DOJ Opinion No. 015, s. 1995

DOJ OPINION NO. 015 , s. 1995 February 20, 1995 Secretary Jesus B. Garcia Department of Transportation and Communications PHILCOMCEN Bldg., Ortigas Avenue Pasig, Metro Manila Sir : This reference to your request for opinion on certain issues concerning the Philippine Aerospace Development Corporation (PADC). llcd You state that the PADC is an attached corporation of the Department of Transportation and Communications (DOTC); that it is empowered to undertake, by itself or through its subsidiaries, activities, businesses and projects for the establishment of a reliable aviation and aerospace industry in the country; and that you intend to give greater attention and support to the said industry provided that you assured of your legal foundation. In this connection, you raise the following specific queries: "First, are Presidential Decree No. 286 and its amendatory decrees (PD Nos. 346, 696 841) valid, subsisting and effective despite the fact that these decrees were issued pursuant to Proclamation Order No. 1081? Second, are Section 3(f), (i), (j) and (m), Section 8, Section 10 and Section 11 of PD No. 696 which revised PD No. 286, valid, subsisting and effective? Third, may PADC sell its shares of stock in its subsidiary to the private sector to such extent as to reduces to its share in the capital stock thereof to less than 51%? Regarding your first query, Section 3, Article XVIII of the 1987 Constitution explicitly states: "Sec. 3. All existing laws, decrees , executive orders, proclamations, and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked." (Emphasis supplied.) We are not aware of any court ruling declaring any of the presidential decrees in question unconstitutional. Neither are we aware of any subsequent legislation repealing or revoking any of such presidential decrees. Accordingly, such presidential decrees remain to be valid and subsisting up to now (see also DOJ Ops. Nos. 112, and 123, s. 1988) As far as the effectivity of the said presidential decrees is concerned, Article 2 of the Civil Code provides that: Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provide. . . ." Interpreting the aforequoted provision, the Court, in the case Taada vs. Tuvera, 146 SCRA 446, held that: ". . . the clause, 'unless it is otherwise provided' refers to the date of effectivity and not to the requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislative may take the law effective immediately upon approval, or any other date, without its previous publication." "The reason is that [the] omission [of publication] would offend due process insofar as it would deny the public knowledge of laws that are supposed to govern it. . . ." "The term 'laws' should refer to all laws and not only to those of general application, for strictly speaking all laws relate to the people in general albeit there are some that do not apply to them directly. . . ." ". . . all statutes, including those of all local application and private laws, shall be published as a condition for their effectivity , which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislative." "Covered by this rule are presidential decrees . . . promulgated by the President in the exercise of legislative powers . . ." ". . . under Article 2 of the Civil Code, the publication of laws must be made in the Official Gazette , and not elsewhere, as a requirement for their effectivity after fifteen days from such publication or after different period provided by the legislature." (emphasis supplied) Applying the aforequoted ruling, we have verified that P.Ds. Nos. 286, 346, 696 and 841 were all published in the Official Gazette (see Vol. 70, No. 22, pp. 4373-38 [Supp.]; Vol. 69, No. 51 p. 11688-D [Dec. 17, 1973]; Vol. 71, No 22, p. 3186 [June 2, 1975]; Vol. 72, No. 3, p. 531 [Jan. 19, 1976], respectively). It, therefore, leaves no room for doubt that P.D. No. 286 and its amendatory decrees (P.Ds. Nos. 346, 696 and 841) are all valid, subsisting and effective until now. With respect to your second query, we take it that the is whether or not Section 3(f), (i), (j) and (m) and Section 8, 10 and 11 of P.D. No. 696 remain unaffected by other subsequent legislation. We believed that Section 3(f) of P.D. No. 696 which vests PADC with the power "To hold public agricultural lands and mineral lands in excess of the areas permitted to private corporations, associations and persons by the laws of the Philippines for a period not exceeding twenty-five years, renewable by the President of the Philippines for another twenty-five years;" remains unaffected by the new provisions of the 1987 Constitution governing the exploration, development and utilization of our natural resources (see Sec. 2, Art. XII, 1987 Constitution). It may be pointed out that the PADC, being a government-owned or controlled corporation (GOCC) with original charter, is part of government, and as to which the constitutional limitations or restrictions applicable to private corporation incorporated under the general incorporation law, may not apply. With the respect to Section 3(i), (j) and (m), referring, respectively, to the power of the PADC to acquire, purchase, dispose, etc. of certificates of stock of other corporations; to invest funds and to form subsidiaries; and to coordinate with the Department of National Defense relative to activities related to national defense, we are not aware of any subsequent law which may have modified or amended said provisions. The same observation holds true with reference to the provision of Section 10 governing the borrowing power of PADC. However, Section 8 of P.D. No. 696 which empowers PADC to form, establish, organize and maintain subsidiary corporations should be considered in the light of Section 17 of Administrative Order No. 17 which, insofar as pertinent, reads: "Sec. 17. Role of the GCMCC [Government Corporate Monitoring and Coordinating Committee] in Evaluating Proposals to Create, Acquire and Dissolve Government Corporations . Restraint shall be exercised in the creation or acquisition of corporations by the Government. Accordingly, all proposals for the acquisition, creation and dissolution of government corporations initiated and endorsed by any executive agency, office or instrumentality of the Government shall, in each case, be subject to review and evaluation of the GCMCC in accordance with appropriate criteria established under this Administrative Order before they are submitted to the President. The GCMCC shall advise the President regarding proposed government corporations to be created by the legislature. All proposals to acquire a government corporation, including proposals to establish subsidiary corporations, shall be submitted to the President for decision/approval . xxx xxx xxx (Emphasis supplied) We make no comment in regard to Section 10 providing to tax exemptions for PADC. This is a matter which should be addressed to the Department of Finance. Answering your last query, the pertinent provision of Section 8 of P.D. No 696 states that: " In all cases, the Corporation shall own at least fifty-one percentum (51%) of the capital stock of each subsidiary. . . ." (Emphasis supplied) The observation of the Court in the case of Ablan vs. Madarang, 41 SCRA 213, while interpreting a statute, is quite instructive: "This is a case where the law is clear. It speaks of a language that is categorical. It is quite explicit. It is too plain to be misread. All that is called for is to apply the statutory command." Hence, it is our view that the PADC cannot sell its shares of stock in its subsidiary to the private sector to such extent as to reduce its share in the capital stock thereof to less than 51% without contravening the clear and unequivocal provision of Section 8 of P.D. No. 696, abovequoted. However, we hasten to add that this rule does not apply to the subsidiaries of the PADC which have been identified pursuant to Proclamation No. 50, as amended. Such subsidiaries identified for privatization are not covered by the provisions of Section 8, and the PADC may, subject to existing guidelines on privatization of government corporations, sell all or a portion of its stock ownership in such subsidiaries to the private sector. Please be guided accordingly. Very truly yours, (SGD.) DEMETRIO G. DEMETRIA Acting Secretary