DOJ Opinion No. 082, s. 1987

DOJ OPINION NO. 082 , s. 1987 August 19, 1987 The Director General National Economic and Development Authority NEDA sa Pasig, Amber Avenue Pasig, Metro Manila M a d a m : This refers to your request for opinion on the authority of the President to fix tariff rates under Section 401 of the Tariff and Customs Code (P.D. 1464, as amended), even if Congress is already in session. It appears that in connection with the Import Liberalization Program, you submitted a draft executive order providing for tariff rate adjustments on certain commodities covered by the said Program; that you find this issuance necessary to protect the viability of domestic industries from the effects of the import liberalization policy; that the proposed E.O. had not been noted upon when Congress convened; and that the Tariff Commission is of the view that the presidential authority to fix tariff rates under the "flexible clause" of the Tariff Code remains valid and binding pursuant to the transitory provisions of the 1987 Constitution. It is believed that the authority of the President to fix tariff rates still subsists despite the convening of Congress. LLpr Section 401 of the Tariff and Customs Code (P.D. 1464, as amended) states insofar as pertinent: "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 existing protective rates of import duty (including any necessary change in classifications.) The existing rates may be increased or decreased but in no case shall the reduced rate of import duty is lower than the basic rate of ten (19) per cent ad valorem, nor shall the increased rate of import duty be higher than a maximum of one hundred (100) per cent ad valorem; (2) to establish import quota or to ban imports of any commodity, as may be necessary; and (3) to impose an additional duty on all imports not exceeding ten (10) per cent ad valorem whenever necessary: 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." The constitutional basis of the foregoing legal provision is Section 17[2], Article VIII of the 1973 Constitution which reads: "The Batasang Pambansa may by law authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imports." A similar provision is found in the present Charter. (Sec. 28[2], Art. VI.) Thus, while the power to impose duties upon imported commodities is legislative in character, there is no question that such power may be delegated by the lawmaking body to the Chief Executive. Indeed, the US Supreme Court has upheld the validity of a provision in the US tariff law authorizing the President to fix import duty rates, although there is no provision in the American constitution similar to that quoted above, for the reason that if Congress can validly delegates its rate-making authority in interstate commerce, it may likewise delegate its authority to fix custom duties. (Hampton, Jr. vs. United States, 276 U.S. 394; 72 L ed 624.) The reason behind such permissible delegation, it has been said, is the necessity of giving the President the authority to act with dispatch on matters affecting the national economy, it being recognized that the legislative process is much too cumbersome for speedy solutions of economic problems, especially those relating to foreign trade. (Cruz, Political Law, 1987 Ed., p. 86.) The fact that the 1973 Constitution has already been superseded by the 1987 Charter is of no moment. The continuing validity of the Tariff and Customs Code is based on Section 3, Article XVIII of the new Charter which states that "all existing laws, decrees, executive orders, proclamations , letters of instructions, and other executive in unless not inconsistent with this Constitution shall remain operative until amended, repealed or revoked." It is noted, in this connection, that the essence of the proposed memorandum of understanding is the establishment of diplomatic mission facilities in consequence of the establishment of friendly relations between the soviet Union and the Philippines. The agreement shall be negotiated by the President or her duly designated representative on her own responsibility and within the scope of her constitutional authority, as an appropriate instrument in handling an important aspect of our foreign relations. Moreover, the instant draft agreement merely implements an existing treaty, to which the Philippines is a signatory, the 1961 Vienna Convention on Diplomatic Relations. This Convention which was concurred in by the Senate in 1965, obligates the members thereof to facilitate acquisition of premises in the territory of the receiving state for purposes of establishing resident missions. In pursuance of said Convention, the Philippines and the USSR adopted on June 2, 1976 the Joint Communique on the Establishment of Diplomatic Relations whereby both countries have agreed to establish diplomatic relations, rendering each other assistance necessary for the establishment of diplomatic missions. Thus, we believe that congressional ratification is no longer necessary to give effect to the provisions of the proposed memorandum of understanding. prcd Please be guided accordingly. Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice