ROXAS & COMPANY INC. vs.

DAMBA-NFSW, GR 149548
The case involves three haciendas in Nasugbu, Batangas, namely, Palico, Banilad and Caylaway,
owned by herein petitioner Roxas & Company, Inc. At issue there was the validity of the
haciendascoverage under the CARP as well as Roxasapplication for their conversion from
agricultural to non-agricultural use. For failure to observe due process, the acquisition
proceedings over the haciendas were nullified. With respect, however, to the application for
conversion, the Court held that DAR is in a better position to resolve the same, it being the
primary agency possessing the necessary expertise on the matter. In its Decision dated
December 17, 1999, this Court ordered the remand of the case to the DAR for proper acquisition
proceedings and determination of Roxass application for conversion
CHEVRON PHILIPPINES, INC. (Formerly CALTEX PHILIPPINES, INC.), Petitioner,
vs.
BASES
CONVERSION
DEVELOPMENT
AUTHORITY
and
CLARK
DEVELOPMENT
CORPORATION, Respondents
Facts:
On June 28, 2002, the Board of Directors of respondent Clark Development Corporation (CDC)
issued and approved Policy Guidelines on the Movement of Petroleum Fuel to and from the Clark
Special Economic Zone. In one of its provisions, it levied royalty fees to suppliers delivering
Coastal fuel from outside sources for Php0.50 per liter for those delivering fuel to CSEZ locators
not sanctioned by CDC and Php1.00 per litter for those bringing-in petroleum fuel from outside
sources. The policy guidelines were implemented effective July 27, 2002.
The petitioner Chevron Philippines Inc (formerly Caltex Philippines Inc) who is a fuel supplier to
Nanox Philippines, a locator inside the CSEZ, received a Statement of Account from CDC billing
them to pay the royalty fees amounting to Php115,000 for its fuel sales from Coastal depot to
Nanox Philippines from August 1 to September 21, 2002.
Petitioner, contending that nothing in the law authorizes CDC to impose royalty fees based on a
per unit measurement of any commodity sold within the special economic zone, protested
against the CDC and Bases Conversion Development Authority (BCDA). They alleged that the
royalty fees imposed had no reasonable relation to the probably expenses of regulation and that
the imposition on a per unit measurement of fuel sales was for a revenue generating purpose,
thus, akin to a tax.
BCDA denied the protest. The Office of the President dismissed the appeal as well for lack of
merit.
Upon appeal, CA dismissed the case. CA held that in imposing the royalty fees, CDC was
exercising its right to regulate the flow of fuel into CSEZ under the vested exclusive right to
distribute fuel within CSEZ pursuant to its Joint Venture Agreement (JVA) with Subic Bay
Metropolitan Authority (SBMA) and Coastal Subic Bay Terminal, Inc. (CSBTI) dated April 11, 1996.
The appellate court also found that royalty fees were assessed on fuel delivered, not on the sale,
by petitioner and that the basis of such imposition was petitioners delivery receipts to Nanox
Philippines. The fact that revenue is incidentally also obtained does not make the imposition a
tax as long as the primary purpose of such imposition is regulation.
When elevated in SC, petitioner argued that: 1) CDC has no power to impose fees on sale of fuel
inside CSEZ on the basis of income generating functions and its right to market and distribute
goods inside the CSEZ as this would amount to tax which they have no power to impose, and
that the imposed fee is not regulatory in nature but rather a revenue generating measure; 2)
even if the fees are regulatory in nature, it is unreasonable and are grossly in excess of
regulation costs.
Respondents contended that the purpose of royalty fees is to regulate the flow of fuel to and
from the CSEZ and revenue (if any) is just an incidental product. They viewed it as a valid
exercise of police power since it is aimed at promoting the general welfare of public; that being
the CSEZ administrator, they are responsible for the safe distribution of fuel products inside the
CSEZ.
Issue:

Whether the act of CDC in imposing royalty fees can be considered as valid exercise of the police
power.
Held:
Yes. SC held that CDC was within the limits of the police power of the State when it imposed
royalty fees.
In distinguishing tax and regulation as a form of police power, the determining factor is the
purpose of the implemented measure. If the purpose is primarily to raise revenue, then it will be
deemed a tax even though the measure results in some form of regulation. On the other hand, if
the purpose is primarily to regulate, then it is deemed a regulation and an exercise of the police
power of the state, even though incidentally, revenue is generated.
In this case, SC held that the subject royalty fee was imposed for regulatory purposes and not for
generation of income or profits. The Policy Guidelines was issued to ensure the safety, security,
and good condition of the petroleum fuel industry within the CSEZ. The questioned royalty fees
form part of the regulatory framework to ensure free flow or movement of petroleum fuel to
and from the CSEZ. The fact that respondents have the exclusive right to distribute and market
petroleum products within CSEZ pursuant to its JVA with SBMA and CSBTI does not diminish the
regulatory purpose of the royalty fee for fuel products supplied by petitioner to its client at the
CSEZ.
However, it was erroneous for petitioner to argue that such exclusive right of respondent CDC to
market and distribute fuel inside CSEZ is the sole basis of the royalty fees imposed under the
Policy Guidelines. Being the administrator of CSEZ, the responsibility of ensuring the safe,
efficient and orderly distribution of fuel products within the Zone falls on CDC. Addressing
specific concerns demanded by the nature of goods or products involved is encompassed in the
range of services which respondent CDC is expected to provide under Sec. 2 of E.O. No. 80, in
pursuance of its general power of supervision and control over the movement of all supplies and
equipment into the CSEZ.
There can be no doubt that the oil industry is greatly imbued with public interest as it vitally
affects the general welfare. Fuel is a highly combustible product which, if left unchecked, poses a
serious threat to life and property. Also, the reasonable relation between the royalty fees
imposed on a per liter basis and the regulation sought to be attained is that the higher the
volume of fuel entering CSEZ, the greater the extent and frequency of supervision and inspection
required to ensure safety, security, and order within the Zone.
Respondents submit that the increased administrative costs were triggered by security risks that
have recently emerged, such as terrorist strikes. The need for regulation is more evident in the
light of 9/11 tragedy considering that what is being moved from one location to another are
highly combustible fuel products that could cause loss of lives and damage to properties.
As to the issue of reasonableness of the amount of the fees, SC held that no evidence was
adduced by the petitioner to show that the fees imposed are unreasonable. Administrative
issuances have the force and effect of law. They benefit from the same presumption of validity
and constitutionality enjoyed by statutes. These two precepts place a heavy burden upon any
party assailing governmental regulations. Petitioners plain allegations are simply not enough to
overcome the presumption of validity and reasonableness of the subject imposition.
WHEREFORE, the petition is DENIED for lack of merit and the Decision of the Court of Appeals
dated November 30, 2005 in CA-G.R. SP No. 87117 is hereby AFFIRMED.
Espina vs. Zamora
631 SCRA 17, GR No. 143855, September 21, 2010
FACTS
On March 7, 2000, President Joseph Estrada signed into law R.A. 8762, or the Retail Trade
Liberalization Act of 2000, expressly repealing R.A. 1180 which absolutely prohibited foreign
nationals from engaging in the retail business in the Philippines.
Espina, together with the other members of the House of Representatives, filed a petition
assailing the constitutionality of R.A. 8762, saying that the law contradicts Sections 9, 19, and 20
of Article II of the Constitution which enjoins the State to place the national economy under the
control of Filipinos to achieve equal distribution of opportunities and to protect Filipino enterprise
against unfair competition and trade policies.

The respondents contended that Sections 9, 19, and 20 of Article II of the Constitution are not
self-executing provisions that are judicially demandable. They said that the Constitution
mandates the regulation but not the prohibition of foreign investments. Respondents also
contended that petitioners have no legal standing to file the petition. They cannot invoke the fact
that they are taxpayers since R.A. 8762 does not involve the disbursement of public funds.
ISSUE
1.
WON R.A. 8762 (Retail Trade Liberalization Act of 2000) is unconstitutional; and
2.
WON petitioner lawmakers have the legal standing to challenge the
constitutionality of
R.A. 8762
HELD
1. The Supreme Court held that the provisions of Article II of the 1987 Constitution are not selfexecuting. Legislative failure to pursue such policies cannot give rise to a cause of action in the
courts. In other words, although Article II requires the development of a self-reliant and
independent national economy effectively controlled by Filipino entrepreneurs, it does not
impose a policy of Filipino monopoly of the economic environment. The objective is simply to
prohibit foreign powers or interests from maneuvering our economic policies and ensure that
Filipinos are given preference in all areas of development.
Thus, while the Constitution mandates a bias in favor of Filipino goods, services, labor and
enterprises, it also recognizes the need for business exchange with the rest of the world on the
bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign
competition and trade practices that are unfair. In sum, petitioners have not shown how the retail
trade liberalization has prejudiced and can prejudice the local small and medium enterprises
since its implementation about a decade ago.
2. The long settled rule is that he who challenges the validity of a law must have locus standi or
a legal standing to do so. More particularly, he must show that he has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected
to some burdens or penalties by reason of the law he complains of.
Here, there is no clear premise showing that the implementation of the Retail Trade Liberalization
Act prejudices petitioners or inflicts damages on them, either as taxpayers or as legislators.
The Supreme Court dismissed the petition for lack of merit.