G.R. No. 108461 - Philippine International Trading Corp. vs. Angeles

PHILIPPINE INTERNATIONAL TRADING CORPORATION (PITC) — petitioner before the Supreme Court; issuer of Administrative Order No. SOCPEC 89-08-01.
REMINGTON INDUSTRIAL SALES CORPORATION — private respondent and original petitioner in RTC Case No. 92-158; sought prohibition and mandamus against PITC.
FIRESTONE CERAMICS, INC. — private respondent and intervenor in RTC Case No. 92-158.
Hon. Zosimo Z. Angeles — presiding judge, Regional Trial Court, Makati, Branch 58; rendered Decision dated January 4, 1993 in civil Case No. 92-158.
Petition for Review on Certiorari filed by PITC in the Supreme Court assailing the RTC Decision that declared Administrative Order No. SOCPEC 89-08-01 null and void.

Administrative Order No. SOCPEC 89-08-01 (Aug. 30, 1989) — required that all applications to import from the Peoples Republic of China (PROC) be accompanied by a viable and confirmed export program of Philippine products to PROC equal in value to the proposed import (one-to-one ratio) to be completed within six months.
Export program implementation methods per the Order:

By the importer himself; or
By tie-up between the importer and a legitimate exporter (via IMPORTER-EXPORTER AGREEMENT, PITC Form No. M-1006); or
As later authorized by PITC Board Resolution No. 92-02-05, through the PITC itself upon payment of a Counter Export Development Service (CEDS) fee of 0.5% of the unliquidated undertaking.

Essential commodities — 15% of value of imports applied for.
Other commodities — 50% of value of imports applied for.
Forms of guarantee: cash deposit, bank hold-out, or domestic letter of credit.
Guarantees forfeitable if export commitment not completed within six months; refund/cancellation upon submission of specified export documents.

Miscellaneous provisions authorized PITC to disapprove applications not in accordance with the rules and to penalize fraudulent statements or documents submitted by importers.

Remington and Firestone applied to PITC for authority to import from PROC, were granted authority after executing undertakings to balance imports with exports.
Subsequent failure by both respondents to submit export credits equivalent to their imports led PITC to withhold further import approvals.
Remington filed a Petition for Prohibition and Mandamus with prayer for TRO and preliminary injunction on January 20, 1992; TRO issued January 21, 1992 ordering PITC to cease processing applications for goods from PROC.
Firestone was permitted to intervene on July 2, 1992.
The parties agreed that the evidence adduced at the preliminary injunction hearing was sufficient to decide the case on the merits.
The RTC rendered its Decision (annexed to petition) holding the Administrative Order null and void and unconstitutional, enjoining PITC from further implementing the Order and commanding approval of pending and future applications free of the balancing requirements.

RTC ruled PITC’s regulatory authority under LOI No. 444 and P.D. No. 1071 had been repealed or obliterated by Executive Order No. 133 (Feb. 27, 1987) attaching PITC to the Department of Trade and Industry (DTI).
RTC held the Administrative Order was promulgated pursuant to an international agreement (Memorandum of Agreement / Trade Protocols) that had not been concurred in by two-thirds of the Senate, rendering the Order void under Article VII, Sec. 21, 1987 Constitution.
RTC found the Order restrained trade in violation of Sections 1 and 19, Article XII, 1987 Constitution.
RTC concluded the Administrative Order was invalid for lack of publication contrary to Article 2 of the New Civil Code.

Whether PITC had the authority to issue Administrative Order No. SOCPEC 89-08-01 and related regulations, in light of LOI 444, P.D. No. 1071, and Executive Order No. 133.
Whether the Administrative Order was rendered void for having been promulgated pursuant to international agreements (Memorandum of Understanding / Trade Protocols) not concurred in by two-thirds of the Senate, in violation of Article VII, Sec. 21, 1987 Constitution.
Whether the Administrative Order violated constitutional provisions against restraint of trade (Sections 1 and 19, Article XII, 1987 Constitution).
Whether Administrative Order No. SOCPEC 89-08-01 was effective as law given the lack of publication required by Article 2, New Civil Code.
Whether the respondents’ obligations to pay PITC the 0.5% Counter Export Development Service (CEDS) fee for...(Subscriber-Only)