Corp. Rehab.

In the light of the current global economic crisis, perhaps it is useful to present the salient parts of the latest issuance of the Philippine Supreme Court on the procedures for corporate rehabilitation.

On December 2, 2008, the Philippine Supreme Court en banc issued A.M. No. 00-8-10-SC, or the “Rules of Procedure on Corporate Rehabilitation (2008)”, which took effect on January 16, 2009.

I wish to digest its salient parts here, for legal research purposes of the visitors of this blog.

The Rules shall apply to petitions for rehabilitation of corporations, partnerships and associations pursuant to Presidential Decree No. 902-A, as amended. It will be noted that Republic Act No. 8799, otherwise known as The Securities Regulation Code, has transferred from the Securities and Exchange Commission (SEC) to the Regional Trial Courts (RTC) jurisdiction over corporate rehabilitation cases.

“Rehabilitation” means the restoration of the debtor to a position of successful operation and solvency, if it is shown that its continuance of operation is economically feasible and its creditors can recover by way of the present value of payments projected in the rehabilitation plan, more so if the corporation continues as a going concern than if it is immediately liquidated.

Any proceeding initiated under the Rules are considered in rem. Jurisdiction over all persons affected by the proceedings is considered as acquired upon publication of the notice of the commencement of the proceedings in any newspaper of general circulation in the Philippines.

The proceedings are summary and non-adversarial in nature.

The following pleadings are prohibited:

(a) Motion to dismiss;
(b) Motion for a bill of particulars;
(c) Petition for relief;
(d) Motion for extension;
(e) Motion for postponement;
(f) Third-party complaint;
(g) Intervention;
(h) Motion to hear affirmative defenses; and
(i) Any pleading or motion which is similar to or of like effect as
any of the foregoing.

Any pleading, motion, opposition, defense or claim filed by any interested party must be verified and must contain as annexes such documents as may be deemed by the party submitting the same as supportive of the allegations in the affidavits. The court may decide matters on the basis of affidavits and other documentary evidence. Where necessary, the court may conduct clarificatory hearings before resolving any matter submitted to it for resolution.

Petitions for rehabilitation pursuant must be filed in the Regional Trial Court (RTC) which has jurisdiction over the principal office of the debtor as specified in its articles of incorporation or partnership. Where the principal office of the corporation, partnership or association is registered in the Securities and Exchange Commission as Metro Manila, the action must be filed in the RTC of the city or municipality where the head office is located. A joint petition by a group of companies must be filed in the RTC which has jurisdiction over the principal office of the parent company, as specified in its articles of incorporation.

When so authorized by the court, any pleading and/or document required by these Rules may be filed with the court and/or served upon the other parties by facsimile transmission (fax) or electronic mail (e-mail). In such cases, the date of transmission shall be deemed to be the date of service. Where the pleading or document is voluminous, the court may, upon motion, waive the requirement of service; provided that a copy thereof together with all its attachments is duly filed with the court and is made available for examination and reproduction by any party, and provided, further, that a notice of such filing and availability is duly served on the parties.

Upon motion, the court may issue an order to protect trade secrets or other confidential research, development or commercial information belonging to the debtor.

Any order issued by the court is immediately executory. A petition to review the order will not stay the execution of the order unless restrained or enjoined by the appellate court.

Upon motion, the court may nullify any transfer of property or any other conveyance, sale, payment or agreement made in violation of its stay order or in violation of the Rules.

Within five (5) working days from the filing of a petition for corporate rehabilitation with the RTC, and if the court finds it to be sufficient in form and substance, it shall issue a stay order:

(a) appointing a rehabilitation receiver and fixing his bond;

(b) staying enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against the debtor, its guarantors and persons not solidarily liable with the debtor;

provided, that the stay order shall not cover claims against letters of credit and similar security arrangements issued by a third party to secure the payment of the debtor’s obligations;

provided, further, that the stay order shall not cover foreclosure by a creditor of property not belonging to a debtor under corporate rehabilitation;

provided, however, that where the owner of such property sought to be foreclosed is also a guarantor or one who is not solidarily liable, said owner shall be entitled to the benefit of excussion as such guarantor;

(c) prohibiting the debtor from selling, encumbering, transferring, or disposing in any manner any of its properties except in the ordinary course of business;

(d) prohibiting the debtor from making any payment of its liabilities except as provided in items (e), (f) and (g), infra, or when ordered by the court.

(e) prohibiting the debtor's suppliers of goods or services from withholding supply of goods and services in the ordinary course of business for as long as the debtor makes payments for the services and goods supplied after the issuance of the stay order;

(f) directing the payment in full of all administrative expenses incurred after the issuance of the stay order;

(g) directing the payment of new loans or other forms of credit accommodations obtained for the rehabilitation of the debtor with prior court approval;

(h) fixing the dates of the initial hearing on the petition not earlier than forty-five (45) days but not later than sixty (60) days from the filing thereof;

(i) directing the petitioner to publish the Order in a newspaper of general circulation in the Philippines once a week for two (2) consecutive weeks;

(j) directing the petitioner to furnish a copy of the petition and its annexes, as well as the stay order, to the creditors named in the petition and the appropriate regulatory agencies such as, but not limited to, the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas, the Insurance Commission, the National Telecommunications Commission, the Housing and Land Use Regulatory Board and the Energy Regulatory Commission;

(k) directing the petitioner that foreign creditors with no known addresses in the Philippines be individually given a copy of the stay order at their foreign addresses;

(l) directing all creditors and all interested parties (including the regulatory agencies concerned) to file and serve on the debtor a verified comment on or opposition to the petition, with supporting affidavits and documents, not later than fifteen (15) days before the date of the first initial hearing and putting them on notice that their failure to do so will bar them from participating in the proceedings; and

(m) directing the creditors and interested parties to secure from the court copies of the petition and its annexes within such time as to enable themselves to file their comment on or opposition to the petition and to prepare for the initial hearing of the petition.

It must be stress that the issuance of a stay order does not affect the right to commence actions or proceedings insofar as it is necessary to preserve a claim against the debtor.

The petitioner shall immediately serve a copy of the stay order on the rehabilitation receiver appointed by the court, who shall manifest his acceptance or non-acceptance of his appointment not later than ten (10) days from receipt of the order.

The stay order shall be effective from the date of its issuance until the approval of the rehabilitation plan or the dismissal of the petition.

The court may, upon motion, terminate, modify, or set conditions for the continuance of the stay order, or relieve a claim from the coverage thereof upon showing that:

(1) any of the allegations in the petition, or any of the contents of any attachment, or the verification thereof has ceased to be true;

(2) a creditor does not have adequate protection over property securing its claim;

(3) the debtor's secured obligation is more than the fair market value of the property subject of the stay and such property is not necessary for the rehabilitation of the debtor; or

(4) the property covered by the stay order is not essential or necessary to the rehabilitation and the creditor’s failure to enforce its claim will cause more damage to the creditor than to the debtor.

The creditor lacks adequate protection if it can be shown that:

(1) The debtor fails or refuses to honor a pre-existing agreement with the creditor to keep the property insured;

(2) The debtor fails or refuses to take commercially reasonable steps to maintain the property; or

(3) The property has depreciated to an extent that the creditor is undersecured.

Upon showing of the creditor’s lack of adequate protection, the court will order the rehabilitation receiver to:

(1) make arrangements to provide for the insurance or maintenance of the property, or

(2) to make payments or otherwise provide additional or replacement security such that the obligation is fully secured.

If such arrangements are not feasible, the court will modify the stay order to allow the secured creditor lacking adequate protection to enforce its claim against the debtor; provided, however, that the court may deny the creditor the foregoing remedies if such remedies would prevent the continuation of the debtor as a going concern or otherwise prevent the approval and implementation of a rehabilitation plan.

In the appointment of the rehabilitation receiver, the following qualifications should be taken into consideration by the court:

(1) Expertise and acumen to manage and operate a business similar in size and complexity to that of the debtor;

(2) Knowledge in management, finance and rehabilitation of distressed companies;

(3) General familiarity with the rights of creditors in suspension of payments or rehabilitation, and general understanding of the duties and obligations of a rehabilitation receiver;

(4) Good moral character, independence and integrity;

(5) Lack of conflict of interest as defined in this Section; and

(6) Willingness and ability to file a bond in such amount as may be determined by the court.

A rehabilitation receiver may be deemed to have a conflict of interest if:

(1) He is a creditor or stockholder of the debtor;

(2) He is engaged in a line of business which competes with the debtor;

(3) He is, or was within two (2) years from the filing of the petition, a director, officer, or employee of the debtor or any of its present creditors, or the auditor or accountant of the debtor;

(4) He is or was within two (2) years from the filing of the petition, an underwriter of the outstanding securities of the debtor;

(5) He is related by consanguinity or affinity within the fourth civil degree to any creditor, stockholder, director, officer, employee, or underwriter of the debtor; or

(6) He has any other direct or indirect material interest in the debtor or any creditor.

The rehabilitation receiver shall not take over the management and control of the debtor but shall closely oversee and monitor the operations of the debtor during the pendency of the proceedings. For this purpose, the rehabilitation receiver shall have the powers, duties and functions of a receiver under Presidential Decree No. 902-A, as amended, and the Rules of Court.

The rehabilitation receiver shall be considered as an officer of the court. He shall be primarily tasked to study the best way to rehabilitate the debtor and to ensure that the value of the debtor's property is reasonably maintained pending the determination of whether or not the debtor should be rehabilitated, as well as implement the rehabilitation plan after its approval. His specific duties include the following:

(a) To verify the accuracy of the petition, including its annexes such as the Schedule of Debts and Liabilities and the Inventory of Assets submitted in support of the petition;

(b) To accept and incorporate, when justified, amendments to the Schedule of Debts and Liabilities;

(c) To recommend to the court the disallowance of claims and rejection of amendments to the Schedule of Debts and Liabilities that lack sufficient proof and justification;

(d) To submit to the court and make available for review by the creditors, a revised Schedule of Debts and Liabilities;

(e) To investigate the acts, conduct, properties, liabilities and financial condition of the debtor, the operation of its business and the desirability of the continuance thereof; and, any other matter relevant to the proceeding or to the formulation of a rehabilitation plan;

(f) To examine under oath the directors and officers of the debtor and any other witnesses that he may deem appropriate;

(g) To make available to the creditors documents and notices necessary for them to follow and participate in the proceedings;

(h) To report to the court any fact ascertained by him pertaining to the causes of the debtor's problems, fraud, preferences, dispositions, encumbrances, misconduct, mismanagement and irregularities committed by the stockholders, directors, management, or any other person against the debtor;

(i) To employ such person or persons such as lawyers, accountants, appraisers and staff as are necessary in performing his functions and duties as rehabilitation receiver;

(j) To monitor the operations of the debtor and to immediately report to the court any material adverse change in the debtor's business;

(k) To evaluate the existing assets and liabilities, earnings and operations of the debtor;

(l) To determine and recommend to the court the best way to salvage and protect the interests of the creditors, stockholders and the general public;

(m) To study the rehabilitation plan proposed by the debtor or any rehabilitation plan submitted during the proceedings, together with any comments made thereon;

(n) To prohibit and report to the court any encumbrance, transfer or disposition of the debtor's property outside of the ordinary course of business or what is allowed by the court;

(o) To prohibit and report to the court any payments outside of the ordinary course of business;

(p) To have unlimited access to the debtor's employees, premises, books, records and financial documents during business hours;

(q) To inspect, copy, photocopy or photograph any document, paper, book, account or letter, whether in the possession of the debtor or other persons;

(r) To gain entry into any property for the purpose of inspecting, measuring, surveying or photographing it or any designated relevant object or operation thereon;

(s) To take possession, control and custody of the debtor's assets;

(t) To notify counterparties and the court as to contracts that the debtor has decided to continue to perform or breach;

(u) To be notified of and to attend all meetings of the board of directors and stockholders of the debtor;

(v) To recommend any modification of an approved rehabilitation plan as he may deem appropriate;

(w) To bring to the attention of the court any material change affecting the debtor's ability to meet the obligations under the rehabilitation plan;

(x) To recommend the appointment of a management committee in the cases provided for under Presidential Decree No. 902-A, as amended;

(y) To recommend the termination of the proceedings and the dissolution of the debtor if he determines that the continuance in business of such entity is no longer feasible or profitable or no longer works to the best interest of the stockholders, parties-litigants, creditors or the general public;

(z) To apply to the court for any order or directive that he may deem necessary or desirable to aid him in the exercise of his powers and performance of his duties and functions; and (aa) To exercise such other powers as may from time to time be conferred upon him by the court.

Before entering upon his powers, duties and functions, the rehabilitation receiver must be sworn in to perform them faithfully, and must post a bond executed in favor of the debtor in such sum as the court may direct.

The rehabilitation receiver and the persons hired by him is entitled to reasonable professional fees and reimbursement of expenses which are considered as administrative expenses.

The rehabilitation receiver is not be subject to any action, claim or demand in connection with any act done or omitted by him in good faith in the exercise of his functions and powers.

The rehabilitation plan shall include:

(a) the desired business targets or goals and the duration and coverage of the rehabilitation;

(b) the terms and conditions of such rehabilitation which shall include the manner of its implementation, giving due regard to the interests of secured creditors such as, but not limited, to the nonimpairment of their security liens or interests;

(c) the material financial commitments to support the rehabilitation plan;

(d) the means for the execution of the rehabilitation plan, which may include debt to equity conversion, restructuring of the debts, dacion en pago or sale or exchange or any disposition of assets or of the interest of shareholders, partners or members;

(e) a liquidation analysis setting out for each creditor that the present value of payments it would receive under the plan is more than that which it would receive if the assets of the debtor were sold by a liquidator within a six-month period from the estimated date of filing of the petition; and

(f) such other relevant information to enable a reasonable investor to make an informed decision on the feasibility of the rehabilitation plan.

If the rehabilitation plan extends the period for the debtor to pay its contractual obligations, the new period should not extend beyond fifteen (15) years from the expiration of the stipulated term existing at the time of filing of the petition.

The approval of the rehabilitation plan by the court shall result in the following:

(a) The plan and its provisions shall be binding upon the debtor and all persons who may be affected thereby, including the creditors, whether or not such persons have participated in the proceedings or opposed the plan or whether or not their claims have been scheduled;

(b) The debtor shall comply with the provisions of the plan and shall take all actions necessary to carry out the plan;

(c) Payments shall be made to the creditors in accordance with the provisions of the plan;

(d) Contracts and other arrangements between the debtor and its creditors shall be interpreted as continuing to apply to the extent that they do not conflict with the provisions of the plan; and

(e) Any compromises on amounts or rescheduling of timing of payments by the debtor shall be binding on creditors regardless of whether or not the plan is successfully implemented.

Upon motion, within ninety (90) days from the approval of the rehabilitation plan, and after notice and hearing, the court may revoke the approval thereof on the ground that the same was secured through fraud.

An approved rehabilitation plan may, upon motion, be altered or modified if, in the judgment of the court, such alteration or modification is necessary to achieve the desired targets or goals set forth therein.

The court shall, upon motion or upon recommendation of the rehabilitation receiver, terminate the proceeding in any of the following cases:

(a) Dismissal of the petition;

(b) Failure of the debtor to submit the rehabilitation plan;

(c) Disapproval of the rehabilitation plan by the court;

(d) Failure to achieve the desired targets or goals as set forth in the rehabilitation plan;

(e) Failure of the debtor to perform its obligations under the plan;

(f) Determination that the rehabilitation plan may no longer be implemented in accordance with its terms, conditions, restrictions or assumptions; or

(g) Successful implementation of the rehabilitation plan.

Upon termination of the rehabilitation proceedings, the rehabilitation receiver shall submit his final report and accounting within such period of time as the court will allow him. Upon approval of his report and accounting, the court shall order his discharge.

A rehabilitation petition may be debtor-initiated or creditor-initiated.

In a debtor-initiated rehabilitation petition, a debtor who foresees the impossibility of meeting its debts when they respectively fall due, may petition the proper RTC for rehabilitation.

A group of companies may jointly file a petition for rehabilitation when one or more of its constituent corporations foresee the impossibility of meeting debts when they respectively fall due, and the financial distress would likely adversely affect the financial condition and/or operations of the other member companies of the group and/or the participation of the other member companies of the group is essential under the terms and conditions of the proposed rehabilitation plan.

The petition filed by the debtor must be verified and must set forth with sufficient particularity all the following material facts: (1) the name and business of the debtor; (2) the nature of the business of the debtor; (3) the history of the debtor; (4) the cause of its inability to pay its debts; (5) all the pending actions or proceedings known to the debtor and the courts or tribunals where they are pending; (6) threats or demands to enforce claims or liens against the debtor; and (7) the manner by which the debtor may be rehabilitated and how such rehabilitation may benefit the general body of creditors, employees and stockholders.

The petition shall be accompanied by the following documents:

(1) An audited financial statement of the debtor at the end of its last fiscal year;

(2) Interim financial statements as of the end of the month prior to the filing of the petition;

(3) A Schedule of Debts and Liabilities which lists all the creditors of the debtor, indicating the name and last address of record of each creditor; the amount of each claim as to principal, interest, or penalties due as of the date of filing; the nature of the claim; and any pledge, lien, mortgage judgment or other security given for the payment thereof;

(4) An Inventory of Assets which must list with reasonable specificity all the assets of the debtor, stating the nature of each asset, the location and condition thereof, the book value or market value of the asset, and attaching the corresponding certificate of title therefor in case of real property, or the evidence of title or ownership in case of movable property, the encumbrances, liens or claims thereon, if any, and the identities and addresses of the lienholders and claimants. The Inventory shall include a Schedule of Accounts Receivable which must indicate the amount of each, the persons from whom due, the date of maturity and the degree of collectibility categorizing them as highly collectible to remotely collectible;

(5) A rehabilitation plan which conforms with the minimal requirements set out in Section 18 of Rule 3;

(6) A Schedule of Payments and Disposition of Assets which the debtor may have effected within three (3) months immediately preceding the filing of the petition;

(7) A Schedule of Cash Flow of the debtor for three (3) months immediately preceding the filing of the petition, and a detailed schedule of the projected cash flow for the succeeding three (3) months;

(8) A Statement of Possible Claims by or against the debtor which must contain a brief statement of the facts which might give rise to the claim and an estimate of the probable amount thereof;

(9) An Affidavit of General Financial Condition which shall contain answers to the questions or matters prescribed in Annex "A" of the Rules;

(10) At least three (3) nominees for the position of rehabilitation receiver as well as their qualifications and addresses, including but not limited to their telephone numbers, fax numbers and e-mail address; and

(11) A certificate attesting under oath that (i) the filing of the petition has been duly authorized; and (ii) the directors and stockholders of the debtor have irrevocably approved and/or consented to, in accordance with existing laws, all actions or matters necessary and desirable to rehabilitate the debtor including, but not limited to, amendments to the articles of incorporation and by-laws or articles of partnership; increase or decrease in the authorized capital stock; issuance of bonded indebtedness; alienation, transfer, or encumbrance of assets of the debtor; and modification of shareholders' rights.

The petition filed by the debtor must be verified by an affidavit of a responsible officer of the debtor.

Every creditor of the debtor or any interested party must file his verified opposition to or comment on the petition not later than fifteen (15) days before the date of the initial hearing fixed in the stay order. After such time, no creditor or interested party shall be allowed to file any comment thereon or opposition thereto without leave of court.

If the Schedule of Debts and Liabilities omits a claim or liability, the creditor concerned shall attach to its comment or opposition a verified statement of the obligations allegedly due it.

On or before the initial hearing set in the stay order, the petitioner shall file a publisher's affidavit showing that the publication requirements and a petitioner’s affidavit showing that the notification requirement for foreign creditors had been complied with. After insuring that the debtor has complied with the jurisdictional requirements, the court shall ensure that the parties consider in detail all of the following:

(1) Amendments to the rehabilitation plan proposed by the debtor;
(2) Simplification of the issues;
(3) The possibility of obtaining stipulations and admission of facts and documents, including resort to request for admission under Rule 26 of the Rules of Court;
(4) The possibility of amicably agreeing on any issue brought up in the comments on, or opposition to, the petition;
(5) Referral of any accounting, financial and other technical issues to an expert;
(6) The possibility of submitting the petition for decision on the basis of the comments, opposition, affidavits and other documents on record;
(7) The possibility of a new rehabilitation plan voluntarily agreed upon by the debtor and its creditors; and
(8) Such other matters as may aid in the speedy and summary disposition of the case.

The period allowed for the initial hearings is 90 days from the date of the first initial hearing. Within 20 days after the last hearing, the court shall issue an order which shall:

(1) Give due course to the petition and immediately refer the petition and its annexes to the rehabilitation receiver who shall evaluate the rehabilitation plan and submit his recommendations to the court not later than ninety (90) days from the date of the last initial hearing, if the court is satisfied that there is merit to the petition, otherwise the court shall immediately dismiss the petition; and

(2) Recite in detail the matters taken up in the initial hearing and the actions taken thereon, including a substitute rehabilitation plan, if any.

If the debtor and creditors agree on a new rehabilitation plan, the order shall so state the fact and require the rehabilitation receiver to supply the details of the plan and submit it for the approval of the court not later than sixty (60) days from the date of the last initial hearing. The court must approve the new rehabilitation plan not later than ninety (90) days from the date of the last initial hearing upon concurrence of the following:

(1) Approval or endorsement of creditors holding at least two-thirds (2/3) of the total liabilities of the debtor including secured creditors holding more than fifty percent (50%) of the total secured claims of the debtor and unsecured creditors holding more than fifty percent (50%) of the total unsecured claims of the debtor;

(2) The rehabilitation plan would provide the objecting class of creditors with payments whose present value projected in the plan would be greater than that which they would have received if the assets of the debtor were sold by a liquidator within a six (6)-month period from the date of filing of the petition; and

(4) The rehabilitation receiver has recommended approval of the plan.

If no new rehabilitation plan is agreed upon by the debtor and the creditors, the rehabilitation receiver, at any time before he submits his evaluation on the debtor-proposed rehabilitation plan to the court shall, either alone or with the debtor, meet with the creditors or any interested party to discuss the plan with a view to clarifying or resolving any matter connected therewith.

Any creditor or interested party of record may file comments on or opposition to
the proposed rehabilitation plan, with a copy given to the rehabilitation receiver, not later than sixty (60) days from the date of the last initial hearing. The court shall conduct summary and non-adversarial proceedings to receive evidence, if necessary, in hearing the comments on and opposition to the plan.

The debtor may modify its rehabilitation plan in the light of the comments of the rehabilitation receiver and creditors or any interested party and submit a revised or substitute rehabilitation plan for the final approval of the court. Such rehabilitation plan must be submitted to the court not later than ten (10) months from the date of the date of filing of the petition.

The court may approve a rehabilitation plan even over the opposition of creditors of the debtor if, in its judgment, the rehabilitation of the debtor is feasible and the opposition of the creditors is manifestly unreasonable. The opposition of the creditors is manifestly unreasonable if the following are present:

(a) The rehabilitation plan complies with the requirements of the Rules;

(b) The rehabilitation plan would provide the objecting class of creditors with payments whose present value projected in the plan would be greater than that which they would have received if the assets of the debtor were sold by a liquidator within a six (6)-month period from the date of filing of the petition; and

(c) The rehabilitation receiver has recommended approval of the plan.

In approving the rehabilitation plan, the court must ensure that the rights of the secured creditors are not impaired. The court must issue the necessary orders or processes for its immediate and successful implementation. It may impose such terms, conditions, or restrictions as the effective implementation and monitoring thereof may reasonably require, or for the protection and preservation of the interests of the creditors should the plan fail.

The court shall decide the petition within one (1) year from the date of filing of the petition, unless the court, for good cause shown, is able to secure an extension of the period from the Supreme Court.

As to creditor-initiated rehabilitation petitions, any creditor or creditors holding at least twenty percent (20%) of the debtor's total liabilities may file a petition with the proper regional trial court for rehabilitation of a debtor that cannot meet its debts as they respectively fall due.

Where the petition is filed by a creditor or creditors, it is sufficient that the petition is accompanied by a rehabilitation plan and a list of at least three (3) nominees to the position of rehabilitation receiver and verified by a sworn statement that the affiant has read the petition and that its contents are true and correct of his personal knowledge or based on authentic records and that the petition is being filed to protect the interests of the debtor, the stockholders, the investors and the creditors of the debtor.

Pre-negotiated rehabilitation plans are allowed. When a debtor foresees the impossibility of meeting its debts as they fall due, he may, by itself or jointly with any of its creditors, file a verified petition for the approval of a pre-negotiated rehabilitation plan. The petition shall be supported by an affidavit showing the written approval or endorsement of creditors holding at least two-thirds (2/3) of the total liabilities of the debtor, including secured creditors holding more than fifty percent (50%) of the total secured claims of the debtor and unsecured creditors holding more than fifty percent (50%) of the total unsecured claims of the debtor.

In such a case, if the court finds the petition sufficient in form and substance, it shall, not later than five (5) working days from the filing of the petition, issue an order which shall:

(a) Identify the debtor, its principal business or activity/ies and its principal place of business;

(b) Direct the publication of the order in a newspaper of general circulation once a week for at least two (2) consecutive weeks, with the first publication to be made within seven (7) days from the time of its issuance;

(c) Direct the service by personal delivery of a copy of the petition on each creditor who is not a petitioner holding at least five percent (5%) of the total liabilities of the debtor, as determined in the schedule attached to the petition, within three (3) days;

(d) Direct the petitioner to furnish a copy of the petition and its annexes, as well as the stay order, to the relevant regulatory agency;

(e) State that copies of the petition and the rehabilitation plan are available for examination and copying by any interested party;

(f) Direct creditors and other parties interested (including the Securities and Exchange Commission and the relevant regulatory agencies such as, but not limited to, the Bangko Sentral ng Pilipinas, the Insurance Commission, the National Telecommunications Commission, the Housing and Land Use Regulatory Board and the Energy Regulatory Commission) in opposing the petition or rehabilitation plan to file their verified objections thereto or comments thereon within a period of not later than twenty (20) days from the second publication of the order, with a warning that failure to do so will bar them from participating in the proceedings;

(g) Appoint the rehabilitation receiver named in the plan, unless the court finds that he is not qualified under these Rules in which case it may appoint a qualified rehabilitation receiver of its choice;

(h) Stay enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against the debtor, its guarantors and persons not solidarily liable with the debtor; provided, that the stay order shall not cover claims against letters of credit and similar security arrangements issued by a third party to secure the payment of the debtor’s obligations; provided further, that the stay order shall not cover foreclosure by a creditor of property not belonging to a debtor under corporate rehabilitation; provided, however, that where the owner of such property sought to be foreclosed is also a guarantor or one who is not solidarily liable, said owner shall be entitled to the benefit of excussion as such guarantor;

(i) Prohibit the debtor from selling, encumbering, transferring, or disposing in any manner any of its properties except in the ordinary course of business;

(j) Prohibit the debtor from making any payment of its liabilities outstanding as of the date of filing of the petition;

(k) Prohibit the debtor's suppliers of goods or services from withholding supply of goods and services in the ordinary course of business for as long as the debtor makes payments for the services and goods supplied after the issuance of the stay order;

(l) Direct the payment in full of all administrative expenses incurred after the issuance of the stay order; and

(m) Direct the payment of new loans or other forms of credit accommodations obtained for the rehabilitation of the debtor with prior court approval.


Within ten (10) days from the date of the second publication of the order, the court shall approve the rehabilitation plan unless a creditor or other interested party submits a verified objection to it in accordance with the next succeeding section.

Any creditor or other interested party may submit to the court a verified objection to the petition or the rehabilitation plan. The objections shall be limited to the
following:

(a) The petition or the rehabilitation plan or their attachments contain material omissions or are materially false or misleading;
(b) The terms of rehabilitation are unattainable; or
(c) The approval or endorsement of creditors required has not been obtained

The court shall set the case for hearing not earlier than ten (10) days and no later than twenty (20) days from the date of the second publication of the order. If the
court finds that the objection is valid, it shall direct the petitioner to cure the defect within a period fifteen (15) days from receipt of the order.

The court shall decide the petition not later than one hundred twenty (120) days from the date of the filing of the petition. If the court fails to do so within said period, the rehabilitation plan shall be deemed approved.

Not later than thirty (30) days from the approval of a rehabilitation plan under the Rule, the plan may, upon motion and after notice and hearing, be revoked on the ground that the approval was secured by fraud or that the petitioner has failed to cure the defect ordered by the court.

The Rule applies where (a) assistance is sought in a Philippine court by a foreign court or a foreign representative in connection with a foreign proceeding; (b) assistance is sought in a foreign State in connection with a domestic proceeding governed by these Rules; or (c) a foreign proceeding and a domestic proceeding are concurrently taking place.

Please note that the sole fact that a petition is filed pursuant to this Rule does not subject the foreign representative or the foreign assets and affairs of the debtor to the jurisdiction of the local courts for any purpose other than the petition.

The court may refuse to take an action if (a) the action would be manifestly contrary to the public policy of the Philippines; and (b) if the court finds that the country of which the petitioner is a national does not grant recognition to a Philippine rehabilitation proceeding in a manner substantially in accordance with this Rule.

A foreign representative may apply with the Regional Trial Court where the debtor resides for recognition of the foreign proceeding in which the foreign representative has been appointed.

A petition for recognition shall be accompanied by:

(a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or

(b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or

(c) In the absence of evidence referred to in subparagraphs (a) and

(b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.

A foreign proceeding shall be recognized if:

(a) The proceeding is a foreign proceeding as defined in the Rule;

(b) The person or body applying for recognition is a foreign representative as defined in the Rule; and

(c) The petition meets the requirements of the Rule;

A petition for recognition of a foreign proceeding shall be decided within thirty (30) days from the filing thereof.

From the time of filing the petition for recognition of the foreign proceeding, the foreign representative shall inform the court promptly of:

(a) Any substantial change in the status of the foreign proceeding or the status of the foreign representative's appointment; and
(b) Any other foreign proceeding regarding the same debtor that becomes known to the foreign representative.

From the time of filing a petition for recognition until the same is decided upon, the court may, upon motion of the foreign representative where relief is urgently needed to protect the assets of the debtor or the interests of the creditors, grant relief of a provisional nature, including:

(a) Staying execution against the debtor's assets;
(b) Entrusting the administration or realization of all or part of the debtor's assets located in the Philippines to the foreign representative or another person designated by the court in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to
devaluation or otherwise in jeopardy;
(c) Any other equitable reliefs allowed by the Rule.

Upon recognition of a foreign proceeding:

(a) Commencement or continuation of individual actions or individual proceedings concerning the debtor's assets, rights, obligations or liabilities is stayed; provided, that such stay does not affect the right to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor.
(b) Execution against the debtor's assets is stayed; and
(c) The right to transfer, encumber or otherwise dispose of any assets of the debtor is suspended.

SEC. 9. Relief That May be Granted After Recognition of Foreign
Proceeding.—
(a) Upon recognition of a foreign proceeding, where necessary to
protect the assets of the debtor or the interests of the creditors, the court
may, upon motion of the foreign representative, grant any appropriate relief
including:

(1) Staying the commencement or continuation of individual actions or individual proceedings concerning the debtor's assets, rights, obligations or liabilities to the extent they have not been stayed under Section 8(a) of this Rule;
(2) Staying execution against the debtor's assets to the extent it has not been stayed under Section 8(b) of this Rule;
(3) Suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor to the extent this right has not been suspended under the Rule;
(4) Providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor's assets, affairs, rights, obligations or liabilities;
(5) Entrusting the administration or realization of all or part of the debtor's assets located in the Philippines to the foreign representative or another person designated by the court;
(6) Extending other equitable reliefs granted under the Rule;
(7) Granting any additional relief that may be available to the rehabilitation receiver under these laws.
(b) Upon recognition of a foreign proceeding, the court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor's assets located in the Philippines to the foreign representative or another person designated by the court; provided that the court is satisfied that the interests of local creditors are adequately protected.

As a rule, it must be noted that in granting or denying relief or in modifying or terminating the relief, the court must be satisfied that the interests of the creditors and other interested persons, including the debtor, are adequately protected.

Upon recognition of a foreign proceeding, the foreign representative acquires the
standing to initiate actions to avoid or otherwise render ineffective acts detrimental to creditors that are available under the Rule.

Upon recognition of a foreign proceeding, the foreign representative may intervene in any action or proceeding in the Philippines in which the debtor is a party.

In matters covered by the Rule, the court shall cooperate to the maximum extent possible with foreign courts or foreign representatives. The court is entitled to communicate directly with, or request information or assistance directly from, foreign courts or foreign representatives. Cooperation may be implemented by any appropriate means, including but not limited to the following:

(a) Appointment of a person or body to act at the discretion of the court;
(b) Communication of information by any means considered appropriate by the court;
(c) Coordination of the administration and supervision of the debtor’s assets and affairs;
(d) Approval or implementation by courts of agreements concerning the coordination of proceedings;
(e) Coordination of concurrent proceedings regarding the same debtor;
(f) Suspension of proceedings against the debtor;
(g) Limiting the relief to assets that should be administered in a foreign proceeding pending in a jurisdiction other than the place where the debtor has its principal place of business (foreign non-main proceeding) or information required in that proceeding; and
(h) Implementation of rehabilitation or re-organization plan for the debtor.

After the recognition of a foreign proceeding, a local proceeding under the Rule may be commenced only if the debtor is doing business in the Philippines, the effects of the proceedings shall be restricted to the assets of the debtor located in the country and, to the extent necessary to implement cooperation and coordination, to the other assets of the debtor that, under local laws, must be administered in that proceeding.

Where a foreign proceeding and a local proceeding are taking place concurrently regarding the same debtor, the court shall seek cooperation and coordination with the concerned foreign court. Any relief granted to the foreign proceeding must be made consistent with the relief granted in the local proceeding.

Please note that a party may file a motion for reconsideration of any order issued by the court prior to the approval of the rehabilitation plan. No relief can be extended to the party aggrieved by the court’s order on the motion through a special civil action for certiorari under Rule 65 of the Rules of Court. Such order can only be elevated to the Court of Appeals as an assigned error in the petition for review of the decision or order approving or disapproving the rehabilitation plan.

Further, please note that an order issued after the approval of the rehabilitation plan can be reviewed only through a special civil action for certiorari under Rule 65 of the Rules of Court.

To stress: An order approving or disapproving a rehabilitation plan can only be reviewed through a petition for review to the Court of Appeals under Rule 43 of the Rules of Court within fifteen (15) days from notice of the decision or order.

Leak

As I have written in a previous blog, in the case of “IN RE: UNDATED LETTER OF MR. LOUIS C. BIRAOGO, etc., En Banc, A.M. No. 09-2-19-SC, February 24, 2009, Per Curiam”, which involved retired Philippine Supreme Court Associate Justice RUBEN REYES, the Philippine Supreme Court held Justice Reyes “liable for GRAVE MISCONDUCT for leaking a confidential internal document of the Court” and “FINED P500,000.00, to be charged against his retirement benefits”.

Justice Reyes was further “disqualified to hold any office or employment in any branch or instrumentality of the government including government-owned or controlled corporations”.

Furthermore, Justice Reyes was “directed to SHOW CAUSE within ten (10) days from receipt of a copy of this Decision why he should not be disciplined as a member of the Bar”.

His staff Atty. Rosendo B. Evangelista and Armando Del Rosario were “held liable for SIMPLE NEGLECT OF DUTY and (were) ordered to pay (a) FINE in the amount of P10,000.00 and P5,000.00, respectively”.

The decision was made immediately final and executory by the Court.

In view of the extraordinary and far-reaching nature and effects of the said case, I wish to digest hereinbelow the salient jurisprudential or doctrinal parts of the aforecited decision of the Supreme Court, for purposes of legal research of the foreign and local visitors of this blog.

The Court made the following doctrinal pronouncements in the area of Legal and Judicial Ethics which the Bench and the Bar should internalize if they were to preserve the sanctity of the rule of law and the administration of justice. Thus:

“x x x.

The subsequent retirement of a judge or any judicial officer from the service does not preclude the finding of any administrative liability to which he is answerable.
A case becomes moot and academic only when there is no more actual controversy between the parties or no useful purpose can be served in passing upon the merits of the case. The instant case is not moot and academic, despite Justice Reyes’s retirement.

Even if the most severe of administrative sanctions may no longer be imposed, there are other penalties which may be imposed if one is later found guilty of the administrative offenses charged, including the disqualification to hold any government office and the forfeiture of benefits.

The Court retains jurisdiction either to pronounce a respondent official innocent of the charges or declare him/her guilty thereof. A contrary rule would be fraught with injustice and pregnant with dreadful and dangerous implications. For, what remedy would the people have against a civil servant who resorts to wrongful and illegal conduct during his/her last days in office? What would prevent a corrupt and unscrupulous government employee from committing abuses and other condemnable acts knowing fully well that he/she would soon be beyond the pale of the law and immune from all administrative penalties?

If only for reasons of public policy, this Court must assert and maintain its jurisdiction over members of the judiciary and other officials under its supervision and control for acts performed in office which are inimical to the service and prejudicial to the interests of litigants and the general public. If innocent, a respondent official merits vindication of his/her name and integrity as he leaves the government which he/she served well and faithfully; if guilty, he/she deserves to receive the corresponding censure and a penalty proper and imposable under the situation.

X x x.

The New Code of Judicial Conduct provides that confidential information acquired by justices and judges in their judicial capacity shall not be used or disclosed for any other purpose not related to their judicial duties. The Code of Conduct for Court Personnel likewise devotes one whole canon on confidentiality, to wit:


SECTION 1. Court personnel shall not disclose to any unauthorized person any confidential information acquired by them while employed in the judiciary, whether such information came from authorized or unauthorized sources.


Confidential information means information not yet made a matter of public record relating to pending cases, as well as information not yet made public concerning the work of any justice or judge relating to pending cases, including notes, drafts, research papers, internal discussions, internal memoranda, records of internal deliberations and similar papers.


The notes, drafts, research papers, internal discussions, internal memoranda, records of internal deliberations and similar papers that a justice or judge uses in preparing a decision, resolution or order shall remain confidential even after the decision, resolution or order is made public.


SEC. 2. Confidential information available to specific individuals by reason of statute, court rule or administrative policy shall be disclosed only by persons authorized to do so.


SEC. 3. Unless expressly authorized by the designated authority, court personnel shall not disclose confidential information given by litigants, witnesses or attorneys to justices, judges or any other person.


SEC. 4. Former court personnel shall not disclose confidential information acquired by them during their employment in the Judiciary when disclosed by current court personnel of the same information would constitute a breach of confidentiality. Any disclosure in violation of this provisions shall constitute indirect contempt of court. (Emphasis and underscoring supplied.)


Ineluctably, any release of a copy to the public, or to the parties, of an unpromulgated ponencia infringes on the confidential internal deliberations of the Court. It is settled that the internal deliberations of the Court are confidential. A frank exchange of exploratory ideas and assessments, free from the glare of publicity and pressure by interested parties, is essential to protect the independence of decision-making of those tasked to exercise judicial power.

In Mirasol v. De La Torre, Jr., the Court stated that “[c]ourt documents are confidential documents. They must not be taken out of the court without proper authority and without the necessary safeguards to ensure their confidentiality and integrity.” Thus, the Court found the clerk of court guilty of gross misconduct.

Moreover, the case enunciates that acts of gross misconduct destroy the good image of the judiciary so the Court cannot countenance them nor allow the perpetrators to remain in office. This same pronouncement was reiterated in Betguen v. Masangcay. Though both cases involve indiscretions of clerks of court, it is but logical that a higher standard of care be imposed upon magistrates of the Court.

PAGCOR v. Rilloza, in fact, commands persons who routinely handle confidential matters to be confidential employees. They are thus expected to be more careful than an ordinary employee in their day to day business. They are reposed such trust and confidence that a breach of their duty would mean breach of trust. As applied to the case of Justice Reyes, the breach of duty amounts to breach of public trust as the committee believes that the leak was motivated by self-interest.

The fact that Justice Reyes was not formally charged is of no moment. It is settled that under the doctrine of res ipsa loquitur, the Court may impose its authority upon erring judges whose actuations, on their face, would show gross incompetence, ignorance of the law or misconduct.

In People v. Valenzuela, which deals with the administrative aspect of a case brought on certiorari, the Court dispensed with the conduct of further hearings under the principle of res ipsa loquitur and proceeded to consider critical factors in deducing malice and bad faith on the part of the judge, after it did not accept at face value the judge’s mere denial. In that case, the judge ordered the return of the peso equivalent of the foreign currency to the accused despite its forfeiture as dutiable goods and even after the finding that the accused had nothing to do with the mailing thereof.

In Cathay Pacific Airways, Ltd. v. Romillo, Jr., where the Court took into account glaring circumstances in the proceedings of the case in concluding that the judge acted with bad faith, the judge was similarly found guilty of grave and serious misconduct when he unjustly declared the defendant in default and awarded outrageously exorbitant damages. l

Prudential Bank v. Castro was an administrative case spawned by a party’s complaint, wherein the Court, in light of the surrounding circumstances, found that the judge committed serious and grave misfeasance because the issuance of the orders and ill-conceived summary judgment showed the judge’s partiality to, or confabulation with the plaintiff and its lawyers.

In Consolidated Bank and Trust Corporation v. Capistrano, the Court proceeded in adjudging the attendant circumstances as tainted with bad faith and questionable integrity to call for the exercise of the Court’s disciplinary powers over members of the judiciary. In that case, the Court found the submissions of the judge unacceptable and clearly inadequate to overcome the cumulative effect of the highly questionable actuations– taking cognizance of a claim for damages arising from an attachment, instead of having it litigated in the same action where the writ was issued – as evincing gross ignorance of the law and active bias or partiality.

The Court, in Cruz v. Yaneza, perceived the judge’s persistent pattern of approving bail bonds and issuing release orders beyond its territorial jurisdiction as evincing a modus operandi that flagrantly flaunts fundamental rules.

In De Los Santos v. Magsino, the Court again applied the doctrine of res ipsa loquitur when a judge irregularly approved a bail bond and issued a release order of an accused whose case was pending in another province, in palpable disregard and gross ignorance of the procedural law on bail.

The principle was also applied to discipline court personnel and suspend members of the Bar from the practice of law.

The Court, in Office of the Court Administrator v. Pardo, found the clerk of court guilty of gross discourtesy in the course of official duties when he failed to accord respect for the person and rights of a judge as can be gleaned from a mere reading of his letter to the Executive Judge.

In Sy v. Moncupa, the Court found the evidence against the clerk for malversation of public funds eloquently speaks of her criminal misdeed to justify the application of the doctrine of res ipsa loquitur. The clerk admitted the shortage in the court funds in her custody and pleaded for time to pay the amount she had failed to account for.

In maintaining an earlier Resolution, the Court, in In re Wenceslao Laureta, also declared that nothing more was needed to be said or proven and the necessity to conduct any further evidentiary hearing was obviated. In that case, the Court found that the letters and charges leveled against the Justices were, of themselves and by themselves, malicious and contemptuous, and undermined the independence of the judiciary.

Meanwhile, in Emiliano Court Townhouses Homeowners Association v. Dioneda, it was held that it was reasonable to conclude that under the doctrine of res ipsa loquitur, the respondent committed an infringement of ethical standards by his act of receiving money as acceptance fee for legal services in a case and subsequently failing to render such service. The Court found the respondent liable for disloyalty to his client and inexcusable negligence in legal matters entrusted to him.

The Court, in Dizon, clarified the doctrine of res ipsa loquitur, viz:
In these res ipsa loquitur resolutions, there was on the face of the assailed decisions, an inexplicable grave error bereft of any redeeming feature, a patent railroading of a case to bring about an unjust decision, or a manifestly deliberate intent to wreak an injustice against a hapless party. The facts themselves, previously proven or admitted, were of such a character as to give rise to a strong inference that evil intent was present. Such intent, in short, was clearly deducible from what was already of record. The res ipsa loquitur doctrine does not except or dispense with the necessity of proving the facts on which the inference of evil intent is based. It merely expresses the clearly sound and reasonable conclusion that when such facts are admitted or are already shown by the record, and no credible explanation that would negative the strong inference of evil intent is forthcoming, no further hearing to establish them to support a judgment as to the culpability of a respondent is necessary. (Underscoring and emphasis supplied.)

The apparent toning down of the application of the res ipsa loquitur rule was further amplified in at least two cases. In Louis Vuitton S.A. v. Villanueva, the Court ruled that the doctrine of res ipsa loquitur does not apply to cases of knowingly rendering a manifestly unjust judgment, and even if the doctrine is appreciable, complainant still has to present proof of malice or bad faith.

Then came Fernandez v. Verzola, where it was held that failure to substantiate a claim of corruption and bribery and mere reliance on conjectures and suppositions cannot sustain an administrative complaint. In dismissing the complaint, the Court rejected as untenable the reasoning that the decision itself is evidence of corruption per doctrine of res ipsa loquitur. It upheld the rule that rendering an erroneous or baseless judgment, in itself, is not sufficient to justify the judge’s dismissal from the service.

The supposed tempering of the principle of res ipsa loquitur in Dizon only bolstered and solidified the application of the doctrine in cases not only of gross negligence but of serious misconduct as well, since it speaks of “inference of evil intent.”

As explained in Louis Vuitton, the familiar rule in administrative cases is that the acts of a judge in his judicial capacity are not subject to disciplinary action, and that he cannot be subjected to civil, criminal or administrative liability for any of his official acts, no matter how erroneous, as long as he acts in good faith. The rule adds that the proper remedy is via judicial recourse and not through an administrative action.

It must be pointed out that Louis Vuitton involves gross ignorance of the law and/or knowingly rendering an unjust judgment. In cases of leakage or breach of confidentiality, however, the familiar rule obviously does not apply. While the injured party is the Court itself, there is no judicial remedy available to undo the disclosure. Moreover, the premature disclosure does not spring from the four corners of the assailed decision or resolution nor can it gleaned on the face of the issuance itself. Indeed, one need not dwell on the substance of the decision since that in itself is inherently insufficient. In unearthing the misdeed, it becomes not only desirable but also necessary to trace the attendant circumstances, apparent pattern and critical factors surrounding the entire scenario.

In Macalintal v. Teh, the Court pronounced:

When the inefficiency springs from a failure to consider so basic and elemental a rule, a law or a principle in the discharge of his duties, a judge is either too incompetent and undeserving of the position and title he holds or he is too vicious that the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority. In both instances, the judge's dismissal is in order. After all, faith in the administration of justice exists only if every party-litigant is assured that occupants of the bench cannot justly be accused of deficiency in their grasp of legal principles. (Underscoring supplied.)


The same norm equally applies in the breach of the basic and essential rule of confidentiality that, as described in one case, “[a]ll conclusions and judgments of the Court, be they en banc or by Division, are arrived at only after deliberation [and c]ourt personnel are not in a position to know the voting in any case because all deliberations are held behind closed doors without any one of them being present.

As Dizon declared, the doctrine of res ipsa loquitur does not dispense with the necessity of proving the facts on which the inference of evil intent is based. It merely expresses that absent a credible explanation, it is clearly sound and reasonable to conclude a strong inference of evil intent on the basis of facts duly admitted or shown by the record. In fine, jurisprudence allows the reception of circumstantial evidence to prove not only gross negligence but also serious misconduct.

Justice Reyes is Likewise Liable for Violating his Lawyer’s Oath and the Code of Professional Responsibility

For leaking a confidential internal document of the En Banc, the committee likewise finds Justice Reyes administratively liable for GROSS MISCONDUCT for violating his lawyer’s oath and the Code of Professional Responsibility, for which he may be disbarred or suspended per Section 27, Rule 138 of the Rules of Court. Canon 1 of the Code of Professional Responsibility requires a lawyer to uphold the Constitution, obey the laws of the land and promote respect for law and legal processes. It is likewise provided in Rule 1.01 and 1.02 of the said canon that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct and that a lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. Here, the act of Justice Reyes not only violated the New Code of Judicial Conduct for the Philippine Judiciary, the Code of Judicial Conduct and the Canons of Judicial Ethics, it also infringed on the internal deliberations of the Court and impeded and degraded the administration of justice. The act is rendered all the more pernicious considering that it was committed by no less than a justice of the Supreme Court who was supposed to serve as example to the bench and bar.

That Justice Reyes was an impeachable officer when the investigation started is of no moment. The rule prohibiting the institution of disbarment proceedings against an impeachable officer who is required by the Constitution to be a member of the bar as a qualification in office applies only during his or her tenure and does not create immunity from liability for possibly criminal acts or for alleged violations of the Code of Judicial Conduct or other supposed violations. Once the said impeachable officer is no longer in office because of his removal, resignation, retirement or permanent disability, the Court may proceed against him or her and impose the corresponding sanctions for misconduct committed during his tenure, pursuant to the Court’s power of administrative supervision over members of the bar. Provided that the requirements of due process are met, the Court may penalize retired members of the Judiciary for misconduct committed during their incumbency. Thus, in Cañada v. Suerte, this Court ordered the disbarment of a retired judge for misconduct committed during his incumbency as a judge.

However, pernicious as Justice Reyes’s infractions may have been, the committee finds the imposition of the supreme penalty of disbarment unwarranted. In the determination of the imposable disciplinary sanction against an erring lawyer, the Court takes into account the primary purpose of disciplinary proceedings, which is to protect the administration of justice by requiring that those who exercise this important function shall be competent, honorable, and reliable men in whom courts and clients may repose confidence. While the assessment of what sanction may be imposed is primarily addressed to the Court’s sound discretion, the sanction should neither be arbitrary or despotic, nor motivated by personal animosity or prejudice. Rather, it should ever be controlled by the imperative need to scrupulously guard the purity and independence of the bar. Thus, the supreme penalty of disbarment is meted out only in clear cases of misconduct that seriously affect the standing and character of the lawyer as an officer of the court and member of the bar. Under the circumstances of this case, the committee finds the penalty of indefinite suspension from the practice of law sufficient and proper.
Liability of Atty. Rosendo B. Evangelista

X x x.

VFA: Puno dissent

In his dissenting opinion in the recent consolidated cases of SUZETTE NICOLAS Y SOMBILON v. ALBERTO ROMULO, et. al., G.R. NO. 175888, February 11, 2009; JOVITO R. SALONGA, et. al. v. DANIEL SMITH, et. al., G.R. NO. 176051, February 11, 2009; BAGONG ALYANSANG MAKABAYAN (BAYAN), et. Al., v. PRESIDENT GLORIA MACAPAGAL-ARROYO, ET AL., G.R. NO. 176222, Febrero 11, 2009, Philippine Chief Justice Reynato Puno stated his position that the Visiting Forces Agreement (VFA) between the Philippine and the United States was unconstitutional and that the custody over Lance Corporal Daniel Smith should be transferred from the U.S. Embassy in Manila to the New Bilibid Prison in Muntinlupa, pending final resolution of his appeal from conviction for the crime of rape.

As a former professor of Public International Law (PIL) for many years at my law alma mater, the Far Eastern University (FEU) in Manila, I find wisdom in Puno’s dissent than in the majority opinion.

I wish to discuss Puno’s dissent for purposes of legal research and academic debate among the visitors of this blog.

As a prelude, the instant cases basically discussed the legal distinctions and the effects of the public international law doctrines of “incorporation” versus “transformation” in the foreign relations of our country with the United States.

Puno strongly dissented in the 2000 case of Bayan v. Zamora, G.R. No. 138570, October 10, 2000, 342 SCRA 449, 497-521, Puno proffered the view that the VFA fell short of the requirement set by Section 25, Article XVIII of the 1987 Constitution stating that the agreement allowing the presence of foreign military troops in the Philippines must be “recognized as a treaty by the other contracting state.”

He stated that there was an anomalous asymmetry in the legal treatment of the VFA by the United States as opposed to that of the Philippines which he described as a slur on our sovereignty.

In the instant cases, the petitioners challenge the transfer of custody of Daniel Smith from the Philippine government (under the Bureau of Jail Management and Penology) to the United States authorities.

It will be recalled that on December 4, 2006, respondent Daniel Smith was convicted of rape by the Regional Trial Court (RTC) of Makati City, Branch 139. Smith’s temporary confinement at the Makati City Jail was subsequently ordered by the trial court pending negotiations between the U.S. and RP governments.

The public prosecutor filed a manifestation before the trial court submitting copies of agreements signed on the same day by Ambassador Kristie Kenney and Chief State Prosecutor Jovencito Zuno, Secretary of Justice Raul Gonzalez, and Secretary of Foreign Affairs Alberto Romulo turning over to the U.S. authorities (US Embassy) the physically custody of Smith while his appeal was pending.

The public respondents in the instant cases raised the defense of stare decisis and res judicata as against the petitioners’ attempt to assail the validity of the VFA, citing Bayan v. Zamora and Lim v. Executive Secretary.

Puno urged the Court En Banc to revisit Bayan v. Zamora, which upheld the validity of the VFA, in light of a recent change in U.S. policy on treaty enforcement. Of significance was the case of Medellin v. Texas, 522 US ___, where it was held by the U.S. Supreme Court that while treaties entered into by the President with the concurrence of the Senate are binding international commitments, they are not domestic law unless Congress enacts implementing legislation or unless the treaty itself is "self-executing."

In Medellin v. Texas, Jose Ernesto Medellin, a Mexican national, was convicted of capital murder and sentenced to death in Texas for the gang rape and brutal murders of two Houston teenagers. His conviction and sentence were affirmed on appeal. Medellin then filed an application for post-conviction relief and claimed that the Vienna Convention on Consular Relations (Vienna Convention) accorded him the right to notify the Mexican consulate of his detention; and because the local law enforcement officers failed to inform him of this right, he prayed for the grant of a new trial.

While Medellin’s petition was pending, the International Court of Justice (ICJ) issued its decision in the Case Concerning Avena and Other Mexican Nationals (Avena), where the ICJ held that the U.S. violated Article 36(1)(b) of the Vienna Convention by failing to inform 51 named Mexican nationals, including Medellin, of their Vienna Convention rights. The ICJ ruled that those named individuals were entitled to a review and reconsideration of their U.S. state court convictions and sentences regardless of their failure to comply with generally applicable state rules governing challenges to criminal convictions.

In Sanchez-Llamas v. Oregon, 548 U.S. 331(2006) -- issued after Avena but involving individuals who were not named in the Avena judgment, contrary to the ICJ’s determination -- the U.S. Federal Supreme Court held that the Vienna Convention did not preclude the application of state default rules. The U.S. President, George W. Bush, then issued a Memorandum (President’s Memorandum) stating that the United States would discharge its international obligations under Avena by having State courts give effect to the decision.

Medellin repaired to the U.S. Supreme Court. In his petition, Medellin contends that the Optional Protocol, the United Nations Charter, and the ICJ Statute supplied the “relevant obligation” to give the Avena judgment binding effect in the domestic courts of the United States.

The Supreme Court of the United States ruled that neither Avena nor the President’s Memorandum constitutes directly enforceable federal law that pre-empts state limitations on the filing of successive habeas corpus petitions. It held that while an international treaty may constitute an international commitment, it is not binding domestic law unless Congress has enacted statutes implementing it or unless the treaty itself is "self-executing." It further held that decisions of the ICJ are not binding domestic law; and that, absent an act of Congress or Constitutional authority, the U.S. President lacks the power to enforce international treaties or decisions of the ICJ.

The new US ruling is clear-cut, according to Puno: While a treaty may constitute an international commitment, it is not binding domestic law unless Congress has enacted statutes implementing it or the treaty itself conveys an intention that it be “self-executing” and is ratified on that basis.” [See: 522 US ___, March 25, 2008, supra; 128 S. Ct. 1346 (2008)].

The Avena judgment creates an international law obligation on the part of the United States, but it is not automatically binding domestic law because none of the relevant treaty sources—the Optional Protocol, the U.N. Charter, or the ICJ Statute—creates binding federal law in the absence of implementing legislation, and no such legislation has been enacted.

In fine, the U.S. President’s authority to enter into treaties that are enforceable within its domestic sphere was severely limited by Medellin. In Medellin, the United States posited the theory that the President’s constitutional role uniquely qualifies him to resolve the sensitive foreign policy decisions that bear on compliance with an ICJ decision. In said case, the U.S. President, through the issuance of the Memorandum, sought to vindicate the United States interest in ensuring the reciprocal observance of the Vienna Convention, protecting relations with foreign governments, and demonstrating commitment to the role of international law. Though these interests were compelling, the Supreme Court held that “the president’s authority to act, as with the exercise of any governmental power, must stem from an act of Congress or from the Constitution itself.”

The U.S. Supreme Court held:

The President has an array of political and diplomatic means available to enforce international obligations, but unilaterally converting a non-self-executing treaty into a self-executing one is not among them. The responsibility for transforming an international obligation into domestic law falls to Congress. x x x As this court has explained, when treaty stipulations are “not self-executing they can only be enforced pursuant to legislation to carry them into effect.” x x x Moreover, “[u]ntil such act shall be passed, the Court is not at liberty to disregard the existing laws on the subject.” x x x


According to the US Supreme Court, the requirement that Congress, rather than the President, implement a non-self executing treaty derives from the text of the Constitution, which divides the treaty-making power between the President and the Senate. The Constitution vests the President with the authority to “make” a treaty.

If the Executive determines that a treaty should have domestic effect of its own force, the determination may be implemented “in making” the treaty, by ensuring that it contains language plainly providing for domestic enforceability. If the treaty is to be self-executing in this respect, the Senate must consent to the treaty by the requisite two-thirds vote, consistent with all other constitutional restraints.

The US Supreme Court categorically held that while a treaty may constitute an international commitment, it is not binding domestic law unless Congress has enacted statutes implementing it, or the treaty itself conveys an intention that it be “self-executing” and is ratified on that basis.

What is the iimplication of Medellin v. Texas on the VFA?

With Medellin, the case law is now settled that acknowledgement by the U.S. President that an agreement is a treaty, even with the concurrence of the U.S. Senate, is not sufficient to make a treaty enforceable in its domestic sphere, unless the words of the treaty itself clearly express the intention to make the treaty self-executory, or unless there is corresponding legislative enactment providing for its domestic enforceability.

The VFA does not satisfy either of these requirements and cannot thus be enforced within the U.S.

It will be noted that the 1987 Philippine Constitution provides in Sec. 25, Art. XVIII that after the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of America concerning Military Bases, foreign military bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for that purpose, and recognized as a treaty by the other contracting State.

Puno stressed that among the three constitutional requisites that must be complied with before foreign military bases, troops, or facilities can be allowed in Philippine territory, the third requirement, that any such agreement should be recognized as a treaty by the other contracting party, lies at the very heart of this case.

He stated that in Bayan v. Zamora, the majority of the Philippine Supreme Court anchored the validity of the VFA on the flabby conclusion that it was recognized as a treaty by the U.S; that the phrase “recognized as a treaty” means that the other contracting party accepts or acknowledges the agreement as a treaty; that it was inconsequential whether the United States treats the VFA only as an executive agreement because, under international law, an executive agreement is binding as a treaty; that as long as the VFA possesses the elements of an agreement under international law, the said agreement is to be taken equally as a treaty.” (Bayan v. Zamora, G.R. No. 138570, October 10, 2000, 342 SCRA 449, 488).

In strong terms, Puno asserted that to justify its tortuous conclusion, the majority of the Philippine Supreme Court in Bayan v. Zamora did not accord strict meaning to the phrase, “recognized as a treaty” and declared that “words used in the Constitution are to be given their ordinary meaning except where technical terms are employed, in which case the significance thus attached to them prevails. Thus, the Court held that it was sufficient that the other contracting party accepts or acknowledges the agreement as a treaty.

Puno stated that in obvious error, the majority of the Court gave undue deference to the statement of the former Ambassador of the United States to the Philippines, Thomas C. Hubbard, that Senate advice and consent was not needed to consider a treaty binding on the U.S., on the premise that the President alone had the power to conclude the VFA, deriving from his responsibilities for the conduct of foreign relations and his constitutional powers as the Commander–in-Chief of the Armed Forces, to conclude that the U.S. accepted or acknowledged the agreement as a treaty. He stated that based thereon the majority then jumped to the conclusion that the U.S. recognized the VFA as a treaty, and that the constitutional requirements had been satisfied.

Puno argued that it could be deduced from the posture of the former US Ambassador that the VFA is an executive agreement, entered into by the President under his responsibility for the conduct of foreign relations and his constitutional powers as Commander-in-Chief of the Armed Forces. It can be further deduced that the VFA is not recognized as a treaty by the U.S., but it is akin to a sole or presidential executive agreement, which would be valid if concluded on the basis of the U.S. President’s exclusive power under the U.S. Constitution. In other words, it does not fall under the category of an executive agreement entered into by the President pursuant to the authority conferred in a prior treaty because, although the VFA makes reference to the Mutual Defense Treaty in its Preamble, the Mutual Defense Treaty itself does not confer authority upon the U.S. President to enter into executive agreements in the implementation of the Treaty. Neither does the VFA fall under the category of Congressional Executive Agreement, as it was not concluded by the U.S. President pursuant to Congressional authorization or enactment, nor has it been confirmed by the U.S. Congress, Puno added.

Puno stressed that it must be clear from the text of the VFA itself that the VFA is self-executory in order that it may be reciprocally enforced. He added that
Medellin was straightforward in ruling that the domestic enforceability of the treaty should be reflected in the text of the treaty itself; it cannot simply be inferred from a multitude of factors, nor can it be derived from the context in which the agreement was entered into.

Medellin now imposes a “clear statement requirement” of the self-executory nature of a treaty, before judgments based on that treaty could overrule state law and be enforced domestically. The Court now looks into the language of the treaty, parsing the treaty’s text to determine whether the treaty was intended to be self-executory or not. If the text of the treaty does not clearly indicate the intention of the signatories to make it executory in the domestic sphere, Congress has the responsibility to transform an international obligation arising from a non-self-executory treaty into domestic law.

Puno stated that an examination of the text of the VFA does not show any provision that would satisfy the “clear statement requirement” within the text of the treaty to show that the United States intended it to be reciprocally enforced in the domestic sphere. Absent such clear wording in the VFA itself that it is to be self-executory, and without the concurrence of the Senate, the VFA remains an international obligation of the U.S., but it does not have the corresponding mechanism to have the rights and obligations found therein enforced against the U.S. This is especially true when the enforcement of such rights would cause a violation of U.S. domestic laws, whether substantive or procedural.

In Bayan, the majority of this Court held that the phrase “recognized as a treaty” means that the other contracting party accepts or acknowledges the agreement as a treaty. The salient question is: who has the authority to acknowledge it as a treaty? Previously, it could have been argued that the President’s recognition alone is sufficient; but all that is now changed with the categorical pronouncement in Medellin that Congress must enact statutes implementing the treaty, or the treaty itself must convey an intention that it be “self-executing” and is ratified on that basis, in order for the treaty to be enforced in the domestic sphere.

It must be noted that Article II, Section 2, Clause 2 of the U.S. Constitution provides that the President “shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur.” In the U.S., a “treaty” is only one of four types of international agreements, namely: Article II treaties, executive agreements pursuant to treaty, congressional executive agreements, and sole executive agreements. The VFA is classified as a sole executive agreement.

In Medellin, the Us Supreme Court concluded that given the absence of congressional legislation, a non-self executing treaty does not expressly or impliedly vest the Us President with the unilateral authority to make them self-executing.

Puno concluded that at best, the VFA can be considered as an international commitment by the U.S., but the responsibility of transforming an international obligation arising from a non-self-executing treaty into domestic law falls to Congress. It is therefore an error to perpetuate the ruling of the majority of the Philippine Supreme Court in Bayan that it is inconsequential whether the United States treats the VFA only as an executive agreement because, under international law, an executive agreement is binding as a treaty. Medellin has held that the binding effect of a treaty as an international obligation does not automatically mean that the treaty is enforceable in the domestic sphere.

Puno reminded the Court that Medellin held that that the binding effect of a treaty is mutually exclusive from the actual enforcement of the rights and obligations sourced from it.

Though the VFA attaches international obligations to the parties to the agreement, it is irrelevant in the enforcement of a non-self-executory treaty in the domestic courts of the U.S. As long as the text of the VFA does not clearly show that it is self-executory and as long as U.S. Congress has not made it enforceable in the domestic sphere, it does not have obligatory force in U.S. domestic courts.

Puno further reminded the Court that the Philippine Senate has concurred in the ratification of the VFA by a two-thirds vote of its members. The Romulo-Kenny Agreement was entered into in implementation of Article V(6) of the VFA, and the custody over Daniel Smith was transferred from the Philippine Government to the U.S. Embassy.

He reiterated his dissent in Bayan v. Zamora about the clear intention of the framers of the Constitution in imposing the requirement that the agreement must be “recognized by the other state as a treaty.” Recognition as a treaty by the other contracting state does not merely concern the procedure by which it is ratified, or whether or not it is concurred in by the Senate. The decisive mark to show that the agreement is considered as a treaty by the other contracting state is whether the agreement or treaty has obligatory effects and may be used as a source of rights
enforceable in the domestic sphere of the other contracting party.

Medellin evidently shows us that the wording of the VFA does not bear this mark. Though considered as a treaty by the Executive, it may not create obligatory effects in the U.S.’s domestic sphere absent a clear statement in the text of the Agreement that it is self-executory, or without a congressional act implementing it.

Regardless of whether there is concurrence by the U.S. Senate in the RP-U.S. Mutual Defense Treaty, the disparity in the legal treatment of the VFA by the U.S. is clear, considering the Medellin ruling. Indeed, even assuming there is a Senate concurrence in the RP-U.S. Mutual Defense Treaty, the VFA still cannot be given domestic effect in the United States. It is up to the Court to decide whether the terms of a treaty reflect a determination by the President who negotiated it and the Senate that confirmed it if the treaty has domestic effect. To repeat, any treaty becomes enforceable within the U.S. only when the Court has determined it to be so, based on the clear terms of the treaty or through Congressional enactment to implement the provisions of the treaty.

It bears stressing that the RP government has already enforced the provisions of the VFA and has transferred custody of Lance Corporal Daniel Smith to U.S. authorities. The Philippine government has considered the VFA to be fully enforceable within our jurisdiction; yet, the U.S. does not look at the VFA as enforceable within its domestic jurisdiction. This dichotomy is evidently proscribed by the Constitution, for such dichotomy would render our sovereignty in tatters.

Edsa

Once in a while it takes the youth to remind the old of how the latter has degraded and trampled upon the valuable lessons provided by historical events that had transpired in our country.

Such is the case of EDSA I and EDSA II.

Sometimes I wonder how President Gloria Arroyo, who has always been proud of her Ph.D. and other high academic credentials, could intentionally dismiss and ignore the old adage that a person or a country that ignores the errors of the past is bound to repeat them.

I shed a tear out of joy and respect for the Filipino youth when I read a recent commentary by a young Australia-bred Filipino writer, in the persons of Ania Aquino of the Philippine Daily Inquirer, when she wrote a critical analysis on how we, the older generation, more particularly EDSA II-generated Pres. Arroyo and her paid political clique, have dishonored by neglect the invaluable historical lessons of EDSA.

I want you to read the materials below which deal with the above topic. One by Ania Aquino. The other by former Supreme Court Justice Isagani Cruz. And form your opinion.

I see EDSA as a symbol of truth and justice.


I was there in EDSA I and EDSA II. The first one, with my friends in the parish. The second one, with my young children.

We risked our lives for truth, justice, democracy, and freedom.

Despite the travesty and dishonor the memory of EDSA has received from our corrupt and hypocritical political leaders/mercenaries, I still pray that the future generations of young Filipinos will not lose sight of what the common Filipinos are capable of achieving and dreaming, for the sake of truth, justice and freedom in our God-forsaken country.

I truly hope and pray that the future youth of this country will not take the selfish and deluded path that their elders have taken.



COMMENTARY

What a shame: Patching wounds of Edsa
By Ania Aquino

Philippine Daily Inquirer
First Posted 02:54:00 03/01/2009


(The author is a student taking up communications and law at the University of Western Sydney. She is currently serving an internship at the Philippine Daily Inquirer.)

PRESIDENT Macapagal-Arroyo did not attend the 23rd Edsa commemoration on Feb. 25. The Vice President arrived, then left after a few minutes. I am a third-generation Australian-raised Filipino. I was there. I stayed.

I was only two months old when the first People Power Revolution broke out. I do not remember Edsa I, but I want to.

And so at the crack of dawn, I was at the foot of the Edsa Shrine, wondering to myself: If democracy was returned to the country here, if this monument of Filipinos with arms raised is so significant, then where is the President and why did my parents still opt to raise me abroad?

I was born in Manila, but as soon as I could crawl, my parents left in pursuit of what is arguably the “Pinoy Dream”—a life away from here.

The year 1986 was supposed to mark the rebirth of the Philippines, a time to rebuild the republic and turn it into the nation it should have been. Edsa was seen as the moment in history when Filipinos were peacefully empowered to stand up against the Marcos dictatorship and recover their lost democracy.

We were given the chance, but looking down that battered highway called Edsa, it seemed how soon we forgot.

In 2001, President Joseph Estrada was accused of violating the Constitution, through perjury, misuse of public funds and illegally enriching himself from illegal gambling bribes. Estrada faced impeachment but resigned, so welcome Edsa II.
No to Edsa III

But now the thought of an Edsa III is embarrassing to the President who first gained her seat in Malacañang through Edsa II. To President Macapagal-Arroyo, another Edsa would not be good for our international reputation, so let’s just forget about it.
“The world will not forgive an Edsa III, but it will instead condemn the Philippines as a country whose political system is hopelessly unstable,” said Ms Arroyo.

The Philippines was ranked 90th out of 177 countries in the 2007/2008 Human Development Index of the United Nations Development Program, which provides a composite measure of human progress and the complex relationship between income and well-being.

The National Statistical Coordination Board in 2006 found poverty incidence in the Philippines at 32.9 percent.

Forty-two percent of respondents in a Pulse Asia survey believed President Macapagal-Arroyo to be “the most corrupt” of the country’s presidents.

And while numbers and statistics are arguable, do not fret as compilation and accuracy of election results has never been the country’s strong point.

The real picture is in the eyes of the people, and, ironically, recognition of this was what I thought People Power was about.

Is this theme now finished?

With or without this global financial crisis, stability never arrived.
Whatever happened to Jun Lozada?

The President has had impeachment complaints filed against her in 2005, 2006, 2007 and 2008. Her husband, Jose Miguel Arroyo, got the head start in 2009 with allegations of his links to the World Bank collusion deals.

Rampant political corruption continues, from the 2004 election fraud, the NorthRail project, the Mt. Diwalwal project, the alleged bribery House members to the scam under the Rural Credit Guarantee Corp., the NBN-ZTE deal and the fertilizer fund scam.

Will it stop with the change in government in 2010?

Whatever happened to Jun Lozada? Is he still “touring” Villamor Air Base, Cavite,
Calamba and Laguna? Will he and his family now forever be taking sanctuary at La Salle?

Are we really living in a democracy?

On a global scale, poverty is now part of the Philippine identity.
Record murder rate

The Philippines holds the record in the 2009 Guinness Book of Records as the country with the highest murder rate. We are also ranked highly in journalist deaths in the line of duty.

Edsa was intended to be the moment for the country to take off and move forward. Why do these records reflect otherwise?

As I stand here in front of the People Power monument, the resonant holler from construction workers, strapped and crammed into the back of a semi-trailer, rings in my ears.

In Australia that would be illegal.

“Nothing will change,” said Romar Balagtas, the driver of the battered taxi that brought me from Makati to Manila one day. He insisted on a set fare of P300 until I spoke to him in Tagalog.

“Sorry, ma’am, I thought you were a foreigner,” said Romar, who clearly would have overcharged me if he had the chance.

“Ma’am, passport cover? Sampaguita flower?” cries a desperate street vendor as I stand on the site where freedom was reborn.

They all have their views, they are the victims—but not one will vote in 2010.
‘Retrogression’

“It’s retrogression, not progression,” said my Dad.

During my stay here, my father, a clever savvy character, phones me from Australia. He advises me to constantly watch my back, dress down and only carry what is necessary.

I am not the daughter of a businessman, a politician or an heir to a family fortune. But, regardless, I’m told not to feel too at home, in a place that should really be home.

Last year, my father and mother returned to the Philippines after 20 years of living Down Under. With their childhood memories scattered all over our 7,000 islands, the excitement in Mum’s eyes soon turned to dismay.

Mum was hit with a migraine as soon as she entered the airport. Her face said it all, nothing had improved from the time they were here.

“What happened to the church? We used to go there! What happened to Manila? Where is the river?” Mum said as we drove past the murky, near nonexistent Pasig River.
Culture shock

My two younger sisters, who were here for the first time, gasped and jumped in culture shock.

For the duration of that month-long holiday, my sisters opted to stay in front of their computers attaching themselves back to Australia rather than discovering what should also be their home, the Philippines.

I don’t mean to offend, but my family is just a small piece in the big puzzled view of the global Pinoy. It’s a national problem that has gone international.

These views are real. Or have we all become complacent and forgotten? One drive around Metro Manila speaks a thousand words.

Just as United States President Barack Obama stands strong affirming his commitment to the American people in their time of crisis, our President is supposed to be our pillar of hope.

Her no-show at the Edsa I celebrations leaves me feeling lost.

Has the Philippines succumbed to this spiral of hopelessness and loss of confidence? What does the administration’s near nonattendance mean?
People Power so yesterday

Forgive my innocence, but if it is the day that Filipinos were freed, then why must we suppress rather than express? Oh, that’s right, it’s embarrassing. So, okay, then let us save face.

Let us just leave Edsa to history and move forward. Correct, President Arroyo? We will move forward in the direction Edsa is now known for today.

For many third-generation Filipinos bred overseas, Edsa means the congested road of traffic linking one mall to another, the road where many aspire to have their faces planked on the commercial billboards, and the path “where something happened, just not sure what,” as another Filipino-Australian puts it.

That is Edsa today. People power and national progress are so yesterday.

Traffic is its metaphor. Edsa is the road we avoid in our travels.

What a shame.


The Philippines is blessed with rich natural resources. The Filipino is strong. We have the manpower to move mountains, rebuild towns, topple tyranny and replicate anything.

It’s true our OFWs are the most desired globally. If we are to leave this country, let it be because of the desire to grow and spread the Filipino, not to escape and deny.

A miracle happened in 1986. Unity and consciousness shone on the Filipino people. Is it really us who should feel shame in celebration? Is it really us the world won’t forgive?

See:
http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20090301-191649/What-a-shame-Patching-wounds-of-Edsa





Separate Opinion
Above all liberties

By Isagani A. Cruz
Philippine Daily Inquirer
First Posted 04:58:00 03/01/2009



I AM only one of the millions of Filipinos who disagree with Gloria Macapagal-Arroyo’s dismissal of the Edsa demonstrations—particularly of Edsa III that challenged her ascension to power—that she said might be interpreted by other peoples as evidence of the instability of our government.

She did not specifically refer to Edsa I the anniversary of which we were celebrating at that time or Edsa II that legitimated her accidental succession to the presidency. She was especially critical of Edsa III, which foretold the people’s dissatisfaction with her that unfortunately had not yet revealed the fangs behind the smiles. Everybody knew that she was also referring last week to future attempts to oust her from the office she has been precariously holding since the Garci tapes.

Edsa I was hailed by the rest of the world when unarmed civilians faced the mighty tanks of Marcos that yielded to the flowers offered by an old grandmother from her wheelchair. Edsa II belied the hopes of the nation that was jumping from the frying pan into the fire. Many people still think today that Edsa III was better than Edsa II, comparing the past minor embezzlements with the present mammoth pillage.

Consider the report of the Senate blue ribbon committee on the P728-million fertilizer fund. Former Agriculture Undersecretary Jocelyn Bolante, with nine other confederates, have been found responsible for the crime of plunder and other related offenses that, it said, should be prosecuted by the Office of the Ombudsman. It also called for the resignation of Ombudsman Merceditas Gutierrez for suspicious dereliction of duty.

The report cautiously did not mention President Arroyo among the named offenders but noted in unmistakable language her participation in the massive fraud. It said that as chief executive and head of the Cabinet, she would have been on top of the official acts of its members and should at the very least have known about their operations. The hundreds of millions of public funds could not have been distributed illegally without her consent or, in fact, direct orders. The double entendre against Ms Arroyo was clear enough, but the dissenting senators felt it should have been more direct and less evasive.

Gloria Macapagal-Arroyo was like Richard Nixon, who was not included with his identified staff members all of whom were prosecuted for and convicted of their various crimes in the Watergate scandal. The American people knew he was the unnamed principal who directed their cover-ups and, for the first time in the history of their country, was forced to resign to avoid his impeachment and removal.

The NBN-ZTE contract is still too fresh to be forgotten although it took President Arroyo to go to China herself to cancel it because of its awful stench befouling our country. When Romulo Neri had earlier reported to her about being bribed P2 million to support the contract, she told him to reject the money but, just the same, to approve the deal. Pressed for more information by the Senate, he invoked the President’s executive privilege and was sustained by the Supreme Court. Rodolfo Lozada testified he was kidnapped by government agents to prevent him from spilling the beans about the contract; another witness spoke about the “greedy people + + ” who wanted their share in the spoils; and the problem, according to Neri, was how to “moderate their greed.”

And now we are intrigued about the insinuation from the World Bank that some influential persons have been receiving substantial “commissions” for brokering certain public works contracts in the Philippines funded by it. Among those mentioned are members of the House of Representatives and Jose Miguel Arroyo, the President’s husband, who is also suspected of involvement in the NBN-ZTE contract.

The World Bank, which had earlier declined to elaborate, has finally issued a lengthy but inconclusive report about the alleged wrongdoers. As in the Bolante case, Ms Gloria has yet to be heard in their defense or condemnation.

As an ordinary citizen, I am alarmed by President Arroyo’s suggestion against rallies as indicia of the weakness of our government. I hope it is only a suggestion and not a command she can enforce as commander in chief of the Armed Forces of the President. Forcible prevention of rallies is a malediction that has no place in a republican regime. The prohibition has the evil earmarks of the dungeon and the rack and the Court of the Inquisition.

I am no communist although I share many of his complaints against the government. I am not an oppositionist and much less a cohort of Malacañang. I am a witness of current events and offer my little share, like many other citizens, to improve the future for our country. I am a free Filipino. I participated in Edsa I and in Edsa II but not in Edsa III that was no more than a gathering of hired rowdies. If there is an Edsa IV against Gloria Macapagal-Arroyo, I will be there to join the angry millions.

Milton said, “Give me liberty to know, to utter and to argue freely, according to conscience, above all liberties.” This we can enjoy in the ramparts of Edsa.

See:
http://opinion.inquirer.net/inquireropinion/columns/view/20090301-191658/Above-all-liberties