The non-impairment clause and government contracts

Section 10, Article III of the Constitution provides:

"SECTION 10. NO LAW IMPAIRING THE OBLIGATION OF CONTRACTS SHALL BE PASSED."

According to a ruling of the Supreme Court, the purpose of the non-impairment clause is to safeguard the integrity of contracts against unwarranted interference by the State. As a rule, contracts should not be tampered with by subsequent laws that would change or modify the rights and obligations of the parties. 

It includes statutes enacted by the national legislature, executive orders and administrative regulations promulgated under a valid delegation of power, and municipal ordinances passed by the local legislative bodies.

There is impairment if a subsequent law changes the terms of a contract between the parties, imposes new conditions, dispenses with those agreed upon or withdraws remedies for the enforcement of the rights of the parties. It is anything that diminishes the efficacy of the contract.

However, it applies only to previously perfected contracts and is limited in application to laws that derogate from prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties.

Interestingly, Republic Act No. 3019 considers as a corrupt practice and unlawful the act by any public officer, “Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.”


It behooves all concerned officers of government agencies and instrumentalities then, especially those bestowed with rule-making powers, to observe and be mindful of this section of the Bill of Rights when entering into contracts and subsequently crafting rules and regulations affecting the former, to avert and avoid any legal bind.  

The (non)necessity of executing a waiver to disclose bank deposits by public officers and employees

All these hoopla and hullabaloo about the issue of requiring all government employees and officials, especially the cabinet secretaries, members of Congress and the judiciary, to execute a waiver allowing the opening up and/or disclosure of their bank accounts, must be viewed with a discerning and critical eye. Is such waiver really necessary?

Under the old or pre-2011 sworn statement of assets, liabilities and net worth (SALN) form, it was provided, that:

“I hereby authorized the Ombudsman or his duly authorized representative to obtain and secure from all appropriate government agencies, including the Bureau of Internal Revenue, such documents that may show my assets, liabilities, net worth, business interests and financial connections, to include those of my spouse and unmarried children below 18 years of age living with me in my household covering past years to include the year I first assumed office in government.”

In the revised or present SALN form, it is also stated, that:

“I/We hereby authorize the Ombudsman or his duly authorized representative to obtain and secure from all appropriate agencies, including the Bureau of Internal Revenue, such documents that may show such assets, liabilities, net worth, business interests, and financial connections, including those of my spouse and my/our children below 18 years of age living in my household, covering previous years, and if possible, including the year I/we first assumed office in Government.”

Some personages argue that such authorization does not include foreign currency deposit accounts. A high-profile and more prominent public official even went on to declare that their non-disclosure is absolute.

Just for context, both legal and factual, the Bank Secrecy Law (Republic Act No. 1405) was enacted on Sept. 9, 1955, while the Foreign Currency Deposit Act (Republic Act No. 6426) was approved on April 4, 1974.

Meanwhile, the 1987 Constitution expressly and emphatically states: “A public officer or employee shall, upon assumption of office and as often thereafter as may be required by law, submit a declaration under oath of his assets, liabilities, and net worth. In the case of the President, the Vice-President, the Members of the Cabinet, the Congress, the Supreme Court, the Constitutional Commissions and other constitutional offices, and officers of the armed forces with general or flag rank, the declaration shall be disclosed to the public in the manner provided by law. (Section 17, Article XI)

A few rules on statutory construction therefore come to mind. Firstly, that the Constitution prevails over any and all laws. Secondly, where the language of the law is clear and unequivocal, it must be given its literal application and applied without interpretation. And thirdly, where the law makes no distinctions, one does not distinguish. Where the law does not distinguish, courts should not distinguish.

Considering that RA 1405 and RA 6426 are mere statutes and were enacted prior to the passage and ratification of the 1987 Constitution, it is obvious that the latter shall prevail. In fact, the 1987 Constitution provides in its transitory provisions that, “All existing laws, decrees, executive orders, proclamations, letters of instructions, and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed, or revoked.” (Section 3, Article XVIII)

The Constitution requires that a public officer or employee must declare his assets, liabilities, and net worth. There is no exception, condition, restriction, limitation, or qualification. The language is clear and unequivocal. Thus, it must be taken literally without need of further interpretation.

In a related manner, since the Constitution does not distinguish between foreign currency deposits and peso deposits, or any assets for that matter, no distinction can be made.

Finally, the implementing law for the SALN - the Code of Conduct and Ethical Standards for Public Officials and Employees (Republic Act No. 6713), which was enacted on February 20, 1989, cannot be bent or distorted. Consistent with the Constitution, it mentions "assets such as investments, cash on hand or in banks, stocks, bonds, and the like." (Section 8, par. A, subpar. c) It also carries a repealing clause: "All laws, decrees and orders or parts thereof inconsistent herewith, are deemed repealed or modified accordingly, unless the same provide for a heavier penalty." (Section 16)


This law is anchored on a sacred provision of the Constitution, to wit:

“Public office is a public trust. Public officers and employees must, at all times, be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest lives.” (Section 1, Article XI)

China’s claims over Spratly Islands and Scarborough Shoal and its inconsistent precedents and different standards on territorial negotiations

China adopts different standards throughout territorial negotiations with its neighbours. As a result, it does not have a consistent set of policies to decide how to settle these disagreements with its neighbours, particularly when it comes to maritime disputes.

When Japan proposed a 50-50 delimitation in the 1970s to resolve the Sino-Japan disputes over the East China Sea continental shelf, China firmly rejected it. Instead, it adopted the position that the dispute should be settled on the basis of the “natural extension of the continental shelf”, meaning that all of the East China Sea continental shelf extending eastwards from its coastal lines should be Chinese. This formula, when compared with the “50-50” formula proposed by Tokyo, allows Beijing to increase the size of its claimed continental shelf by 30,000 sq km.

However, when China negotiated its territorial disputes over the Heixiazi Island with Russia in the 1990s (over which they fought a battle in 1969), it compromised on its claim over the whole island and accepted a “50-50” formula.

In the Gulf of Tonkin, China accepted the “50-50” formula again, with further compromises over the Vietnam-occupied islands in the Gulf. The eventual result of the boundary demarcation was “53-47”, with Vietnam taking a larger share of the maritime area. People later attributed this willingness to compromise with Russia and Vietnam to then-President Jiang Zemin’s eagerness to settle border disputes.

The maritime settlements with Vietnam also set an inconsistent precedent for China’s historical claims to territory in the South China Sea. Beijing asserts that South East Asian countries should accept its sovereignty over the geographic features within the nine-dashed line because historically they have been Chinese. However, China transferred control of White Dragon Tail Island 70 nm off the coast of Hainan to Vietnam in 1957, despite the fact that a Chinese fishing village had been on the island for almost 100 years. If this island, so close to the Chinese coastline and with historical evidence of Chinese occupation and administration, was not considered to be China’s “historical territory”, questions can be raised about how the numerous South China Sea islands, farther away from the mainland and with less historical evidence, can be considered as such. The other claimants are pointing to the territorial settlements with Vietnam as an “example of Chinese double standards”.

China has also set inconsistent legal precedents for its claim that the Nansha (Spratly) Islands – almost all of which are small islands, rocks, low tide elevations or underwater reefs largely incapable of sustaining long-term habitation – are entitled to an EEZ. In the case of the Japanese island of Okinitorishima, China maintained that small uninhabited islands should not be given a continental shelf or EEZ of their own, and added that similar practice should be followed in the South China Sea. If Beijing holds to this principle, it will be unable to justify its claim over a large part of the waters around the Spratly Islands and within the nine-dashed line. (Taken from http://www.crisisgroup.org/~/media/Files/asia/north-east-asia/223-stirring-up-the-south-china-sea-i.pdf)

The Bouncing Check Law and valid cause for a "stop payment"

What may constitute valid cause or good reason to legally justify “stop payment” of a check under Batas Pambansa (BP) Blg. 22?

The law enumerates the elements of BP Blg. 22 to be (1) the making, drawing, and issuance of any check to apply for account or for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

In a case decided by the Supreme Court (Daleon vs. Tan [2010]), it held that placing a check on a “stop payment” may be justified provided that there is a good reason to do so.

These are the facts:

Pursuant to the terms of their agreement on the purchase of the Daleons’ undivided land, the Tans gave the Daleons a down payment of P10.861 million and issued in their favor 12 postdated checks in the amount of P658,750.00 per check to cover the remaining balance of P7.905 million.

Eight days after the parties executed their agreement, one Bartolome Sy caused to be annotated on the title to the property an adverse claim on the undivided share of one of the Daleons.  For this reason, the Tans placed a stop payment order on their first postdated check and repeatedly wrote the Daleons that, until the adverse claim on the property was canceled, they were stopping payment on their checks.

The Daleons deposited the first three checks in their bank but these were returned for the reason “SPO/DAIF” or “stop payment order/drawn against insufficient funds.”  Meanwhile, the Daleons succeeded in getting a court order that directed the cancellation of Bartolome Sy’s adverse claim on their title to the property.  They then deposited the other checks that the Tans gave them but these, too, were returned for the reason “SPO/DAIF.”

Subsequently, the Tans wrote the Daleons, informing them that they were ready to make good on their checks provided the Daleons presented to them a clean title to the property.  In addition, they requested the Daleons to submit to them the documents specified in the contract to sell as a prerequisite to the payment of the last two checks.  Meanwhile, the Tans’ stop payment order on their checks remained in force.

While the issue in this case does not refer to the matter of violation of BP 22 itself, the Supreme Court has declared that, “the Tans had to place that stop payment for a valid reason.  They agreed to buy the property believing that the seller’s title was unblemished by any lien or unfavorable claim.  Bartolome Sy’s adverse claim, which came shortly after the execution of the contract and the initial payment to the Daleons of P10.861 million, was certainly distressing.  Its annotation on the title served as warning to third parties like the Tans that someone claimed an interest or a better right to the property than the registered owner. Certainly, the Tans were justified in placing a stop payment order on their checks to avoid greater loss since it may be assumed that they did not want to buy such an expensive property that had a cloud on its title.”

"The stage of life is yours for the taking"

It is with fondness and delight that we anticipate to watch our sons, Joaquin and Enrique, together with their classmates and schoolmates, perform today.

We were initially wondering what could our kids be doing in school after class as their lips were tightly sealed. They kept saying it was a “top secret,” as instructed by their teachers. Then gradually, as weeks went by, bits and pieces of the play were being teasingly revealed to us - some dance steps, dialogues, and the roles they’re about to play. Until, finally, we found out about “The Lost Treasure.”

Of course, we appreciate the fact that Joaquin and Enrique are enjoying themselves and having pure fun rehearsing and playing with their friends. My husband and I are firm believers of learning beyond textbooks and formal lessons, about people and about life.

This exemplary example of the vaunted multiple-intelligence approach of Juventus definitely helps the kids understand certain situations and empathize with some characters. We know this is another step for them to gain confidence and just be themselves in public even as it teaches the value of cooperation, hard work, and plain friendship.

We are happy and excited to know that, finally, the product of the kids’ and their teachers’ months-long efforts will be shared with us - their parents and relatives – today. Nothing can warm the heart more.

And no matter the role, regardless of their exposure, I’d like to say that we should be proud of our kids. It is through their individual contributions that the whole play is built; without any of them it would be incomplete. Together, they constitute the sum of all parts of what we’re about to enjoy today.

At this point, for Joaquin and Enrique, permit me to say, “break a leg!” For all the kids, just go and have fun. The stage of life is yours for the taking.    

(This is the speech delivered by my better half for our kids' school play as the parents' message.)   

Does SCTEx now mean "Stone Casting and Throwing Expressway"?

It may sound corny. But I am posing this query because we have been recently victimized in the Subic Clark Tarlac Expressway (SCTEx) by nefarious individuals who seemed to have no scruples if they harmed or hurt innocent people.

On the evening of 19 February 2012, my brother-in-law was driving our 2012 Hyundai Santa Fe and cruising at a speed of not more than 100kph along the SCTEx - coming from the South Clark Interchange and bound for the Subic Bay Freeport. With us were my wife and two kids. At about 8:45 to 9:00 in the evening of said date, while traversing the Floridablanca-Dinalupihan segment of the SCTEx, and as my brother-in-law slowed down to avoid some rocks scattered on the road, we suddenly heard a loud “bang!” from the right side part of the Santa Fe.

Owing to the isolation of the place, and as said portion of the SCTex was dark - there were no lampposts there - and in consideration of the safety and security of my family, we decided not to stop to check whatever it was that seemed to have hit the vehicle. The car behind us, was apparently hit, too - it even momentarily stopped and blinked its hazard lights. We proceeded instead to the Tipo toll plaza. Upon reaching the toll plaza, I alighted from the Santa Fe to see and check what caused the loud bang. I noticed an ugly depression on the top front, right side of the vehicle, still bearing a dusty, dirty white color, most likely, of the rock that hit it. By all indications, someone with malicious intentions threw a rock at it. Luckily, it did not hit the glass.

We told the toll collector and the guard on duty to report to their mobile patrol the incident and for the patrol to proceed to the said portion of SCTEx to deter further rock throwing by some evildoers who seemed to have no qualms destroying properties and/or harming innocent people. As it was getting late and our kids were tired, we couldn't wait for another mobile patrol to arrive in the toll plaza anymore, so we decided to head home.

Now, this incident was scary and dangerous especially for regular users of the SCTEx such as ourselves. Unfortunately, this was by no means an isolated incident, as another blogger previously reported the same. Please check: http://baldrunner.com/2010/05/19/travel-advisory/.

To date, despite notice, we have yet to hear from SCTEx officials, including those of the BCDA's, on the steps they plan to undertake to address this serious concern, considering that this has been going on for years. 

(Disclosure: Our law office previously represented MNTC in a criminal case. However, public interest demands that it is not a sufficient justification to withhold reporting this incident.) 

The coal-fired thermal power plant, the Subic Watershed Forest Reserve and the Writ of Kalikasan

In 1992, then President CORAZON C. AQUINO, issued Proclamation No. 926 to “withdraw from sale, entry, settlement, exploitation, exploration and other forms of disposition, subject to private rights, if any there be, and set aside and declare Subic Watershed Forest Reserve to protect and preserve the rare biological diversity of the flora and fauna therein and keep intact the productive capacity of the hydrologic unit supplying the developable portions of the Subic Bay Military Reservation…”

The initiative of the present administration of the Subic Bay Metropolitan Authority (SBMA) to “institutionalize public consultations for environmentally sensitive projects to give stakeholders a voice in determining development directions and ensure transparency in the Subic Bay Freeport,” is legally sound, duly commendable and must be fully supported by all stakeholders.

Just recently, SBMA conducted a stakeholders’ consultation process to understand and consolidate the opinions of various concerned sectors on the coal-fired thermal power plant being proposed for construction at the Redondo Peninsula. At the moment, according to SBMA, only a site preparation permit has been issued to the consortium that owns the proposed coal-fired thermal power plant.

Hopefully, the residents, fisher-folks, businesses such as resorts, hotels, amusement parks and water utilities, contiguous to and within the Subic Bay Freeport Zone (SBFZ), wouldn’t have to resort to legal relief and remedies - such as the “Writ of Kalikasan” - to save and protect the pristine forest, coast and waters of Subic Bay, consistent with and pursuant to Proclamation 926, Republic Act No. 7227 and other pertinent environmental laws.

No matter how one looks at it, a coal-fired thermal power plant appears anathema to SBFZ’s thrust as a prime eco-tourism destination and health and retirement haven. According to news reports, Subic already surpassed Baguio in terms of numbers of visitors. With its vision of becoming a part of cruise ship itineraries, a world-class leisure- and resort-type residences, and preferred meetings, incentives, conventions and exhibitions (MICE) venue, a coal-fired thermal power plant ominously jutting out across the bay would be a huge turn-off and disappointment. The equally important protection of several endangered species such as fruit bats and marine turtles ought not to be discounted.

Should the threat of a coal-fired thermal power plant persist, the effectivity of the Supreme Court-sanctioned “The Rules of Procedure for Environmental Cases” would be tested.

There it provides for the extraordinary remedy called “Writ of Kalikasan.” The writ is a remedy available to a natural or juridical person, entity authorized by law, people’s organization, non-governmental organization, or any public interest group accredited by or registered with any government agency, on behalf of persons whose constitutional right to a balanced and healthful ecology is violated, or threatened with violation by an unlawful act or omission of a public official or employee, or private individual or entity, involving environmental damage of such magnitude as to prejudice the life, health or property of inhabitants in two or more cities or provinces.” (Section 1, Rule 7)

According to the Supreme Court (SC), “the underlying emphasis in the Writ of Kalikasan is magnitude as it deals with damage that transcends political and territorial boundaries. Magnitude is thus measured according to the qualification set forth in this Rule — when there is environmental damage that prejudices the life, health or property of inhabitants in two or more cities or provinces.”

“The petition for the issuance of a Writ of Kalikasan can be filed by any of the following: (1) a natural or juridical person; (2) entity authorized by law; or (3) people’s organization, non-governmental organization, or any public interest group accredited by or registered with any government agency “on behalf of persons whose constitutional right to a balanced and healthful ecology is violated… involving environmental damage of such magnitude as to prejudice the life, health or property of inhabitants in two or more cities or provinces.”  Those who may file for this remedy must represent the inhabitants prejudiced by the environmental damage subject of the writ. The requirement of accreditation of a group or organization is for the purpose of verifying its existence. The accreditation is a mechanism to prevent “fly by night” groups from abusing the writ.”

“The Writ of Kalikasan is a special remedy available against an unlawful act or omission of a public official or employee, or private individual or entity, involving environmental damage of such magnitude as to prejudice the life, health or property of inhabitants in two or more cities or provinces,” adds the SC.