G.R. No. 196231 - Gonzales III vs. Office of the President of the Philippines

A group of exporters filed the petition challenging the enforcement by the Central Bank of the Philippines of Circulars Nos. 133 and 171.
The challenged circulars require exporters to surrender 20% of their foreign exchange receipts at par value (P2.00 to $1.00) while allowing them to sell the remaining 80% at the prevailing free market rate.
The legal basis for these actions includes:

Section 71 of the Central Bank Charter (Republic Act No. 265), which granted emergency powers during a foreign exchange crisis leading to the issuance of Circular No. 20 of December 9, 1949.
Republic Act No. 2609 (July 16, 1959) authorizing the Central Bank to impose a margin of not more than 40% on banks’ selling rates of foreign exchange until December 31, 1964.

In response to recurring foreign exchange difficulties, the Central Bank devised a "Plan for Gradual Lifting of Exchange and Import Controls" in April 1960.
The Bank subsequently issued several circulars to reduce the retention rate on foreign exchange receipts:

Circular No. 105 (April 25, 1960): Mandated the retention of 25% of export receipts (with 75% to be sold at the official rate).
Circular No. Ill (September 12, 1960): Adjusted the ratio to 70% for sale and 30% for retention.
Circular No. 117 (November 28, 1960): Further modified the split to 50%-50%.
Circular No. 121 (March 2, 1961): Reduced the retention to 25%.
Circular No. 133 (January 21, 1962): Further eased the measure to a 20%-80% split.

With the continuing foreign exchange crisis and deteriorating international reserves, the Central Bank, through Circular No. 171 (issued April 23, 1964), extended and maintained the 20% retention scheme.

Petitioners argued that the maintenance of the 20% retention was illegal and unconstitutional:

It allegedly violated the Supreme Court’s decision in Bacolod-Murcia Milling Co. vs. Central Bank of the Philippines.
It was claimed to contravene paragraph 2 of Republic Act No. 2609 by not effectuating total decontrol after four years.
The measure was asserted to involve an unlawful delegation of legislative power.
Petitioners contended that the policy was confiscatory, constituting an invalid exercise of police power and eminent domain.
The retention was deemed to deprive exporters of property rights and due process.
It was argued that the 20% retention effectively imposed an export tax beyond the legal authority of the Central Bank.

The petition was initiated on July 27, 1964, following the refusal of the Central Bank to reconsider Circular No. 171.

Its regulation, including the 20% retention measure, is pursuant to and within its emergency powers under Section 74 of Republic Act No. 265.
The retention measure is designed primarily to protect and stabilize the international reserve, essential to the nation’s economic stability.

Former Governor Miguel Cuaderno, acting as an intervenor, argued that post the expiry of Republic Act No. 2609 the authority of the Central Bank should be limited (such as selling dollars only at par), though this issue was not central to the petitioners’ claims.

Whether the Central Bank is legally authorized to impose and continue the 20% retention on exporters’ foreign exchange receipts beyond the period contemplated by Republic Act No. 2609.

Does the continuation of Circulars Nos. 133 and 171, which enforce the 20% retention, comply with the statutory framework and the intended program of gradual decontrol?
Is the 20% retention measure blighted by being a confiscatory exercise or an unlawful imposition equivalent to an export tax?

Whether the statutory provisions and the emergency powers delegated under Republic Act No. 265, as supplemented by Republic Act No. 2609, justify the Central Bank’s actions to protect the international reserve in the face of a continuing exchange crisis.

Whether the previous judicial pronouncements (specifically the personal views expressed in Bacolod-Murcia Milling Co. vs. Central Bank) bind the Central Bank’s exercise of its powers in this context.