DOJ Opinion No. 012, s. 1998

DOJ OPINION NO. 012 , s. 1998 January 29, 1998 Secretary Salvador H. Escudero III Department of Agriculture Elliptical Road, Diliman Quezon City Sir : This refers to your request for opinion on "whether or not the President, pursuant to Section 401 of the Tariff and Customs Code of the Philippines, can issue an order reducing the tariffs on agricultural products whose quantitative restrictions (QRs) have been repealed by Republic Act (RA) No. 8178 or the Agricultural Tariffication Act of 27 March 1996". The request, it appears, was precipitated by the strong clamor from various sectors in the economy for the immediate reduction of the tariffs levied by E.O. No. 313, s. 1996 on certain products which included agricultural products, particularly corn and corn substitutes such as barley, rye, oats and wheat, whose quantitative import restrictions (QRs) have been lifted and replaced with tariffs pursuant to R.A. No. 8178. You state that tariff review and discussions on the said agricultural products have been deferred in view of your desire to determine first the legal feasibility of implementing the proposal. Section 401 of the Tariff and Customs Code (Presidential Decree No. 1464, as amended) adverted to above pertinently provides: "SEC. 401. Flexible Clause . a. In the interest of national economy, general welfare and/or national security, and subject to the limitations herein prescribed, the President, upon recommendation of the National Economic and Development Authority (hereinafter referred to as NEDA), is hereby empowered: (1) to increase, reduce or remove protective rates of import duty (including any necessary change in classification). The existing rates may be increased or decreased to any level, in one or several stages but in no case shall the increased rate of import duty be higher than a maximum of one hundred (100) per cent ad valorem; . . . Provided, That upon periodic investigations by the Tariff Commission and recommendation of the NEDA, the President may cause a gradual reduction of protection levels granted in Section One Hundred and Four of this Code, including those subsequently granted pursuant to this section. xxx xxx xxx c. The power of the President to increase or decrease rates of import duty within the limits fixed in subsection 'a' shall include the authority to modify the form of duty. In modifying the form of duty, the corresponding ad valorem or specific equivalents of the duty with respect to imports from the principal competing foreign country for the most recent representative period shall be used as bases. . . ." (Part III, P.D. No. 1464, as amended) We take it that your reservation on the power of the President to reduce the tariffs on the terrified agricultural products under E.O. No. 313, s. 1996, to levels lower than the country's tariff binding commitments, notwithstanding the above-quoted provision of the Tariff and Customs Code, is grounded upon the provision of Section 6 of R.A. No. 5178, also known as the "Agricultural Tariffication Act", which, provides: "Sec. 6. Tariffication . In lieu of quantitative restrictions, the maximum bound rates committed under the Uruguay Round Final Act shall be imposed on the agricultural products whose quantitative restrictions are repealed by this Act . The President shall issue the corresponding tariffs beginning 1996 up to the year 2000: Provided, That the schedule of the initial and final applied rates shall be consistent with the country's tariff binding commitments . In case of shortages or abnormal price increases in agricultural products, whose quantitative restrictions are lifted under this Act, the President may propose to Congress, revisions, modifications or adjustments of the Minimum Access Volume (MAV); Provided, however, That in the event Congress fails to act after fifteen (15) days from receipt of the proposal, the same shall be deemed approved." (Emphasis ours.) We resolve your query in the affirmative. The fundamental rule of statutory construction is to ascertain and give effect to the intention or purpose of the legislature which intent must be determined from the language of the statute itself (Taada vs. Yulo, 61 Phil. 515; People vs. Concepcion, 44 Phil. 126). It is also a rule of statutory construction that in ascertaining the legislative intent, the debates on the floor and the deliberations of the legislative body on the proposed enactment may be resorted to and considered in interpreting any ambiguous provision in the law (Palanca vs. City of Manila, 41 Phil. 125; Arenas vs. City of San Carlos, 82 SCRA 318, cited in Agpalo, Statutory Construction, 1986 Ed., pp. 73-74; see also Sands, Sutherland Statutory Construction, 4th Ed., Vol. 2A, pp. 216-217). The clear and explicit language of R.A. No. 8178, especially Section 6, earlier quoted, leaves no room for doubt as to the power of the President to "issue the corresponding tariffs beginning 1996 up to the year 2000". However, apart from stating that "the schedule of initial and final applied rates shall be consistent with the country's tariff binding commitments", there is nothing in Section 6 or in any other provisions of R.A. No. 8178 which expressly allows the President to reduce the initial tariffs fixed "to levels lower than the country's tariff binding commitments". The absence of such express authorization in the law is what has apparently caused you to doubt whether the President indeed has such authority. A close examination of the provisions of Section 6 itself, aided by the deliberations in the House of Representatives on House Bill No. 6436, which later became R.A. No. 8178, reveals that the tariffs initially fixed in 1996 may be the subject of periodic review and modification by the President until the year 2000, "provided that the schedule of the initial and final applied rates shall be consistent with the country's tariff binding commitments", referring to the maximum bound rates committed by the Philippines under the Uruguay Round Final Act. A review of the legislative deliberation on House Bill No. 8436 and its companion bill (House Bill No. 6451) discloses that the maximum rates may be reduced by the President consistent with the provision of the Uruguay Round on the gradual reduction of tariffs every year, thus: "Mr. Taada asked how the Tariff rates under House Bill No. 6451 will relate to the reduction of tariffs concerning the members of the ASEAN. The Sponsor replied that if the President reduces tariff rates , it would only be in accordance with the provision in the Uruguay Round that the tariff rates will be gradually reduced every year ." (House Journal No. 66, March 5, 1996, p. 19; emphasis supplied.). As you state, E.O. No. 313 issued by the President on March 29, 1996, which, we assume, fixed the initial tariff rates on agricultural products covered by R.A. No. 8178, "levied tariffs on these agricultural products at the maximum tariff binding commitments ". We believe that such rates as thus fixed in E.O. No. 313 may be reduced by the President "to levels lower than the country's tariff binding commitments" provided that the final schedule of tariffs shall be "consistent with the country's tariff binding commitments" as provided for in Section 6 of said Act. Considering that the power to fix tariff rates is a delegated legislative power pursuant to Section 28(2), Article VI of the 1987 Constitution, and in the absence of adequate standards in R.A. No. 8178 governing the exercise of such power by the President vis-a-vis the tariffs on agricultural products covered by said R.A. No. 8178, Section 401 of the Tariff and Customs Code, authorizing the President to fix tariffs under certain conditions and limitations, which provision has not been expressly repealed by R.A. No. 8178, applies pro tanto and may be invoked by the President in reducing the tariffs prescribed in E.O. No. 313. Please be guided accordingly. Very truly yours, (SGD.) TEOFISTO T. GUINGONA, JR. Secretary