
Rule on Guidelines to be Observed by Trial Judges and Clerks of Court in the Conduct of Pre-
Trial and Use of Deposition-Discovery Means; AM No 03-1-09-SC effective 16 August 2004 hereinafter
referred to as Pre-Trial Guidelines citing J BELLOSILLO, EFFECTIVE PRE-TRIAL TECHNIQUE, pp 4-42.
20
Id, pp 4-43.
21
1997 RULES OF CIVIL PROCEDURE, Rule 13, s 7; REV RULES OF CRIM PROCEDURE, Rule 118, s
4.
22
REV RULES OF CRIM PROCEDURE, Rule 116, s 1(a).
23
Id, Rule 116, s 1(b).
24
Id, Rule 116, s 1(c).
25
CONST, Art III, s 13; REV RULES OF CRIM PROCEDURE, Rule 114.
26
CONST, Art. III, s 14(2).
27
REV RULES OF CRIM PROCEDURE, Rule 116, ss 6-8.
4
The trial then proceeds if the defendant has entered a plea of not guilty.
Once commenced, the trial continues from day to day, as far as practicable, until
it is concluded. It may also be postponed for a reasonable period of time for
good cause. The Court shall, after consultation with the prosecutors and defense
counsel, set the case for continuous trial on a weekly or other short-term trial
calendar at the earliest possible time but in no case shall the entire trial period
exceed 180 days from the first day of trial.28 The trial is then followed by a
written judgment which is promulgated by reading it in the presence of the
defendant and the judge who rendered it.29 At any time before judgment of
conviction becomes final, the court may grant a new trial or reconsider its own
instance, with the consent of the accused or on motion of the prosecution. Either
party may appeal from a final judgment or ruling or from an order made after
judgment affecting the substantial rights of the defendant, but the prosecution
cannot appeal if the defendant would thereby be placed in double jeopardy.30 If
the death penalty is imposed, the case is automatically elevated to the Supreme
Court, whether the defendant has appealed or not.31
CIVIL PROCEDURE
Civil procedure includes ordinary civil actions, special civil actions, and
provisional remedies.
A civil action is a suit by which one party sues another for the enforcement
or protection of a right, or redress of a wrong. A civil action may either be
ordinary or special. Both are governed by the rules for ordinary civil actions
subject to specific rules prescribed for a special civil action.32 A special
proceeding is a remedy by which a party seeks to establish a status, a right or a
particular fact.33
An ordinary civil action is commenced by filing of the original complaint in

court.34 An action affecting title to, or possession of real property, or interest
therein, or forcible entry and detainer action is a real action while one founded
upon the privity of contract or for the enforcement or resolution of a contract or
for the recovery of personal property35 is a personal action. Where the object of
an action is a judgment against a particular person to exclude him of all his rights
28
REV RULES OF PROCEDURE, Rule 119, s 2.
29
Id, Rules 119 & 120.
30
Id, Rule 121, s 2. See also CONST, Art III, s 21.
31
Id, Rule 122. See also Amendments to the Revised Rules of Criminal Procedure to Govern
Death Penalty Cases, AM No 005-03-SC, effective 15 October 2004.
32
1997 RULES OF CIVIL PROCEDURE, Rule 1, s 3(a).
33
Id, Rule 1, s 3(c).
34
Id, Rule 1, s 5.
35
Id, Rule 4, s 1; De la Cruz v Seminary of Manila, 18 Phil 330 (1911) as cited in I J FERIA & M C
NOCHE, CIVIL PROCEDURE ANNOTATED 204 (2001).
5
in respect of a particular property or relief prayed for, the action is one in
personam.
Where the object is to determine the rights of a party over a specific

property against the whole world, equally binding to everyone, the action is one
in rem. And where the action is directed against a particular person for the
purpose of using his interest over a particular property to satisfy a lien or
encumbrance, such as in the case of a foreclosure on a mortgage, then the
action is quasi-in-rem.36 If the technical object of the suit is to establish a claim
against some particular person, with a judgment which generally in theory at
least, binds his body, or to bar some individual claim or objection, so that only
certain persons are entitled to be heard in defense, the action is in personam,
although it may concern the right of possession of a tangible thing.37
Once the case is filed, a summons is issued by court wherein the

defendant is notified of the action brought against him. There are three methods
of serving summons:
(1) personal service where the summons is handed to the defendant in

person;
(2) substituted service where the summons is handed together with a copy of
the complaint to some competent person in charge of the defendants
office or regular place of business; and
(3) service by publication wherein the defendant is designated as an unknown
owner or whenever his address is unknown or cannot be ascertained by
diligent inquiry, may by leave of court be effect upon him by publication in
a newspaper of general circulation in such places and in such time as the
court may order.38
Service upon private domestic corporations may be made on the president,

managing partner, general manager, corporate secretary, treasurer, or in-house
counsel while service upon a private foreign corporation doing business in the
Philippines may be made on its resident agent designated in accordance with law
for that purpose or, if there is no such agent, on the government official
designated by law to that effect or on any of its officers or agents within the
Philippines.39 By serving such a summons, the court acquires jurisdiction over
the person of the defendant. Trial and judgment without such service are null
and void.40 The respective claims of the parties are then alternately presented
through pleadings.41 If the defendant has a cross-claim or compulsory
36
1 F REGALADO REMEDIAL LAW COMPENDIUM 16 (5th rev edn, 1988).
37
I J FERIA & M C NOCHE, op cit, p 205.
38
1997 RULES OF CIVIL PROCEDURE, rule 14, ss 6, 7 & 14.
39
Id, Rule 14, ss 11 & 12.
40
Id, Rule 14; Salmon v Tan Cueco 36 Phil 556 (1917); Trimica v Polaris Marketing Corp GR
__________ 60 SCRA 321 (1974).
41
Id, Rule 6.
6
counterclaim, it must be asserted in the answer, or be considered barred. All
pleadings must be verified.
Within one day from the receipt of the complaint, a summons is prepared
containing a remainder to defendant to observe restraint in filing a motion to
dismiss and instead allege the grounds as defenses in the answer. Likewise, the
court issues an order requiring the parties to avail of the modes of discovery
under Rules 23-28 within 5 days from filing the answer together with the
summons.42
Within 5 days from the date of filing of the reply, plaintiff must promptly
move ex parte that the case be set for pre-trial. Three days before pre-trial, the
parties shall submit their briefs containing the following:
(1) willingness to enter into an amicable settlement indicating the desired

terms or to submit the case to alternative modes of dispute resolution;
(2) a summary of admitted facts and proposed stipulation of facts;
(3) issues to be tried and resolved;
(4) documents or exhibits to be presented, stating the purpose thereof. (No
evidence shall be allowed to be presented or offered during the trial in
support of a partys evidence-in-chief other than those that had been
earlier identified and pre-marked during the pre-trial, except if allowed by
the court for good cause shown.)
(5) a manifestation of their having availed or their intention to avail
themselves of discovery procedures or referral to commissioners; and
(6) the number and names of the witnesses, the substance of their
testimonies, and the approximate number of hours that will be required by
the parties for the presentation of their respective witnesses.43
The trial judge refers the parties and their counsel to the Philippine
Mediation Center (PMC) for mediation and if it fails, refer the case to the Branch
Clerk of Court to assist the parties in reaching a settlement and to mark the
documents or exhibits to be presented.44 The trial judge should exert all efforts
to arrive at a settlement of the dispute or if it fails, adopt measures to facilitate the
disposition of the case.45
A party who fails to appear at the pre-trial conference may be non-suited

or considered as in default.46 If the court finds that facts exist upon which a
42
Supreme Court, Pre-Trial Guidelines, s A(i).
43
See also 1997 REVISED RULES ON CIVIL PROCEDURE, Rule 18.
44
PRE-TRIAL GUIDELINES, s A(3). See also Supreme Court issuances in AM 01-10-5-SC-PHILJA
dated 06 October 2001 and M 04-3-15-SC-PHILJA dated 03 March 2004 on the use of ADR in Pre-Trial,
particularly court-annexed mediation before pilot courts in Metro Manila, Cebu and Davao.
45
Id, s A(4-9).
46
1997 REVISED RULES OF CIVIL PROCEDURE, Rule 18, s 5.
7
judgment on the pleadings or summary judgment may be made, it may render
such judgment as justice may require.47
The Court then prepares a trial calendar for the case and notices of the
relevant dates are served on the parties.48 During the trial, each party
endeavours to maintain by testimonies and evidence the claim embodied in the
pleadings.49
The Rules of Court provide certain rules of evidence which regulate the
production of evidence in court, decide what can be admitted and what should be
excluded and determines its value and effect.50
After the determination of the rights of the parties pertinent to the claim
made by the court, as the law and evidence may warrant, the judgment is
rendered. This judgment must be prepared personally and signed by the judge.
It must clearly and distinctly state the facts and the law on which it is based and
be filed with the clerk of court.51 No petition for review or motion for
reconsideration of a decision of the court shall be refused or denied without
stating the legal basis for that decision.52
If the judgment is final, not interlocutory, and the period of appeal has
been perfected, the judgment rendered may be said to have become executory,
and the prevailing party is entitled, as a matter of right, to its execution.53 Where
the judgment or order has become executory, the court cannot refuse to issue a
writ of execution except:
(1) when subsequent facts and circumstances arise, which render such
execution unjust or impossible;54
(2) on equitable grounds, as when there has been a change in the situation of
the parties which makes execution inequitable;55
(3) where the judgment has been novated by the parties;56
(4) when a petition for relief or an action to enjoin the judgment is filed and a
preliminary injunction is prayed for and granted;57
47
1991 REV RULES ON SUMMARY PROCEDURE, Rule 3, s 6.
48
1997 REV RULES ON CIVIL PROCEDURE, Rule 30, s 1.
49
Id, Rule 30, s 5.
50
REV RULES ON EVIDENCE, Rule 128, ss 1-4.
51
52
CONST, Art VIII, s 14, 2nd par.
53
54
Butuan City v Ortiz GR No 18054, 22 December 1961; Lipana v Devt Bank of Rizal GR No
73884, 24 September 1987.
55
Albar v Carandang GR No 18003, 29 September 1962; Luna v International Appellate Court
GR No 68374, 18 June 1985.
56
Fua Cam Lu v Yap Fauco 74 Phil 287 (1943).
57
8
(5) where the judgment has become dormant, the five-year period under
section 6 of rule 39 of the Rules of Court having expired without the
judgment having been revived; or
(6) where the judgment turns out to be incomplete or conditional.58
For a writ of execution to be valid it must conform strictly to the judgment and it
cannot vary the terms of the judgment it seeks to enforce. The effective period or
lifetime of a writ of execution is 5 years, counted from the date of its receipt by
the office, generally from the sheriff. However, the sheriff makes a report to the
court within 30 days after its receipt and every 30 days thereafter until the
judgment is satisfied in full.59
If the judgment directs a party to execute a conveyance of land, or deliver

deeds or other instruments or to perform some other specific act, and the party
fails to comply within the time specified, the court may direct the act to be done at
the cost of the disobedient party by some other persons appointed by the court.60
If the real or personal property is within the Philippines, the court may, in lieu of
enforcing the judgment, direct a subsequent judgment divesting the title of any
party and vesting it in others and such judgment will have the force and effect of
a conveyance executed in due form of law.61
When the execution requires the delivery or restitution of property, the

officer must oust the person against whom the judgment is rendered and place
the judgment creditor in possession of such property and then levy as much of
the property of the judgment debtor as will satisfy the judgment and costs
included in the writ of execution.62 When the property subject of the execution
contains improvements, the officer shall not destroy or remove the
improvements, except upon special order of the court, after due hearing.63
A monetary judgment is enforced by the officer levying on all the

properties, real and personal of every name and nature whatsoever, which may
be disposed of for value, except those properties which are exempt from
execution. Any excess in the proceeds must be delivered to the judgment debtor
unless otherwise directed by the court.64
EVIDENCE
Evidence is admissible when it is relevant to the issue and is not excluded by the
rules or evidence. However, not all relevant matters are admissible in evidence
58
Del Rosario v Villegas 49 Phil 634 (1926); Ignacio v Hilario 76 Phil 605; Cu Unjieng v
Mabalacat Sugar Co 70 Phil 380 (1940).
59
1997 REV RULES ON CIVIL PROCEDURE, Rule 39.
60
Id, Rule 30, s 10.
61
Id, Rule 39, s 10. See also Rule 39, s 11.
62
1997 REV RULES ON CIVIL PROCEDURE, Rule 30, s 10(c).
63
Id, Rule 30, s 10(d).
64
Id, Rule 30, s 9(a), 3rd par.
9
and as a rule, collateral matters, even if relevant, are not admissible. As to form,
evidence is either real, documentary or testimonial. Real evidence is that which
is addressed to the senses of the court, as where objects are exhibited for the
personal observation of the judge. Documentary evidence consists of the
documents, depositions and other papers presented before the court.
Testimonial evidence is that which is given orally by witnesses. Except as
provided by the Rules, all persons who can perceive and perceiving can make
known their perception to others, may be witnesses. Evidence can also be direct
when it tends to prove a fact without reference to any fact; circumstantial when it
tends to prove a fact by inference only; incompetent when the witness giving it
lacks fitness to give evidence; irrelevant when it has no connection with the point
at issue; immaterial when it would not affect the point at issue even if admitted;
primary when it is the best proof that can be produced; secondary when it is
proof admissible in the absence of primary evidence; prima facie when it appears
to be sufficient for the time being until something arises to controvert it; and
conclusive when it establishes the fact sought to be proved without any further
question.65
There are certain matters on which evidence need not be presented.

These are:
(1) matters of judicial notice;66

(2) admissions made by the parties in the pleadings, or in the course of the
trial or other proceedings in the case otherwise known as judicial
admissions;67 and
(3) matters covered by legal presumptions.68
Matters which are deemed to be of judicial notice without introduction of proof

are:
(1) facts which are of public knowledge;

(2) facts which are capable of unquestionable demonstration; and
(3) facts which ought to be known to judges because of their functions, such
as the existence and territorial extent of states, measure of time, etc.69
In civil cases, the party bearing the burden of proof must establish his case by a
preponderance of evidence.70 In a criminal case, the accused is entitled to an
acquittal unless his guilt is established beyond reasonable doubt.71
65
M J GAMBOA, AN INTRODUCTION TO LAW 454-5 (1965).
66
REVISED RULES ON EVIDENCE, Rule 129, s 1.
67
Id, Rule 129, s 4.
68
Id, Rule 131.
69
Id, Rule 129, s 1.
70
Id, Rule 133, s 1.
71
Id, Rule 133, s 2.
10
Effective 01 August 2001, the Supreme Court promulgated the Rules on
Electronic Evidence covering electronic documents and electronic data
messages which are applicable to civil and criminal actions as well as quasi-
judicial and administrative cases pursuant to the E-Commerce Law.72
SPECIAL CIVIL ACTIONS, PROVISIONAL REMEDIES AND SPEICAL

PROCEEDINGS
Special civil actions by their nature, require a different procedure from that of
ordinary civil actions. Actions for interpleader, declaratory relief, certiorari,
mandamus, quo warranto, expropriation, foreclosure of real estate mortgage,
partition, forcible entry and unlawful detainer and contempt are special civil
actions.73 Provisional remedies which are available for the preservation or
protection of the rights or interests of parties during the pendency of the principal
action are preliminary attachment; preliminary injunction; receivership; replevin
and support pendente elite.74 All other remedies, including one to establish the
status or right of a party or a particular fact, are called special proceedings.75
Rules of special proceedings are provided for in the following cases: settlement
of the estates of deceased persons; allowance or disallowance of wills; letters
testamentary; escheat; guardianship and custody of children; appointment of
trustees; adoption; rescission and revocation of adoption; hospitalization of
insane persons; habeas corpus; change of name; voluntary dissolution of
corporations; judicial approval of voluntary recognition of minor natural children;
constitution of family homes; declaration of absence; and cancellation or
correction of entries in the civil registry.76
On 28 October 1997, Republic Act No. 8369 otherwise known as the

Family Courts Act was signed into law. Under Section 5, the Family Courts have
exclusive jurisdiction to hear and decide the following cases:
(a) Criminal cases where one or more of the accused is below eighteen (18)
years of age but not less than nine (9) years of age, or where one or more
of the victims is a minor at the time of the commission of the offense:
Provided, that if the minor is found guilty, the court shall promulgate
sentence and ascertain any civil liability which the accused may have
incurred. The sentence, however, shall be suspended without need of
application pursuant to Presidential Decree No 603, otherwise known as
the Child and Youth Welfare Code;
(b) Petitions for guardianship, custody of children, habeas corpus in relation
to the latter;
(c) Petitions for adoption of children and the revocation thereof;
72
AM No 01-7-01-SC, dated 17 July 2001; Rep Act No 8792 ( ).
73
RULES OF COURT, Rules 62-71.
74
75
76
11
(d) Complaints for annulment of marriage, declaration of nullity of marriage
and those relating to marital status and property relations of husband and
wife or those living together under different status and agreements, and
petitions for dissolution of conjugal partnership of gains;
(e) Petitions for support and/or acknowledgment;
(f) Summary judicial proceedings brought under the provisions of Executive
Order No 209, otherwise known as the Family Code of the Philippines;
(g) Petitions for declaration of status of children as abandoned, dependent or
neglected children, petitions for voluntary or involuntary commitment of
children; the suspension, termination , or restoration of parental authority
and other cases cognizable under Presidential Decree No 603, Executive
Order No 56 (Series of 1986), and other related laws;
(h) Petitions for the constitution of the family home;
(i) Cases against minors cognizable under the Dangerous Drugs Act, as
amended;
(j) Violations of Republic Act No 7610, otherwise known as the Special
Protection of Children Against Child Abuse, Exploitation and
Discrimination Act, as amended by Republic Act No 7658; and
(k) Cases of domestic violence against women and children.
Pursuant to Section 13 of the Family Court Act, the Supreme Court

constituted a Committee on Revision of the Rules of Court (Family Courts)
chaired by Senior Associate Justice Reynato S. Puno. To date, the Supreme
Court has promulgated the following rules: (1) Rule on Examination of a Child
Witness; (2) Rule on Juveniles in Conflict with the Law; (3) Rule on Declaration of
Absolute Nullity of Void Marriages and Annulment of Voidable Marriages; (4)
Rule on Legal Separation; (5) Rule on Provisional Orders; (6) Rule on Custody of
Minors and Writ of Habeas Corpus in Relation to Custody of Minors; (7) Rule on
Guardianship of Minors; (8) Rule on Adoption; (9) Rule on Violence Against
Women and Children; and (10) Rule on Commitment of Children.
One of the innovative strategies of the Supreme Court in decongesting the

caseloads of family courts is the Justice on Wheels Project. It aims to improve
the access of poor and marginalized sectors to affordable judicial services. The
mobile court is in the form of a large bus staffed by a judge, a prosecutor, and a
stenographer, among others. The Ad-Hoc Committee on the Justice on Wheels
Project is headed by Justice Adolfo S. Azcuna as Chairperson and Senior
Deputy Court Administrator Zenaida N. Elepao as Vice-Chairperson.
The cases heard were for such crimes as light threats, illegal possession
of firearms and deadly weapons, theft, robbery, and violations of PD 1619 a
decree penalizing the use or possession or the unauthorized sale to minors of
volatile substances for the purpose of inducing intoxication.
ENFORCEMENT OF JUDGMENTS AND ARBITRAL AWARDS
12
The court may enter a satisfaction of judgment upon:
(1) return of execution satisfied;77

(2) the filing of an admission of satisfaction of judgment executed and
acknowledged in the manner as a conveyance of real property by the
judgment-creditor or his attorney;
(3) an indorsement of such admission by the judgment-creditor or his attorney
on the face of the record of the judgment;78 or
(4) when the judgment is satisfied other than upon an execution, the court
may order satisfaction of judgment without the judgment debtor complying
with certain specified requirements.79
The effect of a judgment varies. If it is in rem, the judgment or order is

conclusive upon the title to the thing, the will or administration or the condition,
status, or relationship of the person; if it is in personam, the judgment is
conclusive amongst the parties and their successors-in-interest by title
subsequent to the commencement of the action or special proceedings, litigating
for the same thing and under the same title and in the same capacity and the
conclusiveness of judgment, wherein the parties to both actions may be the
same but the causes of action are the same, is binding only with respect to the
matters actually raised and adjudged therein.80
Provided that a foreign tribunal has jurisdiction to promulgate the

judgment, the effects will be as follows. In actions in rem, the judgment is
conclusive upon verification of title to the thing; in actions in personam, the
judgment is presumptive evidence of a right as between the parties and their
successors-in-interest by a subsequent title, but the judgment may be repelled by
evidence of want of jurisdiction, want of notice to the party, collusion, fraud or
clear mistake of law or fact.81
Except for labour arbitration, which is provided for by the Labour Code,82
the legal basis of arbitration is the contract or agreement between the parties to
arbitrate future disputes or to submit to arbitration, disputes that have already
arises. Article 1306 of the Civil Code likewise guarantees such right when it
provides that:
Contracting parties may establish such stipulations, clauses, terms and

conditions as they may deem convenient, provided they are not contrary
to law, morals, good customs, public order or public policy.
77
78
79
Id, Rule 30, s 45.
80
Id, Rule 39, s 47.
81
Id, Rule 30, s 48.
82
Presidential Decree No 442 (1974), ss 260-262.
13
Section 2 of the Arbitration Law recognizes both the arbitration agreement and
the arbitration clause.83 By the broad language of section 1, it implies that any
claim or dispute arising out of a contract or determinate legal relationship may be
submitted to arbitration. When the court is satisfied that the making of the
agreement or the failure to comply with it is not in issue, the court shall order the
parties to proceed to arbitration in accordance with the terms of the agreement.84
All acts of the parties, subsequent to the making of the contract which raise
issues of fact or law, lie exclusively within the jurisdiction of the arbitrators.
Usually, a contract provides for a method of naming or appointing an

arbitrator or arbitrators but if there is no such method, the Regional Trial Court
shall designate the arbitrator and they must be sworn by any officer authorized
by law to administer an oath.85
Arbitrators, may, at the commencement of the hearing, ask both parties for
brief statements of the issues in controversy and/or an agreed statement of facts.
The arbitrators are the sole judges of the relevancy and materiality of evidence
offered and are not bound to conform to the Rules of Court pertaining to
evidence.86 Briefs may be filed by the parties within 15 days after the close of
the oral hearings.87 Unless the parties have stipulated by written agreement the
time within which the arbitrators must render their award, the written award shall
be rendered within 30 days after the closing of the hearings, which period may be
extended by mutual consent.88 At any time within one month after the award is
made, any party to the arbitration may apply to a court having jurisdiction for an
order confirming the award, unless the award is vacated, modified or corrected
as prescribed by law.89 An appeal may be taken from an order upon an award
through certiorari proceedings, but such appeals are limited to questions of law.90
83
Rep Act No 876 (1973).
84
Id, s 6.
85
Id, ss 8 & 13.
86
Id, s 15.
87
Id, s 16.
88
Id, s 19.
89
Id, s 23.
90
Id, s 29.
14
CHAPTER 5
The Legal Profession
LEGAL EDUCATION
Legal training is carried out in law schools which are generally university based,
and English is used as the medium of instruction. These schools are of two
types public and private depending on how they are supported. There are
three public schools, namely, the University of the Philippines, the Don Mariano
Marcos State University and the Mindanao State University. The first law
courses were conducted in Spanish in 1834 at the Pontifical University of Santo
Tomas and were designed around the various branches of civil law. Law
courses in English began in the Manila YMCA in 1910, which was the forerunner
of the College of Law, University of the Philippines, until its formal establishment
in 1911.
As institutions of higher learning, all law schools are explicitly guaranteed

academic freedom under the Constitution.1 However, they are also subject to the
supervision and regulation by the State.2 While private schools come under the
jurisdiction of the Commission on Higher Education, the state universities operate
under a special charter. Due to the recent close supervision of the government,
there are, at present, 54 private law schools operating throughout the country.
The Integrated Bar of the Philippines (IBP) and the Philippine Association of
Accrediting Schools and Universities (PAASCU) have evolved a set of criteria for
law school standards which will affect the accreditation of law schools, if
implemented by the Supreme Court.
As a result of state regulation, private law schools follow a core curriculum

of required courses spread over four years. The curriculum of the University of
the Philippines College of Law differs in some material respects from this
curriculum. It has recently implemented a core elective curriculum wherein the
students are required to take basic courses and are given the freedom to choose
up to 20% of the courses for their Bachelor of Law degree (LLB). Usual methods
of instruction employed in private law schools include the lecture and recitation
method. The University of the Philippines College of Law uses the modified
Socratic, case, problem, clinical approach, and the seminar methods depending
upon the subject and the teachers personal style. Patterned after some
American law schools, Ateneo University College of law converted its LLB
degree into the Juris Doctor degree (JD). Consultation is now made as to
1
CONSTITUTION, art XIV, s 5(2). See also CONSTITUTION (1973), art XV, s 8(2).
2
CONSTITUTION, art XIV, s 4(1).
1
whether the Commission on Higher Education (CHED) would require the other
law schools to follow the move.
The Supreme Court wields a potent influence not only on the admission to
the practice of law but on legal education as well.3 Under the Rules of Court, the
completion of a baccalaureate degree before admission to the four-year law
course is prescribed.4 It also specifies the subjects of the bar examinations
which, of course, require the inclusion in the law curriculum of certain designated
courses such as civil law, labour and social legislation, mercantile law, criminal
law, political law (constitutional law, public corporations and public officers),
international law (private and public), taxation, remedial law (civil procedure,
criminal procedure and evidence), legal ethics and practical exercises in pleading
and conveyancing.5
Recently, Republic Act No 7662 (1993) was passed, providing for reforms
in legal education and creating for this purpose the Legal Education Board. To
date, this Board is not yet operational.
Law Student Practice Rule
In a Supreme Court resolution made en banc on 18 December 1986, Rule 138A

of the Revised Rules of Court was adopted permitting limited Law Student
Practice.6 A student who has successfully completed his third year of the regular
four-year prescribed law curriculum and is enrolled in a recognized law schools
clinical legal education programme approved by the Supreme Court, may appear
without compensation in any civil, criminal, or administrative case before any trial
court, tribunal, board or officer, to represent indigent clients adopted by the legal
clinic of the law school.7 The appearance of the law student is under the direct
supervision and control of a member of the Integrated Bar duly accredited by the
law school and all pleadings, briefs, memoranda or other papers are to be filed
by the supervising attorney for and on behalf of the legal clinic. The rules
safeguarding privileged communications between attorney and client are
applicable to communications made to or received by the law student acting for
the clinic.8 Standards of professional conduct governing members of the Bar are
applicable to the law student and failure of an attorney to provide adequate
supervision of student practice may be a ground for disciplinary action.9
Bar Examinations
3
See IR Cortes The Law Curriculum: Assessment and Recommendation in the Light of the Needs
of a Developing Society 47 Phil LJ 446-464 (1972); IR Cortes Legal Education in a Changing Society 46
Phil LJ 444-459 (1971).
4
RULES OF COURT, r 138, s 6.
5
6
Bar Matter No 194, as implemented by Supreme Court Circular No 19, dated 19 December 1986.
7
RULES OF COURT, r 138A, s 1.
8
RULES OF COURT, r 138A, ss 2 & 3.
9
RULES OF COURT, 4 138A, s 4.
2
Bar examinations are conducted annually by a Committee of Bar Examiners
appointed by the Supreme Court. This committee, which holds office for one
year, is composed of a justice of the Supreme Court, who acts as chairperson
and eight members of the Bar.10 In order for a candidate to be deemed to have
passed his examination successfully, he must obtain a general average of 75%
in all subjects without falling below 50% in any one subject.11 Candidates who
fail the examination three times are disqualified from taking a fourth or fifth
examination unless they show, to the satisfaction of the Court, that they have
successfully completed one year refresher course for each examination.
However, for those who have already failed in five or more bar examinations,
they shall be allowed only one more bar examination after completing a one year
refresher course.12
Every applicant for admission as a member of the Bar must be a citizen of

the Philippines, at least 21 years of age, of good moral character and a resident
of the Philippines. He must produce before the Supreme Court satisfactory
evidence of good moral character and that no charges against him involving
moral turpitude have been filed or are pending against him in any court in the
Philippines.13
INTEGRATED BAR OF THE PHILIPPINES (IBP)
The Constitution provides the Supreme Court with the power to promulgate rules
concerning the admission to the practice of law, the Integrated Bar and legal
assistance to the underprivileged.14 As part of its power to regulate the practice
of law, the Supreme Court can discipline, suspend or disbar any unfit and
unworthy member of the Bar, reinstate any disbarred or suspended lawyer,
punish for contempt any person for unauthorized practice of law and, in general,
exercise overall supervision of the legal profession. As early as 1971, the
Philippine Bar Association had adopted Canons 1 to 32 of the American Bar
Associations Canons of Professional Ethics. Canons 33 to 47 were adopted in
1946. there is a Code of Professional Responsibility, drafted by the Integrated
Bar of the Philippines, which was approved by the Supreme Court on 21 June
1988.
The Integrated Bar of the Philippines is governed by Rule 139A of the

Rules of Court which deals with its organization, purposes, regions, chapters,
House of Delegates, Board of Governors, officers, vacancies, membership dues,
effect of non-payment of dues, voluntary termination of membership and
10
11
12
RULES OF COURT, r 138, s 16, as amended by Bar Matter No 1161, s A(3), effective July 15,
2004.
13
14
CONSTITUTION, art VIII, s 5(5).
3
reinstatement, grievance procedures, non-political bar, positions as honorary,
fiscal matters, journal, voluntary bar associations and amendments.
Rule 139B of the Rules of Court specifies the procedure on disbarment

and discipline of attorneys. All the investigations are made by the IBP
Commission on Bar Discipline which in turn, recommends to the Supreme Court
en banc for the disposition of the case in a decision. Lawyers in the Philippines
are considered officers of the court.
As of January 2004, the records of the Supreme Court showed that

49,711 lawyers were admitted to the Bar since 1900,15 and they are members of
the Integrated Bar of the Philippines (IBP) which was created by the Supreme
Court pursuant to its Resolution of 9 January 1973 and constituted into a
corporate body by Presidential Decree No 181 on 4 May 1973. Membership in
the IBP is compulsory and default in the payment of annual dues for one year is
a ground for the removal of the name of the defaulting member from the Role of
Attorneys.16
As of May 2005, there are 46,053 lawyers registered in the 78 chapters of

the IBP. Among its projects is the Legal Aid Project carried out by the National
Committee on Legal Aid and the legal aid officers in the 78 chapters.
CONTINUING LEGAL EDUCATION
As early as 1963, the University of the Philippines law Center17 has a continuing
legal education programme which consists of non-degree courses, such as law
institutes, special symposia and seminar-workshop for specific groups, annual
surveys of Supreme Court decisions and legislations, Bar reviews and general
law practice institutes in co-operation with the Integrated Bar of the Philippines.
There is also an integrated programme designed to bring about functional legal
literacy among the people called the Popularising the Law or the POPLAW
programme.18 It is made up of the following components: Barangay Legal
Education Seminars (BLES) and its echo seminars; Teaching Practical Law to
school children; Legal Education Through Mass Media and Research and the
Development of Legal Resources.
On the other hand, the U.P. Institute of Judicial Administration which

conducts the regular continuing legal education programmes for lawyers and
makes researches and studies for the judiciary funded by a subsidy from the
Supreme Court.
15
The Roll of Attorneys prior to 1945 was destroyed during World War II.
16
Rules of Court, Rule 139A, s 11. This was questioned and upheld in the case of In re Edillon,
IGR No AC-1928, 3 August 1978, 84 SCRA 554 (1978).
17
Rep Act No 3870 (1964), as amended by Presidential Decree No 200.
18
See P Valera Quisumbing Popularising the law (POPLAW): A Program of the University of
the Philippines Law Center 1 ASEAN LJ 105-112 (1982).
4
MANDATORY CONTINUING LEGAL EDUCATION (MCLE)
In order to ensure that members of the Philippine Bar keep abreast with law,
maintain the ethics of the profession and enhance the standards of the practice
of law, the Supreme Court promulgated Bar Matter 850 on 15 September 2000
requiring mandatory continuing legal education (MCLE). Lawyers have to
complete at least thirty-six (36) hours ever three (3) years consisting of the
following subjects: legal ethics (6 units); trial and pre-trial skills (4 units);
alternative dispute resolution (5 units); updates on substantial and procedural
laws (9 units); legal writing and oral advocacy (4 units); international law and
conventions (2 units); and six (6) units to MCLE Prescribed Subjects such as
Technology and the Law, Law and Economics, Environmental Law, International
Legal Processes, Transnational Business Transactions, Law as a Means of
Social Control, Gender Sensitivity in the Court System and Law Reforms in
Specific Areas of Law.19 Credit units are also given for participation as being a
lecturer, resource speaker, panelist, reactor, commentator, moderator,
coordinator, and facilitator in activities approved by the MCLE Governing
Board.20
Now administered by the MCLE Governing Board, the MCLE program

completed its third year of implementation from 15 April 2001 to 31 December
2004. the Board has accredited a total number of 92 providers which presented
a total of 1,383 programs mostly in Metro Manila and major cities in the
Philippines.
JUDICIAL EDUCATION
The Philippine Judicial Academy (PHILJA) which was created by Supreme Court
Administrative Order No. 35-96 and Republic Act No. 8557 (1998) serves as a
training school for justices, judges, court personnel, lawyers and aspirants to
judicial posts. The programs are designed to upgrade their legal knowledge,
moral fitness, probity, efficiency, and capability.
Among the regular programs of the PHILJA are: (1) The Pre-Judicature
Program which provides initial training for aspirants to judicial positions as
mandated by law; (2) The Orientation Seminar Workshop for Newly-Appointed
Judges which prepares the judge for assumption of office and the discharge of
duties and includes an immersion program by sitting with the Executive Judges in
the conduct of judicial proceedings; (3) Regional Judicial Career Enhancement
Program (RJCEP) which updates the judges and court personnel in the different
areas of the law; (4) Special Focus Programs which is thematic in nature which
caters to those judges specifically designated to handle specialized cases; (5)
Convention-seminars which by administrative rule, all national conventions of
19
S Ct Bar Matter No 850 (2000), as amended, Rule 2.
20
Id, Rule 4, s 1.
5
judges and court employees must have an academic component; (6)
Development Program for Court Personnel which provides continuing judicial
education as a response to the need to enhance and update judicial personnel
on the law, current jurisprudence and administrative policies, judicial techniques
and suggested remedies to trial and procedure; (7) Program for Quasi-Judicial
Agencies which provides continuing education to the officers and lawyers of
quasi-judicial agencies pursuant to en banc Supreme Court Resolution A.M. No.
99-7-02-SC-PHILJA dated 6 July 1999; (8) Discussion session which provides a
venue for members of the Appellate Courts to be apprised of and to discuss
recent developments and jurisprudence in different areas of the law, particularly
those relevant to the discharge of their functions; and the (9) Professorial
Competency Program which apprises the participants of the principles of
professional and adult education gearing towards increased efficiency in the
delivery of judicial education.21
The PHILJA also conducted several activities on court-annexed mediation

in the trial courts, in the Court of Appeals, and on the JURIS project which is
funded by the Canadian International Development Agency (CIDA). Thus far, the
JURIS Design and Management Committee have recommended, among others,
the Guidelines for the Implementation of an Enhanced Pre-Trial Proceedings
Through Conciliation and Neutral Evaluation;22 Guidelines to be Observed by
Trial Court Judges and Clerks of court in the Conduct of Pre-Trial and Use of
Deposition-Discovery Measures;23 Expanding the Territorial Areas of the PMC-
Juris Project in Bacolod City and in City of San Fernando, Pampanga to areas
adjacent thereto24 which were approved by the Supreme Court En Banc.
To ensure that the courts fulfill their role in upholding constitutionalism and
the rule of law as well as to promote public confidence in the judiciary. A New
Code of Judicial Conduct for the Philippine Judiciary25 was promulgated on 27
April 2004 and a Code of Conduct for Court Personnel26 on 13 April 2004.
21
Supreme Court of the Philippines, Philippine Judicial Academy, the 2004 Year-ed Report, 16-
23 (2005).
22
AM No 04-1-12-SC, approved 20 January 2004, as amended by AM No 04-1-12-SC, approved
15 June 2004.
23
AM No 03-1-09-SC, approved 10 August 2004.
24
AM No 04-8-22-SC-PHILJA, approved 7 September 2004.
25
AM No 03-05-01-SC, 27 April 2004 and became effective on 01 June 2004. There were a Code
of Judicial Conduct adopted by the Supreme Court when they assumed administrative supervision over all
judges under the 1987 Constitution which took effect on October 20, 1989 and a Canon of Judicial Ethics
on August 1, 1946 issued by the Department of Justice.
26
AM No 03-06-13-SC, 13 April 2004 and became effective on 01 June 2004.
6
CHAPTER 6
CONTRACT LAW
A contract is a meeting of minds between two persons whereby one binds

himself, with respect to the other, to give something or to render some service.1
The contracting parties may establish such stipulation clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law,
morals, good customs, public order or public policy.2 The contracts must bind
both contracting parties and its validity and compliance cannot be left to the will
of one of them.3 There is no contract unless the following requisites concur: (1)
consent of the contracting parties; (2) object certain which is the subject matter of
the contract; and (3) cause of the obligation which is established.4
In onerous contracts the cause is understood to be, for each contracting

party, the prestation or promise of a thing or service by the other; in remuneratory
ones, the service or benefit which is remunerated; and in contracts of pure
beneficence, the mere liberality of the benefactor.5 The particular motives of the
parties in entering into a contract are different from the cause thereof.6 Contracts
without cause, or with unlawful cause, produce no effect whatsoever. The cause
is unlawful if it is contrary to law, morals, good customs, public order or public
policy.7
The following contracts must appear in a public document:8
(1) Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property;
sales of real property or of an interest therein.9
(2) The cession, repudiation or renunciation of hereditary rights or those of
the conjugal partnership of gains;
(3) The power to administer property, or any other power which has for its
object an act appearing or should prejudice a third person;
(4) The cession of actions or rights proceeding from an act appearing in a
public document.
1
CIVIL CODE, art 1305.
2
3
4
5
6
7
8
9
See CIVIL CODE, arts 1402(2) & 1405.
1
The following are excuses for non-performance of contracts:
(1) when the contract refers to an obligation which consists of the delivery of a
determinate thing and the latter is lost or destroyed without the fault of the
debtor, and before he has concurred in delay;
(2) when the contract refers to an obligation and the latter is merged in the
characters of creditor and debtor in one and the same person;
(3) when the contract is novated;
(4) when the contract refers to service and the latter has become difficult as to
be manifestly beyond the contemplation of the parties;
(5) when the object of the contract refers to things outside the commerce of
men;
(6) when the object of the contract refers to intransmissible rights or a future
inheritance except in cases expressly authorized by law;
(7) when the contract refers to services which are contrary to law, morals,
good customs, or public policy;
(8) when the contract refers to objects for which determination as to their kind
is not possible.10
The following are agreements that cannot be proved except by writing, or by

some note or memorandum subscribed to by the party sought to be charged, or
by his agent, or by secondary evidence of its contents:
(1) an agreement that by its terms is not to be performed within a year from
the making thereof;
(2) a special promise to answer for the debt, default or miscarriage of another;
(3) an agreement made upon the consideration of marriage, other than a
mutual promise to marry;
(4) an agreement for the sale of goods, chattels, or things in action, at a price
not less than 500 pesos, unless the buyer accepts and receives part of
such goods and chattels;
(5) an agreement for the leasing for a longer period than one year, or for the
sale, of real property or of an interest therein;
(6) a representation as to the credit of a third person.11
The subject matter of the contract must be a determinate thing and licit, and the
vendor must have a right to transfer their ownership of it at the time it is
delivered. Things having a potential existence may also be the object of a
contract of sale. The efficacy of the sale of a mere hope or expectancy is
deemed subject to the condition that the thing will come into existence. The sale
of a vain hope or expectancy is void.12
10
CIVIL CODE, arts 1231(4) and (6), 1262, 1267, 1291, 1311, 1347 & 1409(1) & (4).
11
CIVIL CODE, art 1403(2) (a)-(f).
12
CIVIL CODE, arts 1458-1561.
2
The goods which form the subject of a contract of sale may be either
existing goods or future goods, namely, goods to be manufactured, raised, or
acquired by the seller after the perfection of the contract. Things subject to a
resolutory condition may also be the object of the contract of sale. A contract for
the delivery of an article at a certain price, which the vendor in the ordinary
course of his business manufactures or procures for the general market, whether
the same is on hand at the time or not, is a contract of sale, but if the goods are
to be manufactured especially for the customer and upon his special order, and
not for the general market, it is a contract for a piece of work.13
A recent legislation governing transactions carried out on cyberspace is

the E-Commerce Act.14 It covers all transactions whether commercial or non-
commercial carried on electronically and provides for modes of authenticating
electronic data messages or electronic documents and of safeguarding their
reliability. Under this law, legal recognition is accorded electronic documents
which shall have the same legal effect, validity and enforceability as any other
documents or legal writing. For evidentiary purposes, electronic documents
become the functional equivalent of written document provided that formalities
required for validity of document under existing laws is observed. Thus, the law
provides for legal recognition of electronic signatures which shall be equivalent of
a persons signature on a written document if proved by showing that a
prescribed procedure, not alterable by the persons interested in the electronic
document.15
For purposes of this Act, the Supreme Court promulgated the Rules on
Electronic Evidence which apply to all civil and criminal actions and proceedings,
as well as quasi-judicial and administrative cases.16
13
CIVIL CODE, arts 1462, 1465 & 1467.
14
Rep Act No 8792 (2000).
15
Id, s 8.
16
AM No 01-7-01-SC, 08 March 2001, effective 01 August 2001.
3
CHAPTER 7
TORT LAW
The Civil Code of the Philippines never used the word tort in any of its
provisions. Instead, the term quasi-delict is used which is the nearest
counterpart of the Roman law concept. Unlike the Roman law concept of tort,
intentional and malicious acts are governed by the Revised Penal Code and not
by the law on quasi-delict.1
Quasi-delict is used to designate those obligations which do not arise from

law, contracts, quasi-contracts or criminal offences. The concept of liability in
quasi-delictual cases is embodied in Chapter 2, Title XVII of the Civil Code.2
The basic provision on quasi-delict, or culpa aquiliana or extra-contractual

culpa, is article 2176 of the Civil Code which provides:
Whoever by act or omission causes damage to another, there being fault

or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
chapter.
Liability for quasi-delict under this article requires the following conditions:
(1) an unlawful act or omission amounting to a fault or negligence,

imputable to the defendant;
(2) damage or injury to the plaintiff;
(3) such damage or injury being the natural and probable, or direct and
immediate consequence of the defendants wrongful act or
omission; and
(4) there being no pre-existing contractual relation between the plaintiff

and defendant.3
Article 1173 of the Civil Code defines negligence as the omission of

that diligence which is required by the nature of the obligation and
corresponds with the circumstances of the persons, of the time and of the
1
C V Sison An Overview of the law on Torts and Damages (1993) Unpublished lecture.
2
Civil Code, arts 2176-2194.
3
C V Sison, op cit.
1
place. If the law or contract does not state the diligence which is to be
observed in the performance, that which is expected of a good father of a
family shall be required. However, the degree of care and diligence
required of a common carrier is extraordinary diligence.4
As a basis for liability, the negligent act or omission must be the

proximate cause of the damage suffered by the plaintiff. Thus, negligence
is a relative term whose application depends upon the situation of the
parties and the degree of case and vigilance which the circumstances
reasonably require and so where the danger is great, a high degree of
care is necessary, and the failure to observe it is a want of ordinary care
under the circumstances.5 Where the concurrent or successive
negligence acts or omission of two or more persons, although acting
independently of each other are, in combination, the direct and proximate
cause of a single injury to a third person, and it is impossible to determine
in what proportion each contributed to the injury, either is responsible for
the whole injury, even though his act done might not have caused the
entire injury, it has been held that the owners of two vehicles are liable
solidarily for the death of the passenger.6
Negligence on the part of the plaintiff will not defeat a claim for
damages in quasi-delict, if it was not the proximate and primary cause of
the injury but only contributed to his harm, the court shall mitigate the
damages to be awarded.7 However, if the plaintiffs own negligence is the
immediate and proximate cause of his injury, he cannot recover
damages.8
The doctrine of res ipsa loquitor establishes a presumption of

negligence in the absence of any statement by the person who has control
of the object causing the injury, where the thing which caused the injury,
without fault of the injured persons, is under the exclusive control of the
defendant and the injury is such as in the ordinary course of things does
not occur if having such control use proper care, it affords reasonable
evidence, in the absence of the explanation, that the injury arose from the
defendants want of care.9
As recognized in American jurisprudence, the doctrine of

respondeat superior, wherein the negligence of the employee is
4
CIVIL CODE, arts 1733 & 1755.
5
Corliss v. Manila Railroad Co, GR No 21291, March 28, 1969, 27 SCRA 674 (1969).
6
Sabido v. Custodio, GR No 21512, August 31, 1966, 17 SCRA 1088 (1966).
7
CIVIL CODE, art 2179; Rabes v. AG & P, 7 Phil 359 (1907), Picart v. Smith, 37 Phil 809 (1918);
Taylor v. Manila Electric Co, 16 Phil 8 (1910); Manila Electric Co v. Remoquillo, 99 Phil 117 (1956).
8
9
Africa v Caltex (Phil), GR No 72986, March 3, 1966, 16 SCRA 448 (1966).
2
conclusively presumed to be the negligence of the employer found its way
in the Civil Code.10
Pursuant to Article 2180 of the Civil Code, the following persons are
liable for the acts or omissions of those persons for whom one is
responsible:
(1) The father and, in case of his death or incapacity, the

mother, are responsible for the damages caused by the minor children
who live in their company.
(2) Guardians are liable for damages caused by minors or

incapacitated persons who are under their authority and live in their
company.
(3) The owners and managers of an establishment or enterprise

are likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.
(4) Employers are liable for the damages caused by their

employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any business
or industry.
(5) The State is responsible in like manner when it acts through

a special agent; but not when the damage has been caused by the official
or to whom the task done properly pertains.
(6) Teachers and heads of establishments of arts and trade

shall be liable for damages caused by their pupils and students or
apprentices, so long as they remained in their custody.
However, if it is shown to the court that they observed all the

diligence of a good father of a family to prevent damage, their
responsibility ceases.11
In several cases decided by the Supreme Court, the following are

some of the defenses which have been interposed and were considered
meritorious:
(a) Last clear chance - According to the doctrine, a person who

has the last clear chance or opportunity of avoiding an accident,
notwithstanding the act of his opponent or the negligence of a third person
10
Art 2180.
11
CIVIL CODE, art 2180, last par.
3
which is imputed to his opponent is considered in law solely responsible
for the consequences of the accident.12
(b) Assumption of risk Here the plaintiff knowing the dangers

involved had voluntarily assumed the risk of injury and therefore foresee
the impending harm that will result if he continues.13
(c) Prescription A motion may be filed on the ground that the

action on quasi-delict has already prescribed if such action has been filed
after four years from the day the quasi-delict was committed.14 The
prescriptive period is not interrupted by the filing of a criminal complaint as
the civil action is entirely independent of the criminal action.15
Aside from articles 2176 to 2194 of the Civil Code on quasi-delicts,

the Civil Code chapter on Human Relations also provides for special torts
which incorporates not only principles of equity but also universal moral
precepts such as:
Every person who, contrary to law, willfully or negligently causes

damage to another, shall indemnify the latter for the same.16
and
Any person who willfully causes loss or injury to another in a

manner that is contrary to morals, good customs or public policy,
shall compensate the latter for the damage.17
It is to be noted, however, that, while article 2176 et seq is limited to acts

or omissions causing damage or injury to another, article 20 includes both
intentional and negligent acts without qualifications.
12
Picart v. Smith, 37 Phil 809 (1918).
13
Afilada v. Hisole, 85 Phil 67 (1949).
14
CIVIL CODE, arts 114692) & 1150. See Capuno v. Elordi, GR 19331, April 30, 1965, 13 SCRA
658 (1965).
15
Paulan v. Sarabia, GR No 10542, July 31, 1958; Pacheco v. Tumangday, GR No 14500, May
25, 1960.
16
CIVIL CODE, art 20.
17
CIVIL CODE, art 21.
4
CHAPTER 8
INVESTMENTS LAW
The Omnibus Investment Code of 1987 and the Foreign Investments Act of
19911 govern investments and the granting of incentives which are administered
by the Department of Trade and Industry (DTI) through the Board of Investments
(BOI) or the Philippine Economic Zone Authority (PEZA), together with all the
laws regulating the making of investments or doing business by foreigners in the
Philippines. It gives foreign and local investors complete information on all
incentives which they may avail of, alternative investment schemes available to
them and requirements for registration of foreign investments without incentives.
Foreign investments mean equity investments made by a non-Philippine national,
in the form of foreign exchange and/or other assets actually transferred to the
Philippines and duly registered with the Central Bank which shall assess and
appraise the value of such assets other than foreign exchange.2
The State encourages private domestic and foreign investments in

industry, agriculture, mining, forestry, tourism, and other sectors of economy
which shall: (1) provide significant employment opportunities relative to the
amount of capital invested; (2) increase productivity of land, minerals, forestry,
aquatic and other resources of the country and improve utilization of products
thereof; (3) improve technical skills of people employed in enterprise; (4) provide
foundation for future development of economy; (5) meet tests of international
competitiveness; (6) accelerate development of less developed regions of
country; and (7) result in increased volume and value of exports for economy.
The State shall encourage projects which will contribute to attainment of these
objectives, fiscal incentives without which said projects may not be established in
locales, number and/or pace required for optimum national economic
development. Fiscal incentive systems shall be devised to compensate for
market imperfections, reward performance contributing to economic
development, and be cost-efficient and simple to administer. Fiscal incentives
shall be extended to stimulate investment and assist initial operations of
enterprise, and shall terminate after a period of not more than 10 years from
registration or start-up of operation, unless specific period is otherwise stated.3
1
Executive Order No. 226 (1987).
2
Rep Act No 7042 (1991), as amended by Rep Act No 8179 (1996) hereinafter cited as FIA.
3
1
Under the FIA, a non-Philippine national not otherwise disqualified by law,
may upon mere registration with the Securities and Exchange Commission
(SEC) or with the Bureau of Trade and Consumer Protection of the Department
of Trade and Industry (DTI), in the case of single proprietorship, do business or
invest in a domestic enterprise up to 100% of its capital unless participation of
non-Philippine nationals in the enterprise is prohibited or limited to a smaller
percentage by law or by the FIA itself.4 Foreign owned firms catering mainly to
the domestic market are encouraged to undertake measures that will gradually
increase Filipino participation in their business, implementing the transfer of
technology to Filipinos and generating employment.5
The term Philippine national means a citizen of the Philippines; or a

domestic partnership or association wholly owned by citizens of the Philippines;
or a corporation organized under the laws of the Philippines which at least sixty
percent (60%) of the capital sock outstanding and entitled to vote is owned and
held by citizens of the Philippines; or a corporation organized abroad and
registered as doing business in the Philippines under the Corporation Code of
which one hundred percent (100%) of the capital stock outstanding and entitled
to vote is wholly owned by Filipinos or a trustee of funds for pension or other
employee retirement or separation benefits, where the trustee is a Philippine
national and at least sixty percent (60%) of the funds will accrue to the benefit of
Philippine nationals; Provided, that where a corporation and its non-Filipino
stockholders own stocks in a Securities and Exchange Commission (SEC)
registered enterprise, at least sixty percent (60%) of the capital stock outstanding
and entitled to vote of both corporation must be owned and held by citizens of the
Philippines and at least sixty percent (60%) of the members of the Board of
Directors of both corporations must be citizens of the Philippines, in order that
the corporation shall be considered a Philippine national.6
The term doing business has been given a technical meaning by law, and
generally refers to all acts that imply a continuity of commercial dealings or
arrangements, and contemplates to that extent the performance of acts or works,
or the exercise of some of the functions normally incident to, and in progressive
prosecution of, commercial gain or the purpose and object of the business
organisations. It includes soliciting orders, service contracts, opening offices or
branches, appointing representatives or distributors domiciled in the Philippines
or who in any calendar year stay in the country for periods that total at least 180
days, or participating in the management, supervision or control of any domestic
company in the Philippines. However, it does not include the mere investment by
a foreign company as a shareholder in a domestic company, the exercise of
rights as such shareholder, having a nominee director to represent its interests in
4
RL Reyes, Foreign Investments in the Philippines, p 1. (Lecture before the UP Institute of
Judicial Administration program, 04 October 2003) 26 p Typescript.
5
Rep Act No 7042 (1991), s 2, para 2.
6
Id, s 3(a).
2
such corporation nor appointing a representative or distributor domiciled in the
Philippines which transacts in its own name and for its own account.7
Atty. Rocky Reyes made the following observations on th two laws

amending the Omnibus Investments Code:8
The FIA clarified that, as a general rule, export and domestic market
enterprises are open to foreign investments to the full extent of their
equity. Before the promulgation of the FIA, the Investments Code
required prior Board of Investments (BOI) approval before an entity which
is not a Philippine national may do business in the Philippines (or for that
matter, for any foreign investment in excess of forty percent (40%) of the
outstanding enterprise). The FIA removes this requirement and permits
non-Philippine nationals not intending to avail of incentives to do business
in the Philippines or to invest in up to one hundred percent (100%) of the
capital of an export or domestic market enterprise. However, foreign
investments are still prohibited in areas reserved to Philippine nationals
by the Constitution special laws and the provisions of the FIA.
. . .
Republic Act No 8179 broadened the definition of Philippine National to

include foreign corporations which are wholly-owned by Filipinos reduced
the minimum paid-up capital for domestic market enterprises which can
be owned 100% by foreigners to US$200, 000 removed the Negative List
C and the list of strategic enterprises and provided former national-born
citizens with certain investment rights.9
Any non-Philippine national may do business or invest in domestic

enterprise up to 100% of its capital provided it is investing in domestic market
enterprise in areas outside Foreign Investment Negative List (FINL) and brings
foreign capital of at least US$200,000; or it is investing in expert enterprise
whose products and services do not fall within Lists A & B of FINL. It is also
provided that country or state of applicant must also allow Filipino citizens and
corporations to do business therein.
List of Investment Areas Reserved to Philippine Nationals or Foreign

Investment Negative List.- (a) List A shall consist of areas of activities where
foreign equity participation in any domestic or export enterprise engaged in any
activity listed therein shall be limited to maximum of 40% as prescribed by
Constitution and specific laws; and (b) List B shall consist of areas of activities
and enterprises regulated pursuant to law which are defense-related activities,
requiring prior clearance and authorization from Department of National Defense
or which have implication on public health and morals.
7
Id, s 3(d).
8
R Reyes, op cit, p 2-3.
9
R Reyes, op cit, p. 2-3.
3
Republic Act No. 7042 covers all investment areas of economic activities
except banking and other financial institutions which are governed and regulated
by General Banking Act and other laws under supervision of Central Bank.
Existing enterprises which have been issued certificates of authority to do

business or to accept permissible investments under Executive Order No 226,
Presidential Decree No 1789 and Republic Act No 5455, whose activities are
included in Transitory FINL or in subsequent Negative Lists, are allowed to
continue same activities which they have been authorized to do subject to same
terms and conditions stipulated in their certificates of registration.
Those whose activities have been previously authorized under Executive

Order No 226, Presidential Decree No 1789 and Republic Act No 5455, and
whose activities are not in Transitory FINL or in subsequent Negative Lists may
opt to be governed by provisions of Act. Said enterprises shall be considered
automatically registered with SEC upon surrender of their certificates of authority
to BOI. SEC shall issue new certificate of authority upon advise of BOI.
Existing enterprises with more than 40% of foreign equity which have
availed of incentives under any of investment incentives laws implemented by
BOI may opt to be governed by the Act. In such cases, said enterprises shall be
required to surrender their certificates of registration, which shall be deemed
express waiver of their privilege to apply for and avail of incentives under
incentives law under which they were previously registered. Subject to BOI rules
and regulations, said enterprises may be required to refund all capital equipment
incentives availed of.
BOI registered enterprises shall be granted following incentives to extent

engaged in preferred area of investment: (1) Income tax holiday full exemption
for six years for pioneer firms and four years for non-pioneer firms from date of
commercial operation, extendible for another year while registered expanding
firms shall be entitled to exemption for income taxes proportionate to their
expansion for period of three years from commercial operation; (2) additional
deduction from taxable income equal to 50% of labor expenses for five years
from registration; (3) tax and duty exemption on imported capital equipment and
accompanying spare parts, under certain conditions; (4) tax credit on domestic
capital equipment subject to certain conditions; (5) simplification of customs
procedures for importation of equipment, spare parts, raw materials and supplies,
and exports of processed products; (6) unrestricted use of consigned equipment
provides re-export bond is posted unless equipment and spare parts have been
imported tax and duty free; (7) employment of foreign nationals in supervisory,
technical or advisory positions for five years from registration, extendible for
limited periods with certain exceptions; (8) exemption from all taxes and duties
on importation of breeding stocks and genetic materials within ten years from
date of registration or commercial operation with certain conditions; (9) tax credit
on domestic breeding stocks and genetic materials equivalent to 100% provided
4
purchase is within ten years from date of registration of enterprise; (10) tax credit
for taxes and duties on raw material, supplies and semi-manufactured products
used in manufacture of export products; (11) access to bonded
manufacturing/trading warehouse system of registered export oriented
enterprises; (12) exemption from taxes and duties on imported spare parts and
required supplies and for consigned equipment; and (13) exemption from
wharfage and any export tax, duty, import and fees.10
For registered enterprises with operations in less developed areas, the

incentives are: (1) automatic entitlement to incentives available to pioneer
enterprises regardless of nationality; (2) additional deduction from taxable
income equal to 100% of labor expenses for five years from registration; and (3)
deduction from taxable income to extent of 100% of cost of necessary and major
infrastructure and public facilities constructed.
Export Processing Zone Authority (now PEZA) registered enterprises are

also entitled to incentives available to BOI-registered enterprises. Additional
incentives are: (1) Merchandise, raw materials, supplies, and other articles
brought into export processing zone are exempt from taxes and duties subject to
certain conditions; and (2) exemption from local taxes and licenses including real
property taxes on production equipment or machineries.
Foreign business entity organized and existing under any laws other than
those of Philippines whose purpose is to supervise, superintend, inspect or
coordinate its own affiliates, subsidiaries or branches in Asia-Pacific region may
be allowed to establish regional or area headquarters in Philippines subject to
certain conditions, among which are following: (1) Its activities shall be limited to
acting as supervisory, communications and coordinating center for its
subsidiaries, affiliates and branches in region and (2) it will not derive any income
from sources within Philippines and will not participate in any manner in
management of any subsidiary or branch office it might have in Philippines.
Regional or area headquarters shall be entitled to following incentives: (1)
Exemption from income tax; (2) exemption from contractors tax; (3) exemption
from all kinds of local licenses, fees and duties; (4) tax and duty free importation
of training materials; (5) importation of motor vehicles for expatriate executives
and their replacement every three years provided taxes and duties are paid upon
importation; and (6) exemption from registration requirements. Expatriate
executives are entitled to: (1) multiple entry visa, valid for one year including
spouses and unmarried children below 21 and exemption from payment of all
fees and duties under immigration and alien registration laws; securing alien
certificates of registration; and obtaining all types of clearances required by any
government department or agency except notice of final departure and tax
clearance from Bureau of Internal Revenue; (2) withholding tax of 15% on gross
income received; (3) tax and duty free importation of personal and household
effects; and (4) travel tax exemption. Foreign company which has established or
10
Executive Order No 226 (1987), as amended by Rep Act No 7918 (1995), s 39.
5
will establish regional or area headquarters may be allowed to establish regional
warehouses subject to the following conditions: (1) Its activities shall be limited
to serving as supply depot for storage, deposit, safekeeping of its spare parts or
manufactured components and raw materials including packing and related
activities; filling up transactions and sales made by its head offices or parent
companies; and serving as storage or warehouse of goods purchased locally by
home office of foreign company for export abroad; (2) it shall not directly engage
in trade nor directly solicit business, promote any sale, nor enter into any contract
for sale or disposition of goods in the Philippines; and (3) it will not derive any
income from sources within the Philippines and its personnel will not participate
in any manner in management of subsidiary, affiliate or branch office it might
have in the Philippines. Imported spare parts, raw materials and other items for
use exclusively on goods stored, brought into regional warehouse from abroad to
be kept and re-exported to Asia-Pacific and other foreign markets shall be
exempt from payment of customs duty, internal revenue tax, export tax and local
taxes.
Special investors resident visa may be issued to any alien who possesses
the following qualifications: (1) He has not been convicted of crime involving
moral turpitude; (2) he is not afflicted with any loathsome, dangerous or
contagious disease; (3) he has not been institutionalized for any mental disorder
or disability; and (4) he is willing and able to invest US$75,000 in the Philippines.
Investors and registered enterprises are entitled to the following basic

rights and guarantees:
(1) repatriation of investment;

(2) remittance of earnings;
(3) the right to remit at the exchange rates prevailing at the time of the
remittance such sums necessary to meet payments of interest and
principal on foreign loans and foreign obligations arising from
technological assistance contracts;
(4) the freedom from expropriation of property represented by investments or
property of enterprises except for public use or in the interests of national
welfare or defense and, upon payment of just compensation; and
(5) no requisition of property represented by investment of property of
enterprises except for public use or in the interests of national welfare or
defense and, upon payment of just compensation; and
(6) no requisition of property represented by investment of property of
enterprises, except in the event of war or national emergency.11
With the Special Economic Zone Act of 1995,12 the government aims to
encourage, promote, induce and accelerate sound and balanced industrial,
economic and social development in the country by providing jobs in rural areas
11
12
Rep Act No 7916 (1991), as amended by Rep Act No 8748 (1995).
6
and increasing productivity and income of every individual and family living in
these areas through the establishment of special economic zones
(ECOZONES) that will effectively attract legitimate and productive foreign
investments.
Special economic zones are selected areas which are highly developed of
which have potential to be developed into agro-industrial, industrial,
tourist/recreational, commercial, banking, investment and financial centers.
Any investor within economic zone whose initial investment shall not be
less than US$150,000, his/her spouse and dependent children under 21 years
old shall be granted permanent resident status within economic zone. Business
establishments operating within ECOZONES shall be entitled to: (1) Fiscal
incentives under Presidential Decree No 66 or Executive Order No 226; (2) tax
credits for exporters using local materials as inputs as provided by Republic Act
No 7844 (Export Development Act of 1994); (3) exemption from taxes under
National Internal Revenue Code except for real property taxes on land owned by
developers; (4) goods manufactured by ECOZONE enterprise shall be made
available for immediate domestic retail sales; (5) additional deduction of of
value of training expenses incurred by ECOZONE enterprises in developing
skilled or unskilled labor or for managerial or other management development
programs; and (6) exemption from national and local taxes and licenses.
ECOZONE developers/operators shall be entitled to the following

incentives: (1) Exemption from national and local taxes and licenses, and in lieu
thereof, ECOZONE developer/operator shall pay 5% final tax on gross income;
(2) additional deduction equivalent to of value of training expenses; (3)
incentives under BOT law; and (4) other incentives under the Code.
To avail of all above incentives and benefits, business enterprises within

ECOZONES must register with the Philippine Economic Zone Authority.
ECOZONE enterprises are allowed to hire foreign nationals in supervisory,

technical or advisory capacity not exceeding 5% of its workforce.
Republic Act No 7652 (1993) allows long term leases of private land by
foreign investors for the establishment of industrial estates, factories, assembly
or processing plants, agro-industrial enterprises, development for industrial or
commercial use, tourism, or other similar priority productive endeavors.
Outside the scope of Republic Act No 7042 are the banking and other
financial institutions. Republic Act No 8791 otherwise known as the General
Banking Law of 2000 regulates the organization and operation of Banks, Quasi-
Banks and Trust Entities. The General Banking Law governs primarily universal
and commercial banks. Under Section 4 of this Act, Banks are classified into:
7
(a) Universal Banks;13
(b) Commercial Banks;
(c) Thrift Banks, composed of (i) Savings and Mortgage Banks; (ii) Stock
Savings and Loan Associations; and (iii) Private Development Banks as
defined by Republic Act No 7906 (1995);14
(d) Rural Banks as defined by Republic Act No 7353 (1992);15
(e) Cooperative Banks as defined in Republic Act No 6938 (1990);16
(f) Islamic Banks as defined by Republic Act No 6848 (1990);17 and
(g) Other classifications of banks as determined by the Monetary Board of the
Bangko Sentral ng Pilipinas.18
A universal bank, in addition to the powers of a commercial bank, can

exercise the powers of an investment house, as well as invest in non-allied
enterprises. On the other hand, a commercial bank, apart from its general
powers of a stock corporation, can (1) exercise all the powers specified in
Section 29; (2) provide other banking services enumerated in Section 53; and (3)
purchase, hold and convey real estate as contemplated by Sections 51 and 52 of
the General Banking Law. Other laws affecting banks are: the Non-Disclosure
Deposits Law;19 Unclaimed Balances Law;20 the Philippine Deposit Insurance
Corporation Law;21 and the Foreign Currency Deposit Act.22
The General Banking Law and Central Bank23 Law apply in a

supplementary character to all banks wholly owned by the government. By
specific provisions of the Central Bank Law, the Bangko Sentral is charged with
the supervision, regulation, and periodic examination of all the banks operating in
the Philippines, including all government banking institutions, such as the Land
Bank of the Philippines24 and the Development Bank of the Philippines.25
The supervisory powers of the Bangko Sentral shall include the following:
(1) the issuance of rules of conduct or the establishment of standards of

operation for uniform application to all institutions or functions covered,
taking into consideration the distinctive character of the operations of
institutions and the substantive similarities of specific functions to which
such rules, modes or standards are to be applied;
13
Concept of Universal Banking was introduced by Batas Pambansa Blg 61 (1980).
14
Thrift Banks Act.
15
Rural Banks Act.
16
Cooperative Code.
17
Charter of Al-Amanah Islamic Investment Bank of the Philippines.
18
R A MORALES, THE PHILIPPINE BANKING LAW (ANNOTATED) 10 (2004).
19
20
Act No 3936 (1932).
21
22
23
Rep Act No 8791 (2000), s 4 in relation to Rep Act No 7653 (1993).
24
Rep Act No 3844 (1964), as amended, s 97.
25
Executive Order No 81 (1986), s 21.
8
(2) the conduct of examination to determine compliance with the laws and
regulations, if the circumstances so warrant as determined by the
Monetary Board;
(3) overseeing to ascertain the laws and regulations are complied with;
(4) regular investigation which shall not be often than once a year from the
last date of examination to determine whether an institution is conducting
its business on a safe or sound basis;
(5) inquiring into the solvency and liquidity of the institutions; or
(6) enforcing prompting corrective action.26
The Bangko Sentral shall also have supervision over the operations of and
exercise regulatory powers over quasi-banks, trust entities and other financial
institutions which under special laws are subject to Bangko Sentral supervision.27
26
Rep Act No 8791 (2000), s 4.
27
Id.
9
CHAPTER 9
INTELLECTUAL PROPERTY LAW
Section 13, Article XIV of the 1987 Constitution mandates that the State shall
protect and secure the exclusive rights of scientists, inventors, artists, and other
gifted citizens to their intellectual property and creations, particularly when
beneficial to the people, for such period as may be provided by law. Pursuant to
this provision, Republic Act No 8293, otherwise known as the Intellectual
Property Code, was enacted. It codified all laws affecting patents,1 trademarks,2
copyrights,3 and the licensing of intellectual property. It also established the
Intellectual Property Office4 which is composed of the following: (a) Bureau of
Patents which has jurisdiction over registration, as well as search and
examination of patent applications and design, patents and utility models;5 (b)
Bureau of Trademarks which has jurisdiction over registration, search and
examination of trademark and service mark applications;6 (c) Bureau of Legal
Affairs which may hear opposition to applications and complaints for violations of
law involving intellectual property rights where total damages are not less than
P200,000;7 it also has jurisdiction to hear cases involving cancellation of
trademark, patent, utility models and industrial designs and petitions for
compulsory licensing of patents; (d) Documentation, Information and Technology
Transfer Bureau which provide for technical, advisory and other services relating
to licensing and promotion of technology and carry out effective program for
technology transfer and register technology transfer agreements;8 (e)
Management Information Services and EDP Bureau which conducts information
planning, research and development, testing of systems and provides
management information services to IPO;9 and (f) Administrative, Financial and
Human Resource Development Service Bureau which mainly receives all
applications and collect fees therefore and publishes patent application and
grants, trademark applications and registration of marks, industrial designs, utility
models, geographic indication and lay-out designs of integrated circuits
registrations.10 The term intellectual property rights consists of: (a) copyright
and related rights; trademarks and service marks; (c) geographic indications; (d)
1
2
Rep Act No 166 91947).
3
Pres Decree No 49 (19__).
4
Rep Act No 8293 (1997), s 5.
5
Id, s 8.
6
Id, s 9.
7
Id, s 10.
8
Id, s. 11.
9
Id, s 12.
10
Id, s 13.
1
industrial designs; (e) patents; (f) lay-out designs (topographies) of integrated
circuits; and (g) protection of undisclosed information (n. TRIPS).11
A. PATENTS
Any technical solution of a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable shall be patentable. It
may be, or may relate to a product, or process, or an improvement of any of the
foregoing. 12 Excluded from patent protection are: (1) Discoveries, scientific
theories and mathematical methods; (2) schemes, rules and methods of
performing arts, playing games or doing business, and programs for computers;
(3) methods for treatment of the human or animal body by surgery or therapy and
diagnostic methods practiced on the human or animal body;13 (4) plant varieties
or animal breeds or essentially biological process for the production of plants or
animals.14 However, these provisions does not preclude Congress to consider
the enactment of law providing sui generic of plant varieties and animal breeds
and a system of communal intellectual rights protection; (5) aesthetic creations;
and (6) anything which is contrary to public order or morality.15
The right to a patent belongs to the inventor, his heirs, or assigns. When
two or more persons have jointly made an invention, the right to a patent shall
belong to them jointly.16 If the invention was created pursuant to a commission,
the person who commissioned the work shall own the patent, unless otherwise
provided in the contract.17 In case the employee made the invention in the
course of his employment contract, the patent shall belong to (a) the employee, if
the inventive activity is not part of his regular duties even if the employee uses
the time, facilities and materials of the employer; (b) the employer if the invention
is the result of the performance of his regularly-assigned duties, unless there is
an agreement, express or implied to the contrary.18
If two or more persons have made the invention separately and

independently of each other, the right to the patent shall belong to the person
who filed an application for such invention or where two or more applications are
filed for the same invention, to the applicant who has the earliest filing date or,
the earliest priority date.19
11
Rep Act No 8394 (1997), s 4.
12
Id, s 21.
13
This provision shall not apply to products and composition for use in any of these methods.
14
This provision shall not apply the microorganisms and non-biological and microbiological
processes.
15
Id, s 22.
16
Id, s 28.
17
Id, s 30.1
18
Id, s 30.2
19
Rep Act No 8293 (1997), s 29.
2
An application for a patent filed in the Philippines by any person who has
filed an application for the same invention in a foreign country, which by treaty,
convention, or law affords similar privileges to citizens of the Philippines will be
considered as if it were filed on the date it was filed in the foreign country,
provided that (a) the local application expressly claims priority; (b) it is filed in the
Philippines within 12 months from the date the earliest date on which foreign
application was filed; and (c) a certified copy of the foreign application together
with an English translation is filed within 6 months from the date of filing in the
Philippines.20
An applicant who is not a resident of the Philippines must appoint and

maintain a resident agent or representative in the Philippines upon whom notice
or process for judicial administrative procedure relating to the application for
patent or the patent may be served.21 If the application is in order, the director
shall issue the patent in the name of the Republic of the Philippines, under the
seal of his office, which shall be signed by him. The term of a patent is 17 years
from the date it is issued, unless revoked or cancelled on grounds specified in
law.
Patent application is published in the IPO Gazette together with search

results after 18 months from date. Within six months from publication, applicant
must file request for substantive examination. If no request for substantive
examination is filed, application will be deemed withdrawn.22
Term of patent is now 20 years from filing date of application with respect
to inventions; seven years without renewal with respect to utility models and five
years for industrial designs which may be renewed for not more than two
consecutive periods of five each.23
Any person may, upon payment of required fee, petition for cancellation of
patent or of any claim thereof, or parts of claim, on any of the following grounds:
(a) invention is not new or patentable; (b) patent does not clearly and completely
disclose invention to be carried out by any person skilled in art; or (c) that the
patent is contrary to public order or morality.24
A patent shall confer on its owner the following exclusive rights:
(a) where the subject matter of a patent is a product, to restrain, prohibit and
prevent any unauthorized person or entity from making, using, offering for
sale, selling or importing that product;
20
Id, s 31.
21
Id, s 33.
22
Rep Act No 8293 (1997), ss 44 & 48.
23
Id, ss 44, 109.3 & 118.
24
Id, s 61.
3
(b) where the subject matter of a patent is a process, to restrain, prevent or
prohibit any unauthorized person or entity from using the process, and
from manufacturing, dealing in, using, selling or offering for sale, or
importing any product obtained directly or indirectly from such process.25
Patent owners shall also have the right to assign, or transfer by
succession the patent, and to conclude licensing contracts for the same.26
A government agency or third person authorized by the government may

exploit the invention even without agreement of the patent owner where: (a) the
public interest, in particular, national security, nutrition, health or the development
of other sectors, as determined by the appropriate agency of the government; (b)
a judicial or administrative body has determined that the manner of exploitation,
by the owner of the patent or his license, is anticompetitive.27
Infringement of patent is redressed by civil action for damages with

injunction and claim for attorneys fees and litigation expenses.28 Action for
damages must be brought within four years. Criminal action is available only for
repeat infringement.29 Law provides maximum of three years imprisonment and
maximum fine of 300,000 pesos as penalty. The criminal action shall prescribe
in three years from the date of the commission of the crime.30
B. INDUSTRIAL DESIGNS
Industrial design is any composition of lines or colors or any three-dimensional

form, whether or not associated with lines or colors. Only industrial designs that
are new or original are protected by new intellectual property law, while industrial
designs dictated essentially by technical or functional considerations to obtain
technical result or those that are contrary to public order, health or morals are not
protected by law.31
Rights and protection accorded to industrial design are subject to same

provisions and requirements relative to patents for inventions.32
The owner of a layout-design registration enjoys the following rights:
(1) to reproduce, whether by incorporation in an integrated circuit or

otherwise, the registered layout-design in its entirety, or any part thereof,
except the act of reproducing any part that does not comply with the
requirement of originality; and
25
Id, s 71.1.
26
Id, s 71.2.
27
Rep Act No 8293 (1997), s 74.
28
Id, s 76.
29
Id, s 79.
30
Id, s 84.
31
Rep Act No 8293 (1997), ss 112, 113.1 & 113.2.
32
Id, s 119.1
4
(2) to sell or otherwise distribute for commercial purposes the registered
layout-design, an article or an integrated circuit in which the registered
layout-design is incorporated.33
C. UTILITY MODELS
Registration of utility models shall be governed by same rules and requirements

governing registration of patents. Only new and industrially applicable utility
models are registrable.34
Utility model registration shall be cancelled on following grounds: (a) that

claimed invention does not qualify for registration as utility model and does not
meet requirements of registrability; (b) that description and claims do not comply
with prescribed requirements; (c) that any drawing necessary to understand
invention has not been furnished; and (d) that the owner of utility model
registration is not inventor or his successor in title.35 An applicant may not file
two applications for the same subject, one for utility model registration and the
other for the grant of patent whether simultaneously or consecutively.36
D. TRADEMARKS, SERVICE MARKS AND TRADE NAMES
Republic Act No 8293 (1997) defines Marks as any visible sign capable of
distinguishing the goods (trademark) or services (service mark) of an enterprise
and shall include a stamped or marked container of goods.37 Trade name
means the name or designation identifying or distinguishing an enterprise.38
Simply put, a tradename refers to the business and its goodwill; a trademark
refers to the goods.39
Trademark registration has a term of ten years, renewable for another ten
years provided that registrant files declaration of actual use within one year from
fifth anniversary.40 Law confers upon registered owner of mark exclusive right to
prevent all third parties not having owners consent from using in course of trade
identical or similar signs or containers for goods or services which are identical or
similar to those in respect of which trademark is registered where such use would
result in likelihood of confusion. Law also requires applicant for trademark
registration to file Declaration of Use within three years from date of filing of
application.41
33
Id, s 119.4
34
Id, ss 108 & 109.
35
Id, s 109.4
36
Id, s 111.
37
Section 121.1.
38
Id, s 121.3
39
R MORALES, op cit, p 96 citing Kobushiki Kaish v. Court of Appeals GR No 120900, 20 July
2000, 336 SCRA 266 (2000).
40
Rep Act No 8293 (1997), s 14.5
41
Id, s 147.1.
5
Assignment or transfer of registrations of mark is allowed provided it is not
made to mislead public as regards nature, source, manufacturing process,
characteristics of goods or services to which mark is applied.42
Assignment must be writing, acknowledged before notary public or other

officer authorized to administer oath, and certified under hand and official seal of
notary or other officer. Assignment is void as against any subsequent purchaser
for value without notice, unless assignment is recorded in Patent Office.43 When
assignment is executed in foreign country, authority of notary or other officer
shall be proved by certificate of diplomatic or consular office of, or representing
interest of, Government of Philippines. No assignment executed in foreign
country written in language other than English or Spanish shall be recorded
unless accompanied by verified English translation. No instrument will be
recorded which does not, in judgment of Director, amount to assignment, or
which does not affect title to trademark or trade name to which it relates.44
Any person who, without consent of registrant, uses, sells, or advertises

any reproduction, counterfeit, copy or imitation of a registered mark or trade
name is guilty of infringement. Injunction may be obtained to prevent
infringement and court may order infringing material to be destroyed.45
No imported merchandise can be admitted entry in Philippines which

copies or simulates mark or trade name registered in Philippines, or bears a
mark or trade name calculated to induce public to believe that article is
manufactured in Philippines, or that it is manufactured in a country other than
place where it is in fact made.46
Subject to well defined exceptions, persons who are nationals of,

domiciled in, or have a bona fide or effective business or commercial
establishment in any foreign country, which is a party to any international
convention or treaty relating to marks or trade names, or the repression of unfair
competition to which the Philippines may be a party, are entitled to the benefits
and subject to the provisions of the Trademark Law to the extent and under the
condition essential to give effect to any such convention and treaties so long as
the Philippines continue to be a party thereto.47
An applicant for the registration of a mark or trade name, who is not a

resident of the Philippines, must appoint an agent or representative in the
42
Id, s 149.2
43
Id, s 149.3
44
Id, s 149.
45
Id, ss 155 & 156.
46
Id, s 166.
47
Rep Act No 8293 (1997), s 3. See also s 160 on the right of a foreign corporation to sue in
Trademark or service mark enforcement action.
6
Philippines upon whom notice or process relating to the application or registration
may be served.48
E. COPYRIGHT
The New Intellectual Property Code protects following original intellectual

creations in literary and artistic domain from the moment of their creation: (a)
Books, pamphlets, articles and other writings; (b) periodicals and newspapers;
(c) lectures, sermons, addresses, dissertations prepared for oral delivery,
whether or not reduced in writing or other material form; (d) letters; (e) dramatic
or dramatico-musical compositions; choreographic works or entertainment in
mime or dumb shows; (f) musical compositions, with or without words; (g) works
of drawing, painting, architecture, sculpture, engraving, lithography or other
works of art; models of designs for works of art; (h) original ornamental designs
or models for articles of manufacture, whether or not registrable as industrial
design, and other works of applied art; (i) illustrations, maps, plans, sketches,
charts and three-dimensional works relative to geography, topography,
architecture or science; (j) drawings or plastic works of scientific or technical
character; (k) photographic works including works produced by process
analogous to photography; lantern slides; (l) audiovisual works and
cinematographic works and works produced by process analogous to
cinematography or any process for making audiovisual recordings; (m) pictorial
illustrations and advertisements; (n) computer programs; and (o) other literary,
scholarly, scientific and artistic works.49
The following derivative works are likewise protected by copyright: (a)

dramatizations, translations, adaptations, abridgments, arrangements, and other
alterations of literary or artistic works; and (b) collections of literary, scholarly or
artistic works, and compilations of data and other materials which are original by
reason of selection or coordination or arrangement or their contents.50
The law provides for the following as not being subject to copyright
protection: (a) Any idea, procedure, system, method or operation, concept,
principle, discovery or mere data as such, even if they are expressed, explained,
illustrated or embodied in work; (b) news of the day and other miscellaneous
facts having character of mere items of press information; and (c) any official text
of legislative, administrative or legal nature, as well as any official translation
thereof.51
No copyright protection is afforded to any work of government, speeches,

lectures, sermons, addresses and dissertations, pronounced, read or rendered in
courts of justice, before administrative agencies, in deliberative assemblies and
48
Id, s 33.
49
Id, s. 172.
50
Id, s 173.
51
Id, s 175.
7
in meetings of public character but author thereof has exclusive right of making
collection of his works.52
The reproduction of published work is allowed even without authorization

of owner provided it is done by natural person exclusively for research and
private study. But reproduction is not allowed if it is: (a) Work of architecture in
form of building, or other construction; (b) entire book, or substantial part thereof,
or of musical work in graphic form by reprographic means; (c) compilation of data
and other materials; (d) computer program except as provided in 189; and (e)
any work in cases where reproduction would unreasonably conflict with normal
exploitation of work or would otherwise unreasonably prejudice legitimate
interests of author.53
Under the new law, certain works are required to be registered and
deposited at National Library and Supreme Court Library for purposes of
completing their records.54
The copyright protection is now for a term of 50 years except for

broadcasts which have a 20-year term and for works of applied art which have a
25 year term.55
52
Id, ss 176.1 & 176.2.
53
Id, ss 186-189.
54
Id, s 191.
55
Id, s 213.
8
CHAPTER 10
ALTERNATIVE DISPUTE RESOLUTION
Disputes and controversies in civil cases may be resolved prior to the institution
of court litigation or pending final resolution of the case through compromise or
arbitration. The Arbitration Law1 permits parties to submit to arbitration to one or
more arbitrators any controversy existing between them which may be the
subject of an action or the stipulation in the contract requires them to submit to
arbitration any controversy arising therefrom. The applicable articles of the Civil
Code also governs arbitration.2
In any civil action, parties and their attorneys are required to appear in a
pre-trial conference before the court to consider the possibility of amicable
settlement or of submission to alternative modes of dispute resolution. Failure on
part of plaintiff to appear shall be a cause for dismissal of the action and a similar
failure on part of the defendant shall cause plaintiff to present his evidence ex
parte and court to render judgment on basis thereof.3
Recently, the Supreme Court, in Resolution AM No. 04-3-15-SC-PHILJA

dated 23 March 2004, approved among other things, the following ADR
resolutions and guidelines on court-annexed and court-referred medidation:
Approval of re-accreditation of 179 PHILJA Mediators;

Implementing Rules and Regulations Governing Mediation in Trial Courts;
Guidelines on the Role of Lawyers in Mediation;
Revised Guidelines for the Payment of Mediation Fees to the Mediators
and Daily Supervisors.
Thus, the trial court, after determining the possibility of an amicable settlement or
of a submission to the alternative modes of dispute resolution, shall issue an
Order referring the case to the Philippine Mediation Center (PMC)4 unit for
1
Rep Act No 876 (1953).
2
Art 2042. The same persons who may enter into a compromise may submit their controversies to
one or more arbitrators for decision.
Art 2043. The provisions of the preceding Chapter upon compromises shall also be applicable
to arbitrations.
Art 2044. Any stipulation that the arbitrators award or decision shall be final, is valid, without
prejudice to articles 2038, 2039 & 2040.
Art 2045. Any clause giving one of the powers to choose more arbitrators than the other is void
and of no effect.
Art 2046. The appointment of arbitrators and the procedure for arbitration shall be governed by
the provisions of such Rules of Court as the Supreme Court may promulgate.
3
1997 Rules of Civil Procedure, Rule 18, s 5.
4
Under the Supreme Court of the Philippines, Philippine Judicial Academy.
1
mediation which shall be personally given to the parties during the pre-trial
together with the complaint and answers.
The coverage of court-annexed mediation are:5
(a) all civil cases, settlement of estates and cases covered by the Rule
on Summary Procedure, except those which by law may not be compromised;
(b) cases cognizable by the Lupong Tagapamayapa under the

Katarungang Pambarangay Law;
(c) the civil aspect of BP 22 cases; and
(d) the civil aspect of quasi-offenses under Title 14 of the Revised

Penal Code.
The places where the Philippine Mediation Center is presently operating

are: Metro Manila, Metro Davao, Metro Cebu, Cagayan de Oro City, Bacolod
City, San Fernando City, Pampanga, Tacloban City, and General Santos City.
Insofar as labor cases are concerned, it is a state policy to promote and

emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation as modes of settling labor or
industrial disputes. In collective bargaining agreements (CBA), parties are
required to include in their agreement the establishment of grievance machinery
for adjustment and resolution of grievances and those arising from the
interpretation or implementation of their CBAs and those arising from the
interpretation and implementation of company personnel policies. Grievances
not settled before grievance machinery shall automatically be referred to a
voluntary mediator or a panel of voluntary arbitrators.6
Specialized arbitration involves particular industries or kind disputes. In

the construction industry, Executive Order No. 1008 (1985) created the
Construction Industry Arbitration Commission (CIAC). Subject to the agreement
of the parties to submit the dispute to voluntary arbitration, the CIAC was given
the original and exclusive jurisdiction over all construction disputes. Banking
disputes on clearing of checks are resolved by a specialized system
administered under the auspices of the Bankers Association of the Philippines.
Lately, the Philippine Legislature has promoted arbitration by enacting more laws
with arbitration as a basic feature. Among these are the Consumer Act of 1992,7
the Mining Act of 1995,8 and the Intellectual Property Code of the Philippines.9
5
Second Revised Guidelines on Mediation, AM No 01-10-05-SC-PHILJA, 06 October 2001.
6
LABOR CODE, arts 260 & 261.
7
Rep Act No 7394 (1992).
8
Rep Act No 7942 (1995).
9
Rep Act No 8293 (1998).
2
On April 2, 2004, the enactment of the Alternative Dispute Resolution
Act10 institutionalizes the use of the alternative dispute system as well as the
establishment of the Office for Alternative Dispute Resolution. It defines
alternative dispute resolution system as any process or procedure used to
resolve a dispute or controversy, other than by adjudication of a presiding judge
of a court or an officer of a government agency in which a neutral third party
participates to assist in the resolution of issues, which includes arbitration,
mediation, conciliation, early neutral evaluation, mini-trial or any combination
thereof.11 Here, mediation includes conciliation.
Under this Act, a mediator is not required to have special qualifications by

background or profession unless required in the mediation agreement or by the
parties.12 Before accepting a mediation, the mediator must disclose to the
parties any such fact known or learned as soon as it is practical and indicate
such conflict of interest.13 A party may designate a lawyer or any other person to
provide assistance in mediation. A waiver of this right shall be made in writing by
the person waiving it but it may be rescinded at any time.14 The parties are free
to agree on the place of mediation but can be any place convenient and
appropriate to all parties.15 If an agreement contains a provision to submit a
dispute to mediation by an institution, it shall include an agreement to be bound
by the internal mediation and administrative policies of such institution.16
A settlement agreement following a successful mediation shall be

prepared by the parties with the assistance of their respective counsel, if any,
and by the mediator. It should make adequate provisions for the contingency of
breach to avoid conflicting interpretations of the argument. It should be signed
by the parties and their counsels and the mediator must explain its contents to
the parties in a language known to them.17 The parties may agree that the
mediator shall become a sole arbitrator for the dispute and shall treat the
settlement agreement as an arbitral award subject to the enforcement under
Republic Act No. 876. if the parties so desire, they may deposit such agreement
with the appropriate Clerk of a Regional Trial Court of the place where one of the
parties reside. Enforcement of the agreement may be made by filing a petition in
the same court; in which case, the court shall proceed in accordance with the
Rules on Summary Procedure.18
10
Rep Act No 9285 (2004).
11
Id, s 3(a).
12
Id, s 13(b).
13
Id, s 13.
14
Id, s 14.
15
Rep Act No 9285 (2004), s 15.
16
Id, s 16.
17
Id, s 17(a) & (b).
18
Id, s 17 & (d).
3
Information obtained through mediation proceedings shall be privileged
and confidential and shall not be subject to discovery and well inadmissible in
any adversarial proceeding, whether judicial or quasi-judicial.19 Neither may a
mediator be called to testify to provide information gathered in mediation. A
mediator who is wrongfully subpoenaed shall be reimbursed the full cost of his
attorneys fees and related expenses.20 However, a privilege arising from the
confidentiality of information may be waived in a record, or orally during a
proceeding by the mediator and the mediation parties. A person who discloses
confidential information shall be precluded from asserting the privilege. If a
person suffers loss or damage as a result of the disclosure, he shall be entitled to
damages in a judicial proceeding against the person making the disclosure.21
There is no privilege against disclosure if mediation communication is: (1)

in an agreement evidenced by a record authenticated by all parties to the
agreement; (2) available to the public or is made during an open session of the
mediation to the public; (3) a threat or statement of a plan to inflict bodily harm or
commit a crime of violence; (4) intentionally used to plan a crime, attempt to
commit or commit a crime or conceal an ongoing crime or criminal activity; (5)
sought or offered to prove or disprove a claim or complaint of professional
misconduct or malpractice filed against mediator in a proceeding; or (7) sought or
offered to prove or disprove a claim or complaint of professional conduct or
malpractice filed against a party, nonparty participant, or representative of a party
based on conduct occurring during a mediation.22 There is also no privilege if a
court or administrative agency finds after a hearing in camera, that the party
seeking discovery of the proponent of the evidence has shown that the evidence
is not otherwise available and that evidence substantially outweighs the interest
in protecting confidentiality in: (1) a court proceeding involving a crime or felony;
or (2) a proceeding to prove a claim or defense that under the law is sufficient to
reform to avoid a liability on a contract arising out of mediation.23
The Act also adopts the Model Law on International Commercial

Arbitration which was approved by UN Commission on International Trade Law
(UNCITRAL) on 21 June 1985.24 in the interpretation of the Model Law, regard
shall be had to its international origin and resort may be made to the travaux
preparatories and the report of the Secretary-General of the UNCITRAL dated
March 25, 1985 entitled International Commercial Arbitration: Analytical
Commentary on Draft Text.25
19
Rep Act No 9285 (2004), s 9(a) & (c).
20
Id, s 9(d) & (f).
21
Id, s 10.
22
Rep Act No 9285 (2004), s 11(a).
23
Id, s 11(b).
24
Id, sec 19. See UN Doc A/40/17 and recommended for enactment by UN General Assembly
Resolution No 40/72, 11 December 1985.
25
Rep Act No 9285 92004), s 20. See UN A/CN.9/264.
4
An arbitration is commercial if it covers matters arising from all
relationships of a commercial nature, whether contractual or not. Relationships
of a commercial nature includes but are not limited to the following transactions:
any trade transaction for the supply or exchange of goods or services,
distribution agreements, construction of works, commercial representation or
agency; factoring; leasing; consulting; engineering; licensing; investment;
financing; banking; insurance; joint venture and other forms of industrial or
business corporation; carriage of goods or passengers by sea, air, rail or road.26
If international arbitration is conducted in the Philippines, a party may be

represented by any person of his choice provided that such representative,
unless admitted to the practice of law in the Philippines, shall not be authorized
to appear as counsel in any Philippine court or any other quasi-judicial body
whether or not such appearance is in relation to the arbitration in which he
appears.27
The arbitration proceedings, including its records, evidence and arbitral

award shall be considered confidential and shall not be published except with the
consent of the parties or for the purpose of disclosing to the court of relevant
documents, in cases where resort to the court is allowed. However, the court in
which the action or appeal is pending may issue a protective order to prevent or
prohibit disclosure of documents or information containing secret processes,
developments, research and other information where it is shown that the
applicant shall be materially prejudiced by an authorized disclosure thereof.28
A court before which an action is brought in a manner is the subject matter

of an arbitration agreement shall, if at least one party so requests not later than
the pre-trial conference, or upon the request of both parties thereafter, refer the
parties to arbitration unless it finds that the arbitration agreement is null and void,
inoperative or incapable of being performed.29
26
Id, s 21.
27
Id, s 22.
28
Rep Act No 9285 (2004), s 23.
29
Id, s 24.
5
CHAPTER 11
ENVIRONMENTAL LAW
The Philippines Environmental Policy is enunciated in Presidential Decree No

1151 (1977) which declares that it is the continuing policy of the State to:
(1) create, develop, maintain, and improve conditions under which man and
nature can thrive in productive and enjoyable harmony with each other;
(2) fulfill the social, economic, and other requirements of present and future
generations of Filipinos; and
(3) ensure the attainment of an environmental quality that is conducive to a
life of dignity and well-being.1
The Decree also established the environmental impact assessment system,

which requires private establishments and government agencies to submit
Environmental Impact Statements (EIS) for every action, project, or undertaking
planned by them, which significantly affects the quality of the environment.2
However, Presidential Decree No 1586 (1978) limited the coverage of the EIS
requirement of Presidential Decree No 1151 by specifying that only projects and
areas which are environmentally critical will automatically fall within its purview.
Proclamation No 2146, issued on 14 December 1981, identified three types of
environmentally critical projects, namely:
(1) Heavy Industries

(a) non-ferrous metal industries
(b) iron and steel mills
(c) petroleum and petro-chemical industries, including oil and gas
(d) smelting plants
(2) Resource Extractive Industries
(a) major mining and quarry projects
(b) forestry products
(i) logging
(ii) major wood processing projects
(iii) introduction of fauna (exotic-animals) into public/private
forests
(iv) forest occupancy
(v) extraction of mangrove products
(vi) grazing
(c) fishery projects
1
Presidential Decree No 1151, s 1.
2
Presidential Decree No 1151, s 4.
1
(i) dikes and fishpond development projects
(3) Infrastructure Projects
(a) major dams
(b) major power plants (fossil-fueled, nuclear-fueled, hydro-electric or
geothermal)
(c) major reclamation projects
(d) major roads and bridges
Environmentally critical areas include the following:
(1) all areas declared by law as national parks, watershed reserves and
wildlife preserves and sanctuaries;
(2) areas set aside as aesthetic potential tourist spots;
(3) areas which constitute the habitat for any endangered or threatened
species of indigenous Philippine wildlife (flora and fauna);
(4) areas of unique historical, archeological or scientific interests;
(5) areas which are traditionally occupied by cultural communities or tribes;
(6) areas frequently visited and/or hard-hit by natural calamities (geologic
hazards, floods, typhoons);
(7) areas with critical slopes;
(8) areas classified as prime agricultural lands;
(9) aquifers recharge areas;
(10) water bodies;
(11) mangrove areas;
(12) coral reefs.
Department Administrative Order (DAO) No 21 (1992) has amended the

Rules and Regulations Implementing PD 1586. The projects specifically
exempted from EIA system are those which are characterized by all of the
following conditions:
(1) discharges minimal amount of wastes and the management of such

wastes is relatively easy;
(2) has capitalization of not more than P500.00;
(3) employs not more than twenty persons.
Environmental Impact Assessment is generally defined as a process

which consists of identifying and predicting the impact of proposed projects and
programmes on the biophysical environment and on mans health and well-being
and interpreting and communicating information about such impacts in a manner
which can be utilized by planners and decision-makers. The importance of this
tool is that it measures resource allocation and utilization in terms of costs
associated with environmental conservation.3
3
National Environmental Protection Council A Handbook on the Environmental Impact Statement
System (1983), as referred to in Tolentino n 7 at p 16.
2
On the other hand, Presidential Decree No 1152 (1977), or the Philippine
Environment Code, deals with the environment in its totality with the
establishment of management policies and quality standards for: air quality;
water quality management; land-use management; natural resources
management and conservation; conservation and utilization of surface and
ground waters; and waste management.
On 14 January 2000, DAO No 2000-05 was issued providing for

programmatic compliance procedures within the Environmental Impact
Statement (EIS) system in order to streamline the procedure for industries in
regional industrial centers. Categories within the purview of programmatic
compliance are:
(a) A project subdivided into several phases and/or stages situated in a

contiguous area;
(b) a project consisting of several components or a clusters of projects co-
located in a designated area such as an industrial estate or export
processing zone.
The processing steps under these guidelines are the following:
(a) Screening wherein a proponent may submit a project profile to the

Environmental Management Bureau (EMB) to enable a procedural
assessment as to whether the undertaking is subject to programmatic
compliance procedures;
(b) Scoping is initiated by the project proponent at the earliest stage to define
the range of actions, alternatives and impacts to be examined as well as
the area for ecoprofiling;
(c) EIS Preparation is made by the project proponent based on procedural
guidelines of the EMB. It requires the proponent to involve the broadest
range of stakeholders in the project;
(d) Submission of the EIS to the EMB which shall be evaluated within seven
working days for completeness and decide whether the information
contained is sufficient for a thorough evaluation of the subject
environmental impacts. Fifteen copies are also furnished the Offices of
the Regional Executive Director, PENRO, CENRO and local government
units with an executive summary to be made available to the public;
(e) Review of the EIS by the EIA Review Committee and the holding of a
public hearing on it;
(f) Granting or denial of the ECC Application;
(g) Decision of the DENR Secretary to either grant or deny the issuance of
the ECC. If granted, there are certain conditionalities attached to it.
Under DAO 21 (1992), the procedure for projects covered by EIS could be
outlined as follows.
3
I. Submission of Forms
Any government or private entity planning to undertake a project should

determine if it falls within the EIA system by consulting the Environmental
Management Bureau or the DENR Regional Office, as the case may be. Once
determined to be covered by the EIA system, the submission of an EIS for an
environmentally critical project or a project description (PD) for an
environmentally critical area is required. An EIS is a more detailed and in-depth
analysis of the environmental impact of a particular project. A PD is essentially a
brief description of the sources of pollution and the controls to be effected. When
determined to be exempted, a certificate of exemption is issued which may
nonetheless contain conditions requiring the proponent to institute necessary
remedial measures.4
II. Evaluation and Recommendation of Appropriate Action
After the initial evaluation of the EIS, the EIA unit of the Environmental
Management Bureau may recommend any of the following: the issuance or
denial of the Environmental Clearance Certificate (ECC), revision of the
submitted EIS, on-site inspection of the proposed site, or further review by the
EIA Review Committee. The EIA Review Committee may require the holding of
a public hearing which is conducted by the Environmental Management Bureau
through its Legal Division.
III. Issuance of Environmental Clearance Certificate (ECC)
Once the EIS or the PD, as the case may be, has been approved, an
Environmental Clearance Certificate (ECC) is issued to the proponent which
gives him the authority to proceed with the implementation of the project. Said
certificate contains conditions which the proponent is bound to comply with. One
of these conditions may be related to the mitigating measures which should be
incorporated in the project implementation, like the installation of specified anti-
pollution equipment. Otherwise, the ECC could be suspended or cancelled and
the proponent subjected to a fine not to exceed fifty thousand pesos
(P50,000.00) Philippine currency, at the discretion of the Environmental
Management Bureau.5
Monitoring is done to determine compliance with the stipulation in their

ECCs and to enforce compliance with EIA requirements for projects which
bypassed the EIS, as well as determine their actual environmental impact.
A. POLLUTION CONTROL
4
E Dominguez, Evaluation of Air Quality, Water Quality and Waste Management Regulation in
the Philipines, p 9.
5
A Tolentino Environmental Law: Boon or Bane to Foreign Trade and Investment, p 50
(Typescript).
4
Republic Act 3931 entitled, An Act Creating the National Water and Air
Pollution Control Commission provided the basis for air quality management
when it declared a national policy to maintain reasonable standards for purity for
the water and the atmospheric air vis--vis their utilization for domestic,
agricultural, industrial and other legitimate uses. The primary thrust of this policy
is the prevention and control of industrial pollution. Presidential Decree 984
(1976) revising RA 3931 elaborated on this policy by including the control of land
pollution and all other kinds of pollution and environmental disturbances like
noise and odor.
Presidential Decree 1181 (1977), provides for the prevention, control and
abatement of air pollution from motor vehicles and for other purposes, the Land
Transportation Office is tasked to implement emission standards from motor
vehicles and may deputize appropriate agencies for the purpose. The idea was
for the NPCC to be the national standard setting agency and the Land
Transportation office to be the enforcement arm in so far as motor vehicles were
concerned so as not to diffuse the functions of the former to police industrial
pollution, which is already a major activity.
Republic Act No. 8749 (1999), otherwise known as the Philippine Clean
Air Act of 1999 sets forth as the states policy to: (a) protect and advance the
right of people to a balanced and healthy ecology in accord with the rhythm and
harmony of nature; (b) attain and maintain a balance between development and
environmental protection; and (c) maintain a quality of air that protects human
health and welfare. Its implementing rules lay down the powers and functions of
the DENR, Department of Transportation and Communication (DOTC),
Department of Trade and Industry (DTI), Department of Energy (DE) and all
other concerned agencies, the rights and obligations of stakeholders and the
rights and duties of the people with respect to the Air Quality Management and
Control Program.6 Finally, the Rules provide for various kinds of fines and
penalties for the three (3) categories of violations of the provisions of the Clean
Air Act (1)Violation of Standards for Stationary Sources; (2) Violation of
Standards for Motor Vehicles; (3) Violations of Other Provisions of the Clean Air
Act, which range from a maximum of One Hundred Thousand pesos
(P100,000.00) or ten (10) years imprisonment to a minimum of One Thousand
Pesos (P1,000.00) or six (6) months and one (1) day imprisonment.7
In a case brought before the Supreme Court regarding the constitutionality

of Section 20 of the Clean Air Act, it was ruled that such section does not
absolutely prohibit incineration as a mode of waste disposal, rather only those
burning processes which emit poisonous and toxic fumes are banned.8
6
DENR Administrative Order No 2000-81, ss 2 & 3, part I of the Implementing Rules and
Regulations for Rep Act No 8749.
7
Id, part XIII.
8
MMDA v Jancom GR No 147465, 30 January 2002, 375 SCRA 320.
5
Presidential Decree 984 or the National Pollution Control Decree prohibits
the throwing, running, draining or otherwise disposing into any of the water, air
and/or land resources any organic or inorganic matter or any substance in
gaseous or liquid form that shall cause pollution thereof. No person shall
likewise perform any of the following activities without first securing a permit for
the discharge of industrial wastes and other wastes which could cause pollution:
(i) the construction, installation, modification or operation of any sewage works or
extensions thereof; (ii) the increase in volume of wastes in excess of the
permitted discharge under the existing permit; and (iii) the construction or
operation of any industrial/commercial establishment which would cause an
increase in the discharge of wastes directly into the water, air and/or land
resources of the Philippines or would otherwise alter their physical, chemical or
biological properties in any manner not already lawfully authorized.9 Penalties
for the commission of the prohibited acts include fines, imprisonment, closure or
stoppage of operations as well as payment of damages.10
In 1974, Presidential Decree 600, also known as the Marine Pollution

Decree, was issued giving the Philippine Coast Guard the responsibility for
preventing, containing and controlling pollution of the seas and other bodies of
water within the territorial jurisdiction of the Philippines. Collaterally, Presidential
Decree 602 (1874) was promulgated creating the National Operation Center for
Oil Pollution (NOCOP) in the Philippine Coast Guard in order to enforce the
provisions of Presidential Decree 600 (1974) and further designating the NOCOP
as the contact agency of similar agencies of the Association of Southeast Asian
Nations (ASEAN) for assistance in cases of major oil spills in the region.
Apart from the provisions of the Civil Code broadly classifying excessive
noise as nuisance, according to Velasco v Meralco,11 noise continuously emitted
by an electric substation constitutes an actionable nuisance. Republic Act No
4136 (1964) or Land Transportation Code, regulates the attachment of horns and
mufflers on motor vehicles in order to prevent or minimize the emission of
exceptionally loud, startling or disagreeable sounds in the operation of said
vehicles. Presidential Decree No 96 (1973) further regulated the use or
attachments of sirens, bells, horns, whistles and other similar gadgets that
produce exceptionally loud or startling sounds, including domelights, blinkers and
similar signaling or flashing devices, unless authorized or allowed to use the
same. Offenders are liable to imprisonment for six months and/or a fine of P600
in addition to cancellation or renovation of the certificate of registration of the
motor vehicle on which the unauthorized gadget or device is installed.12
9
Presidential Decree No 984 (1976), s 8.
10
Id, s 9.
11
GR No 18390, 06 August 1971, 40 SCRA 342.
12
Presidential Decree No 96 (1973), s 2.
6
Presidential Decree 1096 (1977) (National Building Code of the
Philippines) requires all industrial establishments to provide positive noise
abatement devices to tone down the noise level of equipment and machineries in
accordance with the acceptable levels laid down by the Department of Labor and
Employment and the NPCC, now the Department of Environment and Natural
Resources (DENR).
B. WASTE MANAGEMENT
A number of Philippine laws cover waste management. One of the

earliest is the Commonwealth Act 383 (1938) which prohibits the dumping into
any river of refuse, waste matter or substances that may cause an elevation of
the river beds, or block the course of streams and considers the unlawful act as a
misdemeanor for which a penalty of imprisonment for not more than six months
or a P1,000 fine may be imposed. For the purpose of protecting fish and other
aquatic resources, Act 4003 makes unlawful the discharge or deposit into the
waters of the Philippines of any petroleum, acid, coal or oil tar or any refuse from
any refinery, mill or factory.
On January 26, 2001, the Ecological Solid Waste Management Act of

2000 was passed. It defined Solid Waste as referring to all discarded
households, commercial waste, non-hazardous, institutional and industrial waste,
street sweepings, construction debris, agricultural waste and other
hazardous/non-toxic solid waste.
The local government units shall be primarily responsible for the

implementation and enforcement of this Act. Segregation and collection of solid
waste shall be conducted at the barangay level specifically biodegradable,
compostable and reusable wastes but the collection of non-recyclable materials
and special wastes shall be the responsibility of the municipality or city. Multi-
purpose environment cooperatives or associations can undertake projects under
the provisions of this Act. The barangay shall be responsible for ensuing that a
100% collection efficiency from residential, commercial, industrial and agricultural
wastes. A 10-year Government Solid Waste Management Plan shall be
prepared for the re-use, recycling and composting of wastes generated in their
respective jurisdictions. The plan shall take identify the specific strategies and
activities taking into account the following such as availability and provision of
properly designed containers or receptacles in selected collection points for
temporary storage of solid wastes, segregation of different types of wastes for re-
use, recycling and composting, handling and transfer to processing or final
disposal sites and issuance and enforcement of ordinance to effectively
implement the barangay collection system.
Under the Toxic Substances and Hazardous and Nuclear Wastes Control
Act, hazardous wastes are defined as substances that are without any safe
commercial, industrial, agricultural or economic usage and are shipped,
7
transported or brought from the country of origin for dumping or disposal into or
in transit through any part of the territory of the Philippines. They shall also refer
to by-products, side-products, process residues, spent reaction media,
contaminated plant or other substances from manufacturing operations, and as
consumer discards of manufactured products. Nuclear wastes are defined as
hazardous wastes made radioactive by exposure to the radiation incidental to
the production or utilization of nuclear fuels but does not include nuclear fuel, or
radioisotopes which have reached the first stage of so as to be usable for any
scientific, medical, agricultural, commercial, or industrial purpose.13
Primarily, the objective of the Act is to regulate, restrict or prohibit the

importation, manufacture, processing, sale, distribution, use and disposal of
chemical substances and mixtures that present unreasonable risk and/or injury to
health or the environment; to prohibit the entry, even in transit, of hazardous and
nuclear wastes and their disposal into the Philippine territorial limits for whatever
purpose; and to provide advancement and facilitate research and studies on toxic
chemicals through inventory and testing requirements. Among the acts and
omissions considered as unlawful by Republic Act 6969 are: (i) to knowingly use
a chemical substance or mixture which is imported, manufactured, processed or
distributed in violation of the Act; (ii) failure or refusal to submit reports or other
required information; and (iii) failure or refusal to comply with pre-manufacture
and pre-importation requirements. These acts or omissions are punishable by
imprisonment from six months to six years and a fine ranging from P600 to
P4,000.
C. NATURE CONSERVATION AND MANAGEMENT
Republic Act No. 7586, otherwise known as the National Integrated

Protected Areas System Act of 1992 institutes the National Integrated Protected
Areas System (NIPAS) which classifies and administers all designated protected
areas to maintain essential ecological processes and life-support systems, to
preserve genetic diversity, to ensure sustainable use of resources found therein,
and to maintain their natural conditions to the greatest extent possible.14 The law
gives policy recognition to a protected area system whereby each designated
protected area will serve one or more of the objectives of conservation as part of
the system with the corresponding planning and management required to ensure
that the national objectives are met in one or another part of the system.
For a more effective administration and management, private sector and

local government participation was given much thought and consideration. A
management board takes the role of a local protected area administrator. This
devolution of function from the DENR to the regional office of DENR and the
creation of a division in the Regional Office called the Protected Areas and
13
Id, s 5(h) & (i).
14
Rep Act No 7586 (1992), s 9, as implemented by DAO 25, series of 1992 dated 29 June 1992.
8
Wildlife Division solves the present problem of lack of priority and interest in
protected area management.
Under the same law, certain enforcement mechanisms were updated,

particularly as to the penalties that could be imposed for violation of laws
concerning protected areas. The penalties that may be imposed are a fine or
imprisonment or both, as determined by the court, provided that if the area
requires rehabilitation or restoration, the offender shall also be required to restore
or compensate for the restoration of the damage. The court may also order
eviction of the offender from the land and forfeiture in favor of the government of
all minerals, timber or any species collected or removed therefrom, including all
devices/equipment used in connection therewith and constructions or
improvements placed thereon.15
The NIPAS system currently includes 281 protected areas covering 2.7
million hectares or 9 percent of the countrys total land area. Protected Area
Management Boards (PAMBs) are being established with participation of local
stakeholders and these Boards are responsible for developing and implementing
area-specific management plans.16
In order to conserve the countrys wildlife resources and their habitats for
sustainability, RA No. 9147 otherwise known as the Wildlife-Resources
Conservation and Protection Act was enacted on July 30, 2001. Aside from all
wildlife species found in all areas of the country, this law also applies to exotic
species which are subject to trade, are cultured, maintained and/or bred in
captivity or propagated in the country.17
The DENR has jurisdiction over all terrestrial plant and animal species, all
turtles and tortoises and wetland species, including but not limited to crocodiles,
waterbirds, and all amphibians and dugong. On the other hand, the Department
of Agriculture (DA) has jurisdiction over all declared aquatic critical habitats, all
aquatic resources, including but not limited to all fishes, aquatic plants,
invertebrates, and all marine mammals except dugong. Except for the Palawan
Council on Sustainable Development, both departments shall jointly update their
list of species under their jurisdiction.18
Likewise, the Secretary determines whether any wildlife specie or

subspecies is threatened and classified it as critically endangered, vulnerable or
other accepted categories based on best scientific data and with due regard to
internationally accepted criteria. The list is updated regularly and a threatened
specie cannot be removed therefrom within three (3) years following its initial
listing. It is only upon the filing of a petition based on substantial scientific
15
Rep Act No 7586 (1982), s 21.
16
World Bank, Philippines Environment Monitor 2000, p 24.
17
Section 3.
18
Rep Act No 9147 (2001), s 4.
9
information of any person seeking for the addition or deletion of a species from
the list that the Secretary evaluates based on relevant factors and act on the
petition within a reasonable period.19
Bioprospecting is allowed only upon the execution of an undertaking

stipulating that the proponents compliance with and commitments to reasonable
terms which are necessary to protect biological diversity. Before granting the
necessary permit, consultation with concerned agencies is made by the
Secretary as well as prior informed consent be obtained by applicant from the
concerned indigenous cultural communities, local communities, management
board or private individual or entity. The applicant shall disclose the intent and
scope of the bioprospecting activity in a language and process understandable to
the community. If the applicant is a foreign entity or individual, a local institution
should be actively involved in the research, collection, and whenever appropriate,
the technological development of the products derived from the biological and
genetic resources. Upon submission of the complete requirements, the
Secretary shall act on the research proposal within a reasonable period.20
All activities dealing on genetic engineering and pathogenetic organisms

in the Philippines, as well as activities requiring the importation, introduction, field
release and breeding of organisms that are potentially harmful to man and the
environment shall be reviewed in accordance with biosafety guidelines ensuring
public welfare and protection and conservation of wildlife and their habitat.
Breeding and propagation of wildlife for commercial purposes shall be

allowed by the Secretary or the authorized representative through the issuance
of wildlife farm/culture permit. However, only progenies of wildlife raised, as well
as unproductive parent stock shall be utilized for trade. Commercial breeding
operations for wildlife, whenever appropriate shall be subject to an environmental
impact study.21
The Philippine Constitution places the development and utilization of

forest lands and/or forest resources under the full control and supervision of the
State; and allows the State to enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per cent of the capital of which is owned by such
citizens.22
The leading legislation on the subject of forest preservation and protection

is Presidential Decree No. 705 (19 May 1975) entitled the Revised Forestry
Code of the Philippines as amended by PD 1559 (11 June 1978), PD 1775 (14
January 1981) and Executive Order No. 277 (1987), hereinafter referred to as the
19
Rep Act No 9147 (2001), s 14.
20
Id, s 14.
21
Id, s 16.
22
CONST., art XII, s 2.
10
Forestry Code. This Code underscores the need for proper classification,
management and utilization of lands of the public domain to maximize their
productivity to meet the demands of the increasing population.
The Department of Environment and Natural Resources (DENR) has

jurisdiction and authority over all forest lands. As such, it is responsible for the
protection, development, management, regeneration and reforestation of forest
lands; the regulation and supervision of the operations of licensees, lessees and
permittees for the taking or use of forest products therefrom or the occupancy or
the use thereof; the implementation of multiple use and sustained yield
management in forest lands; the protection, development and preservation of
national parks, marine parks, game refuges and wildlife; the implementation of
measures and programs to prevent kaingin and to manage occupancy of forests
and grazing lands; in collaboration with other bureaus, the effective, efficient and
economic classification of lands of the public domain; and the enforcement of
reforestation, parks, game and wildlife laws, rules and regulations.
The Secretary of the Department of Environment and Natural Resources

is also authorized to negotiate and enter into, for and in behalf of the
government, joint venture, co-production, or production-sharing agreements for
the development and utilization of forest lands and/or forest resources with
Filipino citizens or corporations or associations at least sixty per cent of whose
capital is owned by Filipino citizens. Such agreements may be for a period not
exceeding twenty-five years renewable for not more than twenty five years, and
shall conform with the following minimum terms and conditions:23
(i) A provision that the agreement-holder shall furnish the necessary

management, technological, and financial services when required, as
determined by the Secretary of Environment and Natural Resources;
(ii) A stipulated share of revenues and the manner of payment thereof;
(iii) Provision on consultation and arbitration with respect to the interpretation
of the agreement;
(iv) Provision of anti-pollution and environmental protection measures;
(v) Provision for the restoration and protection of the forest;
(vi) Provision for an effective monitoring scheme to be implemented by the
DENR which shall include, but shall not be limited to, the periodic
inspection of all records and books of account of the agreement-holder;
(vii) A commitment to community development; and
(viii) The submission of a management and development plan to be approved
by the Secretary of Environment and Natural Resources.
In order to curb illegal logging and other forms of forest destruction, the
Chain Saw Act of 200224 was enacted. It regulates the ownership, possession,
sale, importation and use of chainsaws or similar cutting implement rendered
23
CONST., art XII, s 2.
24
Rep Act No 9175 (2002).
11
operative by an electric or internal combustion engine or similar means. It
penalizes the selling, purchasing, re-selling, transferring, distributing or
possessing a chainsaw without a proper permit, its unlawful importation or
manufacturing actual unlawful use and the tampering of engine serial number of
any chainsaw.
D. FISHERY RESOURCES
The principal legislation on fisheries is Presidential Decree No. 704

entitled An Act Revising and Consolidating all laws and decrees affecting fishing
and fisheries, as amended by Presidential Decree Nos. 1015 (1976) and 1058
(1976), otherwise known as the Fisheries Decree of 1975. Under the said
decree, it is the policy of the State to accelerate and promote the integrated
development of the fishery industry and to keep the fishery resources of the
country in optimum productive condition through proper conservation and
protection.
In order to carry out this declared policy, the Bureau of Fisheries and
Aquatic Resources (BFAR) was created, which has jurisdiction and responsibility
for the management, conservation, development, protection, utilization and
disposition of all fishery and aquatic resources of the country, except municipal
waters which shall be under the jurisdiction of the municipal or city government
concerned. The BFAR was granted broad powers in the enforcement of the
various fishery laws. It was authorized to issue fishpond lease agreements
(FLAs) to qualified applicants for public forest lands declared by the Forest
Management Bureau as available for fishpond development purposes. Thus, no
person shall exploit, occupy, culture, capture or gather fish or fry of any species
of fish or fishery/aquatic products, engage in any fishery activity in Philippine or
municipal waters, operate a commercial fishery boat for scientific, research or
educational purposes, or seek employment as a fisherman without first securing
a license from the BFAR.
The BFAR may also recommend to the Secretary of Agriculture the

promulgation of fishery administrative orders (FAOs), designating an area or
areas in Philippine waters as fishery reservation for the exclusive use of the
government or of any of its political subdivisions or agencies, or for the culture of
fish and other aquatic animals for educational, research and scientific purposes;
and the promulgation of FAOs establishing fish refuges and sanctuaries to be
administered in the manner prescribed by the BFAR.
In addition to these powers, the BFAR was conferred adjudicative powers,

performing quasi-judicial functions aside from its administrative and regulatory
authority over persons and corporations engaged in the fishery industry licensed
by it. As a quasi-judicial agency, the BFAR has original and exclusive jurisdiction
to hear and decide cases involving fishponds, fishing boats and other
12
miscellaneous fishery products; conduct administrative investigations; and decide
on illegal fishing cases.
The BFAR also has the power to recommend to the Secretary appropriate
action on charter contracts, leases or lease-purchase agreements between
foreign fishing boats and foreign persons, corporations or entities.
Other pertinent laws and presidential issuances of fish resources are:

Republic Act No. 6541 (1972) prohibiting and punishing electro-fishing;
Presidential Decree No. 1058 (1976) increasing the penalties provided for under
Presidential Decree No. 704 for certain forms of illegal fishing and dealing in
illegally caught fish, etc.; Presidential Decree No. 1219 (1977) providing for the
exploration, utilization and conservation of coral resources as amended by
Presidential Decree No. 1698 (1980); Letter of Instructions No. 1328 (1976)
banning commercial trawls and purse seine within a distance of seven (7)
kilometers from the shoreline in all provinces; Letter of Instructions No. 550
(1977) directing the Secretary of Natural Resources to train barangay officials as
deputy fish wardens and/or deputy forest wardens.
The Philippine Fisheries Code of 199825 regulates all aquatic and fishery
resources whether inland, coastal and fishing areas including but not limited to
fishponds, fish pens and cages as well as all lands devoted to aquaculture or
businesses relating to fishery, whether public or private lands. The provisions of
the Code are enforced in all Philippine waters over which the Philippines has
sovereignty and jurisdiction including the Exclusive Economic Zone (EEZ)26 and
continental shelf.
The municipal or city government has jurisdiction over municipal waters27

and shall be responsible for the management, conservation, development,
protection, utilization and disposition of all fish and fishery/aquatic resources.
The Integrated Fisheries and Aquatic Resources Councils serves as the venue
for close collaboration among LGUs in the management of continuous resources.
The Fisheries Code provides that the use and exploitation of the fishery
and aquatic resources in Philippine waters are reserved exclusively to Filipinos
provided, however, that research and survey activities may be allowed under
strict regulations, for purely research, scientific, and technological and
educational purpose that would also benefit Filipino citizens. The Department of
Agriculture (DA) has the power to issue such number of licenses and permits for
the conduct of fishery activities with preference given to resource users in the
local communities adjacent or nearest to the municipal waters. The DA has the
power to prescribe catch ceiling limitations, establishment of closed season and
25
Rep Act No 8550 (1998).
26
27
DAO 2001-17 dated 11 June 2001 provides guidelines for delineating/delimiting municipal
waters.
13
the introduction of foreign aquatic species as well as the protection of rare,
threatened and endangered species. All government agencies as well as private
corporations are required to prepare a detailed environmental impact statement
prior to undertaking activities or programs.28
Disposition of public lands for fishery purposes are primarily available to

qualified fisherfolk cooperatives/associations. Upon expiration of Fishpond
Lease Agreements (FLA), the current lessees shall be given priority and be
entitled to an extension of twenty-five (25) years in the utilization of their
respective leased areas. No fishpens or fish cages or fish traps are allowed in
the lakes. Fish ponds leased to qualified persons shall be for more than 50
hectares for individuals and 250 hectares for corporations or fisherfolk
organizations. The lease shall be for a period of twenty-five (25) years
renewable for another 25 years. The DA shall not only establish a code of
practice for aquaculture but shall formulate incentives and disincentives such as,
but not limited to, effluent charges, user fees and negotiable permits to
encourage compliance with the environmental standards and to promote
sustainable management practices.29
Under the Philippine Fisheries Code,30 the following are prohibited and
penalized:
(1) Unauthorized fishing or engaging in other unauthorized fisheries activities;

(2) Poaching in Philippine waters;
(3) Fishing through explosives, noxious or poisonous substance and/or use of
electricity;
(4) Use of fine mesh net;
(5) Use of active gear in the municipal waters and bays and other fishery
management areas;
(6) Ban on coral exploitation and exportation;
(7) Ban on muro-ami, other methods and gear destructive to coral reefs and
other marine habitat;
(8) Illegal use of superlights;
(9) Conversion of mangroves;

(10) Fishing in overfished areas and during closed season;
(11) Fishing in fishery reserves, refuge and sanctuaries;
(12) Fishing or taking of rare, threatened or endangered species;
(13) Capture of sabalo and other breeders/spawners;
(14) Exportation of breeders, spawners, eggs or fry;
(15) Importation or exportation of breeders, fish or fishery species;
(16) Violation of catch ceilings;
28
Id, ss 5-13.
29
Id, ss 45-48.
30
Id, ss 86-106.
14
(17) Aquatic pollution;
(18) Other violations under this Code:
a. failure to comply with minimum safety standards;

b. failure to conduct a yearly report on all fishponds, fishpens and
fish cages;
c. gathering and marketing of shell fishes which is sexually mature
or below the minimum size or above maximum quantities
prescribed for the particular species;
d. obstruction to navigation or flow and ebb of tide in any stream,
river, lake or bay;
e. construction and operation of fish corrals/traps, fish pens or fish
cages;
(19) Employment of unlicensed fisherfolk, worker or crew by commercial

fishing vessel operators;
(20) Obstruction of defined migration paths of anadromous, catadromous and
other migratory species in areas including but not limited to river mouths
or estuaries; and
(21) Obstruction to fishery law enforcement officer.
The development and conservation of coral resources is regulated by

Presidential Decree No. 1219 (1977) as amended by Presidential Decree No.
1698 (1980). It deals with the exploration, exploitation, utilization and
conservation of coral resources and to protect these resources as provided for
under other existing laws. Environmentalists were against this decree because
the conservation of corals is necessary for the preservation of the natural.
E. MINERAL RESOURCES
The Philippines is endowed with large deposits of minerals. Locally found

metallic minerals are cadmium. chromite, cobalt, copper, gold, iron, lead,
manganese, mercury, molybdenum, nickel, palladium, silver, uranium and zinc.
Non-metallic minerals in local deposits are asbestos, barite, cement raw
materials, clay, coal, construction raw materials, diatomite, feldspar, guano,
gypsum, marble, mica, natural gas, perlite, petroleum, phosphate rock, pyrite,
rock asphalt, silica sand, sulphur, and talc.31 With these natural endowments,
the exploitation of minerals contributes largely to the growth of the national
economy. But these mining operations have adverse effects on the ecological
balance. The large-scale extraction and usage of mineral resources are
inherently and essentially polluting. They consist of the excavation and
permanent removal of the minerals from their deposited positions, and thereafter
their burning fuel or other utilization. From the stage of exploration to extraction,
mining has invariably inflicted some degree of damage to the environment either
through the pollution/siltation of rivers and seabeds, the acidification of
31
M Feliciano et al, Environmental Law in the Philippines, 224 (1992).
15
agricultural plains or the unwanted emissions of smoke, dust, soot, noise, and
other forms of air pollution.32 These negative environmental effects are the
externalities which arise out of the profit-oriented decisions of mining firms. It is
through the use of the regulatory powers of the State that the private sector is
compelled to shoulder the costs of these externalities.
It is for these reasons that mining legislation was enacted to oblige

environmental protection measures to be undertaken by mining operators. The
leading law on mining is Presidential Decree No. 463 (1974), The Mineral
Resources Development Decree of 1974, as amended by Presidential Decree
Nos. 1385 (1978, 677 (1980) and 1902 (1984). Presidential Decree No. 463
amended the Mining Act of 1936 which requires all mining lease contractors to
comply with pollution control laws and regulations. Under the said Decree,
penalty provisions are included to curb pollution from mine wastes and mill
tailings. Section 81 of the said Decree provides that dumping sledge, tailings
and mines wastes in public roads, rivers or other public property shall be a
punishable act penalized by payment of fines or imprisonment, or both. Section
91 delineates specific conservation measures for resource recovery and
prevention. An added dimension in the law is the requirement that mining
operators should institute measures to make the area habitable and economically
useful upon abandonment of operations due to the exhaustion of mineral
resources or for other reasons. This provision is reinforced by Presidential
Decree No. 1189 (1977) which provides that all entities engaged in mining are
required to the fullest extent possible to restore, rehabilitate, and return the
lands, rivers and the natural environment to their original condition.
In 1977, the Mine Wastes and Tailing Fee Act33 was promulgated
imposing fees on mining companies to contain future contingencies. The fees
paid were to accrue to a reserve fund to be used exclusively for the payment of
damages to land, agriculture crops and forest products, marine life and aquatic
resources, the destruction of infrastructure, the revegetation, and the
rehabilitation of farm lands and other areas devoted to agriculture and fishing
damaged by pollution caused by the operation of mining companies.
Presidential Decree No. 512 was signed Declaring Prospecting and Other
Mining Operations of Public Use and Benefit and Establishing the Basis and
Prescribing the Rules and Procedures relating to Acquisition and Use of Surface
Rights in Mineral Prospecting, Development and Exploitation, and Providing
Protection and Compensation to Surface Owners, dated 16 January 1981.
To encourage investment in the mining industry by local and foreign-

owned corporations, Executive Order No. 279 (1987) was promulgated
authorizing the Secretary of Department of Environment and Natural Resources
32
Id, at 227.
33
Pres Decree No 1251 (1977).
16
to negotiate and conclude joint venture, co-production or production sharing
agreements for the exploration, development and utilization of mineral resources,
and prescribing the guidelines for such agreements and those agreements
involving technical or financial assistance by foreign-owned corporations for
large-scale exploration, development, and utilization of minerals. Under said
mode of undertaking, the private contractual party a Philippine national or a
corporation or association at least 60 per cent of whose capital is owned by
Filipinos shall, for a period not exceeding 25 years renewable for a similar
period, furnish the technical, management and financial services for the
development of mineral resources. Among the minimum requirements of the
contract are the institution of industrial safety and anti-pollution measures and the
restoration and/or protection of the environment.
Republic Act No. 7076 (1991), otherwise known as the Peoples Small-
Scale Mining Act defines small-scale mining as minimum activities which rely
heavily on manual labor using simple implements and methods, and which do
not use explosives or heavy mining equipment. The main purpose of the law is
to promote, develop, protect and rationalize viable small-scale mining activities
in order to generate more employment opportunities and provide an equitable
sharing of the nations wealth and natural resources. Through this law, the
pernicious effects of the classic trade-off between development and environment
could be minimized if not totally avoided.
17
The most recent law is Republic Act No. 7942, otherwise known as the
Philippine Mining Act of 1995. It declares that all mineral resources in public and
private lands within the territory and exclusive economic zone of the Philippines
belong to the State. Thus, it shall be the State to promote their rational
exploration, development, utilization and conservation through the combined
efforts of the government and the private sector in order to enhance national
growth in a way that effectively safeguards the environment and protect the rights
of the affected communities.34 Where there is a need to preserve strategic raw
materials for industries critical to national development, or certain minerals for
scientific, cultural, or ecological value, the President may establish mineral
reservations upon the recommendation of the DENR Secretary, mining
operations in existing mineral reservations and such other reservations as may
thereafter be established shall be undertaken by the Department or through a
contractor.35 Every contractor shall undertake an environmental protection and
enhancement program covering the period of the mineral agreement or permit.
The work program shall include not only plans relative to mining operations but
also to rehabilitation, regeneration, revegetation, and reforestation of mineralized
areas, slope stabilization of mined-out and tailings covered areas, aquaculture,
watershed development and water conservation; and socio-economic
development.36
In La Bugal-Blaan Tribal Assn, et al v. Secretary Victor Ramos, the

Supreme Court en banc upheld the constitutionality of the Philippine Mining Law,
its Implementing Rules and Regulations insofar as they relate to financial and
technical agreements as well as the subject Financial and Technical Assistant
Agreement.37
34
Section 2.
35
Section 5.
36
Section 69.
37
GR No 127882, 01 December 2004.
18

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CHAPTER 1

The Philippines, an archipelago of 7,107 islands (about 2,000 of which are

The Philippine legal system is aptly described as a blend of customary

This particular legal system is the result of the immigration of Muslim

Philippine legal history may be categorized according to the various periods in

These customary laws dealt with subjects such as family relations,

The Spanish Regime

The arrival of Ferdinand Magellan in the Philippines on 16 March 1521 presaged

The Philippine Republic of 1898

The American Era and the Commonwealth

The Japanese Occupation

During the Japanese occupation, the Commonwealth, then in exile,

The Philippine Republic, 1946-1972

The inauguration of the Philippine Republic on 04 July 1946 marked the

In the beginning, efforts of the government were geared towards economic

The Constitutional Convention met on 01 June 1971 and it took its

The Martial Law Period

The 1973 Constitution established a parliamentary form of government and

This parliamentary form of government was never implemented. The

Likewise, Amendment No 7 stipulated the continuance of the barangays

On 07 April 1978, 160 regional representatives apportioned among the 13

A presidential election was held on 16 June 1981 and President Marcos

(1) the establishment of a different mode of presidential succession with the

(2) the apportionment of representation in the Batasang Pambansa by

An impeachment resolution was filed by 57 members of the opposition

On 03 November 1985, President Marcos announced the calling of a

When Corazon C Aquino took her oath of office as President on 25 February

Under the Provisional Commission, all existing laws, decrees, executive

Pursuant to Article V of the Provisional Constitution, the Constitutional

He was succeeded by Joseph Ejercito Estrada after the 11 may 1998

Having the same force of authority as legislative enactments are the

The following is a summary of some of the basic codes.

The Code of Commerce

The Code of Commerce became effective on 01 December 1888. largely taken

The Corporation Code

The main forms of business organizations in the Philippines are sole

(1) there must be 5 to 15 directors and a majority should be residents of the

Management of a corporation is vested in a board of directors. The

(1) to sue and be sued in its corporate name;

Stock corporations are prohibited from retaining surplus profits in excess

(1) when justified by corporate expansion projects or programmes approved

Non-stock corporations are those where no part of its income is distributable as

The right of members to vote may be limited, broadened or denied to the

Under Philippine law, a foreign corporation is one which is incorporated

The Code of Muslim Personal Laws of the Philippines67 promulgated on

Book I is entitled Pre-Employment and deals with recruitment and

Book II is entitled Human Resources Development and deals with the

Book III is entitled Conditions of Employment and deals with hours of

The minimum wage rates for agricultural and non-agricultural employees

Book V is entitled Labour Relations and covers the National Labour

The labour arbiters exercise exclusive jurisdiction to hear and decide

(1) unfair labour practice cases;

Cases arising from the interpretation or implementation of the collective

All persons employed in commercial, industrial and agricultural

Book VI is entitled Post-Employment and deals with security of tenure,

Government and the State

The New Charter is described as pro-life, pro-people, pro-poor, pro-Filipino and

Although it is basically patterned after the 1973 Constitution, the 1987

Structure of the Government

The government of the Philippines is republican in form and under a presidential

The President also participates in the legislative process because a bill

The legislative power is vested in the Congress of the Philippines, a bicameral

Upon assumption of office, all members of Congress must make a full

The Party-List System Act45 establishes a mechanism of proportional