Gerardo S. Espina vs. Hon. Ronaldo Zamora (Exec. Sect), Mar Roxas (Sec.

of DTI)
September 21, 2010
Petition to declare R.A No. 8762 Unconstitutional
Abad, J:

Facts:
-

March 7 2000, Estrada signed into law RA 8762 (Retail Trade Liberalization Act of 2000).

Effects:
1.

This expressly repealed RA 1180 which prohibited foreign nationals from engaging in the retail trade business and now allows
them to:
A

<$2.5M

2.5M<7.5M

C
D

7.5M<
250k/store (high-end/luxury products)

Exclusively Filipino citizens and corporations wholly owned

by Filipino Citizens
First two years of effectivity, Foreign ownership of 60%
Beyond 2 years, 100% is allowed
May be wholly owned by foreigners
May be wholly owned by foreigners

2.
-

Allows natural-born Filipino citizens, who had lost their citizenship and now reside in the Philippines, to engage in the retail
business as if they are Filipino citizens.
Petitioners are members of the House of Representatives assailing the constitutionality on ff grounds:
1. Runs against Article 2, (9,19,20) which is to place national economy under Filipinos
2. Implementation would lead to alien control of retail trade (Alien dominance=loss of effective Fil. Control)
3. Foreign retailers like Walmart and K-mart would crush Filipino retailers and sari-sari store
4. World Bank IMF had imposed passage of this RA as condition for release of certain loans
5. It would promote monopolies or combinations in restraint of trade
Respondents:
1. Petitioners have no legal standing
a. Cannot invoke as taxpayers since the RA does not involve disbursement of public funds
b. Cannot invoke as legislators as the law does not infringe on their rights as legislators
2. No justiciable controversy
3. Said sections are not self-executing and are not judicially demandable
4. Constitution mandates regulation but not prohibition of foreign ivnestments.

Issues:
1.
2.

Whether or not petitioner lawmakers have the legal standing to challenge the constiututionality of RA 8762
Whether or not RA 8762 is unconstitutional

I.

Legal Standing

Locus Standi:
-

Personal and substantial interest in that he has suffered or will suffer direct injury as a result of the passage of that law.
He must show that he is or is about to be denied some right he is lawfully entitled
Subject to some burdens or penalties by reason of the law
NO LOCUS STANDI. But courts rule on standing can be relaxed for non-traditional plaintiffs like ordinary citizens, taxpayers, and
legislators when the case involves public interest or of transcendental important/overarching significance.

II.

Constitutionality of RA 8762

Article 2: State Policies and Declaration of Policies

Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and
free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living,
and an improved quality of life for all.
Section 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.
Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to
needed investments.
Article 12: National Economy and Patrimony
Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to
citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such
higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified
Filipinos.
The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national
goals and priorities.
Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures
that help make them competitive.
Section 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity.
Court: These provisions are not self-executing. Legislative failure to pursue such policies cannot give rise to a cause of action in the
courts.
It does not impose a policy of Filipino monopoly of the economic environment. The objective is simply to prohibit foreign powers from
maneuvering our economic policies and ensure that Filipinos are given preference in all areas of development.
Constitution does not rules out entry of foreign investments, while it discourages unlimited entry, it does not prohibit.
It allows exchange on basis of equality and reciprocity, frowning only on unfair foreign competition.
Section 10 of Article 12 gives Congress the discretion to reserve to Filipinos certain areas upon recommendation of the NEDA.

No clear showing that monopoly will be eventual since RA 8762 still imposes restrictions:
1.
2.
3.

Can only engage in the categories enumerated

Only nationals or juridical entities formed in countries which allow Filipino retailers to be engaged in retail business
Cannot engage with use of mobile or rolling stores/carts/sale representatives/d2d/restaurants/sarisari stores.

Petitioners have not shown how retail trade liberalization prejudiced the local small and medium enterprises since its implementation about a
decade ago.