DOJ Opinion No. 193, s. 1981

DOJ OPINION NO. 193 , s. 1981 December 15, 1981 The Governor Central Bank of the Philippines Manila Sir : This has reference to your request for "Opinion as to whether or not [the] importation of Robusta coffee beans for planting purposes may be allowed taking into consideration the provisions of Republic Act No. 2712 (An Act to Prohibit the Importation of Coffee)". LexLib You state that the San Miguel Corporation (SMC) has applied "for authority to import Robusta coffee beans planting materials for its integrated coffee growing and green coffee processing project"; and that the Bureau of Plant Industry has certified, in connection with a similar importation by Filipro, Inc., that the coffee beans "are intended for planting and as such are not subject to the provisions of Republic Act No. 2712". It appears, moreover, that the Board of Investments (BOI) recommends the approval of subject importation because the Robusta coffee beans intended to be imported "are planting materials which are in short supply" locally and this proposed importation would eventually result in the improvement of local production and thereby attain the objectives of RA 2712. Subject to the extended discussion set forth hereunder, we answer your query in the affirmative. Section 1 of the abovesaid act provides: Section 1. The importation or roasted coffee beans, roasted ground coffee, instant or soluble coffee in powder form, extract or concentrate in liquid form or finished coffee products in any form, raw coffee of the robusta , excelsa and liberica varieties, is hereby prohibited; Provided, however , That the importation of raw coffee beans of the arabica variety shall be gradually reduced as follows: starting with and during the year nineteen hundred and sixty, only seventy-five per cent of the nineteen hundred and fifty-nine foreign exchange allocation of bona fide and legitimate coffee roasters shall be allowed; on the second year (nineteen hundred and sixty-one), fifty per cent; on the third year (nineteen hundred and sixty-two), twenty-five per cent; on the fourth year (nineteen hundred and sixty-three), ten per cent; and on the fifth year (nineteen hundred and sixty four), complete banning: Provided, further , That in case of shortage of locally produced arabica coffee, the President of the Philippines, upon recommendation of the Secretary of Agriculture and Natural Resources and the Chairman of the National Economic Council, may authorize the importation of the necessary quantity of raw arabica coffee beans to supplement the shortage." In Opinion No. 158, series 1981, in which we rejected as legally unfeasible the importation by the Tourist Duty Free Shops, Inc. of coffee products to be sold to out going transients, we said that the foregoing provision of law makes it clear that "coffee, whether in raw or in finished form, may not, as of the date of effectivity of RA 2712 on June 18, 1960, be imported into the Philippines except in two cases only", that since it" mentions only two exceptions to the ban on the importation of coffee, no other exception may be allowed", and that the importation in question did not fall within the said exceptions. Nonetheless, a different treatment is called for in the present case considering the purpose for which the present importation is intended in the light of the legislative reason and spirit behind the prohibition in question. It has been said that a statute should be construed in the light of its purpose (Haggar Co. vs. Halvering, 308 US 389, 84 L ed. 34D) and should not be applied when such application is not within the reason upon which the statute is based. (Feiges vs. Recine Dry Goods Co., 285 NW 799, 122 ALR 272) The Explanatory Note to House Bill No. 3966 (which was later enacted as RA 2712) shows that the said enactment was premised upon the finding that the Philippines was already self-sufficient in coffee production. Thus, the Explanatory Note reads inter alia : "It is thus apparent that we are already self-sufficient in coffee production. It production continues to increase, because of our fertile soil and favorable climate, and the determination of many coffee producers especially those from Cavite and Batangas, to produce coffee, then we will be exporting this product also." (Congressional Record, House of Representatives, Fourth Congress, Vol. III, Part II, p.2336) This statutory premise is further illustrated by the exception in the law allowing the continued importation of raw coffee beans of the arabica variety in a diminishing quantity because coffee of said variety was at the time of the enactment of RA 2712 not yet in full production locally. Furthermore, the legislative deliberations on HB 3966, supra , disclose that what the Congress was concerned about when it imposed the ban against the entry of foreign coffee was the competition offered by foreign brands to brands of local manufacture, to wit: "Mr. VILLAREAL. Shouldn't we prohibit importation of beans only rather than canned coffee? Mr. MONTANO. Gentleman from Capiz, we are already processing coffee here and producing many kinds of coffee beans. These people who we are encouraging to manufacture coffee will object naturally. Mr. VILLAREAL. Our tariff law can protect our processed coffee. Mr. MONTANO. Tariff will not be sufficient to protect our coffee industry." (Congressional Record, supra , p. 2339 ) The aforesaid premise (i.e., that the Philippines is self-sufficient in coffee production) upon which subject prohibition against the importation of coffee was founded does not hold true in the present case. Precisely, as aforestated, the BOI recommends approval of subject importation because "the Robusta coffee beans that SMC is proposing to import are planting materials which . . . are in short supply [locally]". Moreover, the evil sought to be remedied by said prohibition (that of protecting locally produced coffee from the competition offered by foreign brands of coffee) will not arise as a result of subject proposal importation. The items involved are planting materials which are intended for planting purposes by the importer in connection with its coffee growing and green coffee processing project; besides, the imported Robusta coffee beans will not complete with local coffee beans of the Robusta variety for the reason that there is a shortage in the domestic supply of said variety. Significantly also, as already pointed out in the aforecited opinion, the purpose of RA 2712 "is to give a double advantage to the country, namely, first, we will save dollars which are badly needed by our economy; and secondly, we will be protecting the interest of an old industry [i.e., coffee] which is striving hard to regain its rightful place in the national economy." These very purposes would nonetheless be served by the proposed importation in that it will ultimately redound to the interests of the Philippine coffee industry inasmuch as the imported coffee beans will be used for planting purposes , thus resulting in the improvement of the quality of the locally produced coffee beans. Furthermore, while the instant importation will mean dollar expenditures at the moment, it will in the last analysis result in foreign exchange savings since the improvement of the local coffee industry will result in qualitative and quantitative improvement of our coffee products for export. Wherefore, it is our view that the subject proposed importation may be legally placed beyond the pale of the strict prohibition against the importation of coffee contained in R.A. No. 2712. We would like to add the caveat , however, that our ruling herein does not constitute a general statement of principle, but an isolated opinion arrived at in the light of the circumstances obtaining in this particular case. Finally, we trust that the government offices/agencies concerned with enforcing RA 2712 will adopt measures to prevent the diversion of the imported items from their intended use. Please be guided accordingly. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice