FIRST DIVISION
G.R. No. 180323, September 16, 2015
PURINA PHILIPPINES, INC.,1Petitioner, v. HON. WALDO Q. FLORES, IN HIS CAPACITY AS SENIOR DEPUTY EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, AND NATIONAL FOOD AUTHORITY, Respondents.
D E C I S I O N
SERENO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Court of Appeals (CA) Decision2 dated 4 July 2007 and Resolution3 dated 24 October 2007 in CA-G.R. SP No. 91619.
The CA upheld the decision of the Office of the President (OP) affirming the finding of the National Food Authority (NFA) that petitioner is engaged in the corn industry. The CA Resolution denied petitioner's motion for reconsideration.
x x x [T]he term "rice and/or corn industry" shall mean and include the culture, milling, warehousing, transporting, exportation, importation, handling the distribution, either in wholesale or retail, the provisions of Republic Act Numbered Eleven hundred and eighty to [the] contrary notwithstanding, or the acquisition for the purpose of trade of rice (husked or unhusked) or corn and the by-products thereof: Provided, That public utilities duly licensed and registered in accordance with law may transport corn or rice.35 (Emphases supplied)R.A. 3018 also created the Rice and Corn Board, which was tasked to study and recommend measures for the improvement and development of the rice and corn industry. On 21 November 1960, the Rice and Corn Board issued Resolution No. 10 pursuant to its mandate to issue rules and regulations implementing R.A. 3018.36 Resolution No. 10 defined the term "by-product" as "the secondary products resulting from the process of husking, grinding, milling, and cleaning of palay and corn, such as, but not limited to binlid, darak tahop, tiktik, corn husk, corn drips and corn meals."37
SECTION 2. As used in this Decree, the term "rice and/or corn industry" shall include the following activities:Whereas foreign equity participation in the rice and corn industry is absolutely prohibited under R.A. 3018, P.D. 194 allows it in associations, partnerships or corporations to the extent of 40%. Section 5 of P.D. 194 provides:
- Acquiring by barter, purchase or otherwise, rice and corn and/or the by-products thereof, to the extent of their raw material requirements when these are used as raw materials in the manufacture or processing of their finished products.
- Engaging in the culture, production, milling, processing and trading, except retailing, of rice and corn; Provided, That the designation of the area in the culture and production, as well as the trading of the produce in the domestic or foreign markets, shall be under the direction and control of the National Grains Authority. (Emphasis supplied)
SECTION 5. In connection with the foreign equity participation, at least 60% thereof shall be transferred to Filipino citizens over a period to be established by the National Grains Authority at the time of approval of its authority to engage in the industry, or phase out its operation within the same period.Associations, partnerships or corporations owned in whole or in part by foreigners are allowed to engage in the rice and corn industry, but are required to transfer at least 60% of their foreign equity participation to Filipino citizens over a period to be established by the National Grains Authority. Otherwise, the foreign entity's business shall phase out within the same period.
xxx [T]he avowed purpose of Republic Act No. 3018, as shown in the explanatory note to the original bill, was to do away with the possibility and practice of aliens creating artificial shortages of rice and corn by hoarding these commodities or cornering the market therefor, so as to enable them to dictate prices thereof. It thus becomes a necessary point of inquiry whether or not the producers of derivatives, in which rice or corn is the main ingredient, could singly, or in combination with others, create an artificial scarcity of the cereals at any given time; and for that purpose, complete data of the consumption capacity of these producers are material.47 x x x.According to petitioner, in order for an enterprise to be regarded as one engaged in the rice and corn industry under R.A. 3018, it must be shown (1) that rice or corn is the principal ingredient of its product; and (2) that it has the ability — singly or in combination with others — to create an artificial scarcity of the grain at any time.48 Considering that P.D. 194 must "be read in furtherance of the general design"49 of R.A. 3018, petitioner concludes that P.D. 194 should also apply only when the two requisites concur. In this case, it is argued that corn is not the principal ingredient of the animal feeds that petitioner manufactures.50
This Court has steadfastly adhered to the doctrine that its first and fundamental duty is the application of the law according to its express terms, interpretation being called for only when such literal application is impossible. No process of interpretation or construction need be resorted to where a provision of law peremptorily calls for application. Where a requirement or condition is made in explicit and unambiguous terms, no discretion is left to the judiciary. It must see to it that its mandate is obeyed.56The wordings of R.A. 3018 and P.D. 194 are clear and unambiguous. Engaging in the importation, warehousing and use of corn as raw material in the manufacture or processing of finished products makes one a participant in the corn industry. Petitioner has never denied engaging in these activities. Accordingly, the law must be applied according to its express terms. We exercise no discretion in declaring that petitioner is engaged in the corn industry.
Endnotes:
1Rollo, p. 10, Petitioner has merged with Cargill Philippines, Inc. The Certificate of the Articles and Plan of Merger was issued by the Securities and Exchange Commission on 8 March 2002.
2 Id. at 35-41. The Decision issued by the Court of Appeals Fifteenth Division was penned by Associate Justice Arcangelita M. Romilla-Lontok, with Associate Justices Mariano C. del Castillo (now a Member of this Court) and Romeo F. Barza concurring.
3 Id. at 43-44.
4 Id. at 35.
5 Id.
6 Id. at 35-36.
7 Id. at 36.
8 Id.
9 Id. at 45.
10 Id. at 46-48.
11 Id. at 47.
12 Id. at 49-50.
13 REPUBLIC ACT NO. 7042 dated 13 June 1991. Sections 3(g) and 8(a) thereof state:chanRoblesvirtualLawlibrary
SECTION 3. Definitions.— As used in this Act: x x x x
g) The term "Foreign Investments Negative List" or "Negative List" shall mean a list of areas of economic activity whose foreign ownership is limited to a maximum of forty percent (40%) of the equity capital of the enterprises engaged therein,
x x x x
SECTION 8. List of Investment Areas Reserved to Philippine Nationals (Foreign Investment Negative List). — The Foreign Investment Negative List shall have three (3) component lists: A, B, and C:chanRoblesvirtualLawlibrary
a) List A shall enumerate the areas of activities reserved to Philippine nationals by mandate of the Constitution and specific laws.
14 Entitled "Authorizing Aliens, as well as Associations, Corporations or Partnerships Owned in Whole or in Part by Foreigners to Engage in the Rice and Corn Industry, and for Other Purposes."
15Rollo, pp. 51-76.
16 Id. at 77.
17 Id. at 79-82.
18 Id. at 83-92.
19 Id. at 93-96.
20 Executive Order No. 2 dated 13 July 1998, entitled "Transferring the National Food Authority from the Department of Agriculture to the Office of the President."
21Rollo, p. 100.
22 Id. at 121-125. The Decision of the Office of the President in O.P. Case No. 98-H-8525 was penned by Senior Deputy Executive Secretary Waldo Q. Flores.
23 The second paragraph of Section 1 states:chanRoblesvirtualLawlibrary
As used in this Act, the term "rice and/or corn industry" shall mean and include the culture, milling, warehousing, transporting, exportation, importation, handling the distribution, either in wholesale or retail, the provisions of Republic Act Numbered Eleven hundred and eighty to contrary notwithstanding, or the acquisition for the purpose of trade of rice (husked or unhusked) or corn and the by-products thereof: Provided, That public utilities duly licensed and registered in accordance with law may transport corn or rice.
24 SECTION 2. As used in this Decree, the term "rice and/or corn industry" shall include the following activities:chanRoblesvirtualLawlibrary
a. Acquiring by barter, purchase or otherwise, rice and corn and/or the by-products thereof, to the extent of their raw material requirements when these are used as raw materials in the manufacture or processing of their finished products.
25Rollo, p, 124.
26 Id.
27 Id. at 126-137.
28 Id. at 138.
29 Id. at 144-163.
30 Id. at 35-41.
31 Id. at 39.
32 Id. at 43-44.
33Chua U v. Lim, 121 Phil. 251 (1965).
34 R.A. 3018, Section 1.
35 Id.
36Go Ka Toe Sons & Co. v. Rice & Corn Board, 126 Phil. 481 (1967).
37 Id. at 481-482.
38 Section 27 of P.D. 4 dated 26 September 1972, as amended, provides:chanRoblesvirtualLawlibrary
SECTION 27. Transfer of the Rice and Corn Board. — The functions, personnel, properties, assets and unexpended appropriations of the Rice and Corn Board are hereby transferred to the Administration under which the Board shall continue to carry out the purpose of Republic Act Numbered Three thousand eighteen in synchronization with the grains industry development program.
39 P.D. 1485 dated 11 June 1978 entitled "National Grains Authority Act."
40"Whereas" clauses of P.D. 194 dated 17 May 1973.
41 Id.
42 P.D. 1770 dated 14 January 1981 entitled the "National Food Authority Act."
43Rollo, pp. 343-344.
44 Id. at 17-20.
45 Id. at 19.
46 Supra note 33.
47 Id. at 254.
48Rollo, p. 25.
49 Id. at 23.
50 Id. at 21.
51 The "Whereas" clauses of P.D. 194 read:chanRoblesvirtualLawlibrary
WHEREAS, Republic Act No. 3018 was enacted into law in 1960 to nationalize the rice and corn industry;ChanRoblesVirtualawlibrary
WHEREAS, after thirteen (13) years of operation, the law has a great extent succeeded in transferring the rice and corn industry in all its aspects to Filipinos and Filipino-owned entities;ChanRoblesVirtualawlibrary
WHEREAS, the existing law has created artificial restraints in the national effort to develop the rice and corn industry;ChanRoblesVirtualawlibrary
WHEREAS, it is imperative to lift the prohibition especially in cases where grains, including rice and corn and/or by-products thereof, are used for direct consumption or as raw materials in the manufacture or processing of their finished products;ChanRoblesVirtualawlibrary
WHEREAS, there is need to encourage foreign investments on a large scale to develop virgin lands for rice and corn;ChanRoblesVirtualawlibrary
52 Section 3 of P.D. 194 states:chanRoblesvirtualLawlibrary
SECTION 3. The National Grains Authority may authorize the alien or business organization mentioned in Section 1 hereof to engage in the rice and/or corn industry, subject to the following conditions:53 Section 3 of R.A. 3018 states:chanRoblesvirtualLawlibrary
- The National Grains Authority shall certify that there is an urgent need for foreign investment in the undertaking and that the same will not pose a clear and present danger of promoting monopolies or combination in restraint of trade.
- The alien, association, corporation or partnership shall have the necessary financial capability and technical competence.
- The alien, association, corporation or partnership shall submit a development plan acceptable to the National Grains Authority. (Emphasis supplied)
SECTION 3. All such persons, associations, partnerships, or corporations that have complied with the requirements provided in Section two hereof, if they so apply, shall be allowed to continue to engage in their respective lines of activity in the rice and/or corn industry only for the purpose of liquidation, as follows:chanRoblesvirtualLawlibrary
(a) Those engaged in the retail, wholesale, culture, transportation, handling, distribution or acquisition for the purpose of trade of rice and/or corn and the by-products thereof shall be allowed to continue to engage therein for a period of two years from the date of effectivity of this Act; and (b) Those engaged in the milling and/or warehousing of rice and/or corn and the by-products thereof shall be allowed to continue to engage therein for a period of three years from the date of effectivity of this Act: Provided, That upon the termination of the periods above-provided none of said alien persons or entities shall be allowed and granted a license to engage in the rice and/or corn industry. Provided, further. That the maximum amount of the capital investments of said alien persons or entities in their respective lines of activity in the industry shall be pegged to the amount of capital investments required to be declared under Section two hereof: Provided, finally. That after the date of approval of this Act no license to engage in the rice and/or corn industry in any field of activity shall be granted to any new alien applicant therefor. (Emphasis supplied)
54Rollo, p. 44.
55 146 Phil. 283 (1970).
56 Id. at 291.