DOJ Opinion No. 097, s. 1989

DOJ OPINION NO. 097 , s. 1989 May 3, 1989 The Chairman Securities & Exchange Commission EDSA, Mandaluyong Metro Manila Sir : This refers to your request for opinion on whether or not "sub-contractors" are also covered by Section 12(1) of P.D. No. 87, as amended by P.D. No. 1857, exempting foreign service contractors from the requirements of Section 126, in relation to Section 148, of the Corporation Code of the Philippines. You state that on October 28, 1987, your Office required Terminal Institution, Inc. (TII), a foreign corporation registered under the laws of Liberia and a sub-contractor of Alcorn (Palawan) Production, Inc., a corporation engaged in petroleum operations under P.D. No. 87, to deposit additional securities worth P2,947,257.96 in accordance with Section 126 of the Corporation Code, since its (TII's) income for fiscal year 1986 exceeded P5,000,000.00 by P147,776,299.00. dctai However, TII has requested for exemption from the said requirement on the ground: a) that it is already subject to a final tax of 8% on its gross income under P.D. No. 1354, and that the additional securities deposit, equivalent in value of 2% of its gross income in excess of P5,000,000.00 is a higher tax burden than that provided under P.D. No. 1354; (b) that its sole activity in the Philippines is the lease to Alcorn (Palawan) Production, Inc. of the floating production storage and off-loading facility under a bareboat charter; and (c) that the additional securities deposit would withdraw from the working capital of TII for purposes unrelated to oil exploration. In support of its request, TII submitted a letter dated June 17, 1988 of the Executive Director of the Office of Energy Affairs expressing the opinion that the exemption aforementioned "may likewise be extended to bonafide subcontractors of a service contractor consistent with the declared policy of P.D. No. 87". We are constrained to refrain from expressing our views on your query, it appearing that the Office of Energy Affairs has already adopted a definite stand on the matter. Pursuant to settled practice and precedents, this Office does not render opinion on issue that has previously been passed upon by the proper government body, in this case, the Office of Energy Affairs, which is responsible for the implementation of policies and programs in the field of energy (Sec. 3, E.O. No. 193 [1987]) and over whose official actuations, the Secretary of Justice possesses no revisory authority. This rule has evolved not only from practical considerations but also out of respect and deference for the competence and expertise of the office having primary jurisdiction to resolve the matter and for its familiarity with the policy repercussions of the question, as well as from a logical recognition of the lawful exercise of an authority conferred by law (Ops. No. 37, s. 1976; No. 1, s. 1983; and No. 66, s. 1987). prcd If that Commission has very strong reservations about the position taken by the Office of Energy Affairs, it may elevate the matter to the Office of the President which has supervision over the Office of Energy Affairs (see Sec. 2, E.O. No. 193). Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary Of Justice