Tiu v. Guingona

SPECIAL THIRTEENTH DIVISION [CA-G.R. SP No. 37788. August 29, 1996.] CONRADO L. TIU, JUAN T. MONTELIBANO, JR., ISAGANI M. JUNGCO , petitioners , vs . HON. TEOFISTO GUINGONA, Executive Secretary, BASES CONVERSION AND DEVELOPMENT AUTHORITY, SUBIC BAY METROPOLITAN AUTHORITY, BUREAU OF INTERNAL REVENUE, CITY TREASURER OF OLONGAPO CITY and the MUNICIPAL TREASURER OF SUBIC, ZAMBALES , respondents . D E C I S I O N LUNA , J p : This "Petition to Declare Executive Order No. 97-A Unconstitutional", by petitioners Conrado L. Tiu, Juan T. Montelibano, Jr., and Isagani M. Jungco, filed before the Supreme Court on October 26, 1994, was referred to this Court in an En Banc Resolution dated June 27, 1995, and forwarded to this ponente on August 6, 1996 in replacement for a case in which he inhibited himself from. Named respondents are the Hon. Teofisto Guingona, then Executive Secretary; Bases Conversion and Development Authority; Subic Bay Metropolitan Authority; Bureau of Internal Revenue; City Treasurer of Olongapo City; and Municipal Treasurer of Subic, Zambales. Petitioners contend that Executive Order 97-A is unconstitutional for it violates the "equal protection of laws" clause of the Constitution and that it is a "class legislation". Petitioners, after quoting Section 12, including paragraphs (a), (b) and (c) of RA 7227, alleged that the territorial boundaries of Olongapo City are embodied in its Charter, RA 4645; those of Subic, Zambales, are defined and determined by previous legislation's; and the territorial boundaries of the former Subic Naval Base are defined by the 1947 Military Bases Agreement between the Philippines and the United States of America, as amended; that EO 97-A was issued and which took effect immediately on June 19, 1993, provides in paragraphs 1.1, 1.2, 1.3, and 1.6 of Section 1: "1.1 The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely tax and duty free area in the SSEFPZ. Business enterprises and individuals (Filipinos and Foreigners) residing within the Secured Area are free to import raw materials, capital goods, equipment, and consumer items tax and duty-free . Consummations items, however, must be consumed within the Secured Area. Removal of raw materials, capital goods, equipment and consumer items out of the Secured Area for sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties, except as may be provided herein. "1.2 Residents of SSEFPZ living outside the Secured Area can enter the Secured Area and consume any quantity of consumption items in hotels and restaurants within the Secured Area. However, these residents can purchase and bring out of the Secured Area to other parts of the Philippine territory consumer items worth not exceeding US $100 per month per person. Only residents age 12 and over are entitled to this privilege. "1.3 Filipinos not residing within the SSEFPZ can enter the Secured Area and consume any quantity of consumption items in hotels and restaurants within the Secured Area. However, they can purchase and bring out of the Secured Area to other parts of the Philippine territory consumer items worth not exceeding US $200 per year per person. Only Filipinos age 15 and over are entitled to this privilege. xxx xxx xxx "1.6 The sale of tax and duty-free consumer items in the Area shall only be allowed in duly authorized duty free shops . Duty Free shops shall be subject to the joint regulation of the Bureau of Customs and the Subic Bay Metropolitan Authority (SBMA) to insure proper accounting of imports and sales." Petitioners, who claim to be ". . . living outside of the Secured Area ", complained that they are being discriminated against in the implementation of Executive Order 97-A, because it provides that only those business enterprises and individuals residing inside the Secured Area are free to import raw materials, capital goods, equipment and consumer items, tax and duty-free, whereas they who reside in the same SSEFPZ but outside of the Secured Area are deprived of the same benefit. There is no actual or reasonable basis to classify residents of the SSEFPZ by place of residence and excluding residents of the Subic Special Economic and Free port Zone who are living outside of the Secured Area . Petitioners likewise claim that under the same Executive Order, only those residing inside the Secured Area are exempt from local and national taxes, whereas those living within the SSEFPZ but outside the Secured Area are required to pay local and national taxes which the Bureau of Internal Revenue as well as the Local Government units of Olongapo City and the Municipality of Subic, Zambales, collect from residents of the said local government units, in violation of RA 7227. Petitioners further claim that the sale of tax and duty-free consumer items are only allowed in duly authorized duty-free shops within the Secured Area, whereas RA 7227 declares the extent of the Subic Special Economic and Free Port Zone to include the entire City of Olongapo as well as the Municipality of Subic, Zambales. Petitioners stand is that to allow the sale of tax and duty-free consumer items only within the Secured Area and only by duly authorized duty free shops is discriminatory to them as well as to other residents of the SSEFPZ living outside the Secured Area. Petitioners pray that EO 97-A be declared unconstitutional; that respondents be ordered to apply RA 7227 fully, equitably and fairly to all residents living inside and/or outside the Secured Area; that the residents of the zone living outside of the Secured Area be allowed to enjoy the same benefits being enjoyed by those residing inside the Secured Area; and that the Bureau of Internal Revenue, the City Treasurer of Olongapo City, and the Municipal Treasurer of Subic, Zambales, be prohibited from collecting local and national taxes from the residents of the Subic Special Economic and Free Port Zone who are living outside the Secured Area, except the five per cent (5%) from the gross income earned by all businesses and enterprises. The respondents Treasurer of Olongapo City, Bases Conversion and Development Authority, Subic Bay Metropolitan Authority, and the Office of the Solicitor General filed their separate comments to the petition. Their uniform stand is that EO 97-A is not unconstitutional. History is perspective, RA 7227 was enacted on March 13, 1992 . It is known as "An Act Accelerating the Conversion of Military Reservations into other Productive Uses, Creating the Bases Conversion and Development Authority for this Purpose, Providing Funds therefor and for other Purposes". Section 12 of the RA established the "Subic Special Economic Zone", and created a "Special Economic and Free-Port Zone (SEFPZ). "SEC. 12. Subic Special Economic Zone Subject to the concurrence by resolution of the sangguniang panlungsod of the City of Olongapo and the sangguniang bayan of the Municipalities of Subic, Morong and Hermosa, there is hereby created a Special Economic and Free-Port Zone consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous extension as embraced, covered, and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America as amended, and within the territorial jurisdiction of the Municipalities of Morong and Hermosa, Province of Bataan, hereinafter referred to as the Subic Special Economic Zone whose metes and bounds shall be delineated in a proclamation to be issued by the President of the Philippines. Within thirty (30) days after the approval of this Act, each local government unit shall submit its resolution of concurrence to join the Subic Special Economic Zone to the Office of the President. Thereafter, the President of the Philippines shall issue a proclamation defining the metes and bounds of the zone as provided herein. Under the same Section 12, the Subic Special Economic Zone (SSEZ for short) shall be developed into a self-sustaining, industrial, commercial, financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments. The SEFPZ shall be operated and managed as a separate customs territory ensuring the free flow and movement of goods and capital within, into the exported out of the territory and providing incentives such as tax and duty-free importation of raw materials, capital and equipment. "(a) Within the framework and subject to the mandate and limitation of the Constitution and the pertinent provisions of the Local Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments; (b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and duty-free importation's of raw materials, capital and equipment. However, exportations or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines; (c) The provisions of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall be imposed within the Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone shall be remitted to the National Government, one percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population area, and other factors . In addition, there is hereby established a development fund of one percent (1%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the development of municipalities outside the City of Olongapo and the Municipality of Subic, and other municipalities contiguous to the base areas. "In case of conflict between national and local laws with respect to tax exemption privileges in the Subic Special Economic Zone, the same shall be resolved in favor of the latter; "(d) No exchange control policy shall be applied and free markets for foreign exchange, gold, securities and future shall be allowed and maintained in the Subic Special Economic Zone; "(e) The Central Bank, through the Monetary Board, shall supervise and regulate the operations of banks and other financial institutions within the Subic Special Economic Zone; "(f) Banking and finance shall be liberalized with the establishment of foreign currency depository units of local commercial banks and offshore banking units of foreign banks with minimum Central Bank regulation; "(g) Any investor within the Subic Special Economic Zone whose continuing investment shall not be less than Two hundred fifty thousand dollars ($250,000.00), his/her spouse and dependent children under twenty-one (21) years of age, shall be granted permanent resident status within the Subic Special Economic Zone. They shall have freedom of ingress and egress to and from the Subic Special Economic Zone without any need of special authorization from the Bureau of Immigration and Deportation. The Subic Bay Metropolitan Authority referred to in Section 13 of this Act may also issue working visas renewable every two (2) years to foreign executives and other aliens possessing highly-technical skills which no Filipino within the Subic Special Economic Zone possess, as certified by the Department of Labor and Employment. The names of aliens granted permanent residence status and working visas by the Subic Bay Metropolitan Authority shall be reported to the Bureau of Immigration and Deportation within thirty (30) days after issuance thereof; "(h) The defense of the zone and the security of its perimeters shall be the responsibility of the National government in coordination with the Subic Bay Metropolitan Authority. The Subic Bay Metropolitan Authority shall provide and establish its own internal security and fire fighting forces; and "(i) Except as herein provided, the local government units comprising the Subic Special Economic Zone shall retain their basic autonomy and identity. The cities shall be governed by their respective charters and the municipalities shall operate and function in accordance with Republic Act No. 7160, otherwise known as the Local Government Code of 1991." Executive Order no. 97 was issued on June 10, 1993 , We quote Sections 1 and 2 of the EO: "Section 1. On Import Taxes and Duties, Tax and duty-free importations shall apply only to raw materials, capital goods and equipment brought in by business enterprises into the SSEZ. Except for these items, importation's of other goods into the SSEZ, whether by business enterprises or resident individuals, are subject to taxes and duties under relevant Philippine laws. "The exportation or removal of tax and duty-free goods from the territory to the SSEZ to other parts of the Philippine territory shall be subject to duties and taxes under relevant Philippine laws. Section 2. On all other taxes, in lieu of all local and national taxes except import taxes and duties), all business enterprises in the SSEZ shall be required to pay the tax specified in Section 12(c) of R.A. No. 7227 ." And Executive Order No. 97-A was issued on June 19, 1993 , which clarified the tax and duty-free privileges within the SSEFPZ, provides for a "Secured Area" consisting of the presently fenced in former Subic Naval Base which shall be the only Completely tax- and duty-free area inside the SSEFPZ. Thus: "Section 1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely tax and duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and foreigners) residing within the Secured Area are free to import raw materials, capital goods, and consumer items tax and duty-free . Consumption items, however, must be consumed within the Secured Area. Removal of raw materials, capital goods, equipment and consumer items out of the Secured Area for sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties, except as may be provided herein." EO 97-A also provides that residents of SSEFPZ who are twelve (12) years of age and over living outside the Secured Area, can enter the Secured Area and consume any quantity of consumer items in hotels and restaurants and bring out of the Area items worth not exceeding $100 per month per person. Filipinos 15 years of age and above who are not residing within SSEFPZ can enter the Secured Area and also consume any quantity but can bring out of the Secured Area consumer items worth not exceeding $200 per year. DISCUSSION Petitioner Jungco and his co-petitioners claim on page B of the petition, paragraph 11, that their ". . . residence and postal address . . . (is) at 2242 Rizal Avenue, Olongapo City . . .". Jungco did not execute a verification; Tiu did stating that his ". . . postal address (is) at Olongapo City"; and Custodio in her verification, stated her "postal address (as) at 2242 Rizal Avenue, BBB, Olongapo City". Petitioners reside outside of the "Secured Area", but complain that they ". . . are discriminated upon in the implementation of Executive Order 97-A." Petitioners do not allege that they operate any "business" or "enterprise". As such, their main petition for grievance is that of a "general grievance" which common to all Filipinos living outside the Secured Area, and cannot claim that locus standi in seeking this judicial redress (Dumlao vs. COMELEC, 95 SCRA 392, 402). The interest of a citizen, the likes of a lawyer, or taxpayer, or father, who assails the constitutionality of a statute, is well defined and explored in Kilosbayan, Incorporated vs. Morato , 246 SCRA 540, 563; in that it: ". . . must be direct and personal. He must be able to show, not only that the law is invalid, but also that he has sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the person complaining has been or is about to be denied some right of privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute complained of . "We apprehend no difference between the petitioner in Valmonte and the present petitioners. Petitioners do not in fact show what particularized interest they have for bringing this suit. It does not detract from the high regard for petitioners as civil leaders to say that their interest falls short of that required to maintain an action under Rule 3, Sec. 2 ." Petitioners' quest may well fall within the purview of an "advisory opinion" and, therefore, the questions/issues posed by them need not be passed upon at this stage. Be that as it may, We shall proceed further. Petitioners contend that EO 97-A is a "class legislation", because under its terms, only those residing inside the "Secured Area" are free to import raw materials, etc., whereas those residing outside the Secured Area are "deprived of this benefit. There is no actual or reasonable basis to classify residents . . . by place of residents . . ." A " good summary of a classification constitutionally acceptable " is found in In re : Cunanan , et al ., 94 Phil. 534, 559-560. "The general rule is well settled by unanimity of the authorities that a classification to be valid must rest upon material differences between the person included in it and those excluded and, furthermore, must be based upon substantial distinctions . As the rule has sometimes avoided the constitutional prohibition, must be founded upon pertinent and real differences, as distinguished from irrelevant and artificial once. Therefore, any law that is made applicable to one class of citizens only must be based on some substantial difference between the situation of that class and other individuals to which it does not apply and must rest on some reason on which it can be defended . In other words, there must be such difference between the situation and circumstances of all the members of the class and the situation and circumstances of all other members of the state in relation to the subjects of the discriminatory legislation as presents a just and natural reason for the difference made in their liabilities and burdens and in their rights and privileges. A law is not general because it operates on all within a class unless there is a substantial reason why it is made to operate on that class only, and not generally on all." (12 Am. Jur. pp. 151-153)." Also of enlightening pronouncement on classification is Itchong, et al., vs. Hernandez, etc. and Sarmiento , 101 Phil. 1155, 1164-1165: "The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited either in the object to which it is directed or by territory within which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such class, and reasonable grounds exists for making a distinction between those who fall within such class and those who do not . (2 Cooley, Constitutional Limitations, 824-825). xxx xxx xxx "The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police power. Is there public interest, a public purpose, or is public welfare involved? Is the Act reasonably necessary for the accomplishment of the legislature's purpose, or is it not unreasonable, arbitrary or oppressive? Is there sufficient foundation or reason in connection with the matter involved, or has there not been a capricious use of the legislative power? Can the aims conceived be achieved by the means used, or is it not merely an unjustified interference with private interest? These are the questions that we ask when the due process test is applied . "The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws is more apparent than real. Properly related, the power and the guarantees are supposed to co-exist. The balancing is the essence or, shall it be said, the indispensable means for the attainment of legitimate aspirations of any democratic society. There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy. So the State can deprive persons of life, liberty and property, provided there is due process of law; and persons may be classified into classes and groups, provided everyone is given equal protection of the law. The test or standard, as always, is reason. The police power legislation must be firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and means. And if distinction and classification has been made, there must be a reasonable basis for said distinction." Likewise, Imbong vs. Comelec , 35 SCRA 28, holds the view that discrimination which is based on substantial distinctions and germane to the purpose of the law is still constitutional. With the set standards as guides, the question asked is: Is EO 97-A a "class legislation" because it applies only to the Secured Area "consisting of the presently fenced in former Subic Naval Base . . ." (sec. 1.1. EO 97-A) A main obstacle to petitioners' quest is that while they attack EO 97-A as unconstitutional, they rely at the governing law, RA 7227, which they do not assail as unconstitutional, when in fact, there is no substantial difference between the provision of EO 97-A and Section 12 of RA 7227. In both, the "Secured Area" is precise and well-defined as ". . . the lands occupied by the Subic Naval Base and its contiguous extensions as embraced, covered and defined by the 1947 Military Bases Agreement between the Philippines and the United of America as amended. . . ." The "objective footprints left on the trail of legislative enactment" with respect to the "Secured Area" as defined under EO and the law is clear in the history of the enactment of RA 7227. It is the intention and meaning of the legislature which should be looked into for the purpose of giving effect to the law (Macondray & Co. vs. Eustaquio, 64 Phil. 46; Daza vs. Villaroman, 69 Phil. 12). The deliberation of the Senate, in its 5th Regular Session, held on January 15, 1992, which led to the passage of RA 7227, is quoted below: "Senator Paterno: Thank you, Mr. President, My first question is the extent of economic zone. Since this will be a free port , in effect. I believe that it is important to delineate or make sure that the delineation will be quite precise , my question is : Is it the intention that the entire of Olongapo City, the Municipality of Subic and the Municipality of Dinalupihan will be covered by the special economic zone or only portions thereof ? "Senator Shahani: Only portions , Mr. President. In other words, where the actual operations of the free port will take place. "Senator Paterno: I see, So, we should say, "COVERING THE DESIGNATED PORTIONS OR CERTAIN PORTIONS OF OLONGAPO CITY, SUBIC, AND DINALUPIHAN " to make it clear that it not supposed to cover the entire area of all of these territories. "Senator Shahani: So, the Gentleman is proposing that the words "CERTAIN AREAS" . . . "The President: The Chair want to invite the attention of the Sponsor and Senator Paterno to letter "C", which says: "THE PRESIDENT OF THE PHILIPPINES IS HEREBY AUTHORIZED TO PROCLAIM, DELINEATE AND SPECIFY THE METES AND BOUNDS OF OTHER SPECIAL ECONOMIC ZONES WHICH MAY BE CREATED IN THE CLARK MILITARY RESERVATIONS AND ITS EXTENSIONS." "Probably, this provision can be expanded since, apparently, the intention is that what referred to in Olongapo as Metro Olongapo is not by itself ipso jure already a special economic zone . "Senator Paterno: That is correct. "The President: Some authority must declare which portions of the same shall be the economic zone. Is it the intention of the Author that it is the President of the Philippines who will make such delineation ? "Senator Shahani: Yes, Mr. President. (Records of the Senate, January 15, 1992. p/ 87) The evident policy and purposes of the law-making body is to confine its coverage to the SSEZ "Secured Area". It was not the intention of Congress to include the entire Olongapo City and other areas mentioned in Section 12 of the law as part of the "Subic Special Economic Zone". The intention and purpose of the law having been discovered, effect should be given to it by the judiciary. "A decent respect for the policy of Congress must save us from imputing to a self-defeating, if not disingenuous purpose." (Bocobo vs. Estanislao, 22 SCRA 520, 524-525). The wisdom of the law and matters of policy in legislation is not within the province of courts to supervise nor to keep it within the bounds of propriety and common sense. That is primarily and exclusively a legislative concern. (People vs. Carlos, 78 Phil. 535). To uphold petitioners' stand that the EO and the law should be equally applied to those residing "outside" the "Secured Area" would constitute a flagrant violation of the law. Itchong, etc., et al. vs. Hernandez, etc., and Sarmiento, supra is worth to restate that: "It is not intended to prohibit legislation . . . (to) territory within which it is to operate . . ." The reason for limiting the Special Economic Zone to the secured area is not hard to find. Under Section 12-(h) of RA 7227, the SSEZ shall be operated and managed by a separate customs territory to ensure that the flow of goods can be monitored by the SBMA and the Bureau of Customs. To extend the confines of the zone outside the secured area where the flow of goods is difficult to manage and monitor will open the area to widespread smuggling which is the fraudulent importation of merchandise. We would like to add that Executive Order 97-A, delimiting the "Secured Area", is within the legislative powers delegated to the President of the Philippines under Section 12 of RA 7227. Thus, the ". . . President shall issue a proclamation defining the metes and bounds of the zone as provided herein". The zone provided for in the Executive Order concerning the "Secured Area", conforms to and is not in conflict with the provisions of RA 7227, as delineated in Section 12, consisting of ". . . the lands occupied by the Subic Naval Base and its contiguous extensions as embraced, covered, and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America as amended , and within the territorial jurisdiction of the Municipalities of Morong and Hermosa, province of Bataan, hereinafter referred to as the Subic Special Economic Zone. . . ." Petitioners' final thrust is that Executive Order No. 97-A is discriminatory, because only those business enterprises and individuals (Filipinos and foreigners) residing within the Secured Area are "free to import" . . . tax and duty free" (Sec. 1, par. 1.1); and that the sale of tax and duty free consumer items is allowed only within the Secured Area in duly authorized duty free shops (Sec. 1, par. 1.6). Petitioners should have no cause to complain as far as these incentives granted to business enterprises and individuals residing within the Secured Area are concerned, i.e., tax and duty free importation; "no taxes, local and national within the zone." The doctrine in Commissioner of Internal Revenue vs. Botelho Shipping Corp., 20 SCRA 487, 492 , is of persuasive force in the case at bar. It already expressed the rationale of tax exemption , which, though a waiver of the right to collect what otherwise would be due to the government, has for its avowed purpose some public benefit or interest, which the lawmaking-body considers sufficient to offset the monetary loss; the grant of the exemption. Thus: ". . . In much the same way as other statutory commands, its avowed purpose is some public benefit or interest , which the lawmaking body considers sufficient to offset the monetary loss entailed in the grant of the exemption. Indeed, Section 20 of Republic Act No. 3079 exacts a valuable consideration for the retroactivity of its favorable provisions, namely, the voluntary assumption, by the end-user who bought reparations good prior to June 17, 1961 of 'all the new obligations provided for in' said Act." In the "Declaration of Policies" (Se. 2), and the "Purpose of the Conversion Authority" [Sec. 2; and Sec. 4 (b), (c), and (f), RA 7277] enumerates the multifarious benefits and interests that the Government would derive from such tax exemption. It will accelerate the sound and balanced conversion into alternative productive uses of the Clark and Subic military reservations and their extensions; promote the economic and social development of Central Luzon in particular and the country in general; encourage the active participation of the private sector in transforming the Clark and Subic military reservations and their extensions into a financial and investment center; attract and promote productive foreign investment; and generate employment opportunities in and around the zone. Petitioners' argument that Executive Order 97-A operates to grant exemption to particular person or persons, is not unconstitutional in that sense. The Botelho doctrine, supra , is firm, that ". . ..there is no constitutional injunction against granting tax exemption to particular person. In fact it is not unusual to grant legislative exemptions thereto. (For) what the fundamental law forbids is the denial of equal protection, such as through unreasonable discrimination or classification." It is worth to add at this late stage that those business enterprises and individuals residing within the secured area are not entirely exempt from the payment of taxes. For the law also provides that: "In lieu of paying taxes, three percent (3%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone shall be remitted to the National Government, one percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population area, and other factors. In addition, there is hereby established a development fund one percent (1%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the development of municipalities outside the City of Olongapo and the Municipality of Subic, and other municipalities contiguous to the base areas." This Court hence upholds Executive Order No. 97-A as not unconstitutional, absence of some actual foundation of record overthrowing the Executive Order. We are "not want to invalidate legislation on equal protection grounds except by the clearest demonstration that it sanctions invidious discriminations, which is all that Constitution forbids." (Gomez vs. Palomar, 25 SCRA at 835). Petitioners failed to overthrow the fact that the President of the Philippines, in issuing EO 97-A merely implements the legislative purpose of the BCDA Law. Courts should be receptive to laws leaving to administrative and executive agencies the adoption of such means as may be necessary to effectuate a valid legislative purpose. [Free Telephone Workers Union vs. Minister of Labor and Employment, 108 SCRA 772]. The President has the necessary power to issue the Executive Order and to issue such rules to implement the statute as Congress precisely gave him that power to issue EO 97-A under the BCDA Law. WHEREFORE, the petition to declare Executive Order No. 97-A as unconstitutional, is hereby DISMISSED, and the constitutionality of the said EXECUTIVE ORDER issued by the President of the Philippines on June 19, 1993, is UPHELD. SO ORDERED. Barcelona and Valdez, Jr * . , JJ . , concur. Footnotes * Vice Justice Hormachuelos, who is on leave.