SECOND DIVISION
PHILLIPS
SEAFOOD (
CORPORATION,
Petitioner, Present:
QUISUMBING, J.,
Chairperson,
-
versus - CARPIO
MORALES,
TINGA,
VELASCO,
JR., and
BRION,
JJ.
THE
BOARD OF INVESTMENTS,
Respondent. Promulgated:
February 4,
2009
x
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D E C I S I O N
Tinga, J.:
This
is a petition for review on certiorari[1]
under Rule 45 of the 1997 Rules of Civil Procedure, assailing two related resolutions
of the Court of Appeals in CA-G.R. SP No. 89327. The Resolution[2]
dated
The
following factual antecedents are matters of record.
Petitioner
Phillips Seafood (
On
Petitioner was granted an Income Tax
Holiday (ITH) for six (6) years beginning July 1993 to July 1999,[5] for
locating in a less-developed area in accordance with Article 40[6] of
Executive Order (E.O.) No. 226, otherwise known as The Omnibus Investments Code
of 1987.
Petitioner used to supply semi-processed
raw materials to Phillips Seafood (Phils.), Inc. (PSPI), an affiliate
corporation also engaged in the export of seafood products, before the latter’s
closure due to financial difficulties. On
On
In a letter dated
93-219 would be extended until
On
On
On
Petitioner changed its corporate name
from PS-Masbate to its current name of Phillips Seafood (
In
a letter dated 25 September 2003, respondent BOI informed petitioner that the
ITH previously granted would be applicable only to the period from 13 August
1999 to 21 October 1999 or before petitioner’s transfer to a “not less-developed
area.”[14]
Petitioner wrote respondent BOI requesting for a reconsideration of its
decision.[15]
On
On
After respondent BOI filed its
comment on the petition, petitioner filed an omnibus motion asking for leave to
file an amended petition to counter the issues raised in the comment for the
first time and to suspend the period for filing a reply.[20]
On
Hence,
the instant petition anchored on the following arguments: (1) petitioner’s
omnibus motion asking for the amendment of its petition for review was filed to
avoid the multiplicity of suits; (2) the executive power of control over the
acts of department secretaries must not be rendered illusory by rules of
procedure; and (3) petitioner is entitled to the ITH.
In
the main, petitioner argues that the review by the Office of the President of
the decisions of respondent BOI must be allowed; otherwise, the President’s
constitutional power to review the decisions of department secretaries will be
rendered illusory if said decisions may be reviewed only by the Court of
Appeals.
The
right to appeal is not a constitutional, natural or inherent right – it is a
statutory privilege and of statutory origin and, therefore, available only if
granted or provided by statute. It may be exercised only in the manner
prescribed by, and in accordance with, the provisions of the law.[21] Thus,
in determining the appellate procedure governing administrative agencies
exercising quasi-judicial or regulatory functions such as respondent BOI, a
perusal of the legislative enactments creating them is imperative.
The BOI was created by virtue of E.O.
No. 226 at the time when then President Corazon Aquino was exercising
legislative powers under the Freedom Constitution Executive Order (E.O.) No.
226, otherwise known as the Omnibus Investments Acts of 1987, laid down the
powers and duties of respondent both as a policy-making body and a regulatory
agency tasked with facilitating the growth of investment in the country. Article
7, E.O. No. 226 directs respondent to act as a collegial body when exercising
its duties and powers. In addition to its administrative or policy-making and
regulatory functions, the BOI is also empowered to promulgate rules and
regulations to implement the provisions of E.O. No. 226.[22]
As a policy-making body, the BOI is
charged with the duties, among others, of preparing an annual investment
priorities plan that gives incentives to specific activities,[23]
of recommending to the Bureau of Immigration the entry of foreign nationals for
employment purposes,[24]
and of inspecting registered enterprises for compliance purposes.[25]
Among the regulatory functions of the
BOI are the processing of applications for registration,[26] the
cancellation of registration or suspension of the enjoyment of certain incentives
under E.O. No. 226,[27] and
the resolution of controversies arising from the implementation of E.O. No. 226.[28] There
is no doubt that the resolution of petitioner’s claim that it is entitled to
the ITH in the instant case calls for the exercise of the BOI’s regulatory
functions.
E.O. No. 226 also provides for various
remedies from the action or decision of the BOI, depending on the nature of the
controversy. These remedies, which are interspersed among the provisions of E.O.
No. 226, are as follows:
Art. 7. Powers and Duties of the Board. — The Board
shall be responsible for the regulation and promotion of investments in the
(4) After due hearing, decide controversies concerning
the implementation of the relevant books of this Code that may arise between registered
enterprises or investors therein and government agencies, within thirty (30)
days after the controversy has been submitted for decision: Provided, That
the investor or the registered enterprise may appeal the decision of the Board
within thirty (30) days from receipt thereof to the President;
x x x
Art. 36. Appeal from Board’s Decision. — Any order or decision of the Board shall be final and
executory after thirty (30) days from its promulgation. Within the said
period of thirty (30) days, said order or decision may be appealed to the
Office of the President. Where an appeal has been filed, said order or
decision shall be final and executory ninety (90) days after the perfection of
the appeal, unless reversed.
x x x
Art. 50. Cause for Cancellation of Certificate of
Authority or Payment of Fine. — A violation
of any of the requirements set forth in Article 49 of the terms and conditions
which the Board may impose shall be sufficient cause to cancel the certificate
of authority issued pursuant to this Book and/or subject firms to the payment
of fines in accordance with the rules and regulations issued by the Board: x x x Provided, further, That where the
issuance of said license has been irregular or contrary to law, any person
adversely affected thereby may file an action with the Regional Trial Court
where said alien or foreign business organization resides or has its principal
office to cancel said license. In such cases, no injunction shall issue without
notice and hearing; and appeals and other proceedings for review shall be
filed directly with the Supreme Court.
x x x
Art. 82. Judicial Relief. — All orders or decisions of the Board in cases
involving the provisions of this Code shall immediately be executory. No appeal
from the order or decision of the Board by the party adversely affected shall
stay such order or decision: Provided, That all appeals shall be filed
directly with the Supreme Court within thirty (30) days from receipt of the
order or decision. [Emphasis supplied]
E.O. No. 226 apparently allows two avenues
of appeal from an action or decision of the BOI, depending on the nature of the
controversy. One mode is to elevate an appeal to the Office of the President when
the action or decision pertains to either of these two instances: first, in the
decisions of the BOI over controversies concerning the implementation of the
relevant provisions of E.O No. 226 that may arise between registered
enterprises or investors and government agencies under Article 7;[29]
and second, in an action of the BOI over applications for registration under
the investment priorities plan under Article 36.[30]
Another mode of review is to elevate
the matter directly to judicial tribunals. For instance, under Article 50, E.O.
No. 226, a party adversely affected by the issuance of a license to do business
in favor of an alien or a foreign firm may file with the proper Regional Trial
Court an action to cancel said license. Then, there is Article 82, E.O. No.
226, which, in its broad phraseology, authorizes the direct appeal to the
Supreme Court from any order or decision of respondent BOI “involving the
provisions of E.O. No. 226.”
E.O. No. 226 contains no provision
specifically governing the remedy of a party whose application for an ITH has
been denied by the BOI in the same manner that Articles 7 and 36 thereof allow
recourse to the Office of the President in certain instances. Nevertheless, Article
82 of E.O. No. 22 is the catch-all provision allowing the appeal to the courts
from all other decisions of respondent BOI involving the other provisions of
E.O. No. 226. The intendment of the law is undoubtedly to afford immediate
judicial relief from the decision of respondent BOI, save in cases mentioned
under Articles 7 and 36.
In relation to Article 82, E.O. No.
226, Section 1 of Rule 43 of the 1997 Rules of Civil Procedure expressly
includes respondent BOI as one of the quasi-judicial agencies whose judgments
or final orders are appealable to the Court of Appeals via a verified petition
for review. Appeals from judgments and final orders of quasi-judicial agencies
are now required to be brought to the Court of Appeals on a verified petition
for review, under the requirements and conditions in Rule 43 which was
precisely formulated and adopted to provide for a uniform rule of appellate
procedure for quasi-judicial agencies.[31]
Thus, petitioner should have
immediately elevated to the Court of Appeals the denial by respondent BOI of
its application for an ITH. From the letter dated 09 October 2003 of respondent
BOI, which informed petitioner that its ITH would be extended only from 13
August 1999 to 21 October 1999, petitioner appealed to the Office of the
President, a recourse that is not sanctioned by either the Rules of Civil
Procedure or by the Omnibus Investments Code of 1987.
Petitioner cannot invoke Article 36
of E.O. No. 226 to justify its appeal to the Office of the President. Article
36, along with Article 7, which allows recourse to the Office of the President,
applies to specific instances, namely, controversies between a registered enterprise
and a government agency and decisions concerning the registration of an
enterprise, respectively. Expresio unius est exclusio alterius. This
enumeration is exclusive so that other controversies outside of its
purview, including petitioner’s
entitlement to an ITH, can invoke only the appellate judicial relief provided
under Article 82. In the instant case, the denial of petitioner’s application
for an ITH is not within the cases where the law expressly provides for
appellate recourse to the Office of the President. That being the case,
petitioner should have elevated its appeal to the Court of Appeals under Rule
43.
Petitioner further contends that from
the decision of respondent BOI, appeal to the Office of the President should be
allowed; otherwise, the constitutional power of the President to review acts of
department secretaries will be rendered illusory by mere rules of procedure.
The executive power of control over
the acts of department secretaries is laid down in Section 17, Article VII[32]
of the 1987 Constitution. The power of control has been defined as the “power
of an officer to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to substitute the
judgment of the former for that of the latter.”
Such “executive control” is not
absolute. The definition of the structure of the executive branch of
government, and the corresponding degrees of administrative control and
supervision is not the exclusive preserve of the executive. It may be
effectively limited by the Constitution, by law, or by judicial decisions.[33]
All the more in the matter of appellate procedure as in the instant case.
Appeals are remedial in nature; hence, constitutionally subject to this Court’s
rule-making power. The Rules of
Procedure was issued
by the Court
pursuant to
Section 5, Article VIII[34]
of the Constitution, which expressly empowers the Supreme Court to promulgate
rules concerning the procedure in all courts.
Parenthetically, Administrative Order
(A.O.) No. 18[35] expressly
recognizes an exception to the remedy of appeal to the Office of the President
from the decisions of executive departments and agencies. Under Section 1[36]
thereof, a decision or order issued by a department or agency need not be
appealed to the Office of the President when there is a special law that
provides for a different mode of appeal. In the instant case, the enabling law
of respondent BOI, E.O. No. 226, explicitly allows for immediate judicial
relief from the decision of respondent BOI involving petitioner’s application
for an ITH. E.O. No. 226 is a law of special nature and should prevail over
A.O. No. 18.
WHEREFORE, the instant petition for review on
certiorari is DENIED and the resolutions of the Court of Appeals dated
SO ORDERED.
DANTE
O. TINGA
Associate Justice
WE
CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CONCHITA
CARPIO MORALES PRESBITERO J. VELASCO,
JR.
Associate Justice Associate
Justice
ARTURO D. BRION
Associate Justice
A T T E S T A T I O N
I
attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
LEONARDO A. QUISUMBING
Associate
Justice
Chairperson
C E R T I F I C A T I O N
Pursuant
to Article VIII, Section 13 of the Constitution, and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[2]
[6]Art. 40. A registered enterprise regardless of nationality located in a less-developed-area included in the list prepared by the Board of Investments after consultation with the National Economic Development Authority and other appropriate government agencies, taking into consideration the following criteria: low per capita gross domestic product; low level of investments; high rate of unemployment and/or underemployment; and low level of infrastructure development including its accessibility to developed urban centers, shall be entitled to the following incentives in addition to those provided in the preceding article:
(a) Pioneer Incentives. — An enterprise in a less-developed-area registered with the Board under Book I of this Code, whether proposed, or an expansion of an existing venture, shall be entitled to the incentives provided for a pioneer registered enterprise under its law of registration.
[9]Art. 39. Incentives to Registered Enterprises. — All registered enterprises shall be granted in the following incentives to the extent engaged in a preferred area of investment:
(a)
Income Tax
(1) For six (6) years from commercial operation for pioneer firms and four (4) years non-pioneer firms, new registered firms shall be fully exempt from income taxes levied by the National Government. Subject to such guidelines as may be prescribed by the Board, the income tax exemption will be extended for another year in each of the following cases: x x x
(ii) utilization of indigenous raw materials at rates set by the Board; xxx
[32]SEC. 17. The President shall have control of all executive departments, bureaus, and offices. He shall ensure that the laws be faithfully executed.
[33]Southern
Cross Cement Corporation v. Cement Manufacturers Association of the
[34]SEC. 5. The Supreme Court shall have the following powers: x x x
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to 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. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.
[35]Entitled
“Prescribing Rules and Regulations Governing Appeals to the Office of the
President of the
[36]SECTION 1. Unless otherwise governed by special laws, an appeal to the Office of the President shall be taken within thirty (30) days from the receipt by the aggrieved party of the decision/resolution/order complained of or appealed from. Said appeal shall be filed with the Office of the President, or with the Ministry/agency concerned, with copies furnished to the affected parties and, if the appeal is filed with the Office of the President, to the Ministry/agency concerned. If the appeal is directly filed with the Ministry/agency concerned, such Ministry/agency shall, within five (5) days from receipt thereof, transmit the appeal to the Office of the President, together with the records of the case.[Emphasis supplied]