PETITION. Petitioners, by counsel, and unto this Honorable Court, respectfully state, that:

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1 REPUBLIC OF THE PHILIPPINES SUPREME COURT SECOND DIVISION MANILA BISHOP PEDRO DULAY ARIGO, CESAR N. SARINO, DR. JOSE ANTONIO N. SOCRATES PROF. H. HARRY L. ROQUE, JR. Petitioners, X X -versus- SC. G.R. No For: PETITION FOR REVIEW ON CERTIORARI UNDER RULE 45 (with an Application for Writs of Preliminary Mandatory and Prohibitory Injunction and/or Temporary Restraining Order) HON. EXECUTIVE SECRETARY EDUARDO R. ERMITA, HON. ENERGY SECRETARY ANGELO T. REYES, HON. FINANCE SECRETARY MARGARITO B. TEVES, HON. BUDGET AND MANAGEMENT SECRETARY ROLANDO D. ANDAYA JR., HON. PALAWAN GOVERNOR JOEL T. REYES, HON. REPRESENTATIVE ANTONIO C. ALVAREZ, (1 ST DISTRICT), HON. REPRESENTATIVE ABRAHAM MITRA, (2 ND DISTRICT), RAFAEL E. DEL PILAR, PRESIDENT & CEO, PNOC EXPLORATION CORPORATION, Respondents. X X PETITION Petitioners, by counsel, and unto this Honorable Court, respectfully state, that: PREFATORY STATEMENT In this citizen s suit, the issue of the equitable share in the proceeds of the utilization of the development of national wealth 1 of a local government unit, in this 1 From the language of the fundamental law of the land. See CONST. (1987), art X, sec. 7, which provides that: Local governments shall be entitled to an equitable share in the proceeds of the utilization and 1

2 case, the Province of Palawan, by the special geographical circumstances involved, is inextricably linked with the integrity of the national territory and the national patrimony; the assailed presidential issuance, EO 683, crafted based on a grievously erroneous construction by the Chief Executive of the constitutionally-defined national territorial limits, is by itself, patently illegal and unconstitutional insofar as it violates the provisions of the 1991 Local Government Code and the 1987 Constitution guaranteeing an equitable share of the proceeds of the utilization of the development of the national wealth of a local government unit. The Court a quo has refused to take cognizance of the case primarily on the grounds of prematurity and of judicial deference to joint efforts by the Executive and the Legislative to define the country s baselines. Petitioners contend that while it is true that the questioned Executive Order is indeed premised on the eventual legislative determination of the metes and bounds of the national territory pertaining to the country s baselines, particularly as it relates to the Kalayaan Island Group, popularly known as the Spratlys, the very terms and conditions of EO 683 already present justiciable issues with respect to the disbursement of public funds provided in the presidential issuance; on this basis, the Courts cannot shirk from the duty to pass upon the relevant legal and constitutional issues; moreover, Petitioners argue that it is as well the constitutional duty of the Courts to examine what the 1987 Constitution itself establishes as the metes and bounds of the national territory. Finally, the Court a quo has faulted Petitioners for their supposed failure to provide it with documents relevant to its adjudication of the Petition, pursuant to the provisions of the Revised Rules of Court. A close examination of the issue however, will support Petitioner s claim that these documents are only tangential to the controversies at hand, development of the national wealth within their respective areas, in the manner provided by law, including sharing the same with the inhabitants by direct means. 2

3 not to mention that this Honorable Court itself has already determined that Petitioners are not legally in a position to secure these documents because they are not parties to it. A. PETITIONERS 1. Bishop Pedro Dulay Arigo current Bishop of the Archdiocese of Puerto Princesa, Palawan, sues as a resident of Palawan, citizen and taxpayer of the Republic of the Philippines. 2. Petitioner Cesar N. Sarino, a former secretary of the Department of the Interior and Local Government (DILG), sues as a citizen and taxpayer of the Republic of the Philippines. 3. Dr. Jose Antonio N. Socrates, a geologist and surgeon by training, sues as a resident of Palawan, citizen and taxpayer of the Republic of the Philippines. 4. Petitioner Prof. H. Harry L. Roque, Jr., is a lawyer and professor of constitutional law and international law at the University of the Philippines, sues as a citizen, taxpayer, and as an officer of the court with a sworn duty to uphold the Constitution and the laws of the Republic of the Philippines. 5. All the petitioners in this controversy may be served with court processes through their counsel, the Roque and Butuyan Law Offices, with office address at Unit 1904, Antel 2000 Corporate Center, No. 121, Valero Street, Salcedo Village, Makati City,

4 B. RESPONDENTS 6. Respondent Hon. Eduardo Ermita is the incumbent Executive Secretary, with office address at 2 nd Floor, Mabini Hall, Malacañang, J.P. Laurel St., San Miguel, Manila, where he may be served with summons and other court processes. 7. Respondent Hon. Angelo T. Reyes is the incumbent Secretary of the Department of Energy [hereinafter, DOE], with office address at Meritt Road, Fort Bonifacio, Taguig, Metro Manila, where he may be served with summons and other court processes. 8. Respondent Hon. Margarito B. Teves Jr. is the incumbent Secretary of the Department of Finance [hereinafter, DOF], with office address at Roxas Blvd., corner Vito Cruz St., Manila, where he may be served with summons and other court processes. 9. Respondent Hon. Rolando D. Andaya Jr. is the incumbent Secretary of the Department of Budget and Management [hereinafter, DBM], with office address at J.P Laurel St., corner Ayala St., City of Manila, where she may be served with summons and other court processes. 10. Respondent Hon. Joel T. Reyes is the incumbent Governor of the Province of Palawan, with office address at the Provincial Capitol, Puerto Princesa City, Palawan, where he may be served with summons and other legal processes. 11. Respondent Hon. Antonio C. Alvarez is the incumbent Representative of the First District of the Province of Palawan. He may be served with summons and other legal processes at the House of Representatives, House of Representatives Complex, Constitution Hills, Quezon City

5 12. Respondent Hon. Abraham Mitra is the incumbent Representative of the Second District of the Province of Palawan. He may be served with summons and other legal processes at the House of Representatives, House of Representatives Complex, Constitution Hills, Quezon City Respondent Rafael E. Del Pilar is the incumbent President & CEO of the PNOC Exploration Corporation. He may be served with summons and other legal processes Building 1, Energy Center, Fort Bonifacio, Taguig City STATEMENT OF MATERIAL FACTS 14. The Republic of the Philippines, through the Department of Energy (DOE), entered into a service contract with Shell Philippines Exploration B.V. and Occidental Philippines, Incorporated on December 11, 1990 for the exclusive contract of petroleum operations in the area referred to as CAMAGO-MALAMPAYA. The exploration led to the drilling of the Camago-Malampaya natural gas reservoir located about eighty (80) kilometers from the coastline of Palawan, in the South China Sea. 15. The Camago-Malampaya project, which features extensive natural gas and oil deposits, is said to be the largest single investment in the country, projected to generate approximately 8 to 10 billion U.S. Dollars of revenue of the Philippine government. 16. A dispute has arisen between the Provincial Government and the National Government over the proportionate share of the proceeds of from the Camago- Malampaya natural gas project. 5

6 17. The Provincial Government of Palawan asserts its claim over a forty percent (40%) share of the proceeds, according to the provisions of the 1991 Local Government Code. Its claim for such a share is founded on its contention that the Camago-Malampaya gas fields are located within the territorial jurisdiction of Palawan and is thus entitled to the proceeds as provided for in the Local Government Code. For this reason, the Provincial Government of Palawan has a pending claim in Court against the National Government The National Government however contends that the Camago- Malampaya natural gas reservoir is approximately eighty (80) kilometers from the coastline of Palawan and is thus outside its territorial jurisdiction. Hence, the Provincial Government s claim to entitlement to national wealth is unfounded. 19. There have been a number of negotiations between the two parties to end the legal tussle between them over who has which rightful share over the proceeds of the project, while the case is still pending in court. 20. The latest of such efforts to settle the controversy is the issuance by the Office of the President on Dec. 1, 2007 of Executive Order No. 683 [hereinafter EO 683], which authorizes the use of fees, revenues and receipts from service contract no. 38 for the implementation of development projects for the people of Palawan It was signed By Respondent Sec. Ermita on behalf of Mrs. Gloria Macapagal-Arroyo. 2 The Provincial Government won a Petition for Declaratory Relief it filed with Branch 95 of the Regional Trial Court of Puerto Princesa, docketed as Special Civil Action Case No Subsequently, the DOE, then headed by Sec. Raphael Perpetuo Lotilla, brought the case before the Supreme Court, docketed as G.R No , where it remains pending. 3 A copy of EO 683 is attached to this pleading as ANNEX A. It was attached to the Petition filed with the Court a quo as ANNEX A as well. 6

7 22. EO 683, among other things, provides that: [T]he duly-authorized representatives of the National Government and the Province of Palawan, with the conformity of the Representatives of the Congressional Districts of Palawan, have agreed on a Provisional Implementation Agreement (PIA) that would allow 50% of the disputed 40% if the Net Government Share in the proceeds of SC 38 to be utilized for the immediate and effective implementation of the development projects for the people of Palawan of EO 683 provides that under the PIA, the DBM is authorized to release funds to the implementing agencies on the endorsement and submission by the DOE and/or the PNOC Exploration Corporation of the following documents: a) directive by the Office of the President or written request of the Province of Palawan, the Palawan Congressional Districts or the Highly Urbanized City of Puerto Princesa, for the funding of designated projects ( 1.1); (b) a certification that the designated projects fall under the investment program of the Province of Palawan, City of Puerto Princesa, and/or the development projects identified in the development program of the National Government or its agencies; ( 1.2); and (c), Bureau of Treasury certification on the availability of funds from the 50% of the 40% share being claimed by the Province of Palawan from the Net Government Share under SC It states that the DBM shall be subject to the actual collections deposited with the National Treasury, and shall be in accordance with the Annual Fiscal Program of the National Government. 25. Another relevant provision is found in 3 of EO 683, which provides that the National government shall allow the Province of Palawan, the Congressional Districts of Palawan and the City of Puerto Princesa to securitize their shares in the 50% of the disputed 40% of the Net Government Share in the proceeds of SC 38 according to the 7

8 PIA. The DOE, in consultation with the DOF, will be responsible for preparing the Net Government Revenues for the period of to June 30, 1010 [sic]. 26. The amounts released pursuant to this EO shall be without prejudice to any ongoing discussions or final judicial resolution of the legal dispute regarding the National Government s territorial jurisdiction over the areas covered by SC 38 in relation to the claim of the Province of Palawan under Sec. 290 of RA 7160, according to 4 of EO EO 684 was to take effect fifteen (15) days after its publication in a newspaper of general circulation. 28. On Feb. 5, 2008, the Petitioners received a certified true copy of EO 683, signed on Dec. 1, 2007 by the Respondent Sec. Ermita by the authority of Mrs. Gloria Macapagal-Arroyo. The effectivity clause of EO 683 provides that it shall take effect 15 days after its publication in a general newspaper. 29. On Feb. 7, 2008 Petitioners filed with the Honorable Court of Appeals a special civil action for certiorari under Rule 65 4 questioning the issuance of EO 683, with an application for writs of preliminary mandatory and prohibitory injunction and/or temporary restraining order. The case was docketed as CA-GR SP No On April 3,2008, Petitioners received notice of the Court a quo s Resolution dated March 18,2008 directing them to submit within five(5) days from notice copies of the following : (1) petition for review on certiorari docketed as GR No (Republic of the Philippineset al., v. the Provincial Government of Palawan) filed with this Honorable Court; (2) the decision of the Regional Trial Court of Puerto Princesa, Palawan, Branch 95 in Special Civil Action No. 3779; (3) Motion for Reconsideration of 4 A copy of the Petition with annexes is attached as ANNEX B. 8

9 the aforesaid RTC decision; (4) Service Contract No. 38; and (5) the Provisional Implementation Agreement (PIA), as required under Section 1, Rule 65, in relation to Section 3, Rule 46 of the 1997 Rules of Civil Procedure Petitioner sought an additional ten (10) days from April 8, 2008 or until April 18, 2008 to comply with the Resolution. 32. On April 18, 2008, Petitioners filed a Manifestation and Motion with the Court a quo, informing the Court that they were unable to obtain a copy of the case records of GR No in the dockets of this Honorable Court despite having made a formal request for it and considering that they are not parties in the said case; They however attached to the pleading certified true copies of the Decision of the Regional Trial Court Branch 95 in Puerto Princesa, Palawan and the Motion for Reconsideration filed by the National Government in the said case as well as a copy of Service Contract No. 38. They further manifested the difficulty they encountered locating a copy of the PIA mentioned in EO 386 and prayed of the Court to direct (1) the Hon. Secretary of Energy, a Respondent in the case, to submit a copy of the Petition for Review in GR No , of which it was the lead Petitioner; (2) The Hon. Executive Secretary of the Philippines, another Respondent, to submit before the Court a quo a certified true copy of SC No. 38 (3) any of the following Respondents, namely Hon. Joel T. Reyes, incumbent Governor of Palawan, Hon. Antonio C. Alvarez, incumbent Representative of the First District of the Province of Palawan and Hon. Abraham Mitra, incumbent Representative of the Second District of the Province of Palawan, to submit to the Court a copy of the said PIA, to which they were supposed to have been signatories On May 29, 2008, the Former Twelfth Division of the Honorable Court of Appeals rendered a resolution in CA GR NO , the dispositive portion of which 5 A copy of the Resolution is attached as ANNEX C. 6 A copy of the Manifestation and Motion with annexes is attached as ANNEX D. 9

10 read thus: WHEREFORE, the petition is DENIED DUE COURSE and accordingly DISMISSED On June 23, 2008, Petitioner filed a Motion praying that the Court a quo reconsider its May 29, 2008: On August 8, 2008, Petitioners filed yet another Manifestation and Motion before the Court a quo a further submission on their failure to provide it with a copy of the Petition in GR No (Republic of the Philippines et al., v. Provincial Government of Palawan), as a result of which the Court a quo, in its May 29,2008 resolution dismissing the case, faulted the Petitioners, finding that Petitioners excuse for failing to submit the said document holds no water in light of the fact that the Supreme Court requires pleadings, motions and other papers to be filed in no less than eighteen (18) copies. 36. In their second Manifestation and Motion, Petitioners informed the Court a quo that on Aug. 5, 2008, they received a copy of a Resolution dated June 23, 2008 of the Third Division of this Honorable Court, in which the High Court resolved to note thus: the letter dated 10 April 2008 of Romel Regalado Bagares of Roque and Butuyan Law Offices and to DENY his request for certified true copies of documents enumerated therein to be submitted in a related case pending before the Court of Appeals as the said law office is not a counsel for any party. The original duplicate copy of the said Resolution was attached to the Manifestation and Motion On June 6, 2008, Petitioners received a copy of a Resolution of the Honorable Court of Appeals dated December 16, 2008, denying their Motion for Reconsideration 7 A duplicate original copy of the Resolution dated May 29, 2008 is attached as ANNEX E. 8 A copy of the Motion for Reconsideration is attached as ANNEX F. 9 A copy of the second Manifestation and Motion with annexes is attached as ANNEX G. 10

11 dated June 23,2008. The dispositive portion read thus: WHEREFORE, premises considered, petitioners motion for reconsideration is DENIED for lack of merit. 10 STATEMENT OF MATERIAL DATES 38. Under Rule 45, Petitioners have 15 days from notice of the assailed judgment or order within which to file a Petition for Review on Certiorari. As Petitioner received the said Resolution on January 7, 2009 they had until January 22, 2009 within which to file the Petition. 39. However, on even date, Petitioners filed with this Honorable Court a motion asking for an additional 30 days or until Feb. 21, 2009 to file the same. At the same time, Petitioners paid the filing and other lawful docket fees in the amount of Four Thousand Seven Hundred and Sixty Three Pesos (P ), inclusive of the fee for a Writ of Preliminary Injunction and/or a Temporary Restraining Order, through Postal Money Orders issued in the name of the Hon. Clerk of Court of this Honorable Court. 40. Thus, Feb. 21, 2009 being a Saturday, Petitioner had until today, Feb. 23, 2009, the next regular business day, within which to do the same. 41. Petitioners therefore are filing the instant action within the reglamentary period provided for under Rule A certified true copy of the Resolution is attached as ANNEX H. 11

12 NATURE OF THE CASE 42. This Petition is an Appeal by Certiorari before the Supreme Court under Rule 45 of the Revised Rules of Court, questioning the resolution of the Court a quo that dismissed the special civil action for certiorari under Rule 65 filed against the Respondents in the instant case. On account of the nature of this petition and the causes of action involved, Petitioners respectfully ask of this Honorable Court that the bond for a writ of preliminary mandatory and prohibitory injunction and/or temporary restraining order be waived. STATEMENT OF THE ISSUES I. WHETHER OR NOT THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW WHEN IT HELD THAT THERE IS NO ACTUAL CASE AND CONTROVERSY IN THE PROCEEDING A QUO. II. WHETHER OR NOT THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW IN DISMISSING THE PETITION ON THE GROUND OF PREMATURITY AND DEFERRING TO ON- GOING JOINT EFFORTS OF THE BOTH THE LEGISLATURE AND THE EXECUTIVE TO REDEFINE THE COUNTRY S BASELINES. III. WHETHER OR NOT THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW IN DISMISSING THE PETITION FOR THE ALLEGED FAILURE OF PETITIONERS TO PROVIDE IT WITH A COPY OF THE PROVISIONAL INTERIM AGREEMENT (PIA) THAT GAVE RISE TO THE ISSUANCE OF EO 683, PURSUANT TO RULE 65 1 IN RELATION TO RULE 46 3 OF THE REVISED RULES OF COURT. IV. WHETHER OR NOT THE HONORABLE COURT A QUO ERRED UNDER LAW IN DISMISSING THE PETITION FOR THE ALLEGED FAILURE OF PETITIONERS TO PROVIDE IT WITH CERTAIN DOCUMENTS PERTAINING TO GR NO , PURSUANT TO RULE 65 1 IN RELATION TO RULE 46 3 OF THE REVISED RULES OF COURT. 12

13 SUBMISSIONS I. THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW WHEN IT HELD THAT THERE IS NO ACTUAL CASE AND CONTROVERSY IN THE PROCEEDING A QUO, CONSIDERING THAT THE ISSUANCE OF QUESTIONED EXECUTIVE ORDER (EO) 683 ALREADY INVOLVES STATUTORY CONSTITUTIONAL AND JURISPRUDENTIAL QUESTIONS THAT ARE RIPE FOR ADJUDICATION, NAMELY, THE DIBURSEMENT OF PUBLIC FUNDS IN VIOLATION OF THE CONSTITUTIONAL PROVISION ON REALIGNMENT OF PUBLIC FUNDS, THE PROVISIONS OF THE 1991 LOCAL GOVERNMENT CODE ON THE EQUITABLE SHARING OF THE INTERNAL REVENUE ALLOTMENT (IRA) BETWEEN THE NATIONAL GOVERNMENT AND THE LOCAL GOVERNMENT UNITS, AND THE UNLAWFUL WITHOLDING OF THE SAID ALLOTMENT, ALL OF WHICH THE COURTS HAVE A CONSTITUTIONAL DUTY TO RESOLVE. II. THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW IN DISMISSING THE PETITION ON THE GROUND OF PREMATURITY AND OF JUDICIAL DEFERENCE TO CO- EQUAL BRANCHES OF GOVERNMENT NOW DELIBERATING ON THE COUNTRY S BASELINES, CONSIDERING THAT (1) THE HONORABLE COURT A QUO HAS A CONSTITUTIONAL DUTY TO INTERPRET THE CONSTITUTIONAL PROVISIONS DEFINING THE NATIONAL TERRITORY AND (2) INDEPENDENT OF THE FINAL ADJUDICATION OF THE DISPUTE BETWEEN THE PROVINCE OF PALAWAN AND THE NATIONAL GOVERNMENT PENDING BEFORE THE THIRD DIVISION OF THIS HONORABLE COURT IN GR NO (REPUBLIC OF THE PHILIPPINES ETAL., V. THE PROVINCIAL GOVERNMENT OF PALAWAN), THE TERMS AND CONDITIONS OF E.O. 683 ARE INDUBITABLY ALREADY A VIOLATION OF CONSTITUTION, STATUTE AND JURISPRUDENCE. III. THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW IN DISMISSING THE PETITION FOR THE ALLEGED FAILURE OF PETITIONERS TO PROVIDE IT WITH A COPY OF THE PROVISIONAL INTERIM AGREEMENT (PIA), CONSIDERING THAT THE TERMS AND PROVISIONS OF EO 683 EMBODY ALL THE TERMS AND PROVISIONS OF THE ASSAILED PIA. THUS WHAT IS BEING CHALLENGED IS THE QUESTIONED ORDER, WHICH WAS DRAFTED AND ISSUED TO EXPRESS IN OFFICIAL TERMS AND TO PUT INTO LEGAL EFFECT THE PIA S OWN TERMS AND CONDITIONS; REQUIRING PETITIONERS TO SUBMIT A COPY OF THE PIA, DRAFTED AND SIGNED IN THE FIRST PLACE UNDER CONDITIONS OF SECRECY, WOULD SIMPLY BE SUPERFLOUS, ACCORDING TO THE RULES COURT. IV. THE HONORABLE COURT A QUO ERRED UNDER LAW IN DISMISSING THE PETITION FOR THE ALLEGED FAILURE OF PETITIONERS TO PROVIDE IT WITH CERTAIN DOCUMENTS PERTAINING TO GR NO , CONSIDERING THAT UNDER THE RULES OF COURT THESE ARE NOT REALLY NECESSARY - AS THEY ARE ONLY TANGENTIAL TO THE RESOLUTION OF THE CASE BY THE COURT A QUO, NOT TO MENTION THAT PETITIONERS ARE NOT EVEN PARTIES TO THE CASE OF WHICH THE SAME DOCUMENTS ARE PART, AS THIS HONORABLE COURT ITSELF HAS ALREADY DETERMINED. 13

14 DISCUSSION I. THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW WHEN IT HELD THAT THERE IS NO ACTUAL CASE AND CONTROVERSY IN THE PROCEEDING A QUO, CONSIDERING THAT THE ISSUANCE OF QUESTIONED EXECUTIVE ORDER (EO) 683 ALREADY INVOLVES STATUTORY CONSTITUTIONAL AND JURISPRUDENTIAL QUESTIONS THAT ARE RIPE FOR ADJUDICATION, NAMELY, THE DIBURSEMENT OF PUBLIC FUNDS IN VIOLATION OF THE CONSTITUTIONAL PROVISION ON REALIGNMENT OF PUBLIC FUNDS, THE PROVISIONS OF THE 1991 LOCAL GOVERNMENT CODE ON THE EQUITABLE SHARING OF THE INTERNAL REVENUE ALLOTMENT (IRA) BETWEEN THE NATIONAL GOVERNMENT AND THE LOCAL GOVERNMENT UNITS, AND THE UNLAWFUL WITHOLDING OF THE SAID ALLOTMENT, ALL OF WHICH THE COURTS HAVE A CONSTITUTIONAL DUTY TO RESOLVE. 43. Contrary to the Court a quo s contention, the instant Petition has not been prematurely filed and that the issues presented before it are not yet ripe for adjudication. While it may well be true that the interim undertaking between the National Government and the Province of Palawan is contingent on the final adjudication of G.R. No , it is undeniable that in the meanwhile that no such adjudication has happened disbursements of public funds will ensue or are already taking place in violation of Statute, Constitution and jurisprudence. 14

15 A. Violations of the 1991 Local Government Code 44. The Court a quo should have considered that EO 683, among other things, provides that: [T]he duly-authorized representatives of the National Government and the Province of Palawan, with the conformity of the Representatives of the Congressional Districts of Palawan, have agreed on a Provisional Implementation Agreement (PIA) that would allow 50% of the disputed 40% if the Net Government Share in the proceeds of SC 38 to be utilized for the immediate and effective implementation of the development projects for the people of Palawan. 45. Thus, even if the case is pending, both parties have agreed that they will nevertheless allow the disbursement of public funds according to an agreed formula. Moreover, such disbursement will proceed independent of and regardless of what the outcome will be of the Supreme Court s adjudication of their respective territorial claims over the Malampaya gas and oil wells. It is for this reason that Petitioners contend that the certiorari proceeding a quo could have been given due course independent of the Supreme Court s adjudication of such territorial conflict between the National Government and the Province of Palawan of EO 683 provides that under the PIA, the DBM is authorized to release funds to the implementing agencies on the endorsement and submission by the DOE and/or the PNOC Exploration Corporation of the following documents: a) directive by the Office of the President or written request of the Province of Palawan, the Palawan Congressional Districts or the Highly Urbanized City of Puerto Princesa, for the funding of designated projects ( 1.1); (b) a certification that the designated projects fall under the investment program of the Province of Palawan, City of Puerto Princesa, and/or the development projects identified in the development program of the National Government or its agencies; ( 1.2); and (c), Bureau of Treasury certification on the availability of 15

16 funds from the 50% of the 40% share being claimed by the Province of Palawan from the Net Government Share under SC It states that the DBM shall be subject to the actual collections deposited with the National Treasury, and shall be in accordance with the Annual Fiscal Program of the National Government. 48. Further 3 of EO 683, provides that the National government shall allow the Province of Palawan, the Congressional Districts of Palawan and the City of Puerto Princesa to securitize their shares in the 50% of the disputed 40% of the Net Government Share in the proceeds of SC 38 according to the PIA. The DOE, in consultation with the DOF, will be responsible for preparing the Net Government Revenues for the period of to June 30, 1010 [sic]. 49. The amounts released pursuant to this EO shall be without prejudice to any ongoing discussions or final judicial resolution of the legal dispute regarding the National Government s territorial jurisdiction over the areas covered by SC 38 in relation to the claim of the Province of Palawan under Sec. 290 of RA 7160, according to 4 of EO Undeniably, EO 683 is now in effect, having already been published in a newspaper of general circulation a long time ago, notwithstanding the fact that requisites embodied in constitution, statute and jurisprudence in respect of disbursements arising from the share of the local government unit in the proceeds of the utilization of its natural resources have not been met. 16

17 51. Obviously, these requisites were not observed in the case of Palawan, as it was not in Pimentel v. Aguirre a clear showing of a grave abuse of discretion amounting to an excess of jurisdiction. 52. For the provisions of the law cannot be bargained away by the PIA as embodied in EO 683; to do so would not only violate the Local Government Code, but above all, the Constitution, which provisions on the equitable sharing of resources between the National Government and the Local Government Unit it is also giving flesh to. 53. First of all, neither Respondent Reyes nor Respondents Alvarez and Mitra have the authority to sign on behalf of the other Local Government Units of Palawan the mayors, as well as the barangay captains. In fact the cities, municipalities, and barangays have a bigger share than the Provincial Government in the allocation of revenues, as 292 of the Local Government Code says. (The city/municipality gets 45 % and the barangay gets 35% or a combined share of 80 percent as against the Province s share of only 20 percent). They cannot sign the PIA as if they are the sole recipients of the proceeds of the utilization of the Malampaya Oil and Gas Reserves. 54. In fact, the PIA removes from the picture the other LGUs who have a rightful stake in such proceeds because here the Province of Palawan claims for itself a much-reduced share of 50 percent of the 40 percent share mandated by the law as belonging to the LGUs, granting the other half to the National Government. 55. Secondly, the PIA violates 290 of the 1991 Local Government Code. The interim agreement only talks of net proceeds supposedly of the utilization of the Malampaya oil and gas resources while the law provides that the share of the LGU is based on gross collection. Hence the interim agreement reduces the rightful share of the LGUs in two ways: one, by making net proceeds as the basis of the sharing, and two, by cutting down the equitable share of the LGUs in such proceeds by half, which share is 17

18 now to be claimed exclusively by the Province of Palawan, without due consideration for the cities, municipalities and barangays concerned. 56. This is patently illegal, and in contravention of the 1991 Local Government Code. In the first place this provision of the law is not subject to compromise. This interim agreement is an unequivocal violation of the intention of the 1991 Local Government Code to provide the local government with greater power over its natural resources. 57. Thirdly, it should be remembered that 286 of the Local Government Code is followed by a clause that says: Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws. Now this provision is important because it goes against all the promises the national government is making through the PIA. Under the law, the proceeds of the utilization of natural resources is to be directly released to each local government unit, without need of any further action. 58. The problem is that the PIA makes it clear that any fund allocation for any project must first be approved by the Department of Energy and/or the PNOC Exploration Corporation as provided for in 1 of EO 683. Moreover, these projects are made subject to the actual collections deposited with the National Treasury. 59. Fourthly, the PIA provides that only those projects identified by the Office of the President, or the Province of Palawan, or the Palawan Congressional Districts, or the Highly Urbanized City of Puerto Princesa may be funded. Now, this goes against the intent of the 1991 Local Government Code to grant LGUs autonomy and to decentralize power. How the money from its equitable share in the utilization of its natural resources is to be spent is a prerogative of the LGUs and the national government has no business fiddling with it, subject only to the terms and conditions found in 294 of the 1991 Local Government Code. 18

19 60. Fifthly, the PIA allows the securitization of the shares of the LGUs and the National Government in the utilization of the Malampaya Oil and Gas resources. The National Government cannot securitize what it does not own legally. Neither can the Province of Palawan securitize what it does not fully own. Securitization also brings with it a host of complex issues, considering that it will necessarily draw the participation of other parties corporations primarily. B. Violations of applicable jurisprudence on the International Revenue Allotment (IRA) 61. The most recent jurisprudence upholds their right under law to the proceeds of the utilization of national wealth within their boundaries. In Pimentel v. Aguirre, this Honorable Court ruled that the shares of the local government unit from national wealth in the national internal revenue shall be automatically released. The High Court said that by this provision in the Local Government Code providing for such release, it uses the word shall and as a rule, it is a word of command that must be given a compulsory meaning. 11 The ponente, Justice Panganiban, thus said: The Constitution vests the President with the power of supervision, not control, over local government units (LGUs). Such power enables him to see to it that LGUs and their officials execute their tasks in accordance with law. While he may issue advisories and seek their cooperation in solving economic difficulties, he cannot prevent them from performing their tasks and using available resources to achieve their goals. He may not withhold or alter any authority or power given them by the law. Thus, the withholding of a portion of internal revenue allotments legally due them cannot be directed by administrative fiat In the same case, the Supreme Court said that if at all there arises a situation where the national government must, of necessity, reduce the share of local 11 G.R. No July 19, Id. 19

20 government units, the law itself sets certain procedures and limits that must be followed. Citing from the Code 13 itself, the ponente thus said: There are therefore several requisites before the President may interfere in local fiscal matters: (1) an unmanageable public sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of Representatives and the presidents of the various local leagues; and (3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current one. C. Violations of the Constitution itself 63. That there is an actual case and controversy in this case is established by the fact that Respondent Sec. Ermita clearly overstepped constitutional bounds when he issued the EO 683 a grave abuse of discretion amounting to a lack of jurisdiction considering that such issuance is a violation of the Constitutional Provision on the equitable sharing of resources between the National Government and the Local Government Unit. 64. In fact, the money supposedly coming from the Net Share of the National Government for disbursement according to EO 683 came from the 40-percent share of the province of Palawan from the proceeds of the Camago-Malampaya oil and gas field, which is a realignment of funds not allowed by the 1987 Charter; 65. Moreover, the Respondent Sec. Ermita committed a grave abuse of discretion amounting to a lack of jurisdiction when he authorized the Secretary of DOE and/or the PNOC Exploration Corporation to determine to which implementing agencies funds may [I]n the event the national government incurs an unmanaged public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of [the] Secretary of Finance, Secretary of the Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year... See also Rep. Act. No (1991) Sec

21 be released under the PIA. For in usual budgeting procedures of Congress, the share from the National Wealth is included in the appropriation for Allocation to Local Government Units which is classified as a mandatory obligation of the National Government to the LGU in accordance with Section 290 of Republic Act No. 7160, otherwise known as the Local Government Code. 66. Thus EO 683 is nothing more than a realignment of funds carried out in violation of the Constitution. 14 For in usual budgeting procedures of Congress, the share from the National Wealth is included in the appropriation for Allocation to Local Government Units which is classified as a mandatory obligation of the National Government to the LGU and automatically released to the LGU in accordance with Section 290 of Republic Act No. 7160, otherwise known as the Local Government Code What is particularly onerous and illegal about the PIA is that it practically grants the Representatives from Palawan s two congressional districts a huge pork barrel fund one that is arguably even larger than the total allocation of pork barrel for all members of the House of Congress appropriations, who each receive around P65 million a year under the annual Congressional Priority Development Assistance Fund (PDAF). 68. Under the terms of EO 683, the money will be coursed through the DBM, upon the recommendation of the DOE and/or the PNOC Exploration Corporation, which is a violation of the Constitutional Provision on the equitable sharing of resources between the National Government and the Local Government Unit. 69. The Constitution makes it mandatory for the government to remit the equitable share of the LGU in the utilization of natural resources. As discussed above, it is made through the appropriation for Allocation to Local Government Units by Congress. 14 See 1987 CONST Art.VI See 1987 CONST, Art. X, 6, 21

22 Here, by virtue of a mere Executive Order, funds are realigned, in violation of the Constitution, and of the principle of separation of powers. Only Congress has that power. Not the Executive Secretary, not the DOE, not the DOF, not the DBM, much less, the PNOC Exploration Corporation. The issues presented by Petitioners in the instant case are clearly ripe for judicial adjudication. 70. It is clear that these terms and provisions of EO 683 may be adjudicated upon by this Honorable Court without reference to the conflicting territorial claims made by the National Government and the Province of Palawan. In fact, Petitioners intent in making reference to the pending case before the Supreme Court between the two entities is merely to provide a historical backdrop to the issuance of the questioned Executive Order. 71. It is for this reason that in the instant Petition, when it was filed, only had a certified true copy of EO 386 as an attachment. 72. This Honorable Court s power of judicial review involves the power to declare as unconstitutional not only a treaty, international or executive agreement, presidential decree, proclamation, order, instruction, ordinance or regulation but also the application, or operation of presidential decrees, proclamations, orders, instructions, ordinances, and other regulations The presidential issuance in question clearly involves constitutional issues that are within the power of this Honorable Court to adjudicate. 74. Moreover, it is already law, thus giving rise to the presumption that its terms and conditions providing for the questioned disbursement of public funds are already being 16 See 1987 CONST Art VIII, 4 (2). 22

23 implemented, as such terms and conditions clearly provide for their immediate implementation. 75. For which reason, it would not be specious to say that this governmental act being challenged EO 683 in fact, already had a direct adverse effect on Petitioners who are suing as citizens exercising a public right under the constitution. As held in Pascual v. Executive Secretary, there are many decisions nullifying, at the instance of taxpayers, laws providing for the disbursement of public funds, upon the theory that the expenditure of public funds, by an officer of the State for the purpose of administering an unconstitutional act constitutes a misapplication of such funds, which may be enjoined at the request of the taxpayer Mabanag v. Lopez-Vito, 78 Phil. 1(1947). 23

24 II. THE HONORABLE COURT A QUO GRAVELY ERRED UNDER LAW IN DISMISSING THE PETITION ON THE GROUND OF PREMATURITY AND OF JUDICIAL DEFERENCE TO CO- EQUAL BRANCHES OF GOVERNMENT NOW DELIBERATING ON THE COUNTRY S BASELINES, CONSIDERING THAT (1) THE HONORABLE COURT A QUO HAS A CONSTITUTIONAL DUTY TO INTERPRET THE CONSTITUTIONAL PROVISIONS DEFINING THE NATIONAL TERRITORY AND (2) INDEPENDENT OF THE FINAL ADJUDICATION OF THE DISPUTE BETWEEN THE PROVINCE OF PALAWAN AND THE NATIONAL GOVERNMENT PENDING BEFORE THE THIRD DIVISION OF THIS HONORABLE COURT IN GR NO (REPUBLIC OF THE PHILIPPINES ETAL., V. THE PROVINCIAL GOVERNMENT OF PALAWAN), THE TERMS AND CONDITIONS OF E.O. 683 ARE INDUBITABLY ALREADY A VIOLATION OF CONSTITUTION, STATUTE AND JURISPRUDENCE. 76. The Court a quo, in dismissing the case, took judicial notice of the on-going efforts of both the legislative and executive departments to arrive at a common position in redefining the country s baseline. 18 It therefore deferred to the legislative-executive rapproachment on the baseline issue, claiming that it concerns policy determination that cannot be made subject to collateral adjudication Resolution dated May 29, 2008, at Id. 24

25 77. Yet the Court a quo itself acknowledges that in fact, there is an existing law defining the country s baseline, namely, Republic Act No. 3046, as amended by Republic Act No That law defining the country s baselines still stands as law, until revoked or amended. The on-going efforts of both legislative and executive departments to refine or otherwise revise that law remain nothing more than that efforts, but not law. 79. With due respect, Petitioners direct to the attention of this Honorable Court the fact that Article 1 the 1987 Constitution itself defines what the metes and bounds of the national territory are: The national territory comprises the Philippine archipelago, with all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines. 80. For this reason, it would be in disregard of this duty under the Constitution if this Honorable Court shirks from the issues presented by herein Petitioners before it merely on the ground that the legislature and the executive are as yet trying to redefine the country s baselines, considering that such efforts have not yet been translated into law so that the country s existing law on baselines remain good law, not to mention that in the first place, the Constitution itself defines the extent of the national territory. 81. There is one very important issue at the heart of this argument, and it is the fact that the issuance of EO 683 manifests a serious lack of understanding on the part of the 20 Id., at fn

26 Executive Secretary of its implications on Philippines claims both to the nature and the expanse of the national territory under the UNCLOS III regime This is because the province of Palawan is the strong and secure anchor on which the Philippine claim to an Extended Continental Shelf (hereinafter, ECS) under the regime of the Law of the Sea stands. Ultimately, such a policy dismembers the national territory because it cuts away the Philippine claim to an ECS as defined under the United Nation Conference on the Law of the Sea. The Conference, after a series of meetings in 1958, 1960, and 1973, adopted in 1982 what is now known as UNCLOS III, which entered into force on November 16, The Philippines is party to the treaty UNCLOS III entitles coastal States like the Philippines to claim a continental shelf of up to 200 nautical miles (n.m.) from its baselines. As Art. 76 (1) of UNCLOS III provides: The continental shelf of a coastal State comprises the seabed and subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge of the continental margin does not extend up to that distance. [emphasis supplied]. 84. This 200 n.m offshore defines the Exclusive Economic Zone [hereinafter EEZ] of the coastal state. In some cases and under certain conditions however, UNCLOS entitles a coastal state up to 350 n.m. of EEZ, or an additional 150 n.m. more, which obtains where the continental shelf or a portion of it is beyond the 200 n.m. limit, subject to the delimitation of the neighboring states claim to a similar continental shelf regime The full text of the multi-lateral treaty may be accessed at the official website found at < last visited, June 10, Under the Revised Rules on Evidence, mandatory judicial notice is given to the law of nations. See RULE OF COURT, Rule 129, 1, 1997 Revised Rules of Court. 22 The Philippines ratified the treaty on May 8, 1984; for information on the status of the treaty as to the various ratifications made, see < last visited, June 10, The relevant provisions of Art. 76, para. 4, et seq., provides thus: 26

27 85. Clearly, the Camago-Malampaya oil and has fields, from the UNCLOS III definition, fall within the area of the continental shelf of Palawan as the natural prolongation of its land territory. It must be stressed that, contrary to the contention of the Chief Executive and her agents, the oil and gas in the area are not found in the waters off Palawan but in the continental shelf of Palawan. 86. In other words, these mineral resources are drawn up by pipes from the deep bowels the subsoil, that is of the continental shelf. To any scientist or lawyer well- 4. (a) For the purposes of this Convention, the coastal State shall establish the outer edge of the continental margin wherever the margin extends beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured, by either: (i) (ii) a line delineated in accordance with paragraph 7 by reference to the outermost fixed points at each of which the thickness of sedimentary rocks is at least 1 per cent of the shortest distance from such point to the foot of the continental slope; or a line delineated in accordance with paragraph 7 by reference to fixed points not more than 60 nautical miles from the foot of the continental slope. (b) In the absence of evidence to the contrary, the foot of the continental slope shall be determined as the point of maximum change in the gradient at its base. 5. The fixed points comprising the line of the outer limits of the continental shelf on the seabed, drawn in accordance with paragraph 4 (a)(i) and (ii), either shall not exceed 350 nautical miles from the baselines from which the breadth of the territorial sea is measured or shall not exceed 100 nautical miles from the 2,500 metre isobath, which is a line connecting the depth of 2,500 metres. 6. Notwithstanding the provisions of paragraph 5, on submarine ridges, the outer limit of the continental shelf shall not exceed 350 nautical miles from the baselines from which the breadth of the territorial sea is measured. This paragraph does not apply to submarine elevations that are natural components of the continental margin, such as its plateaux, rises, caps, banks and spurs. 7. The coastal State shall delineate the outer limits of its continental shelf, where that shelf extends beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured, by straight lines not exceeding 60 nautical miles in length, connecting fixed points, defined by coordinates of latitude and longitude. 8. Information on the limits of the continental shelf beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured shall be submitted by the coastal State to the Commission on the Limits of the Continental Shelf set up under Annex II on the basis of equitable geographical representation. The Commission shall make recommendations to coastal States on matters related to the establishment of the outer limits of their continental shelf. The limits of the shelf established by a coastal State on the basis of these recommendations shall be final and binding. 9. The coastal State shall deposit with the Secretary-General of the United Nations charts and relevant information, including geodetic data, permanently describing the outer limits of its continental shelf. The Secretary-General shall give due publicity thereto. 10. The provisions of this article are without prejudice to the question of delimitation of the continental shelf between States with opposite or adjacent coasts. 27

28 versed in the language of UNCLOS III, it is simply preposterous to say that the Camago- Malampaya fields are outside Palawan, or that the oil and gas reserves are drawn from waters 80 kilometers off its shores. The mineral resources, in fact, are mined from the subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory, to borrow in part from Art. 76(1) of UNCLOS III. 87. Indeed, UNCLOS III acknowledges the inherent right of every coastal state to its Continental Shelf but requires that a clear delimitation of the limits of such right in cases where other states make a similar claim; 24 this delimitation is also important to the determination of where the international sea-bed, which is considered the common heritage of mankind, starts. 88. The deadline for the submission of the limits of the continental shelf has been set on or before May 13, 2009, or ten years after the Scientific and Technical Guidelines of the Commission on the Limits of the Continental Shelf (CLCS) has been adopted. 89. The delineation of the limits of its continental shelf will assure the country s sovereign rights over the petroleum, natural gas and other resources found in the area. In other words, an ECS which extends up to 350 nautical miles from the baselines means a much expanded claim to rich natural resources in the region and a greater access to these resources. A textbook by two noted experts on the Law of the Sea regime explains just how important the issue of delimitating a coastal state s continental shelf is: Physically, the seabed adjacent to a physical coast is usually considered to consist of three separate sections First, the section that slopes down gradually from the low-water mark to the depth, averaging about Art. 83 of the UNCLOS III provides that delimitation between opposite and adjacent states shall be effected by agreement on the basis of international law in order to achieve an equitable solution. See also the ICJ ruling in the 1982 Tunisia/Libya Continental Shelf Case, where the international tribunal ruled that under customary international law, the satisfaction of equitable principles is, in the delimitation process, of cardinal importance ICJ Rep