Rate-fixing

Padua vs Ranada
Sandoval-Guttierez

Petitioners filed separate petitions, protesting the toll rate hikes the CITRA applied for and was provisionally granted. SC
said that both petitions were procedurally unsound, and that LOI 1334-A gave the TRB power to provisionally grant toll
rate hikes without prejudice even without proper notice, publication and hearing, so long as circumstances warrant it and
without prejudice to any final decision on whether such toll rate hikes ought to be approved.

DOCTRINE
An administrative agency may be empowered to approve provisionally, when demanded by urgent public need, rates of
public utilities without a hearing. The reason is easily discerned from the fact that provisional rates are by their nature
temporary and subject to adjustment in conformity with the definitive rates approved after final hearing.

IMPORTANT PEOPLE
[G.R. No. 141949. October 14, 2002]

CEFERINO PADUA, petitioner, vs. HON. SANTIAGO RANADA, PRESIDING JUDGE OF MAKATI, RTC, BRANCH 137,
PHILIPPINE NATIONAL CONSTRUCTION CORP., TOLL REGULATORY BOARD, DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS, and REPUBLIC OF THE PHILIPPINES, respondents.

[G.R. No. 151108. October 14, 2002]

EDUARDO C. ZIALCITA, petitioner, vs. TOLL REGULATORY BOARD AND CITRA METRO MANILA TOLLWAYS
CORPORATION, respondents.

FACTS
1. Feb 27, 2001 – the Citra Metro Manila Tollways Corporation (CITRA) filed with the Toll Regulatory Board (TRB) an
application for an interim adjustment of toll rates at the Metro Manila Skyway Project- Stage 1.
2. The basis for this petition was the provisions of the Supplemental Toll Operation Agreement (STOA) authorizing it, as
the investor, to apply for, and if warranted, to be granted an interim adjustment of toll rates in the event of a significant
currency devaluation.
3. CITRA alleged there was compelling need for such an increase for the toll rates because of the devaluation (am I using
this word right) of the peso exchange rate from 26.1671php to one US dollar in 1995 to 48php to one US dollar in 2000.
4.CITRA’s petition remained unsolved due to heavy opposition. So CITRA filed an “Urgent Motion for Provisional
Approval”, invoking Sec. 3, Rule 10 of the “Rules of practice and Procedure Governing Hearing Before the Toll Regulatory
Board.”
5. oct. 30 2001 – CITRA moved to withdraw above Urgent Motion without prejudice to its right to seek or be granted
provisional relief under above-quoted provision.
Nov. 7, 2001 – CITRA wrote a letter to TRB expression its concern over the undue delay in proceeding. Stated any further
delay would lead to the financial collapse of both the Project and the Phil. Banking system, who’d invested heavily in it.
6. Nov. 9, 2001 - Toll Regulatory Board granted CITRA’s motion to withdraw the Urgent Motion for Provisional Approval,
and issued Resolution No. 2001-89.
7. Reso. 2001-89 authorized provisional toll rate adjustments at the Metro Manila Skyway, effective Jan. 1, 2002.
8. Dec. 17, 24, and 31, 2001 – the above Resolution was published in the newspapers of general circulation.
9. Jan 1, 2002 - implementation
9. Ceferino Padua and Eduardo Zialcita assail the validity and legality of above TRB resolution in individual petitions.
- G.R. No. 141949 is a petition for mandamus seeking to compel respondent Judge Ranada to issue a writ of execution
for the enforcement of the Court of Appeals Decision dated August 4, 1989 in CA-G.R. SP No. 13235. However, he also
questioned in the same petition the issue of whether Resolution No. 2001-89 is valid.
- G.R. No. 151108 – a petition for prohibition by Zialcita.
10. Both cases were consolidated.

ISSUE with HOLDING

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1. Are Padua and Zialcita’s petitions procedurally sound?
SC: NO.
Padua’s petition for mandamus
- SC raked him through the coals. Stated that he ought to have filed a separate case for attacking the validity of
Reso 2001-89.
- Didn’t rule on the merits of the petition for mandamus in this case.

Zialcita’s petition for prohibition was violative the twin doctrine of primary administrative jurisdiction and non-exhaustion of
administrative remedies.
- P.D. No. 1112 explicitly provides that the decisions of the TRB on petitions for the increase of toll rate shall be
appealable to the Office of the President within ten (10) days from the promulgation thereof.[21] P.D. No. 1894
reiterates this instruction and further provides: The petitions delve into questions of fact that the SC isn’t qualified
to handle and only the TRB can answer.
- Also, prohibition will not lie since it won’t correct error or irregularities in procedure if the inferior court has
jurisdiction over the issues.

2. Is Reso. 2001-89 valid?

SC: YES.
- Provisional toll rate adjustments were published on Dec. 17, 24, and 31, 2001 in newspapers of general
circulation such as The Philippine Star, the Philippine Daily Inquirer, and the Manila Bulletin.
- Such publications sufficiently complied with Sec. 5 of PD 1112 which mandates that “no new rates shall be
collected unless published in a newspaper of general publication at least once a week for 3 consecutive weeks.”
- Also, under Letter of Instruction 1334-A, the TRB may grant and issue ex-parte to any petitioner, without need of
notice, publication, or hearing, provisional authority to collect, pending hearing and decision on the merits of the
petition, the increase in rates prayed for or such lesser amount as the TRB may in its discretion provisionally
grant.
- This LOI directs, orders and instructs the TRB to issue provisional toll rates adjustment ex-parte without the need
of notice, hearing and publication. All that is necessary is that it be issued upon (1) a finding that the main petition
is sufficient in form and substance; (2) the submission of an affidavit showing that the increase in rates
substantially conforms to the formula, if any is stipulated in the franchise or toll operation agreement, and that
failure to immediately impose and collect the increase in rates would result in great irreparable injury to the
petitioner; and (3) the submission of a bond. Whether or not CITRA complied with these requirements is an issue
that must be addressed to the TRB.

- SC: The practice is not something peculiar. We have ruled in a number of cases that an administrative agency
may be empowered to approve provisionally, when demanded by urgent public need, rates of public utilities
without a hearing. The reason is easily discerned from the fact that provisional rates are by their nature temporary
and subject to adjustment in conformity with the definitive rates approved after final hearing. In Maceda vs.
Energy Regulatory Board, we ruled that while the ERB is not precluded from conducting a hearing on the grant of
provisional authority which is of course, the better procedure however, it can not be stigmatized if it failed to
conduct one.

- LOIs have the force and effect of law, are oart of the law of the land, and shall remain valid and binding unless
modified, revoked, and superseded by subsequent orders, decrees, instructions, and other acts of the President.

2. Does CITRA have standing to apply for a toll increase?

SC: Yes, it does. CITRA’s right stems from the STOA entered into by the PNCC (the operator) and the Republic of the
Philippines. Sec. 7.05 of the STOA allows the investor (CITRA) or the operator (PNCC) to apply for and if warranted, to be
granted an interim adjustment of toll rates in case of force majeure and a significant currency valuation.

3. Was the Resolution valid even though only the Executive Director issued it?

- SC: Reso. 2001-89was not issued by TRB Executive Director Dumlao, Jr. alone.

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 - - The resolution itself contains the signatures of four other TRB directors.

- Padua: while these Directors signed the petition, none of them personally attended the hearing.

- SC: Under our jurisprudence, an administrative agency may employ other persons, such as a hearing officer,
examiner or investigator, to receive evidence, conduct hearing and make reports, on the basis of which the
agency shall render its decision. Such a procedure is a practical necessity. The appointment of competent officers
to hear and receive evidence is commonly resorted to by administrative bodies or agencies in the interest of an
orderly and efficient disposition of administrative cases.

- Administrative due process requirements guard against abuses – “the tribunal or body or any of its judges must
act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the
views of a subordinate.”

DISPOSITIVE PORTION
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OTHER NOTES
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DIGESTER: Insert name.