Case Summary (G.R. No. 115381)
Challenged Administrative Issuances
KMU’s certiorari petition attacks:
(a) DOTC Department Order No. 92-587 (Mar. 30, 1992) – deregulation policy allowing fare ranges and presumption of need;
(b) DOTC Memorandum (Oct. 8, 1992) – draft implementing rules;
(c) LTFRB Memorandum Circular No. 92-009 (Feb. 17, 1993) – guidelines expanding fare ranges (±20%/–25%) and presuming public need;
(d) LTFRB Order (Mar. 24, 1994) – dismissal of KMU’s petition opposing PBOAP’s 20% increase.
Procedural History and TRO
PBOAP sought an across-the-board rate increase in December 1990; LTFRB granted it after hearing objections. Subsequent deregulation issuances allowed operators to adjust fares within specified bands without LTFRB approval or hearing. KMU challenged these, prompting a TRO on June 20, 1994, which rolled back fares and imposed a moratorium on new franchises.
Standing to Sue under the 1987 Constitution
Article VIII, Section 1 empowers courts to redress “grave abuse of discretion” by government entities. KMU’s members, as daily commuters, suffered direct injury from arbitrary fare increases. Even if strict standing were doubtful, the Court invoked its discretion to address issues of “transcendental importance” and waived technical locus standi requirements.
Illegality of Delegating Rate-Making to Operators
Sec. 16(c) of the Public Service Act and EO 202 authorize LTFRB to “fix and determine” fares after notice and hearing. These provisions do not permit further delegation to carriers. The principle potestas delegata non delegari forbids an administrative agency from passing its rule-making duty to private parties. Deregulation unleashed “compounding fares” akin to compound interest, undermining orderly rate-setting.
Due Process in Rate Adjustment
The law requires that any rate adjustment be supported by a petition, publication, notice to affected parties, and public hearing. Allowing operators to impose fare ranges without such procedural safeguards violates both statutory requirements and the riders’ right to participate in hearings that determine “just and reasonable” fares.
Invalid Presumption of Public Need for Franchises
A Certificate of Public Convenience (CPC) mandates proof of Filipino citizenship, financial capacity, and promotion of public interest (CA 146, Sec. 16(a)). LTFRB MC 92-009’s presumption that need favors the applica
...continue readingCase Syllabus (G.R. No. 115381)
Facts of the Case
- Petitioner
- Kilusang Mayo Uno Labor Center (KMU), representing daily commuters who use buses, trains, and jeepneys.
- Respondents
- Secretary Jesus B. Garcia, Jr. of the Department of Transportation and Communications (DOTC)
- Land Transportation Franchising and Regulatory Board (LTFRB)
- Provincial Bus Operators Association of the Philippines (PBOAP)
- Subject Matter
- Certiorari petition challenging the constitutionality and validity of several DOTC and LTFRB issuances that:
- Authorized provincial bus and jeepney operators to adjust fares within prescribed ranges without LTFRB approval, notice or hearing.
- Created a presumption of public need for new Certificates of Public Convenience (CPC) in favor of applicants, shifting the burden of proof to oppositors.
- Certiorari petition challenging the constitutionality and validity of several DOTC and LTFRB issuances that:
- Underlying Law
- Section 16(c) and Section 20(a) of Commonwealth Act No. 146, as amended (Public Service Act)
- Rule 131, Section 5, Rules of Court
Antecedents and Administrative Issuances
- DOTC Memorandum Order No. 90-395 (June 26, 1990)
- Pilot fare-range scheme for provincial buses: ±15% of LTFRB official rates for one year.
- LTFRB Chairman’s Memorandum (July 24, 1990)
- Highlighted legal constraints under Sec. 16(c), public hearing requirement, and social unfitness amid earthquake aftermath.
- PBOAP Fare Increase Application (December 5–6, 1990)
- Sought P0.085/km increase; later reduced to P0.065/km due to diesel price drop; opposed by consumer groups.
- LTFRB Decision (December 14, 1990)
- Approved adjusted rates for Luzon and Visayas/Mindanao ordinary, student, first-class, premier-class, and air-conditioned buses.
- DOTC Department Order No. 92-587 (March 30, 1992)
- Policy framework for transport sector liberalization:
- Entry/exit rules (no monopolies; presumption of need in favor of applicants).
- Rate/fare deregulation: ±15% liberalization, phased deregulation.
- Phase-out of special financing and incentives for fleet acquisition.
- Policy framework for transport sector liberalization:
- DOTC Memorandum (Oct. 8, 1992)
- Directed LTFRB to adopt implementing rules and procedures based on Order No. 92-587 (World Bank–inspired).
- LTFRB Memorandum Circular No. 92-009 (Feb. 17, 1993)
- Guidelines implementing DO 92-587:
- Presumption of public need in favor of CPC applicants; burden on oppositors.
- Expanded fare range to +20%/–25% in 1994; fares tied to “indicative or reference rates”; public hearin
- Guidelines implementing DO 92-587: