757 PHIL. 212
Assailed in this petition for review on
certiorari1 are the Decision
2 dated August 26, 2011 and the Resolution
3 dated August 3, 2012 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 109493, finding grave abuse of discretion on the part of petitioners the Department of Health (DOH) and the Food and Drug Administration (FDA), then known as the Bureau of Food and Drugs (BFAD), for denying respondent Philip Morris Philippines Manufacturing, Inc.as (PMPMI) permit applications for its tobacco sales promotions.
The Facts
On November 19, 2008, PMPMI, through the advertising agency PCN Promopro, Inc. (PCN), by virtue of Article 116
4 of Republic Act No. (RA) 7394
5 or the aConsumer Act of the Philippines,a applied for a sales promotion permit before the BFAD, now the FDA, for its
Gear Up Promotional Activity (
Gear Up Promo).
6 The application included the mechanics for the promotional activity, as well as relevant materials and fees.
7With more than fifteen (15) days lapsing without the BFAD formally acting upon the application, PMPMI then inquired about its status. However, PMPMI was only verbally informed of the existence of a Memorandum issued by the DOH purportedly prohibiting tobacco companies from conducting any tobacco promotional activities in the country. On January 8, 2009, PCN requested
8 the BFAD to formally place on record the lack of any formal action on its
Gear Up Promo application.
9Meanwhile, on November 28, 2008, PMPMI, through another advertising agency, Arc Worldwide Philippines Co. (AWPC), filed another application for a sales promotional permit, this time for its Golden Stick Promotional Activity (
Golden Stick Promo) which the BFAD, however, refused outright, pursuant to a directive of the BFAD Director that all permit applications for promotional activities of tobacco companies will no longer be accepted. Despite inquiries, the BFAD merely advised AWPC to await the formal written notice regarding its application.
10Eventually, in a letter
11 dated January 5, 2009, the BFAD, through Director IV Leticia Barbara B. Gutierrez, M.S. (Dir. Gutierrez), denied PMPMIas
Gear Up Promo application in accordance with the instructions of the Undersecretary of Health for Standards and Regulations, directing that as of July 1, 2008, aall promotions, advertisements and/or sponsorships of tobacco products are already prohibited,a based on the provisions of RA 9211
12 or the aTobacco Regulation Act of 2003.a
13On January 19, 2009, PMPMI filed an administrative appeal
14 before the DOH Secretary, assailing the BFADas denial of its
Gear Up Promo application, as well as its refusal to accept the
Golden Stick Promo application. In its appeal, PMPMI maintained that under RA 9211,
promotion is not prohibited but merely
restricted, and that while there are specific provisions therein totally banning tobacco advertising and sponsorships, no similar provision could be found banning
promotion.
15 It likewise averred that it had acquired a vested right over the granting of its sales promotional permit applications, considering that the BFAD has been granting such applications prior to January 5, 2009. Finally, it insisted that the denial of its promotional permit applications was tantamount to a violation of its right to due process as well as their right to property.
16The DOH RulingIn a Consolidated Decision
17 dated April 30, 2009, then DOH Secretary Francisco T. Duque III (Sec. Duque) denied PMPMIas appeal, as well as all other similar actions filed by other tobacco companies and thereby affirmed the action of the BFAD denying their sales promotional permit applications, pursuant to the provisions of RA 9211.
18In denying PMPMIas and other tobacco companiesa promotional applications, the DOH ruled that the issuance of permits for sales promotional activities was never a ministerial duty of the BFAD; rather, it was a discretionary power to be exercised within the confines of the law. Moreover, previous approvals of sales promotional permit applications made by the BFAD did not create a vested right on the part of the tobacco companies to have all applications approved.
19The DOH likewise ruled that the intent and purpose of RA 9211 was to
completely ban tobacco advertisements,
promotions, and sponsorships, as promotion is inherent in both advertising and sponsorship. As such, if RA 9211 completely prohibited
advertisements and
sponsorships, then it is clear that
promotion, which is necessarily included in both activities, is likewise prohibited, explaining further that the provisions of RA 9211 should not be interpreted in a way as would render them ridiculous or meaningless.
20Lastly, the DOH cited the Philippinesa obligation to observe the provisions of the Framework Convention on Tobacco Control (FCTC), an international treaty, which has been duly ratified and adopted by the country on June 6, 2005.
21Aggrieved, PMPMI elevated the matter to the CA
via petition for
certiorari and
mandamus,
22 docketed as CA G.R. SP No. 109493, ascribing grave abuse of discretion upon the DOH in refusing to grant its sales promotional permit applications, maintaining,
inter alia, that RA 9211 still allows promotion activities notwithstanding the phase-out of advertising and sponsorship activities after July 1, 2008.
The CA RulingIn a Decision
23 dated August 26, 2011, the CA granted the petition and nullified the Consolidated Decision of the DOH upon a finding that the provisions of RA 9211 were clear when it distinguished
promotion from
advertising and
sponsorship, so much so that while the latter two (2) activities were completely banned as of July 1, 2008, the same does not hold true with regard to
promotion, which was only
restricted. The CA held that the DOH cannot exercise
carte blanche authority to deny PMPMIas promotional permit applications, adding that a[w]hen the law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation, only for application.a
24Furthermore, it ruled that the DOH is bereft of any authority to enforce the provisions of RA 9211, in view of the creation of the Inter-Agency CommitteeaTobacco (IAC-Tobacco) under Section 29 of the said law, which shall have the aexclusive power and function to administer and implement the provisions of [RA 9211] x x x.a
25 Thus, even though PMPMI originally applied for sales promotional permits under Article 116 in relation to Article 109 of RA 7394, from which the DOH derives its authority to regulate tobacco sales promotions, the said provision has already been repealed by Section 39 of RA 9211,
26 which states:
Section 39. Repealing Clause. a DOH Administrative Orders No. 10[,] s. 1993 and No. 24[,] s. 2003 are hereby repealed. Article 94 of Republic Act No. 7394, as amended, otherwise known as the Consumer Act of the Philippines, is hereby amended.
All other laws, decrees, ordinances, administrative orders, rules and regulations, or any part thereof, which are inconsistent with this Act are likewise repealed or amended accordingly.
Hence, the CA ruled that the DOH wrongfully arrogated unto itself the authority given to the IAC-Tobacco to administer and implement the provisions of RA 9211, which includes regulation of tobacco promotions.
27Dissatisfied, the DOH, through the Office of the Solicitor General (OSG), moved for the reconsideration
28 of the said Decision, which the CA denied in a Resolution
29 dated August 3, 2012, hence, this petition.
The Issues Before the CourtThe essential issues to be resolved are: (a) whether or not the CA erred in finding that the authority of the DOH, through the BFAD, to regulate tobacco sales promotions under Article 116 in relation to Article 109 of RA 7394 had already been impliedly repealed by RA 9211, which created the IAC-Tobacco and granted upon it the exclusive authority to administer and implement the provisions thereof; and (b) whether or not the CA erred in ascribing grave abuse of discretion upon the DOH when the latter held that RA 9211 has also completely prohibited tobacco promotions as of July 1, 2008.
The Courtas RulingThe petition is bereft of merit.
At the core of the present controversy are the pertinent provisions of RA 7394,
i.e., Article 116 in relation to Article 109, to wit:
Article 116.
Permit to Conduct Promotion. a No person shall conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least thirty (30) calendar days prior to the commencement thereof. Unless an objection or denial is received within fifteen (15) days from filing of the application, the same shall be deemed approved and the promotion campaign or activity may be conducted: Provided, That any sales promotion campaign using medical prescriptions or any part thereof or attachment thereto for raffles or a promise of reward shall not be allowed, nor a permit be issued therefor. (Emphasis supplied)
Article 109.
Implementing Agency. a The Department of Trade and Industry shall enforce the provisions of this Chapter and its implementing rules and regulations: Provided, That with respect to food, drugs, cosmetics, devices, and hazardous substances, it shall be enforced by the Department of Health. (Emphasis and underscoring supplied)
The DOH derives its authority to rule upon applications for
sales promotion permits from the above-cited provisions. On the other hand, Section 29 of RA 9211 creating the IAC-Tobacco provides:
Section 29.
Implementing Agency. a An Inter-Agency Committee-Tobacco (IAC-Tobacco), which shall have the exclusive power and function to administer and implement the provisions of this Act, is hereby created. The IAC-Tobacco shall be chaired by the Secretary of the Department of Trade and Industry (DTI) with the Secretary of the Department of Health (DOH) as Vice Chairperson. The IAC-Tobacco shall have the following as members:
- Secretary of the Department of Agriculture (DA);
- Secretary of the Department of Justice (DOJ);
- Secretary of the Department of Finance (DOF);
- Secretary of the Department of Environment and Natural Resources (DENR);
- Secretary of the Department of Science and Technology (DOST);
- Secretary of the Department of Education (DepEd);
- Administrator of the National Tobacco Administration (NTA);
- A representative from the Tobacco Industry to be nominated by the legitimate and recognized associations of the industry; and
- A representative from a nongovernment organization (NGO) involved in public health promotion nominated by DOH in consultation with the concerned NGOs[.]
The Department Secretaries may designate their Undersecretaries as their authorized representative to the IAC. (Emphasis and underscoring supplied)
It is the CAas pronouncement that the creation of the IAC-Tobacco effectively and impliedly repealed
30 the above-quoted provisions of RA 7394, thereby removing the authority of the DOH to rule upon applications for sales promotional permits filed by tobacco companies such as those filed by PMPMI subject of this case.
On the other hand, while the DOH and the BFAD concede that the creation of the IAC-Tobacco expressly grants upon the IAC-Tobacco the exclusive power and function to administer and implement its provisions, they nevertheless maintain that RA 9211 did not remove their authority under RA 7394 to regulate tobacco
sales promotions.31 They point out that this much can be deduced from the lack of provisions in RA 9211 and its implementing rules laying down the procedure for the processing of applications for tobacco sales promotions permit.
32 As such, the DOH, through the BFAD, retains the authority to rule on PMPMIas promotional permit applications.
The Court agrees with the CA.
After a meticulous examination of the above-quoted pertinent provisions of RA 7394 and RA 9211, the Court finds that the latter law
impliedly repealed the relevant provisions of the former with respect to the authority of the DOH to regulate tobacco sales promotions.
At this point, the Court notes that both laws separately treat apromotiona as one of the activities related to tobacco: RA 7394 defines
asales promotiona under Article 4 (bm), while RA 9211 speaks of a
promotiona or a
tobacco promotiona under Section 4 (l).
a
Sales promotiona is defined in Article 4 (bm) of RA 7394, to wit:
Article 4. Definition of Terms. a For purposes of this Act, the term:
... ... x
bm) a
Sales Promotiona means techniques intended for broad consumer participation which contain promises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security, service or winning in contest, game, tournament and other similar competitions which involve determination of winner/s and which utilize mass media or other widespread media of information. It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product. (Emphases and underscoring supplied)
Identifying its
Gear Up Promo and
Golden Stick Promo to be activities that fall under
sales promotion as contemplated in the said provision, PMPMI filed its permit applications under Article 116 of RA 7394 before the BFAD.
Meanwhile, Section 4 (l) of RA 9211 defines a
promotiona as follows:
Section 4. Definition of Terms. a As used in this Act:
... ... x
l. aPromotiona a refers to an event or activity organized by or on behalf of a tobacco manufacturer, distributor or retailer with the aim of promoting a brand of tobacco product, which event or activity would not occur but for the support given to it by or on behalf of the tobacco manufacturer, distributor or retailer. It may also refer to the display of a tobacco product or manufactureras name, trademark, logo, etc. on non-tobacco products. This includes the paid use of tobacco products bearing the brand names, trademarks, logos, etc. in movies, television and other forms of entertainment. For the purpose of this Act, promotion shall be understood as tobacco promotion[.] (Emphases and underscoring supplied)
As adverted to elsewhere, the IAC-Tobacco shall have the exclusive power and function to administer and implement the provisions of RA 9211, which includes the conduct of regulating
promotion.The Court has judiciously scrutinized the above definitions and finds that there is no substantial difference between the activities that would fall under the purview of asales promotiona in RA 7394, as well as those under apromotiona in RA 9211, as would warrant a delineation in the authority to regulate its conduct. In fact, the techniques, activities, and methods mentioned in the definition of asales promotiona can be subsumed under the more comprehensive and broad scope of apromotion.a
In order to fully understand the depth and scope of these marketing activities, the Court finds it necessary to go beyond the ambit of the definitions provided in our laws.
Outside RA 7394, asales promotiona refers to activities which make use of amedia and non-media marketing communication for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability,a
33 ato provide added value or incentives to consumers, wholesalers, retailers, or other organizational customers to stimulate immediate salesa and aproduct interest, trial, or purchase.a
34 Examples of devices used in asales promotiona are contests, coupons, freebies, point-of-purchase displays, premiums, raffle prizes, product samples, sweepstakes, and rebates.
35On the other hand, apromotiona is a term frequently used in marketing which pertains to araising customer awareness of a product or brand, generating sales, and creating brand loyaltya
36 which utilize the following subcategories: personal selling, advertising,
sales promotion, direct marketing, and publicity.
37 The three basic objectives of promotion are: (1) to present information to consumers as well as others; (2) to increase demand; and (3) to differentiate a product.
38 aPromotiona can be done through various methods,
e.g., internet advertisements, special events, endorsements, incentives in the purchase of a product like discounts (
i.e., coupons), free items, or contests.
39Consequently, if asales promotiona is considered as one of the subcategories of apromotion,a it is clear, therefore, that apromotiona necessarily incorporates the activities that fall under asales promotion.a Considering that the common and fundamental purpose of these marketing strategies is to raise customer awareness in order to increase consumer demand or sales, drawing a demarcation line between apromotiona and asales promotiona as two distinct and separate activities would be unnecessarily stretching their meanings and, accordingly, sow more confusion. Moreover, the techniques, methods, and devices through which asales promotiona are usually accomplished can likewise be considered as activities relating to apromotion,a like raffle contests, which necessarily require prizes and drawing of winners, discounts, and freebies.
Concomitantly, while the Court acknowledges the attempt of the Department of Justice (DOJ), through its DOJ Opinion No. 29, series of 2004,
40 (DOJ Opinion) to reconcile and harmonize the apparently conflicting provisions of RA 7394 and RA 9211 in this respect, to the Courtas mind, it is more logical to conclude that asales promotiona and apromotiona are actually one and the same. The DOJ, in fact, referred
41 to aproduct promotiona in RA 9211 as apromotion per sea which, therefore, can be taken to mean an all-encompassing activity or marketing strategy which may reasonably and logically include asales promotion.a Besides, the DOJ Opinion is merely persuasive and not necessarily controlling.
42Furthermore, the declared policy of RA 9211 where apromotiona is defined includes the institution of aa balanced policy whereby the use, sale and advertisements of tobacco products shall be regulated in order to promote a healthful environment and protect the citizens from the hazards of tobacco smoke x x x.a
43 Hence, if the IAC-Tobacco was created and expressly given the exclusive authority to implement the provisions of RA 9211 in accordance with the foregoing State policy, it signifies that it shall also take charge of the regulation of the use, sale, distribution, and advertisements of tobacco products, as well as all forms of apromotiona which essentially includes asales promotion.a Therefore, with this regulatory power conferred upon the IAC-Tobacco by RA 9211, the DOH and the BFAD have been effectively and impliedly divested of any authority to act upon applications for tobacco sales promotional permit, including PMPMIas.
Finally, it must be stressed that RA 9211 is a special legislation which exclusively deals with the subject of tobacco products and related activities. On the other hand, RA 7394 is broader and more general in scope, and treats of the general welfare and interests of consumers vis-A -vis proper conduct for business and industry. As such,
lex specialis derogat generali. General legislation must give way to special legislation on the same subject, and generally is so interpreted as to embrace only cases in which the special provisions are not applicable. In other words, where two statutes are of equal theoretical application to a particular case, the one specially designed therefore should prevail.
44In fine, the Court agrees with the CA that it is the IAC-Tobacco and not the DOH which has the primary jurisdiction to regulate sales promotion activities as explained in the foregoing discussion. As such, the DOHas ruling, including its construction of RA 9211 (
i.e., that it
completely banned tobacco advertisements,
promotions, and sponsorships, as
promotion is inherent in both advertising and sponsorship), are declared null and void, which, as a necessary consequence, precludes the Court from further delving on the same. As it stands, the present applications filed by PMPMI are thus remanded to the IAC-Tobacco for its appropriate action. Notably, in the proper exercise of its rule-making authority, nothing precludes the IAC-Tobacco from designating any of its pilot agencies (which, for instance, may even be the DOH
45) to perform its multifarious functions under RA 9211.
WHEREFORE, the petition is DENIED. The Decision dated August 26, 2011 and the Resolution dated August 3, 2012 of the Court of Appeals in CA-G.R. SP No. 109493 are hereby AFFIRMED with the MODIFICATION in that the present permit applications filed by respondent Philip Morris Philippines Manufacturing, Inc. for its tobacco sales promotions are hereby REMANDED to the Inter-Agency Committee-Tobacco for appropriate action.
SO ORDERED.
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and
Perez, JJ., concur.