Congratulations, Appreciation and Explanation

Closing remarks of retired Chief Justice ARTEMIO V. PANGANIBAN during the Awarding Ceremonies held on May 18, 2019 at the Ateneo de Manila Professional Schools Auditorium at Rockwell Center in Makati City in honor of the (1) bar exam topnotchers, passers and top graduates, (2) the current 2018-2019 scholars and (3) the winners of the just-concluded Dissertation Writing Contest of the Foundation for Liberty and Prosperity.

 

Your honors, your excellencies, distinguished guests, ladies and gentlemen. We are honoring today the cream of Philippine legal education, the topnotchers, honor graduates, scholars and winners of the various Education Programs of the Foundation for Liberty and Prosperity, in partnership with the Tan Yan Kee Foundation and the Ayala Corporation. To begin my closing address, may I ask our honorees, a question that is relevant to us, given the just-concluded mid-term elections:

What is the difference between an ordinary robber and a corrupt politician? Answer: The ordinary robber chooses the people he or she will rob. On the other hand, the politician is chosen by the people whom he or she will rob.

Another question: Why do seniors like me love to talk to themselves? Answer: Because they always want to hear an expert’s advice. Another answer: They like to talk to themselves because they cannot get an audience of young, brilliant people to listen to them.

Aha, but today, I got you bright, young people – topnotchers, passers, honor graduates, scholars and winners – to listen to my corny jokes. Now that I have your ears, I would like to talk about three topics: One, words of congratulations; two, words of appreciation and three, words of explanation.

Words of Congratulations

To begin my words of congratulations, please join me in felicitating our number one bar exam topnotcher, Atty. Sean James Borja. He has been our scholar since our scholarship program began in 2016 when he was a junior law student. Since then, he has never disappointed us; in fact, he has always amazed us because he maintained his academic excellence and leadership qualities as well as showed his willingness and ability to internalize and promote the philosophy of liberty and prosperity under the rule of law. Moreover, he graduated as valedictorian of his class here at the Ateneo de Manila (…the best law school… in Rockwell, Makati!) and then proceeded to become number 1 in the last bar examination. As earlier announced by our emcees, he received scholarship grants of P200,000 for his third year law proper, another P200,000 for his fourth year law proper, plus P25,000 for being valedictorian, and now another P200,000 for being numero uno in the last bar exams, or a total of P625,000 in just two years. Cheers!

Please join me also in congratulating Atty. Katrina Monica Gaw for being our scholar during her fourth year law proper for which she received P200,000 and for copping the 5th place in the last bar examination for which we just gave her P100,000, or a total of P300,000. She wanted to be with us today but she had already planned a trip abroad, as her reward to herself, for her magnificent achievements. When I saw her recently, I told her she was better than I because I ranked only No. 6, so she must excel my being only chief justice!

Of course, I also greet our 20 new scholars who received P200,000 each, divided into maximum of P100,000 for tuition, P80,000 in monthly stipends, book allowance of P20,000 and a plaque of appreciation. Like Attys. Borja and Gaw, we expect them to top the bar exams.

As earlier announced, we have 10 finalists in the Dissertation Writing Contest who won P20,000 each, and from these 10, our distinguished Board of Judges selected three third prize winners for an additional cash prize of P100,000 each; one second prize winner, Diana Lou Boado of the Lyceum of the Philippines University, for an additional P200,000; and one first prize winner, Josiah David Quising of the Far Eastern University Institute of Law (the best law school in the Philippines… according to the FEU Law Alumni Association!) for an additional P300,000. Incidentally, Mr. Quising was also our scholar during his junior year in law. We did not forget their faculty advisers who were rewarded P50,000 for each of the third prize winners, P75,000 for the second prize winner and P100,000 for the first prize winner. Hail and congratulations to all of them.

My words of congratulations will not be complete unless I include the parents of our topnotchers, bar passers, scholars and dissertation winners. May I ask all you proud parents to stand up, so we can recognize you? The truth is I envy you because you have sired brilliant children who will all be brilliant lawyers, prosecutors, judges, justices and chief justices someday. In my case, and of course, also of my beloved wife, Professor Leni Panganiban, none of our five children took up law. And therefore, we will not be able to feel the parental joy of having bar exam topnotchers, passers, scholars and dissertation winners.

In their default, I encouraged our ten grandchildren to take up law, promising them full scholarship from my personal retirement benefits in any school of their choice here or abroad. Unfortunately, none has taken up the bait so far. I tried my best to convince our eldest grandson Miguel, when he was still in high school, to take up law. I even showed him my library which I said I would bequeath to him. Ironically, it turned him off. He rushed to his grandmother Leni, saying that he would not take up law because he could not imagine himself reading all the voluminous books in my library. Instead, he took up an industrial management engineering course at UP, and then proceeded to take up a Master in Entrepreneurship at the Babson College in Boston, reputed to be the best entrepreneurship school in the United States. The other day, I got a text from his mother, my eldest daughter Len, who was in Boston attending his graduation, with the good news that Miguel received Magna Cum Laude honors. Well, I said to myself, they also excel pala even if they are not lawyers!

But the better news is that he was admitted, starting next school year, at the Pritzker School of Law at the Northwestern University in Chicago to take up Master of Science in Law, though he did not have a basic law degree. How is that possible? The answer according to his prayerful lola Leni is: for man it is impossible, but for God, all things are possible. The question in my ancient mind now is whether he would be allowed to take the bar exam in any country and thereafter to practice there or anywhere, even without a basic law degree.

Words of Appreciation and Thanks

Let me now turn to my second topic, words of appreciation. First, let me thank our two topnotch Boards of Judges, both chaired by respected justices of the highest court of the land, namely, Senior Justice Antonio T. Carpio for the scholarship competition and Justice Estela M. Perlas-Bernabe for the dissertation writing contest. Both of them sent regrets at their failure to attend today’s program because both are abroad. Justice Bernabe, an Ateneo alumna, wanted to attend because, according to her, she spent a considerable amount of time reading the rather voluminous dissertations submitted to her as chair of the Dissertation Board of Judges. I also invited CJ Lucas P. Bersamin but he is also out of town. Why are they all out of town? Because the Supreme Court is at recess for one month. We could not reschedule the Award Ceremonies because our scholars from various universities nationwide are taking up their final examinations this month, and today, Saturday, is the least disturbing for them.

Both Justices Carpio and Bernabe invited the members of their Boards of Judges to hold the final round of evaluating the applicants at the Division Conference Rooms of the Supreme Court. These rooms constitute the sacred inner sanctum of the temple of justice in our country where, normally, only justices are allowed entry when Division cases are deliberated upon and decided. No secretaries, clerks or aides dare enter these rooms when the justices perform their rituals and duties. This is indeed a great privilege for our scholars and winners, who even before passing the bar examinations were already allowed entry to the Supreme Court’s inner sanctum.

Along with them, may I public thank the other members of the Scholarships Board of Judges, namely former Education Secretary Edilberto C. de Jesus, who is also a former president of and a retired professor at the Asian Institute of Management, where my dear wife Leni taught together with him for 37 years; he was also president of the Far Eastern University; Dean Joan Sarausos-Largo of the University of San Carlos School of Law, which by the way, produced four of the top 10 in the last bar exam; she is the incumbent president of the Philippine Association of Law Schools, and one of the holders of the Chief Justice Panganiban Professorial Chairs on Liberty and Prosperity; Ms. Elizabeth T. Alba, an executive of the Tan Yan Kee Foundation; and Law Professor Tanya Karina A. Lat, a trustee of the FLP.

On the other hand, the four other members of the Board of Judges for the Dissertation Writing Contest are retired Supreme Court Justice Angelina Sandoval-Gutierrez, Dean Largo, Companero Solomon M. Hermosura, the indefatigable general counsel of Ayala Corporation, and Companero Joel Emerson J. Gregorio, a consultant of the Asian Development Bank and a trustee of the FLP.

May I also publicly thank our partner and co-sponsor, the Tan Yan Kee Foundation for generously funding our Scholarship Program? The foundation is named after the father of tycoon Lucio C. Tan. His group of companies adopted the TYK Foundation as the main outlet of its corporate social responsibility. From a holistic commitment framework, the TYK Foundation targets education, culture and sports, health and social welfare including environmental concerns, research, and manpower development. We invited Dr. Tan to join us today in handing out the cash gifts for our topnotchers and scholars but he had to leave today for an urgent meeting in Hong Kong. In his stead, we thank TYKF trustees Marixi R. Prieto, retired chair of the Philippine Daily Inquirer, and Amando Tetangco Jr., retired six-star governor of the Bangko Sentral ng Pilipinas for helping us in handing out the said checks. Gov. Say is rated six stars because he has the distinction of being the only BSP governor to serve for two terms of six years each. Had his charming wife Elma not objected because she wanted him to rest and relax, Gov. Say would have been given another term of six more years, without his asking for it.

I extend equal thanks to another partner, the Ayala Corporation, for generously funding and encouraging the FLP to sponsor the Dissertation Contest. When I advised Ayala Chairman Jaime Augusto Zobel de Ayala of this unique contest to provide content and substance to our advocacy for liberty and prosperity under the rule of law, he immediately agreed to fund the project, as an extra addition to Ayala’s normal budget for philanthropy. Unfortunately, Mr. Zobel is also out of the country today and could not attend. But we are happy and grateful Atty. June Lee Navarro, Ayala Corporation’s Deputy General Counsel and Ayala Land’s general counsel came and assisted us in the distribution of the cash rewards for our dissertation contest winners.

Let me also thank the Ateneo de Manila Professional Schools for allowing us to use their facilities, especially the Ateneo Auditorium where we are holding these Awarding Ceremonies. Ateneo has always been kind in opening its facilities to us for our education projects. May I say a special “thank you” to Law Dean Jose Maria G. Hofilena for his Opening Remarks? Incidentally, he is the latest addition to our list of professorial chair holders.

My deep appreciation also goes to the Philippine Daily Inquirer for the full-color, whole back page advertisement that came out today, compliments of its president, Sandy Prieto-Romualdez. The ordinary cost of that back page full color ad is P330,000 plus 12 percent VAT or a total of almost P400,000. Maraming salamat po also to the Philippine Star, through its president, Miguel G. Belmonte, for running also for free the same ad on page 15 of the May 15 issue of that paper.

Furthermore, I say my sincere appreciation to the Honorable Raul C. Pangalangan, a judge of the International Criminal Court in The Hague, The Netherlands for his message. When I learned yesterday that he was in town, I earnestly asked him to deliver a special message today, to which he gamely agreed. Incidentally, Judge Pangalangan’s family is a major member of the larger FLP community because his wife, UP Law Professor Elizabeth Aguiling-Pangalangan, is one of the 15 esteemed holders of the Chief Justice Panganiban Professorial Chairs on Liberty and Prosperity, and their son Raphael was the first place winner in our Dissertation Writing Contest last year.

I cannot end my thanks without mentioning the wonderful, melodious songs of the Friends from the UP College of Music, particularly for their acapella rendition of “Primus Inter Pares,” one of 18 original songs composed by internationally-acclaimed maestro, Ryan Cayabyab, who was recently-proclaimed a national artist of the Philippines. Lyrics for these 18 songs were written by Kristian Jeff Agustin.

Let me give you a little backgrounder on Jeff. To celebrate my 75th birthday seven years ago, my former staff in the Supreme Court met to stage a concert by the Manila Symphony Orchestra featuring the favorite love songs of my wife and me. After the meeting was over, Jeff, who was one of the clerks working in my chamber when I was the incumbent Chief Justice, half-embarrassingly handed to Atty. Jean Manalili, my former chief of staff, several sheets of paper where he wrote my life story in shining poetry. To cut the long story short, these sheets of paper were submitted to Maestro Ryan who found them worthy to be turned into a unique musical depicting my life story. The musical, titled Ageless Passion, was staged at the Meralco Theater in Pasig City in 2011 to celebrate my 75th birthday. At that time, the musical had only seven original compositions. In thanksgiving, I organized the Foundation for Liberty and Prosperity during the same year. It was restaged in 2016 at the Maybank Performing Arts Center in Bonifacio Global City, Taguig, and this time to mark my 80th birthday. Maestro Ryan and Jeff added another 11 original compositions to make a complete musical of 18 original compositions. Both shows were televised for two hours over GMA NewsTV Channel 11. Notably, the musical was presented by a full complement of professional actors, singers and dancers accompanied by the 60-piece Manila Symphony Orchestra. So, I am amazed and grateful that the Friends from the UP College of Music were able to sing “Primus Inter Pares” acapella, without instrumental accompaniment. Thank you again Friends from the UP College of Music. Incidentally, our only son, Archie, graduated from the UP College of Music, Summa Cum Laude, and proceeded to take up further music studies in Munich, Germany. However, he took another masteral degree in engineering economic system at Stanford University and followed it up with a PhD also on engineering economic systems also at Stanford. Now, he is Executive Director at J.P. Morgan in NYC. Banking is his profession but music is his passion. He is probably following the footsteps of Gov. Tetangco, except that he is still a bachelor!

By the way, I wish to reiterate that Jeff Agustin, the lyrics composer, was just one of the ordinary clerks, not a legal assistant, in the Supreme Court. I did not know that he was such a talented artist. After writing the words of “Ageless Passion,” he got a scholarship from the University of Westminster in London, where he finished his Master in Visual Arts in 2012. Currently, he is finishing his PhD with dual specializations in Communication and Media from the Hong Kong Baptist University, and in Art and Design from the Manchester School of Art in Great Britain. In the country on summer break from his schooling, Jeff is with us today. May I ask him to stand up and be recognized like the other FLP scholars and winners, for he too is a scholar and winner par excellence?

Ladies and gentlemen, permit me to also cite our two emcees, Jose Angelo Tiglao and Mikael Gabrielle Ilao, both FLP scholars, for gamely and smoothly steering today’s program. Gabby correctly recalled that last year, Sean James was the emcee. Will she follow his footsteps and be numero uno in her bar exam?

Words of Explanation from FLP

My third and last topic consists of a short explanation. In ordinary parlance, this is the commercial break for our sponsor, the Foundation for Liberty and Prosperity.

My friends, all our scholars and dissertation winners were chosen based on strict merit, on their academic excellence, leadership qualities and ability and willingness to internalize and espouse the philosophy of liberty and prosperity under the rule of law. Only in case of a tie was the candidates’ social status or financial plight considered, with the less-privileged candidates preferred. The main objective of the contests is to augment existing literature on the FLP’s core philosophy of liberty and prosperity under the rule of law.

For this reason, all the honorees are expected to be models, now and later in their professional careers, of the FLP’s advocacy that we all need both justice and jobs, freedom and food, ethics and economics, peace and development, liberty and prosperity; that these twin beacons must always go together for one is useless without the other; and that the best way to conquer poverty, to create wealth and to share prosperity is to unleash the entrepreneurial genius of our people by granting them the freedom and the tools to help themselves and society. I ask them to make a solemn vow to carry on these advocacies during their lifetime, even after I have gone from this world and passed to the eternal Kingdom of our Lord and God.

To help them continue these advocacies, FLP is organizing new programs, including the formation of an FLP Scholars Society to keep alive and burning their enduring bond of friendship and lifetime vow of continuing our advocacies.

After that announcement, that commercial from the sponsor, let me finally hail all of you ladies and gentlemen for attending today’s ceremonies and for your enthusiastic claps and cheers.

To show our appreciation, I invite all of you to a simple merienda at the lobby outside this auditorium. Let us break bread and continue toasting, cheering and congratulating our honorees, even as we wish our fourth year scholars and winners good luck during their graduation and forthcoming bar exams. Mabuhay!

A Remarkable and Riveting Lecture

* Closing remarks of Retired Chief Justice ARTEMIO V. PANGANIBAN after the Lecture of UP Professor Elizabeth Aguiling-Pangalangan, a holder of the CJ Panganiban Professorial Chairs on Liberty and Prosperity, held on March 28, 2019 at the First Floor Lecture Room, Bocobo Hall, UP Law Center, UP Diliman, Quezon City on “Parents and Children: When Law and Technology Unbundle Traditional Identities.”

 

 

Congratulations to Prof. Beth Pangalangan for her impressive, awesome and absorbing lecture. Scholarly prepared and eloquently delivered, it was indeed one of the best lectures I have ever heard in a long time. It makes me want to be a student again to listen again and again to Professor Beth. Ah, to be young again!

Well-research, Indeed!

Of course, her frequent citation of my decisions and separate opinions reminded me of my over 11 years in the Supreme Court. And what especially amazed me is her research into and many quotes from my books, columns and even my speeches. Wow, really heart-warming.

Let me, at this point, hand to her FLP’s check for P100,000 representing her honorarium, less 5 percent withholding tax imposed by the NIRC as amended by the TRAIN Law, and the Certificate attesting to her enrollment as a distinguished Holder of one of the 15 CJ Panganiban Professorial Chairs on Liberty and Prosperity.

May I also thank Dean Fides Cordero Tan for welcoming us to the UP College of Law. I do not remember having encountered her in the past, but her reputation for academic excellence and administrative expertise preceded her. In testimony thereof, the FLP Board of Trustees has unanimously resolved to invite her to join our corps of professorial chair holder. May I therefore have the honor of personally handing to our esteemed Dean Deng our official letter of invitation?

Ambition to Enroll at UP

My appearance here at the UP Lecture Hall reminds me of my life-long ambition to enroll at the UP. My classmates at Mapa High School in the early 1950s (when most of you in the audience were not yet born) and I used to visit the UP Campus in Diliman. Before the UP Oblation, we promised each other that we would study diligently to be able to obtain UP scholarships. And obtain the scholarships we were able to, except that in my case, my impoverished father – who was a simple government employee – could not afford the then 15-centavo bus ride from our small, rented apartment in Sampaloc, Manila to Diliman, Quezon City.

Even though I was not able to enter this school, I continued my association with the UP community, especially with activist student leaders like then UP Student Council President Fernando Lagua and then Philippine Collegian Editor Homobono Adaza with whom I cofounded the National Union of Students, the largest student organization in the country then and now. Because of their activism, Lagua was suspended for one year and Adaza expelled from the University. Looking back, I told myself, “Buti na lang hindi ako nakapasok sa UP, baka expelled din ako.”

My ambition to enjoy UP education was achieved by our only son and one of our four daughters. Our son, Archie, was only the 4th student to graduate Summa Cum Laude from the UP Conservatory of Music. While he proceeded to further piano studies in Munich, he eventually finished a PhD in engineering economic system at Stanford and is now a banker in New York City as an Executive Director of JP Morgan. But while banking is his profession, music remains his passion. Once in a while, he would come back home to give piano concerts in UP as well as in the Cultural Center and other familiar concert venues.

But my frustrated love for UP was requited by then UP President Edgardo Angara who gave me a small replica of the UP Oblation in the early 1980s to thank me for getting a donation of a fire truck from Japan. And my undying thirst for UP’s academic excellence was somehow quenched by my enrollment as an honorary member of the Phi Kappa Phi Honor Society.

A Word About FLP

Before I close, let me say a few words about the Foundation for Liberty and Prosperity, which as already explained by the previous speakers, was organized after I retired from the Supreme Court to promote and perpetuate my philosophy of “Liberty and Prosperity Under the Rule of Law.” FLP has three education programs:

First, the Professorial Chairs for Liberty and Prosperity in partnership with the Metrobank Foundation, with 15 holders now, three of them by UP academics, namely, Professor Pangalangan, Dean Tan and President Danilo Concepcion.

Second, the Law Scholarship Program, in partnership with the Tan Yan Kee Foundation, for junior and senior law students at P200,000 each, covering tuition, books and monthly stipend. We award 20 of them yearly since 2017. We also give additional cash rewards to our scholars who graduate as valedictorians and/or with Latin honors, as well as to bar topnotchers. Among them is UP’s Ervin Fredrick Dy who obtained an FLP scholarship starting in the Academic Year 2016-2017. He took the bar examinations last November. If he or any other FLP scholar cops the first place, FLP will reward him with P200,000 cash. If any of them lands in the second to the tenth places, he or she will receive P100,000 cash.

Third, the Dissertation Writing Contest, in partnership with the Ayala Group. The first place winner last year was former UP student Raphael Pangalangan, the illustrious son of the illustrious couple from UP and Harvard, who got the P300,000 prize and a gold plaque. By the way, the contest is still open for this year. The deadline for entries was postponed to April 30, 2019 at the request of Dean Tan.

May I end these Closing Remarks with my fervent hope for FLP’s closer link and cooperation with the academics and students of the UP College of Law, the best law school in the world…according to the UP Law Alumni Association. Maraming salamat po.

Way to a Happy, Free and Prosperous Society

Remarks delivered by Retired Chief Justice ARTEMIO V. PANGANIBAN in response to the lecture delivered by Joan S. Largo, Dean of the University of San Carlos School of Law and Governance and President of the Philippine Association of Law Schools on October 17, 2018 at the Buttenbruch Hall of the University of San Carlos, Cebu City.

 

Let me begin by saying how amazed I am that just a few days after Dean Joan S. Largo arrived from, to quote her, “a learning visit on clinical education” in the United States, she was ready with a scholarly and authoritative lecture, backed by a PowerPoint, that she just delivered so eloquently before this appreciative audience of the best and brightest legal minds in Cebu.

I thank her and her colleagues in the Philippine Association of Law Schools (PALS), which she now heads, for their support of my philosophy of liberty and prosperity under the rule of law and of my advocacy for a writ of prosperity. With such display of unity in the academe, I believe, in time, we can successfully craft well-vetted “Rules of the Writ of Prosperity” that we can propose for the promulgation of our Supreme Court.

In her lecture, Dean Largo focused on the constitutional provisions on social justice and human rights which the government, particularly the political branches, have not been able to implement and enforce. She emphasized, and rightly so, on the need to arm the least, the last and the lost: the dirt poor, the marginalized and the powerless with a way to compel our government to uplift their plight. She cited the efforts of the highest courts of other countries, like South Africa, Argentina and Columbia, in using their authority to help alleviate the poor’s angst, pain and suffering.

Simple but profound truth

In my response to Dean Largo, let me also cite other countries to drive to home an analogous point, this time no longer a plea for direct assistance or dole-outs in terms of “conditional transfers” of cash, or cheap rice, or communal housing, or socialized medicine.

Taking off from a speech I delivered before the Asean Law Association a few years ago, let me begin with a famous quotation of Dr. Martin Luther King Jr., “If a man does not have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness.” Let me repeat that, “If a man does not have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness.”

It may seem ironic that I should be citing an American civil rights icon in this august audience of patriotic Filipinos, but like Dean Largo who cited foreign jurisprudence to buttress her cause, I did so not because of Dr. King’s nationality, color, gender or religion. I quoted him because of the truth he said so simply yet so profoundly.

I cited him because precisely of my belief that truth is eternal and limitless; that truth is not bound by sovereignty, or territory, or ideology, or legality; that what is true in America is also true in the Philippines, in Africa, in South America and in the world. And that that truth is this: humans need both justice and jobs; freedom and food; ethics and economics; peace and development; liberty and prosperity; these twin beacons must always go together; one is useless without the other.

Now, even in retirement, I still continue my advocacy for these twin beacons of liberty and prosperity. Thus in 2011, five years after my retirement from the judiciary, when I celebrated my 75th birthday, I organized the Foundation for Liberty and Prosperity, which now sponsors several educational programs, namely, 13 professorial chairs in various law schools, 20 full law scholarships at P200,000 each, in which some USC students are recipients, and a dissertation contest, in which a USC student, Tess Marie Tan, won the second place, second only to Raphael Pangalangan, a Filipino graduate student of the University of Oxford in Great Britain, who copped the first place.

To repeat, there are certain truths that transcend sovereignties, territories, ideologies and legalities. And one of those truths is this: The best way to conquer poverty, to create wealth and to share prosperity is to unleash the entrepreneurial genius of people by granting them the freedom and the tools to help themselves and society.

Saving the fisherman    

Let me push my thesis further by quoting a popular adage from Confucius, “Give a man a fish and you feed him for a day. Teach him to fish and you feed him for a lifetime.” Indeed, to save a fisherman from destitution, we must help him learn how to fish more effectively. We must educate him in the skills needed to catch fish more efficiently, assist him in acquiring a boat, allow him the freedom to sail the vast oceans, and teach him the techniques to market the fish he catches.

Sometimes, some of us fear that the fisherman may get lost and die in the storms that batter the seas; or that he may become selfish and would want to own the entire ocean and its vast resources; or that he may become too rich and powerful and metamorphose into a rival, an enemy, or worse, a master. Such fears of possible misjudgments may indeed happen some of the time. Human arrogance, greed and avarice lurk in all undertakings. But they are the exceptions rather than the rule. We must never stop dreaming for fear that reality may shatter our dreams. We must admit that risks and challenges form part of the interesting reality of being human.

On the other hand, I respectfully believe that the goal of governance and of law is to provide guarantees and incentives to help the fisherman prosper, to create the institutions to support him, and to promulgate minimal regulations to prevent him from appropriating all the fishing grounds, from keeping all the earnings to himself and from forgetting his obligation to pay reasonable taxes to the government. Indeed, government must inspire him to share his consequential wealth with the rest of society.

Validating the truth

Let me take you briefly around the world to validate this simple truth. The United States, the most powerful country in the world and the great promoter of liberal democracy, attained affluence because of the pioneers who defied monarchical tyrannies and started a new nation that unleashed the inventive, innovative and entrepreneurial spirit of people like Thomas Edison, Nikola Tesla, Cornelius Vanderbilt, John Rockefeller, Andrew Carnegie, Henry Ford, J.P. Morgan, and lately of Bill Gates and Steve Jobs, as well of great government leaders like Franklin Delano Roosevelt, Dwight Eisenhower and Barack Obama who provided them with the encouragement to attain their dreams and the good governance to contain their greed and share their wealth.

Then, let us go to China, the second most powerful economy in the world and the prime promoter of the communist system. True, Mao Zedong led the masses in a revolt that dislodged the corrupt and inefficient government born of an outdated monarchy. But it was Deng Xiaoping who led this nation to unparalleled economic prosperity by unleashing the entrepreneurial ingenuity of the Chinese under his “One-Country-Two-Systems” philosophy.

Finally, let me bring you to Korea. As a result of World War II, this country was divided into North and South, which unfortunately could not accept their division and engaged in a terrible war that ruined their economies and impoverished their people. Rising from the ruins, South Korea relied on the entrepreneurial spirit of the Korean people and built on their private initiative as well as on the notion that innovation, creativity, freedom and hard work would enable them to conquer their poverty, provide for their family’s well-being and attain affluence.

In contrast, North Korea – despite its technological and military bravado – wallows in abject poverty as a result of its tight grip on creativity and inordinate fear of the entrepreneurship, education, freedom and prosperity of its people.

Entrepreneurship in the Philippines

I believe that given the same climate of free enterprise, our people can rise to the challenges of innovation, creativity and ingenuity and free themselves of extreme poverty, disease, malnutrition and disability. All they need is a government that affords opportunities for education instead of habitual mendicancy, fosters free competition instead of suffocating regulations, and rewards talent and hard work instead of sycophancy and connection.

The best proofs of this assertion are our overseas Filipino workers. Our engineers, technicians and house helps are treasured in Europe and the Middle East. Our professionals, doctors and nurses, succeed much better than many natives in the United States, Canada and Australia. In fact, the average Filipino professionals earn more than the average Caucasians in those countries. Moreover, they are law-abiding, they observe strict traffic rules simply because these rules are enforced evenly and fairly.

Yes, I conclude this response to Dean Largo with the firm belief that if our Filipino brethren are accord liberty, prosperity and the rule of law, they will use their entrepreneurial ingenuity to uplift themselves from destitution, disease and disability. Our responsibility – as leaders of the academe and the legal profession – is how we can harness the rule of law to enable them to form and enjoy a happy, free and prosperous society.

Maraming salamat po.

Wanted Writ of Prosperity

* Transcript of the extemporaneous Closing Remarks delivered by retired Chief Justice ARTEMIO V. PANGANIBAN after the Public Lecture of Polytechnic University of the Philippines Law Dean Gemy Lito L. Festin held on May 12, 2018 at the Bulwagang Bonifacio, A. Mabini Campus, PUP, Anonas Street, Sta. Mesa, Manila.

 

I have three points to share tonight. First, let me congratulate Dean Gemy Lito L. Festin, our featured chair holder of the Chief Justice Panganiban Professorial Chairs on Liberty and Prosperity, for his innovative and well-researched piece titled “Tutelary Rules Principle as Legal Tool for Easing Economic Rights’ Access to Justice in the Philippines.” I think it is one of best lectures I have heard since the Foundation for Liberty and Prosperity (FLP), in cooperation with the Metrobank Foundation (MBF), started this Lecture Series.

Appreciation and Honorarium      

To show our appreciation more concretely and beyond mere words, may I hand over to Dean Festin his honorarium for P100,000, via this check for P90,000; the balance of P10,000 constitute the withholding tax which will be remitted directly to the Bureau of Internal Revenue in accordance with law, and which remittance the good Dean may use when he files and pays for his income tax returns early next year.

So too, may I advise you that Dean Festin’s piece will find a prominent place in the Coffee Table Book that FLP and MBF will be publishing soon to feature our outstanding professorial lectures. This is not an ordinary book. It will be a big multicolored tome that everyone concerned would be happy to place in their living rooms, not just in their libraries.

I also felicitate the three “reactors,” (in the order they spoke) Atty. Rosalie J. De la Cruz-Cada (Deputy Director for Projects of the IBP Center for Legal Aid), Judge Joselito C. Villarosa (of Branch 66, Regional Trial Court of Makati), and Atty. Arnold C. Bayobay (Graft Prosecutor of the Office of the Ombudsman) for their interesting feedbacks and questions. My admiration too goes to Companero Carlos S. Cao Jr., former Labor Undersecretary and POEA Administrator, for being an insightful and funny Master of Ceremonies.

Truth to tell, this is my first time to hear of the word “Tutelary.” Indeed one is never too old to learn. I may be a retired chief justice now at 81 years, but I think I am not “retarded.” One is never too old to learn new treats.

Political vs Economic Rights 

We have always known in law school that most of our economic rights, even those defined in our Constitution, are not self-executing in nature and cannot, by themselves, be the subject of justiciable controversies. To be enforceable, they need enabling legislation. In several decisions, our Supreme Court – citing the deliberations of the Constitutional Commission – has held that economic and social rights cannot, by themselves, be enforced by the judiciary.

This line of decisions finds support in constitutional history, starting from the United States where we adopted our own Constitution. Remember that the more than two-century-old US Constitution was crafted during the American struggle for freedom and independence from British colonial rule when political and civil liberties were the battle cry. And so it is with us. All our basic laws, starting from the Malolos Constitution to the present 1987 Charter, were also drafted at a time when our people fought for political and civil freedom from foreign conquerors, Spanish and American. This is reflected most specially in the Bill of Rights which centered on political and civil rights.

In the present age, while we still treasure our political and civil liberties, our people’s focus is more on their economic needs and wants. This is clear in many recent credible polls and surveys showing that the most urgent concerns of our people relate to poverty, jobs and high prices. They long for liberation from the bondage of poverty. Of what use indeed is the freedom to travel if we cannot fill our stomachs? Of what use is the freedom of information, if we cannot quench our thirst for potable water?

This is why – since I was a student mired in destitution to my professional life as a lawyer and later as I jurist – I have always advocated for justice and jobs, freedom and food, ethics and economics, nay, liberty and prosperity; one is useless without the other. My major decisions starting from Tanada vs. Angara in 1997 have espoused this doctrine. That is why even in retirement, I organized the Foundation for Liberty and Prosperity as a way of celebrating my 75th birthday in 2011.

Writ of Prosperity

In his lecture, Dean Festin ably tackled this jurisprudential difficulty of enforcing economic rights. But he has moved further by proposing a solution – by referring to the “Tutelary Rules” which the Columbian Supreme Court has drawn precisely to enforce economic rights.

I will no longer repeat his many cogent arguments why we must encourage our Supreme Court to follow the Columbian example and promulgate new Rules of Procedure – a power our Constitution has endowed on the Court – to authorize the enforcement of economic rights. But may I add that one good way of doing that is to create the Writ of Prosperity, in the same manner that our Court has promulgated the Writ of Amparo, the Writ of Habeas Data and the Writ of Kalikasan.

The last Writ was issued to provide a legal way to enforce the right to ecology which is arguably an economic right that does not normally find the same traditional constitutional treatment as the self-executing political and civil rights.

May I suggest that Dean Festin take the initiative of bringing this matter to the Philippine Association of Law Schools to the help of his colleagues there in molding this idea and preparing the detailed Rules of Procedure for this new Writ of Prosperity. I am sure PALS President Sedfrey Candelaria of Ateneo would be sympathetic to this proposal.

I am sure also that both the FLP and the Metrobank Foundation will support this endeavor to give birth to the Writ of Prosperity.

May I also suggest that concurrently with the effort to convince the Supreme Court to institute the new Writ, we make a similar endeavor to amend the Constitution to include the right to prosperity and the corollary right against poverty? This would be timely because of the current national effort to amend the Constitution. Again, both the FLP and the MBF, and I personally, would be happy to support this worthwhile venture.

Polytechnic University of the Philippines

The second topic of my closing remarks would be about PUP. I must confess that this is my first time to visit your school. But I do know about it since it was the old Philippine College of Commerce founded in 1901 up to its transformation into a university by a group of avant garde educators led by my activist friend, the late Dr. Nemesio Prudente. PUP is also kind of nostalgic for me, because I located my first law office here in Sta. Mesa, at the Ramon Magsaysay Boulevard very near the vehicular bridge crossing the railroad, less than one kilometer away. Back then, I was intending to run for Congress in this congressional district that includes the University Belt, until the idea was vetoed by my dear wife who did not want any partisan political post for me, or for our children.

To be sure, I am sentimentally attached to PUP, because it was, and still is, the hotbed of activism. Activist student leaders are close to my heart because as you may know, I organized the National Union of Students of the Philippines more than fifty years ago, which was, and still is, the largest student organization in the country. Incidentally, at that time, the Catholic colleges like Ateneo, La Salle, St. Theresa and St. Scholastica did not participate in non-Catholic student organizations. But the NUSP crossed the cloisters and got the collegialas into the mainstream student movements. This historic turn was a bonus for me — it was because of the NUSP that I met the gentle Scholastican, Elenita Carpio, who later became my wife.

I am thus happy that PUP chose to be an active participant in FLP’s programs. Aside from the professorial chair that FLP awarded to Dean Festin, it also awarded full scholarships, including tuition, books and monthly stipends, to three FLP law students, Jun Dexter Rojas, Ma. Vida Malaya Villarico and Rexlyn Anne Evora. They won three of the 21 scholarships awarded for this school year, with only Ateneo de Manila surpassing the count with four. Ms Evora was also chosen as one of the six finalists in the FLP Dissertation Writing Contest.

May I also announce right now that additional cash prizes await them should they graduate with Latin honors? FLP will also award P100,000 to each FLP scholar or dissertation writing contest winner/finalist who make it to the Top Ten in the coming Bar Exam, and double that, or P200,000, for the numero uno.

I have no doubt that PUP graduates are capable of achieving this feat. After all, your bar exam track record is enviable. Your first batch of graduates in 2016 had a 100 percent passing record, while your 2017 grads had an 88.88 passing rate. It is time for you to top Bar Exam this year. I will be there in 2019 to celebrate and hand out FLP’s checks for the Top Ten achievers among our scholars or dissertation winners/finalists.

Why I Am Who I Am

Now, for the third and final topic of my closing remarks. I was very touched by the Invocation that started our program. I was reminded of my speech titled “Why I Am Who I Am Now” delivered in 2007 when I was the guest speaker to celebrate the 200th anniversary of the Canossian Sisters (the speech can be accessed in my personal website, cjpanganiban.com).

By way of backgrounder, like many of you in the audience, and yes, like many of PUP students in general, I belonged to a very poor family when I was young. My father finished only high school and was a government clerk. My mother did not finish elementary school. My father supported not only his four children, of whom I was the youngest, but also his seven siblings who were all younger than him, because his own father passed away even before I was born. As the youngest in our impoverished family, nothing was left for me. I had to sell newspapers, peddle cigarettes amongst jeepney passengers, and shined shoes to support myself. In college, I had to maintain my scholarship and sell textbooks to my classmates to be able to own one as my commission.

I studied in public schools, at Juan Luna Elementary School and Mapa High School. I wanted to enroll at the University of the Philippines for college where I was granted a tuition scholarship as an honor graduate of our high school batch of 1,200. But my impoverished father could not afford the then 15-centavo bus fare from our small rented “entresuelo” in Cataluna Street, Sampaloc, Manila to the UP Diliman Campus. He advised me to enroll instead at the then nearby University of Santo Tomas or Far Eastern University.

At UST, I was interviewed by an old Dominican priest. “So, you want a college scholarship. Since you come from a non-Catholic high school, I will ask you three questions. If you can answer them, I will grant you a scholarship. First, how many Gods are there?” “One,” I readily replied.

“How many persons in one God?” he followed up. “Three,” I gamely answered. Then came the final question, “Name them.” Believe it or not, ladies and gentlemen, I did not know the answer, so I muttered, “Susmariosep!” “Wrong,” he boomed with finality, ending my hope of entering the oldest university in the country. At FEU, I was granted a scholarship without any question, but I had to maintain it with high grades throughout my stay.

That incident I considered as a challenge for me to learn more of my faith. At FEU, I met the chaplain, the late Fr. Michael Nolan, who recruited me to the Student Catholic Action. After college, I continued my Catholic learning, attending many seminars and reading the Holy Bible back to back a few times, plus tens of volumes of commentaries on Catholicism. I embraced the Lord Jesus as my savior and master.

In 1991, I was invited to be a lay member of the Second Plenary Council of the Philippines, where I (together with about 50 Catholic lay leaders) met and dialogued with all the Catholic bishops and leading priests here in forging new regulations to implement the reforms of Vatican II in the Philippines.

My ascent to Catholic leadership was capped by my appointment by the late Pope John Paul II as the only Filipino lay member in 1996-2002 of the Pontifical Council for the Laity based in the Vatican City. This 30-member Council is the highest advisory “dicastery” advising the Pope “on all matters regarding the life of the Catholic faithful worldwide.”

So, from being a Catholic ignoramus who did not know the three persons of the Holy Trinity, I graduated to the highest lay advisory council of the Pope in the Vatican. I relate this story to inspire you, my young friends in the audience, that we should take disappointments and defeats as opportunities and challenges to achieve victory later in life. Poverty and ignorance are not barriers to success. They can be overcome. Looking back, maybe if I were not as poor and as ignorant as I was, I would not have struggled and worked as hard as I did to become “why I am who I am today.”

Maraming salamat po and magandang gabi po sa inyong lahat.

Spreading the Gospel of Liberty and Prosperity

*Keynote address delivered by Chief Justice Artemio V. Panganiban during the National Forum on “Liberty and Prosperity”, held on August 24-25, 2006, at the Manila Hotel.

 

Good afternoon and Mabuhay to all of you. I am deeply honored to deliver this keynote address before so many distinguished jurists, lawyers, diplomats, business heads, civil society leaders, academics, and high government officials from different parts of the world gathered here today for this three-day Global Forum on Liberty and Prosperity.

In this keynote address, it is my purpose (1) to follow up and explain in greater breadth and depth the twin concepts of liberty and prosperity; (2) to expound on how the Global Forum was organized and structured; (3) to illustrate how the speakers and delegates may meaningfully participate; and (4) to discuss how the beneficent effects of these twin beacons of justice, as I am apt to call them, may be extended far and wide to the peoples of the world.

May I also say, at the outset, that it has been my personal crusade since joining the Philippine Supreme Court more than 11 years ago to actively espouse and propagate these twin beacons of justice. Upon assuming the chief justiceship of the Philippines last year, I publicly pursued them even more fervently. Indeed, they have become the cornerstones of my magistracy.
For that reason exactly, I embarked on a knowledge-sharing-cum-lecture circuit in May and June of this year. My aim was to broach and carry forward these twin beacons to jurists, legal practitioners, business heads, civil society leaders, diplomats, academics, and developmental agencies in several countries—especially the Unites States, Spain, France , the Netherlands and the United Kingdom. In all my meetings with the various personalities and sectors mentioned, I was delighted to note the very warm reception given to Liberty and Prosperity. It was during those meetings that the format of this Forum was ironed out and initial invitations were extended.

I am thus grateful to, among others, World Bank (WB) President Paul Wolfowitz and Asian Development Bank (ADB) President Haruhiko Kuroda. Due to their inability to be physically present, both have graciously agreed to send video messages, which we will hear on Friday, October 20; US Supreme Court Justice Anthony Kennedy and US Court of Appeals Judge Clifford Wallace who, despite their unavoidable physical absence, have ensured their participation through video conferencing from their location in San Diego, California; as well as Chief Justice Guy Canivet of France and International Bar Association President Fernando Pombo Garcia, both of whom will personally present their views and experiences on these twin beacons.

I also thank those who have encouraged me to pursue my advocacy despite their inability to participate personally because of conflicts in schedule and other reasons. Among them are President Rosalyn Higgins of the International Court of Justice, based in the Hague; Chief Justice Willibord Davids of the Netherlands; President Francisco Jose Hernando Santiago of the Spanish Supreme Court; the Chief Justice of England and Wales, Lord Philipps of Worth Matravers; and Ms Karen Mathis, president of the American Bar Association.

On the same theme, several fora have also been conducted in my country over the past months. In these gatherings were discussed not only the theoretical foundations of these twin beacons of justice but, more important, concrete ways of implementing them locally.

The first of these domestic fora was the National Academic Forum attended by distinguished and renowned scholars of the law in our country on July 20, 2006. This forum was followed shortly on August 24-25, 2006, by the National Forum on Liberty and Prosperity. It was participated in not just by justices and judges, but also by representatives of our legislative and executive branches of government; also in attendance were law practitioners, business leaders, and civil society advocates. The resolutions passed during the forum outlined several plans of action on how to implement the twin beacons in our courts, in the legal profession, the academe, the government and society in general.

On top of these efforts, I wrote a book entitled Liberty and Prosperity. This book, together with a searchable compact disc (CD) version, will be circulated for the first time today to all delegates.

The lecture circuit and fora, as well as the book, have encouraged the members of our Supreme Court to sponsor this Global Forum to give the world community an opportunity to discuss Liberty and Prosperity. Fortunately, our aspirations drew the support of the United Nations Development Programme (UNDP), the World Bank, the ADB, the Canadian International Development Agency (CIDA); and the US Agency for International Development (USAID) through The Asia Foundation (TAF), the American Bar Association (ABA), and the Rule of Law Effectiveness (ROLE).

In the next three days, we will share our national and sectoral experiences, mutually discuss the challenges confronting Liberty and Prosperity in various parts of the world, and draw lessons from them. As you may have noted from the program, we have invited a cross section of the global society to discuss the country experiences of Canada, Benin, Singapore, France, Argentina, Nepal, Russia, Guatemala, China, Egypt; and those of the bar associations, academic and judicial institutes, development institutions, other branches of government, and civil society.

I hope then that at the end of this 3-day forum, we shall have come to a mutual understanding of the principles of Liberty and Prosperity and mapped out common courses of action to carry them out globally. An example of a possible project is a global foundation for Liberty and Prosperity, which will serve as a venue for a continuing discussion and sharing of ideas, experiences, and best practices by the various sectors represented in this Forum. In this search, the foundation could also bestow international awards to outstanding personalities and programs advocating the twin beacons.

Let me now briefly go through various events that have given impetus to Liberty and Prosperity as twin beacons of justice.

Safeguarding Liberty

The history of the world shows a long and arduous road to freedom. From the Magna Carta of the British to the French Revolution, and from the Declaration of Independence of the Americans to the struggle for nationhood of the Filipinos, calls for civil and political liberties reverberated in the annals of our past. Liberté, égalité, fraternité, ou la mort! Tierra y libertad! Mabuhay ang Republika ng Pilipinas! These were some of the battle cries for nationhood and freedom.

Indeed, history rings for peoples’ right to be free—free to live peacefully, to earn a living, to participate in political processes, to vote and to be voted for; as well as to speak, to assemble peaceably for redress of grievances, and to worship one’s Creator the way one deigns, among others.

In these battles to uphold freedom throughout the past centuries, the judiciaries of the world have had to cope and innovate with a never-ending saga of fortitude and forthrightness. So, too, must they now face up to new challenges brought about by the advances in technology and the demands of our global community. Thus, even now, laws and judicial doctrines safeguarding liberty are continuously tested to the limits.

Indeed, traditional conceptions of liberty have paved the way to new freedoms. In the Philippines, for example, the right to conduct public opinion polls and to publish their results, a right born recently of the information age, is now considered an essential part of the traditional freedom of speech and expresion. [1] I am sure that many, if not most, of the countries represented in this Forum have had to face similar questions in the past; and that they have given wise counsel, as well as guidance, on the legality of exit polls as part of the freedom of speech. [2]

Furthermore, recent money-laundering activities and threats of terror have become new objects of calibration in the defense of human freedom.

Recent Decisions Upholding Liberty

Very recently, our Supreme Court promulgated three landmark Decisions involving (1) the right of Congress to summon executive officials for investigations in aid of legislation, in conjunction with the people’s right to information on matters of public concern; [3] (2) the right of citizens to peaceful assembly for redress of grievances; [4] and (3) the rights of the people under a declaration of a “state of national emergency.” [5] In all these cases, our Supreme Court upheld the primacy of civil liberties over governmental actions.

The struggles for civil and political liberties by other judiciaries are, of course, just as long and difficult. An example is the Cour de Cassation (the highest court of France). In a case involving a former official whose employment had been terminated by the African Development Bank, the French court ruled on January 25, 2005, that the right to a hearing before an impartial tribunal prevailed over the jurisdictional immunity granted by a State to international organizations. [6] It explained that a party’s inability to refer its claim to a competent judge constituted a denial of justice and thus established the competence of the French judiciary to acquire jurisdiction. Thus, it upheld the former bank official’s fundamental right to a day in court.

Jameel v. Wall Street Journal Europe Sprl [7] (promulgated on October 11, 2006), which echoes the landmarkReynolds v. Times Newspapers Ltd., [8] has been hailed as a triumph of the freedom of expression and of the press. The Lords of Appeal of the House of Lords, the court of last resort in the United Kingdom, upheld the right to publish allegations about public figures on matters of public interest, as long as the journalist acted responsibly.

Further, on April 26, 2005, the Spanish Supreme Court ruled in favor of a Complaint filed by three nongovernmental organizations on the regulation and management of detention centers for foreigners. The ruling annulled certain provisions of a ministerial Order, particularly with respect to stringent discipline measures (such as the isolation and the regulation of the behavior of detainees, as well as the rules on visits and communications). [9]

Indeed, courts have the duty to safeguard the liberty of all peoples. Very recently, in Hamdan v. Rumsfeld [10] (decided on June 29, 2006), the United States Supreme Court held that a military commission convened to try a Yemeni national captured in Afghanistan lacked the power to proceed, “because its structure and procedures violate both the Uniform Code of Military Justice and the Geneva Conventions” on the matter. Holding that the military commission afforded less protection than that guaranteed under those laws, the US Supreme Court noted substantial deviations from the fundamental rights accorded to the accused, such as those precluding defendants and their counsel from learning what evidence was to be presented against them during any part of the proceeding; and those involving the admission of any evidence, such as hearsay testimony that had not been sworn to and statements gathered through coercion.

In Rasul v. Bush [11] (decided on June 28, 2004), a case also originating from the hostilities in Afghanistan, the US Supreme Court ruled that its district courts had jurisdiction to consider challenges to the legality of the detention of aliens (who in this case were Australians and Kuwaitis) captured abroad and incarcerated at Guantanamo Bay.

For sure, many other jurisdictions must have ruled on matters similar to those I have mentioned. Hence, we ask for your active participation, so that we may all learn from one another’s experiences, decisions and advocacies.

Nurturing Prosperity

While safeguarding liberty is a traditional and fairly common task for the judiciary, the nurturing of prosperity may not be too familiar to the courts. Some jurisdictions may even take the view that the judiciary need not exert conscious thought and effort to nurture progress. Nonetheless, I maintain that whatever the status of a country’s economic progress, courts must contribute to the achievement or nurturance of prosperity; or, at the very least, to the alleviation of poverty, disease and disability.

Important world events impel me to advocate a necessary—nay, indispensable—nexus between political liberty and economic prosperity, which I will explain shortly.

Mandate to Uphold Economic Rights

First. The Universal Declaration of Human Rights (UDHR), which was adopted by the General Assembly of the United Nations on December 10, 1948, has emerged as the fundamental law of human rights. The UDHR recognizes the entitlement of the common people to liberty and prosperity. This fact is evident in the following provisions of its Preamble:

“Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world, x x x x x x x x x

“Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom,”

The UDHR also recognizes—aside from the basic right to life, liberty and security of persons (Articles 3 to 21) — their right to economic, cultural and social rights (Articles 22 to 27). [12]

In the Philippines , our 1987 Constitution [13] commands the State to “promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty x x x.”

Equally significant, Article XII on the National Economy and Patrimony mandates “a more equitable distribution of opportunities, income and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.” [14] Our Constitution likewise demands the institutionalization of social justice. [15]

That these provisions are not self-executory does not in any way diminish their legal significance. They direct the legislature to enact laws to alleviate poverty, and they provide the courts with a juridical context within which to interpret other constitutional provisions and laws.

Global Efforts to Solve Economic Deprivation

Second. Another impetus to my twin advocacies pertains to developments in the private sector. More and more people around the world are realizing the need to fight poverty and deprivation and are pooling enormous resources and talents to combat this common menace.

For starters, Time magazine’s “Persons of the Year” for 2005—the world’s richest multi-billionaire couple, Bill and Melinda Gates—have staged their own campaign for vaccinations and public health care. Their target: to save 700,000 lives. [16]

Billionaire investment guru Warren Buffett has joined the crusade with a mind-boggling $30 billion donation of blue-chip Berkshire Hathaway stocks to the Gates Foundation. [17]

Just last September of this year, billionaire financier George Soros announced that he was contributing $50 million to the Millenium Villages Project. This nongovernmental initiative seeks to show that closely focused development projects can alleviate severe poverty within a few years. [18]

Even the famed Nobel Peace Foundation has veered its lenses to poverty alleviation, as it has awarded the Nobel Peace Prize to Bangladeshi Muhammad Yunus a few days ago, on October 14, 2006. He and his Grameen Bank had pioneered micro credit and proved that the poor’s misfortunes could be transformed by helping them become self-employed. Over 6.6 million impoverished Bangladeshis have availed themselves of micro loans. [19]

Philanthropic endeavors in Asia have likewise brought back hope to the homeless, the blind, the poor, and the neglected. This year, six exceptional Asians and one exemplary organization were awarded the Ramon Magsaysay Awards [20] — Asia’s equivalent of the Nobel Prize. Later, one of these awardees, Mr. Antonio Meloto, will share with us civil society’s experience in arousing civic consciousness through the Gawad Kalinga Community Development Foundation. It has been largely instrumental in building private mass housing projects for slum dwellers in the Philippines.

Need for a Stable Judiciary

Third. Still another factor behind the call for both liberty and prosperity is the growing consensus among developmental institutions that a stable judiciary and a firmly established rule-of-law system are necessary means to achieve liberty and prosperity. Institutions, like the United Nations Development Program (UNDP), the World Bank (WB), and the Asian Development Bank (ADB) have realized that poverty alleviation and economic growth cannot be attained, unless there is “a well-functioning judicial system [that] enables the State to regulate the economy and empower private individuals to contribute to economic development by confidently engaging in business, investments and other transactions.”

This stance explains why the UNDP is passionate about broadening the poor’s access to justice; why the WB wants “an effective and efficient judicial system that protects citizens from the abuses of government and safeguards the rights of the poor”; [21] and why the ADB desires “to enhance the effectiveness and the accountability of the judiciary.” [22]

In the audio-visual presentation we have witnessed, ADB President Kuroda and WB’s Joachim von Amsberg discussed the necessary nexus between progress and a stable rule-of-law environment. Both agree that the rule of law forms the foundation of sustained economic development.

If I may paraphrase Mr. Amsberg, law and justice are basic ingredients of development. Thus, it is his submission that there is no choice to be made between liberty and prosperity. Both are imperative paradigms in society. For the same reason, President Kuroda observed that the People’s Republic of China is undergoing a massive law reform program, so that it may continue to play a critical role in the world economy.

In the light of these three developments, among several others, I am convinced that the prosperity of the peoples of the world requires as much nurturing in the present century as that accorded to liberty in the past. These developments have instilled in me my advocacy of justice and jobs, freedom and food, integrity and investments, ethics and economics, democracy and development; in short, liberty and prosperity.

Liberty and Prosperity as a Philippine Judicial Policy

Pursuant to this effort to protect liberty and to promote prosperity, our Philippine judiciary has leaned towards a dual standard of judicial review. First, in cases involving liberty, the scales of justice weigh heavily against government and in favor of the people—especially the poor, the oppressed, the marginalized, the dispossessed and the weak. Laws and actions of government and its instrumentalities restricting the fundamental rights of our people come to the courts highly suspect in their constitutional validity. Second, in cases involving prosperity and development issues, deference is generally accorded to the political branches of our government; namely, the Presidency and Congress.

Let me add that, as a rule, Philippine courts do not pass upon the merits or wisdom of economic policies. These are matters that have been left by our people to the President and Congress to evaluate and decide. [23]

This judicial no-interference rule on economic policy does not mean, though, that our courts in the Philippines will abdicate their duty of striking down “grave abuse of discretion.” As you may know, our judiciary has been vested by our Constitution with a unique duty to nullify not just legislative or executive acts that clearly violate the Constitution, the laws, or settled jurisprudence; [24] but also those that have been issued with arbitrariness, whim, caprice, bias or personal hostility. [25]

To the first set of acts—those contrary to the Constitution and the law—courts in general claim an inherent mandate flowing from judicial power. I suppose, though, that the second category is peculiarly Filipino. It traces its origin to the previous dictatorial regime, the magnitude and monstrosity of which were described earlier by our former President Corazon C. Aquino in our audiovisual presentation. [26]

Concretely, there have indeed been instances when courts had to perform a delicate balancing act between the demands of liberty and the needs of prosperity. In British Columbia Securities Commission v. Branch, [27] the Supreme Court of Canada had to choose between the freedom from testimonial compulsion and the right of the government to compel a company’s officers to attend an examination under oath and to produce all pieces of information and records in their possession as provided under that country’s Securities Act. Ruling in favor of the securities commission, the Canadian Court noted that the “effective implementation of securities legislation, which has obvious implications on the nation’s material prosperity, depends on the willingness of those who choose to engage in the securities trade to comply with the defined standards of conduct.”

Search for a Model for Economic Development

As the world searches for the proper balance between liberty and prosperity and a model for economic development, various theories are being proposed. For instance, Professor William Easterly, who has recently published a book entitled Elusive Quest for Growth, [28] opined that most economically advanced countries had adopted liberal democracy, in which human rights were zealously protected. [29] He added that under those benign regimes, entrepreneurs felt comfortable and thus invested their money for the long term, thereby propelling stable economies. But when confronted with the other models of economic prosperity in Asia, Latin America and Eastern Europe, he conceded that there was no single formula for rapid economic growth.

Another theory proposed to explain how progress has been made possible in some countries of the world relates a country’s stability and progress to the degree to which it is “open,” both within its borders and to the outside world.[30] What is interesting about this theory is that it attempts to provide a framework both for countries that owe their stability and progress to their success in isolating themselves from the outside world, [31] on the one hand; and, on the other, those whose stability may be traced to their openness to social, political, and economic change. [32]

A group of four economists have tried to find an explanation of progress in various countries’ legal systems—whether common law or civil law. They are Rafael La Porta, an Argentinian; Florencio Lopez-de-Silanes, a Mexican; Andrei Sheifler, a Russian who immigrated to the US when he was 15; and Robert Vishny. Their theory has given rise to what is now known as “law and finance.” [33] According to this school of thought, common-law countries are more economically advanced than those subscribing to civil law. The former allegedly tend to be less corrupt and purport to protect both shareholders and creditors better than civil-law countries do. [34] The evidence supporting this theory, however, is hardly absolute.

Earlier, in the audiovisual presentation, Mr. Amsberg of the World Bank described how various countries dealt with the issues of liberty and prosperity within their social, cultural, economic and political milieus. According to him, historically, the United States placed greater emphasis on individual freedoms; European societies, on equality; while some Asian countries with flourishing economies, on strong states.

Our own experience in the Philippines demonstrates that Liberty and Prosperity must go hand and hand. One cannot be sacrificed for the other. After all, during the years of Martial Law, authoritarian rule was proven to be incapable of producing meaningful long-term economic progress. Even more important, our people value their freedoms very dearly and will not exchange them for food. Indeed, the Filipinos may endure occasional hunger, but they will never tolerate injustice and indignity for long.

Closing

I have attempted, as best as I could, to present the twin beacons of Liberty and Prosperity in the context of history, as well as of existing and emerging realities in many countries.

How to find the right balance between these two paradigms may be found in each country’s unique circumstances. By no means is the perception of balance in one country to be taken as an absolute prescription for others. I hope, though, that through an exchange of ideas, information, and best practices during this Forum, all countries and sectors represented may be able to evaluate the value of the shared experiences and to imbibe these as they may deem appropriate under their unique environmental circumstances.

Senator Angara, one of the leaders of our legislative branch, made an incisive point in the audiovisual presentation prior to my speech. He said that the matter of how best to calibrate the balance between liberty and prosperity must be left to the people of a particular country. Indeed, each country and each sector of society [35] has its own history, experience, temperament, economics, culture and politics, which should determine how viableLiberty and Prosperity would be in its jurisdiction.

Nonetheless, I present Liberty and Prosperity as a framework within which the various countries’ courts, congresses, parliaments, cabinets, bar associations, judicial institutes, academes, business communities, and civil society may formulate their missions and visions for the future. They may do well to rally around the commonalities of our countries’ experiences, rather than our differences.

I believe that should this Forum be able to discuss these varying approaches to balancing liberty and prosperity and later find some common areas from which some understanding may be culled and a program of action drawn, our gathering together during these three significant days in October 2006 would have been fruitful and successful.

Maraming salamat po.

__________

Keynote address delivered by Chief Justice of the Philippines , the Hon. Artemio V. Panganiban, during the opening ceremonies on October 18, 2006, of the three-day Global Forum on Liberty and Prosperity, at the Shangri-La Makati Hotel, Metro Manila, Philippines.

[1] ABS-CBN Broadcasting Corporation v. Commission on Elections (380 Phil. 780, January 28, 2000, per Panganiban, J.) In this case, the Court emphatically explained that, “when faced with borderline situations in which the freedom of a candidate or a party to speak and the freedom of the electorate to know are invoked against actions allegedly made to assure clean and free elections, this Court shall lean in favor of freedom.” This ruling recognizing public opinion polls as a species of the freedom of expression was echoed one year later in Social Weather Stations v. Comelec (357 SCRA 496, 501, May 5, 2001, per Mendoza, J.) In this case, the Court stressed that “because of the preferred status of the constitutional rights of speech, expression, and the press, a law prohibiting the publication of pre-election surveys is vitiated by a weighty presumption of invalidity.”

[2] For a sampling of how other countries have construed exit polls, please see Panganiban, Reforming the Judiciary 154-169 (2000).

[3] Senate v. Ermita, GR No. 169777, April 20, 2006. More accurately, the Court invalidated the major provisions of Executive Order No. 464. In simplest terms, the Decision held that Congress had the right to compel the appearance of executive officials in congressional investigations, because the power of legislative inquiry was as broad as the power to legislate. Hence, deemed unconstitutional were the provisions of EO 464. This executive order allowed the executive branch to evade congressional requests for information without properly invoking executive privilege in recognized instances. Nonetheless, the Court directed Congress to indicate, in its invitation to executive officials, the subject matter of the inquiry and of related questions, so that the President or the executive secretary could properly invoke executive privilege, if warranted.

To the extent that investigations in aid of legislation were to be generally conducted in public, the Court held that “any executive issuance tending to unduly limit disclosures of information in such investigations necessarily deprives the people of information which, being presumed to be in aid of legislation, is presumed to be a matter of public concern. The citizens are thereby denied access to information which they can use in formulating their own opinions on the matter before Congress — opinions which they can communicate to their representatives and other government officials through the various legal means allowed by their freedom of expression. x x x.”

[4] Bayan v. Ermita, GR No. 169838, April 25, 2006. This ponencia, penned by Justice Adolfo S. Azcuna, stated thus:

“x x x[T]his Court reiterates its basic policy of upholding the fundamental rights of our people, especially freedom of expresion and freedom of assembly. In several policy addresses, Chief Justice Artemio V. Panganiban has repeatedly vowed to uphold the liberty of our people and to nurture their prosperity. He said that ‘in cases involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak. Indeed, laws and actiions that restrict fundamental rights come to the courts with a heavy presumption against their validity. These laws and actions are subjected to heightened scrutiny.’”

[5] David v. Arroyo, GR No. 171396, May 3, 2006. Writing for the majority in this case, Justice Angelina Sandoval-Gutierrez ruled as follows:

“All powers need some restraint; practical adjustments rather than rigid formula are necessary. Superior strength – the use of force – cannot make wrongs into rights. In this regard, the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically their liberty.

“Chief Justice Artemio V. Panganiban’s philosophy of liberty is thus most relevant. He said: ‘In cases involving involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak.’ Laws and actions that restrict fundamental rights come to the courts ‘with a heavy presumption against their constitucional validity.’”

[6] Bull n?16, Chambre sociale. http://www.courdecassation.fr/jurisprudence, last accessed on October 16, 2006.

[7] [2006] UKHL 44.

[8] [1999] UKHL 45.

[9] Recurso De Casacion Num. 1888/2001, Tribunal Supremo, Sala de Lo Contencioso-Administrativo, D. Enrique Lecumberri Marti, ponente.

[10] 548 U.S. ___ (2006).

[11] 542 U.S. ___ (2004).

[12] It is well to note that from the Universal Declaration of Human Rights, two solemn agreements emerged: (1) the Covenant on Civil and Political Rights; and (2) the Covenant on Economic, Social and Cultural Rights. Commentators on international law are wont to distinguish the two in terms of the executory character of civil and political rights as against the ideal or developmental character of economic and social rights.

[13] The following provisions of the Constitution, among others, mandate the State to promote economic prosperity:

Article II (Declaration of Principles and State Policies)

“Sec. 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.”

“Sec. 17. The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development.”

Article XII (National Economy and Patrimony)

“Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.

“The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

“In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.”

“Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”

“Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”

[14] Art. XII, Sec. 1.

[15] Art. XIII, Sec. 1:

“The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

“To this end, the State shall regulate the acquisition, ownership, use and disposition of property and its increments.”[15]

[16] Bono, the other Time “Person of the Year”, on the other hand, “charmed and bullied and morally blackmailed the leaders of the world’s richest countries into forgiving $40 billion in debt owed by the poorest.”[16] He believes that money saved from debt relief can be spent, instead, on health and schools rather than interest payments.

[17] This sum will be given gradually, beginning in July this year and continuing every year for as long as one of the couple — Bill, 50; or Melinda, 42 — is active in the Gates Foundation. But each installment must be spent in the year it is given. For 2006, Buffett has given 602,500 Berkshire B shares valued at about $1.5 billion, which must be spent by the Gates Foundation within the year.

[18] http://allafrica.com/stories/200609190864.html accessed on October 6, 2006.

[19] Philippine Daily Inquirer, October 16, 2006, p. 1.

[20] The 2006 Ramon Magsaysay Awardees are: Eugenia Duran Apostol, who was cited for her unrelentingly espousal of truth, independence and integrity in Philippine media; Ek Sonn Chan, who found fulfillment in providing safe, clean, and cheap drinking water for millions of Phnom Penh’s poor residents; Arvind Kejriwal, who made it his relentless crusade to educate New Delhi’s poorest citizens on their right to information and to empower them to fight corruption; Antonio Meloto who, together with the Gawad Kalinga Community Development Foundation, has demonstrated the meaning of deep commitment by building homes for slum dwellers in the Philippines; Dr. Sanduk Ruit who, by his abiding love, has bestowed munificent gifts of sight to the poverty-stricken people of Nepal; and Park Won Soon, who has fostered social justice, fair business practices, clean government, and a generous spirit in South Korea’s young democracy.

[21] See Legal and Judicial Sector Manual (2002), a World Bank publication.

[22] Law and Policy Reform, ADB Report, January 2005, pp. 26-28

[23] An example of this deference to economic policies can be found in Tañada v. Angara (338 Phil. 546, 604-605, May 2, 1997, per Panganiban, J.). In this case, the Philippine Supreme Court upheld the Senate’s consent to the Philippines ratification of the World Trade Organization (WTO) Agreement. This laissez-faire judicial policy on economic issues was reiterated in La Bugal-B’laan Tribal Association v. Ramos (445 SCRA 1, December 1, 2004, per Panganiban, J.). In affirming the constitutionality of the Mining Law allowing 100-percent foreign investments in large-scale mining, the Court held thus:

“x x x. The Constitution should be read in broad, life-giving strokes. It should not be used to strangulate economic growth or to serve narrow, parochial interest. Rather, it should be construed to grant the President and Congress sufficient discretion and reasonable leeway to enable them to attract foreign investments and expertise, as well as to secure for our people and our posterity the blessings of prosperity and peace.”

[24] Republic v. COCOFED, 423 Phil. 735, December 14, 2001.

[25] Benito v. Comelec, 349 SCRA 705, January 19, 2001; Defensor-Santiago v. Guingona Jr., 359 Phil. 276, November 18, 1998; and Philippine Airlines, Inc. v. Confesor, 231 SCRA 41, March 10, 1994.

[26] Consistent with this “grave abuse” exception to the no-interference rule, the Supreme Court has nullified many contracts entered into by our government. Some of these contracts involved the reclamation of portions of Manila Bay, the construction and operation of the new Manila International Airport Terminal, and the automation of the 2004 national elections. (_Chavez v. Public Estates Authority,_ 384 SCRA 152, July 9, 2002; 451 Phil. 1, May 6, 2003; and 415 SCRA 403, November 11, 2003; per Carpio, J.; Agan v. PIATCO, GR No. 155001, May 5, 2003 and January 21, 2004, per Puno, J.; Information Technology Foundation of the Philippines v. Commission on Elections, GR No. 159139, 419 SCRA 141, January 13, 2004, per Panganiban, J.) Because of these decisions, our courts have been pilloried as unduly interfering in business and economic matters. Our critics, however, conveniently overlook the fact that, under our Constitution, our courts have the duty not merely to settle actual controversies involving legally demandable and enforceable rights. They must also strike down acts of any instrumentality of government whenever those acts have been entered into “with grave abuse of discretion.”

[27] 2 S.C.R. 3, April 13, 1995.

[28] MIT Press, Cambridge and London. Romain Wacziarg of Stanford University describes Easterly’s work as a “superb book [that] draws on what we have learned from almost two decades of cross-country growth comparisons” about “supposedly miracle growth policies [that] have proven disastrous or ineffective,” but wisely “avoids proposing a new panacea x x x.” Wacziarg, Review of Easterly’s The Elusive Quest for Growth, XL Journal of Economic Literature 907-918, September 2002.

[29] The discussion was summarized by Prof. Alex Magno, a participant in a relevant roundtable discussion, in his column in the Philippine Star on January 19, 2006.

[30] Ian Bremmer, “The J Curve: A New Way to Understand Why Nations Rise and Fall (2006)”. The framework is repesented by the “J Curve.” The vertical axis of the curve measures a state’s stability; the horizontal axis, its “openness.” Nations higher on the graph are more stable; those lower are less stable. Nations to the right of the dip in the “J” are more open; those to the left are less so. http://www.jcurvebook.com/ and http://en.wikipedia.org/wiki/J_curve, last accessed on October 14, 2006.

[31] Among these countries are North Korea, Iran, and Cuba.

[32] France, the United States, and Japan have been identified to be among these countries.

[33] “Law and Finance,” Journal of Political Economy, Vol. 106, No. 6, 1113-1155 (December 1998).

[34] According to research published by the scholars beginning in 1998, countries that come from a French civil-law tradition struggle to create effective financial markets, while countries having a British common-law tradition succeed far more frequently.

[35] The religious sector, too, has genuine concerns about the alleviation of poverty and the sharing of resources. Thus, in the gospel last Sunday, October 15, 2006, Catholics throughout the world were reminded of the young rich man’s question, “What must I do to inherit eternal life?” and of the Lord Jesus’ answer, “Go, sell what you have and give to the poor, and you will have treasures in heaven; then come, follow me.” (MKA 10:17-30)

Safeguarding the Liberty and Nurturing the Prosperity of the Peoples of the World

* Keynote address delivered by Chief Justice of the Philippines , the Hon. Artemio V. Panganiban, during the opening ceremonies on October 18, 2006, of the three-day Global Forum on Liberty and Prosperity, at the Shangri-La Makati Hotel, Metro Manila, Philippines.

 

Good afternoon and Mabuhay to all of you. I am deeply honored to deliver this keynote address before so many distinguished jurists, lawyers, diplomats, business heads, civil society leaders, academics, and high government officials from different parts of the world gathered here today for this three-day Global Forum on Liberty and Prosperity.

In this keynote address, it is my purpose (1) to follow up and explain in greater breadth and depth the twin concepts of liberty and prosperity; (2) to expound on how the Global Forum was organized and structured; (3) to illustrate how the speakers and delegates may meaningfully participate; and (4) to discuss how the beneficent effects of these twin beacons of justice, as I am apt to call them, may be extended far and wide to the peoples of the world.

May I also say, at the outset, that it has been my personal crusade since joining the Philippine Supreme Court more than 11 years ago to actively espouse and propagate these twin beacons of justice. Upon assuming the chief justiceship of the Philippines last year, I publicly pursued them even more fervently. Indeed, they have become the cornerstones of my magistracy.
For that reason exactly, I embarked on a knowledge-sharing-cum-lecture circuit in May and June of this year. My aim was to broach and carry forward these twin beacons to jurists, legal practitioners, business heads, civil society leaders, diplomats, academics, and developmental agencies in several countries—especially the Unites States, Spain, France , the Netherlands and the United Kingdom. In all my meetings with the various personalities and sectors mentioned, I was delighted to note the very warm reception given to Liberty and Prosperity. It was during those meetings that the format of this Forum was ironed out and initial invitations were extended.

I am thus grateful to, among others, World Bank (WB) President Paul Wolfowitz and Asian Development Bank (ADB) President Haruhiko Kuroda. Due to their inability to be physically present, both have graciously agreed to send video messages, which we will hear on Friday, October 20; US Supreme Court Justice Anthony Kennedy and US Court of Appeals Judge Clifford Wallace who, despite their unavoidable physical absence, have ensured their participation through video conferencing from their location in San Diego, California; as well as Chief Justice Guy Canivet of France and International Bar Association President Fernando Pombo Garcia, both of whom will personally present their views and experiences on these twin beacons.

I also thank those who have encouraged me to pursue my advocacy despite their inability to participate personally because of conflicts in schedule and other reasons. Among them are President Rosalyn Higgins of the International Court of Justice, based in the Hague; Chief Justice Willibord Davids of the Netherlands; President Francisco Jose Hernando Santiago of the Spanish Supreme Court; the Chief Justice of England and Wales, Lord Philipps of Worth Matravers; and Ms Karen Mathis, president of the American Bar Association.

On the same theme, several fora have also been conducted in my country over the past months. In these gatherings were discussed not only the theoretical foundations of these twin beacons of justice but, more important, concrete ways of implementing them locally.

The first of these domestic fora was the National Academic Forum attended by distinguished and renowned scholars of the law in our country on July 20, 2006. This forum was followed shortly on August 24-25, 2006, by the National Forum on Liberty and Prosperity. It was participated in not just by justices and judges, but also by representatives of our legislative and executive branches of government; also in attendance were law practitioners, business leaders, and civil society advocates. The resolutions passed during the forum outlined several plans of action on how to implement the twin beacons in our courts, in the legal profession, the academe, the government and society in general.

On top of these efforts, I wrote a book entitled Liberty and Prosperity. This book, together with a searchable compact disc (CD) version, will be circulated for the first time today to all delegates.

The lecture circuit and fora, as well as the book, have encouraged the members of our Supreme Court to sponsor this Global Forum to give the world community an opportunity to discuss Liberty and Prosperity. Fortunately, our aspirations drew the support of the United Nations Development Programme (UNDP), the World Bank, the ADB, the Canadian International Development Agency (CIDA); and the US Agency for International Development (USAID) through The Asia Foundation (TAF), the American Bar Association (ABA), and the Rule of Law Effectiveness (ROLE).

In the next three days, we will share our national and sectoral experiences, mutually discuss the challenges confronting Liberty and Prosperity in various parts of the world, and draw lessons from them. As you may have noted from the program, we have invited a cross section of the global society to discuss the country experiences of Canada, Benin, Singapore, France, Argentina, Nepal, Russia, Guatemala, China, Egypt; and those of the bar associations, academic and judicial institutes, development institutions, other branches of government, and civil society.

I hope then that at the end of this 3-day forum, we shall have come to a mutual understanding of the principles of Liberty and Prosperity and mapped out common courses of action to carry them out globally. An example of a possible project is a global foundation for Liberty and Prosperity, which will serve as a venue for a continuing discussion and sharing of ideas, experiences, and best practices by the various sectors represented in this Forum. In this search, the foundation could also bestow international awards to outstanding personalities and programs advocating the twin beacons.

Let me now briefly go through various events that have given impetus to Liberty and Prosperity as twin beacons of justice.

Safeguarding Liberty

The history of the world shows a long and arduous road to freedom. From the Magna Carta of the British to the French Revolution, and from the Declaration of Independence of the Americans to the struggle for nationhood of the Filipinos, calls for civil and political liberties reverberated in the annals of our past. Liberté, égalité, fraternité, ou la mort! Tierra y libertad! Mabuhay ang Republika ng Pilipinas! These were some of the battle cries for nationhood and freedom.

Indeed, history rings for peoples’ right to be free—free to live peacefully, to earn a living, to participate in political processes, to vote and to be voted for; as well as to speak, to assemble peaceably for redress of grievances, and to worship one’s Creator the way one deigns, among others.

In these battles to uphold freedom throughout the past centuries, the judiciaries of the world have had to cope and innovate with a never-ending saga of fortitude and forthrightness. So, too, must they now face up to new challenges brought about by the advances in technology and the demands of our global community. Thus, even now, laws and judicial doctrines safeguarding liberty are continuously tested to the limits.

Indeed, traditional conceptions of liberty have paved the way to new freedoms. In the Philippines, for example, the right to conduct public opinion polls and to publish their results, a right born recently of the information age, is now considered an essential part of the traditional freedom of speech and expresion. [1] I am sure that many, if not most, of the countries represented in this Forum have had to face similar questions in the past; and that they have given wise counsel, as well as guidance, on the legality of exit polls as part of the freedom of speech. [2]

Furthermore, recent money-laundering activities and threats of terror have become new objects of calibration in the defense of human freedom.

Recent Decisions Upholding Liberty

Very recently, our Supreme Court promulgated three landmark Decisions involving (1) the right of Congress to summon executive officials for investigations in aid of legislation, in conjunction with the people’s right to information on matters of public concern; [3] (2) the right of citizens to peaceful assembly for redress of grievances; [4] and (3) the rights of the people under a declaration of a “state of national emergency.” [5] In all these cases, our Supreme Court upheld the primacy of civil liberties over governmental actions.

The struggles for civil and political liberties by other judiciaries are, of course, just as long and difficult. An example is the Cour de Cassation (the highest court of France). In a case involving a former official whose employment had been terminated by the African Development Bank, the French court ruled on January 25, 2005, that the right to a hearing before an impartial tribunal prevailed over the jurisdictional immunity granted by a State to international organizations. [6] It explained that a party’s inability to refer its claim to a competent judge constituted a denial of justice and thus established the competence of the French judiciary to acquire jurisdiction. Thus, it upheld the former bank official’s fundamental right to a day in court.

Jameel v. Wall Street Journal Europe Sprl [7] (promulgated on October 11, 2006), which echoes the landmarkReynolds v. Times Newspapers Ltd., [8] has been hailed as a triumph of the freedom of expression and of the press. The Lords of Appeal of the House of Lords, the court of last resort in the United Kingdom, upheld the right to publish allegations about public figures on matters of public interest, as long as the journalist acted responsibly.

Further, on April 26, 2005, the Spanish Supreme Court ruled in favor of a Complaint filed by three nongovernmental organizations on the regulation and management of detention centers for foreigners. The ruling annulled certain provisions of a ministerial Order, particularly with respect to stringent discipline measures (such as the isolation and the regulation of the behavior of detainees, as well as the rules on visits and communications). [9]

Indeed, courts have the duty to safeguard the liberty of all peoples. Very recently, in Hamdan v. Rumsfeld [10] (decided on June 29, 2006), the United States Supreme Court held that a military commission convened to try a Yemeni national captured in Afghanistan lacked the power to proceed, “because its structure and procedures violate both the Uniform Code of Military Justice and the Geneva Conventions” on the matter. Holding that the military commission afforded less protection than that guaranteed under those laws, the US Supreme Court noted substantial deviations from the fundamental rights accorded to the accused, such as those precluding defendants and their counsel from learning what evidence was to be presented against them during any part of the proceeding; and those involving the admission of any evidence, such as hearsay testimony that had not been sworn to and statements gathered through coercion.

In Rasul v. Bush [11] (decided on June 28, 2004), a case also originating from the hostilities in Afghanistan, the US Supreme Court ruled that its district courts had jurisdiction to consider challenges to the legality of the detention of aliens (who in this case were Australians and Kuwaitis) captured abroad and incarcerated at Guantanamo Bay.

For sure, many other jurisdictions must have ruled on matters similar to those I have mentioned. Hence, we ask for your active participation, so that we may all learn from one another’s experiences, decisions and advocacies.

Nurturing Prosperity

While safeguarding liberty is a traditional and fairly common task for the judiciary, the nurturing of prosperity may not be too familiar to the courts. Some jurisdictions may even take the view that the judiciary need not exert conscious thought and effort to nurture progress. Nonetheless, I maintain that whatever the status of a country’s economic progress, courts must contribute to the achievement or nurturance of prosperity; or, at the very least, to the alleviation of poverty, disease and disability.

Important world events impel me to advocate a necessary—nay, indispensable—nexus between political liberty and economic prosperity, which I will explain shortly.

Mandate to Uphold Economic Rights

First. The Universal Declaration of Human Rights (UDHR), which was adopted by the General Assembly of the United Nations on December 10, 1948, has emerged as the fundamental law of human rights. The UDHR recognizes the entitlement of the common people to liberty and prosperity. This fact is evident in the following provisions of its Preamble:

“Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world, x x x x x x x x x

“Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom,”

The UDHR also recognizes—aside from the basic right to life, liberty and security of persons (Articles 3 to 21) — their right to economic, cultural and social rights (Articles 22 to 27). [12]

In the Philippines , our 1987 Constitution [13] commands the State to “promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty x x x.”

Equally significant, Article XII on the National Economy and Patrimony mandates “a more equitable distribution of opportunities, income and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.” [14] Our Constitution likewise demands the institutionalization of social justice. [15]

That these provisions are not self-executory does not in any way diminish their legal significance. They direct the legislature to enact laws to alleviate poverty, and they provide the courts with a juridical context within which to interpret other constitutional provisions and laws.

Global Efforts to Solve Economic Deprivation

Second. Another impetus to my twin advocacies pertains to developments in the private sector. More and more people around the world are realizing the need to fight poverty and deprivation and are pooling enormous resources and talents to combat this common menace.

For starters, Time magazine’s “Persons of the Year” for 2005—the world’s richest multi-billionaire couple, Bill and Melinda Gates—have staged their own campaign for vaccinations and public health care. Their target: to save 700,000 lives. [16]

Billionaire investment guru Warren Buffett has joined the crusade with a mind-boggling $30 billion donation of blue-chip Berkshire Hathaway stocks to the Gates Foundation. [17]

Just last September of this year, billionaire financier George Soros announced that he was contributing $50 million to the Millenium Villages Project. This nongovernmental initiative seeks to show that closely focused development projects can alleviate severe poverty within a few years. [18]

Even the famed Nobel Peace Foundation has veered its lenses to poverty alleviation, as it has awarded the Nobel Peace Prize to Bangladeshi Muhammad Yunus a few days ago, on October 14, 2006. He and his Grameen Bank had pioneered micro credit and proved that the poor’s misfortunes could be transformed by helping them become self-employed. Over 6.6 million impoverished Bangladeshis have availed themselves of micro loans. [19]

Philanthropic endeavors in Asia have likewise brought back hope to the homeless, the blind, the poor, and the neglected. This year, six exceptional Asians and one exemplary organization were awarded the Ramon Magsaysay Awards [20] — Asia’s equivalent of the Nobel Prize. Later, one of these awardees, Mr. Antonio Meloto, will share with us civil society’s experience in arousing civic consciousness through the Gawad Kalinga Community Development Foundation. It has been largely instrumental in building private mass housing projects for slum dwellers in the Philippines.

Need for a Stable Judiciary

Third. Still another factor behind the call for both liberty and prosperity is the growing consensus among developmental institutions that a stable judiciary and a firmly established rule-of-law system are necessary means to achieve liberty and prosperity. Institutions, like the United Nations Development Program (UNDP), the World Bank (WB), and the Asian Development Bank (ADB) have realized that poverty alleviation and economic growth cannot be attained, unless there is “a well-functioning judicial system [that] enables the State to regulate the economy and empower private individuals to contribute to economic development by confidently engaging in business, investments and other transactions.”

This stance explains why the UNDP is passionate about broadening the poor’s access to justice; why the WB wants “an effective and efficient judicial system that protects citizens from the abuses of government and safeguards the rights of the poor”; [21] and why the ADB desires “to enhance the effectiveness and the accountability of the judiciary.” [22]

In the audio-visual presentation we have witnessed, ADB President Kuroda and WB’s Joachim von Amsberg discussed the necessary nexus between progress and a stable rule-of-law environment. Both agree that the rule of law forms the foundation of sustained economic development.

If I may paraphrase Mr. Amsberg, law and justice are basic ingredients of development. Thus, it is his submission that there is no choice to be made between liberty and prosperity. Both are imperative paradigms in society. For the same reason, President Kuroda observed that the People’s Republic of China is undergoing a massive law reform program, so that it may continue to play a critical role in the world economy.

In the light of these three developments, among several others, I am convinced that the prosperity of the peoples of the world requires as much nurturing in the present century as that accorded to liberty in the past. These developments have instilled in me my advocacy of justice and jobs, freedom and food, integrity and investments, ethics and economics, democracy and development; in short, liberty and prosperity.

Liberty and Prosperity as a Philippine Judicial Policy

Pursuant to this effort to protect liberty and to promote prosperity, our Philippine judiciary has leaned towards a dual standard of judicial review. First, in cases involving liberty, the scales of justice weigh heavily against government and in favor of the people—especially the poor, the oppressed, the marginalized, the dispossessed and the weak. Laws and actions of government and its instrumentalities restricting the fundamental rights of our people come to the courts highly suspect in their constitutional validity. Second, in cases involving prosperity and development issues, deference is generally accorded to the political branches of our government; namely, the Presidency and Congress.

Let me add that, as a rule, Philippine courts do not pass upon the merits or wisdom of economic policies. These are matters that have been left by our people to the President and Congress to evaluate and decide. [23]

This judicial no-interference rule on economic policy does not mean, though, that our courts in the Philippines will abdicate their duty of striking down “grave abuse of discretion.” As you may know, our judiciary has been vested by our Constitution with a unique duty to nullify not just legislative or executive acts that clearly violate the Constitution, the laws, or settled jurisprudence; [24] but also those that have been issued with arbitrariness, whim, caprice, bias or personal hostility. [25]

To the first set of acts—those contrary to the Constitution and the law—courts in general claim an inherent mandate flowing from judicial power. I suppose, though, that the second category is peculiarly Filipino. It traces its origin to the previous dictatorial regime, the magnitude and monstrosity of which were described earlier by our former President Corazon C. Aquino in our audiovisual presentation. [26]

Concretely, there have indeed been instances when courts had to perform a delicate balancing act between the demands of liberty and the needs of prosperity. In British Columbia Securities Commission v. Branch, [27] the Supreme Court of Canada had to choose between the freedom from testimonial compulsion and the right of the government to compel a company’s officers to attend an examination under oath and to produce all pieces of information and records in their possession as provided under that country’s Securities Act. Ruling in favor of the securities commission, the Canadian Court noted that the “effective implementation of securities legislation, which has obvious implications on the nation’s material prosperity, depends on the willingness of those who choose to engage in the securities trade to comply with the defined standards of conduct.”

Search for a Model for Economic Development

As the world searches for the proper balance between liberty and prosperity and a model for economic development, various theories are being proposed. For instance, Professor William Easterly, who has recently published a book entitled Elusive Quest for Growth, [28] opined that most economically advanced countries had adopted liberal democracy, in which human rights were zealously protected. [29] He added that under those benign regimes, entrepreneurs felt comfortable and thus invested their money for the long term, thereby propelling stable economies. But when confronted with the other models of economic prosperity in Asia, Latin America and Eastern Europe, he conceded that there was no single formula for rapid economic growth.

Another theory proposed to explain how progress has been made possible in some countries of the world relates a country’s stability and progress to the degree to which it is “open,” both within its borders and to the outside world.[30] What is interesting about this theory is that it attempts to provide a framework both for countries that owe their stability and progress to their success in isolating themselves from the outside world, [31] on the one hand; and, on the other, those whose stability may be traced to their openness to social, political, and economic change. [32]

A group of four economists have tried to find an explanation of progress in various countries’ legal systems—whether common law or civil law. They are Rafael La Porta, an Argentinian; Florencio Lopez-de-Silanes, a Mexican; Andrei Sheifler, a Russian who immigrated to the US when he was 15; and Robert Vishny. Their theory has given rise to what is now known as “law and finance.” [33] According to this school of thought, common-law countries are more economically advanced than those subscribing to civil law. The former allegedly tend to be less corrupt and purport to protect both shareholders and creditors better than civil-law countries do. [34] The evidence supporting this theory, however, is hardly absolute.

Earlier, in the audiovisual presentation, Mr. Amsberg of the World Bank described how various countries dealt with the issues of liberty and prosperity within their social, cultural, economic and political milieus. According to him, historically, the United States placed greater emphasis on individual freedoms; European societies, on equality; while some Asian countries with flourishing economies, on strong states.

Our own experience in the Philippines demonstrates that Liberty and Prosperity must go hand and hand. One cannot be sacrificed for the other. After all, during the years of Martial Law, authoritarian rule was proven to be incapable of producing meaningful long-term economic progress. Even more important, our people value their freedoms very dearly and will not exchange them for food. Indeed, the Filipinos may endure occasional hunger, but they will never tolerate injustice and indignity for long.

Closing

I have attempted, as best as I could, to present the twin beacons of Liberty and Prosperity in the context of history, as well as of existing and emerging realities in many countries.

How to find the right balance between these two paradigms may be found in each country’s unique circumstances. By no means is the perception of balance in one country to be taken as an absolute prescription for others. I hope, though, that through an exchange of ideas, information, and best practices during this Forum, all countries and sectors represented may be able to evaluate the value of the shared experiences and to imbibe these as they may deem appropriate under their unique environmental circumstances.

Senator Angara, one of the leaders of our legislative branch, made an incisive point in the audiovisual presentation prior to my speech. He said that the matter of how best to calibrate the balance between liberty and prosperity must be left to the people of a particular country. Indeed, each country and each sector of society [35] has its own history, experience, temperament, economics, culture and politics, which should determine how viableLiberty and Prosperity would be in its jurisdiction.

Nonetheless, I present Liberty and Prosperity as a framework within which the various countries’ courts, congresses, parliaments, cabinets, bar associations, judicial institutes, academes, business communities, and civil society may formulate their missions and visions for the future. They may do well to rally around the commonalities of our countries’ experiences, rather than our differences.

I believe that should this Forum be able to discuss these varying approaches to balancing liberty and prosperity and later find some common areas from which some understanding may be culled and a program of action drawn, our gathering together during these three significant days in October 2006 would have been fruitful and successful.

Maraming salamat po.

__________

Keynote address delivered by Chief Justice of the Philippines , the Hon. Artemio V. Panganiban, during the opening ceremonies on October 18, 2006, of the three-day Global Forum on Liberty and Prosperity, at the Shangri-La Makati Hotel, Metro Manila, Philippines.

[1] ABS-CBN Broadcasting Corporation v. Commission on Elections (380 Phil. 780, January 28, 2000, per Panganiban, J.) In this case, the Court emphatically explained that, “when faced with borderline situations in which the freedom of a candidate or a party to speak and the freedom of the electorate to know are invoked against actions allegedly made to assure clean and free elections, this Court shall lean in favor of freedom.” This ruling recognizing public opinion polls as a species of the freedom of expression was echoed one year later in Social Weather Stations v. Comelec (357 SCRA 496, 501, May 5, 2001, per Mendoza, J.) In this case, the Court stressed that “because of the preferred status of the constitutional rights of speech, expression, and the press, a law prohibiting the publication of pre-election surveys is vitiated by a weighty presumption of invalidity.”

[2] For a sampling of how other countries have construed exit polls, please see Panganiban, Reforming the Judiciary 154-169 (2000).

[3] Senate v. Ermita, GR No. 169777, April 20, 2006. More accurately, the Court invalidated the major provisions of Executive Order No. 464. In simplest terms, the Decision held that Congress had the right to compel the appearance of executive officials in congressional investigations, because the power of legislative inquiry was as broad as the power to legislate. Hence, deemed unconstitutional were the provisions of EO 464. This executive order allowed the executive branch to evade congressional requests for information without properly invoking executive privilege in recognized instances. Nonetheless, the Court directed Congress to indicate, in its invitation to executive officials, the subject matter of the inquiry and of related questions, so that the President or the executive secretary could properly invoke executive privilege, if warranted.

To the extent that investigations in aid of legislation were to be generally conducted in public, the Court held that “any executive issuance tending to unduly limit disclosures of information in such investigations necessarily deprives the people of information which, being presumed to be in aid of legislation, is presumed to be a matter of public concern. The citizens are thereby denied access to information which they can use in formulating their own opinions on the matter before Congress — opinions which they can communicate to their representatives and other government officials through the various legal means allowed by their freedom of expression. x x x.”

[4] Bayan v. Ermita, GR No. 169838, April 25, 2006. This ponencia, penned by Justice Adolfo S. Azcuna, stated thus:

“x x x[T]his Court reiterates its basic policy of upholding the fundamental rights of our people, especially freedom of expresion and freedom of assembly. In several policy addresses, Chief Justice Artemio V. Panganiban has repeatedly vowed to uphold the liberty of our people and to nurture their prosperity. He said that ‘in cases involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak. Indeed, laws and actiions that restrict fundamental rights come to the courts with a heavy presumption against their validity. These laws and actions are subjected to heightened scrutiny.’”

[5] David v. Arroyo, GR No. 171396, May 3, 2006. Writing for the majority in this case, Justice Angelina Sandoval-Gutierrez ruled as follows:

“All powers need some restraint; practical adjustments rather than rigid formula are necessary. Superior strength – the use of force – cannot make wrongs into rights. In this regard, the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically their liberty.

“Chief Justice Artemio V. Panganiban’s philosophy of liberty is thus most relevant. He said: ‘In cases involving involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak.’ Laws and actions that restrict fundamental rights come to the courts ‘with a heavy presumption against their constitucional validity.’”

[6] Bull n?16, Chambre sociale. http://www.courdecassation.fr/jurisprudence, last accessed on October 16, 2006.

[7] [2006] UKHL 44.

[8] [1999] UKHL 45.

[9] Recurso De Casacion Num. 1888/2001, Tribunal Supremo, Sala de Lo Contencioso-Administrativo, D. Enrique Lecumberri Marti, ponente.

[10] 548 U.S. ___ (2006).

[11] 542 U.S. ___ (2004).

[12] It is well to note that from the Universal Declaration of Human Rights, two solemn agreements emerged: (1) the Covenant on Civil and Political Rights; and (2) the Covenant on Economic, Social and Cultural Rights. Commentators on international law are wont to distinguish the two in terms of the executory character of civil and political rights as against the ideal or developmental character of economic and social rights.

[13] The following provisions of the Constitution, among others, mandate the State to promote economic prosperity:

Article II (Declaration of Principles and State Policies)

“Sec. 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.”

“Sec. 17. The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development.”

Article XII (National Economy and Patrimony)

“Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.

“The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

“In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.”

“Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”

“Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”

[14] Art. XII, Sec. 1.

[15] Art. XIII, Sec. 1:

“The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

“To this end, the State shall regulate the acquisition, ownership, use and disposition of property and its increments.”[15]

[16] Bono, the other Time “Person of the Year”, on the other hand, “charmed and bullied and morally blackmailed the leaders of the world’s richest countries into forgiving $40 billion in debt owed by the poorest.”[16] He believes that money saved from debt relief can be spent, instead, on health and schools rather than interest payments.

[17] This sum will be given gradually, beginning in July this year and continuing every year for as long as one of the couple — Bill, 50; or Melinda, 42 — is active in the Gates Foundation. But each installment must be spent in the year it is given. For 2006, Buffett has given 602,500 Berkshire B shares valued at about $1.5 billion, which must be spent by the Gates Foundation within the year.

[18] http://allafrica.com/stories/200609190864.html accessed on October 6, 2006.

[19] Philippine Daily Inquirer, October 16, 2006, p. 1.

[20] The 2006 Ramon Magsaysay Awardees are: Eugenia Duran Apostol, who was cited for her unrelentingly espousal of truth, independence and integrity in Philippine media; Ek Sonn Chan, who found fulfillment in providing safe, clean, and cheap drinking water for millions of Phnom Penh’s poor residents; Arvind Kejriwal, who made it his relentless crusade to educate New Delhi’s poorest citizens on their right to information and to empower them to fight corruption; Antonio Meloto who, together with the Gawad Kalinga Community Development Foundation, has demonstrated the meaning of deep commitment by building homes for slum dwellers in the Philippines; Dr. Sanduk Ruit who, by his abiding love, has bestowed munificent gifts of sight to the poverty-stricken people of Nepal; and Park Won Soon, who has fostered social justice, fair business practices, clean government, and a generous spirit in South Korea’s young democracy.

[21] See Legal and Judicial Sector Manual (2002), a World Bank publication.

[22] Law and Policy Reform, ADB Report, January 2005, pp. 26-28

[23] An example of this deference to economic policies can be found in Tañada v. Angara (338 Phil. 546, 604-605, May 2, 1997, per Panganiban, J.). In this case, the Philippine Supreme Court upheld the Senate’s consent to the Philippines ratification of the World Trade Organization (WTO) Agreement. This laissez-faire judicial policy on economic issues was reiterated in La Bugal-B’laan Tribal Association v. Ramos (445 SCRA 1, December 1, 2004, per Panganiban, J.). In affirming the constitutionality of the Mining Law allowing 100-percent foreign investments in large-scale mining, the Court held thus:

“x x x. The Constitution should be read in broad, life-giving strokes. It should not be used to strangulate economic growth or to serve narrow, parochial interest. Rather, it should be construed to grant the President and Congress sufficient discretion and reasonable leeway to enable them to attract foreign investments and expertise, as well as to secure for our people and our posterity the blessings of prosperity and peace.”

[24] Republic v. COCOFED, 423 Phil. 735, December 14, 2001.

[25] Benito v. Comelec, 349 SCRA 705, January 19, 2001; Defensor-Santiago v. Guingona Jr., 359 Phil. 276, November 18, 1998; and Philippine Airlines, Inc. v. Confesor, 231 SCRA 41, March 10, 1994.

[26] Consistent with this “grave abuse” exception to the no-interference rule, the Supreme Court has nullified many contracts entered into by our government. Some of these contracts involved the reclamation of portions of Manila Bay, the construction and operation of the new Manila International Airport Terminal, and the automation of the 2004 national elections. (_Chavez v. Public Estates Authority,_ 384 SCRA 152, July 9, 2002; 451 Phil. 1, May 6, 2003; and 415 SCRA 403, November 11, 2003; per Carpio, J.; Agan v. PIATCO, GR No. 155001, May 5, 2003 and January 21, 2004, per Puno, J.; Information Technology Foundation of the Philippines v. Commission on Elections, GR No. 159139, 419 SCRA 141, January 13, 2004, per Panganiban, J.) Because of these decisions, our courts have been pilloried as unduly interfering in business and economic matters. Our critics, however, conveniently overlook the fact that, under our Constitution, our courts have the duty not merely to settle actual controversies involving legally demandable and enforceable rights. They must also strike down acts of any instrumentality of government whenever those acts have been entered into “with grave abuse of discretion.”

[27] 2 S.C.R. 3, April 13, 1995.

[28] MIT Press, Cambridge and London. Romain Wacziarg of Stanford University describes Easterly’s work as a “superb book [that] draws on what we have learned from almost two decades of cross-country growth comparisons” about “supposedly miracle growth policies [that] have proven disastrous or ineffective,” but wisely “avoids proposing a new panacea x x x.” Wacziarg, Review of Easterly’s The Elusive Quest for Growth, XL Journal of Economic Literature 907-918, September 2002.

[29] The discussion was summarized by Prof. Alex Magno, a participant in a relevant roundtable discussion, in his column in the Philippine Star on January 19, 2006.

[30] Ian Bremmer, “The J Curve: A New Way to Understand Why Nations Rise and Fall (2006)”. The framework is repesented by the “J Curve.” The vertical axis of the curve measures a state’s stability; the horizontal axis, its “openness.” Nations higher on the graph are more stable; those lower are less stable. Nations to the right of the dip in the “J” are more open; those to the left are less so. http://www.jcurvebook.com/ and http://en.wikipedia.org/wiki/J_curve, last accessed on October 14, 2006.

[31] Among these countries are North Korea, Iran, and Cuba.

[32] France, the United States, and Japan have been identified to be among these countries.

[33] “Law and Finance,” Journal of Political Economy, Vol. 106, No. 6, 1113-1155 (December 1998).

[34] According to research published by the scholars beginning in 1998, countries that come from a French civil-law tradition struggle to create effective financial markets, while countries having a British common-law tradition succeed far more frequently.

[35] The religious sector, too, has genuine concerns about the alleviation of poverty and the sharing of resources. Thus, in the gospel last Sunday, October 15, 2006, Catholics throughout the world were reminded of the young rich man’s question, “What must I do to inherit eternal life?” and of the Lord Jesus’ answer, “Go, sell what you have and give to the poor, and you will have treasures in heaven; then come, follow me.” (MKA 10:17-30)

Attributes of a Good Independent Director

* Address delivered by retired Chief Justice ARTEMIO V. PANGANIBAN before the Good Governance Advocates & Practitioners of the Philippines on October 19, 2015 at the Dusit Hotel, Makati City.


10849017_1070811649604155_4884045370930523855_o

Let me thank your President Gil L. Gonzales for inviting me to speak before your forum on the general theme of “BOARD INDEPENDENCE: Reality or Myth?” This theme is quite provocative and timely in view of the current effort of the Securities and Exchange Commission to update the Corporate Governance Blueprint.

At the outset, let me stress that I favor the upgrading of corporate governance, even if I have objections to some proposed regulations, which in my humble view are illegal and/or unreasonable.

I was asked to speak specifically on the topic, “The Attributes and Challenges of a Great Independent Director.” This topic is quite provocative too because it assumes that yours truly is a “Great Independent Director,” an honor I would like to humbly decline. The word “great” intimidates me for it implies “fantastic” or “extraordinary” expertise.

Expertise is easily demonstrated in the science of medicine. During my parents’ time, physicians used to call on patients’ homes and cured all kinds of diseases. Then, specialization came and doctors became experts only of the brain, or of the heart, or of the kidney, and so on.

This reminds me of my high school friend who studied medicine at the best university in Diliman, Quezon City and who specialized abroad on the diseases of the eyes. Due to difficulties with my right eye, I visited him at his private eye center. After his assistants preliminarily examined me with microscopes and gadgets and applied drops and ointments in and around my right eye, I was finally ushered into his private room.

“Art, I am sorry I cannot help you,” he solemnly began. “Why not? You are a great eye expert, why can’t you help me?” I protested. “Well,” he smiled sheepishly, “it’s because the problem is in your right eye. I am a great expert only of the left eye.”

Yes, an expert is one who knows more and more about less and less. So the ultimate expert is one who knows everything about nothing!

I hope my doctor-friends will forgive me for that joke. Nonetheless, please permit me to avoid using the word “great.” I would rather just speak of a “good” independent director, a more modest and achievable ambition. So, may I respectfully plead that my topic be changed to “The Attributes of a Good Independent Director.”

Let me divide my address into three general subjects culled from the very words of the topic assigned to me: Good Independent Director or GID. Permit me, however, to reverse the sequence; the first topic would be about being a director, the second, about being independent, and the third, about being good.

 

About Being a Director

To begin with, a GID must own at least one share of stock and elected to the Board of Directors in accordance with the Corporation Code, as well as the Articles of Incorporation and Bylaws of the corporation concerned.

All directors, whether executive, non-executive or independent, are trustees or fiduciaries of the corporation. Their prime duty is to promote and uphold the welfare of the corporation which has a legal personality, attributes, goals, and undertakings that are distinct and separate from its shareholders. As such, directors are expected to promote and defend such separate and distinct corporate characteristics above and beyond their own individual or private interests. Their major duty is to help the corporation grow and profit legally, honestly, reasonably and ethically.

Because of their unique background, special training, wide experience and vast contacts, GIDs have – to use a common computer terminology – “killer apps.” Thus, aside from their special duty of being enforcers of good corporate governance, GIDs dispense balanced advice in special fields like advance technologies, economics, law, finance, acquisitions and mergers, government relations, and the like.

GIDs normally have high moral ascendancy in the business community. They are chosen not only for their intellectual expertise but also for their trustworthiness, objectivity and fairness. They may be former Cabinet members, esteemed business executives, outstanding professionals, or retired members of the judiciary. They can become good referees and mediators to cool the competitive tension not only among shareholders and directors within the same company but also between the major shareholders and directors of one conglomerate locked in bruising battle with their counter-parts in competing conglomerates.

 

About Being Independent

Let me now go to the second major topic: about being “independent.” What differentiates IDs from executive and non-executive directors is the very name they carry, and that is: they are “independent.” But what does “independent” mean? The Securities Regulation Code or SRC does not really “define” what IDs are; it merely states what they are not, as follows:

“SEC. 38. Independent Directors. – … an independent director shall mean a person other than an officer or employee of the corporation, its parent or subsidiaries, or any other individual having a relationship with the corporation, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.”

The Revised SRC Rules use this same negative definition-by-exclusion approach, reminiscent of the Ten Commandments, by listing down what an ID is not, like (1) he/she is not an owner of more than two percent (2%) of the capital stock, (2) not related to a shareholder owning at least 10% of the capital stock, (3) not acting as a representative of any substantial shareholder, (4) not employed in any executive capacity within the last two years, (5) has not been a professional adviser of the company also within the last two years, and (6) has not and does not engage in transactions with the corporation, other than arms length and immaterial ones.

In short, essentially, IDs are corporate fiduciaries or directors who do not have – directly by themselves, or indirectly through their privies (like professional firms, business entities or relatives) – any relationship with the corporation, or its subsidiaries and affiliates, or its major shareholders or their privies, that may affect their objectivity in performing their duties as such fiduciaries or directors.

Aside from the laws passed by Congress, the role and work of IDs is also covered by regulations of various executive agencies, mainly of the Securities and Exchange Commission, as well as of specialized agencies for special types of businesses, like the Bangko Sentral ng Pilipinas for banks, the Land Transportation Franchising and Regulatory Board for busses and taxis, Civil Aeronautics Board for airlines, etc.

One thing is clear however. These regulatory agencies exercise merely delegated powers from Congress and cannot expand their authority beyond what is given them by law. Hence, they cannot restrict or limit rights and powers given by law to corporations and shareholders. In our system of government, the private sector is the engine of economic growth. The role of the government is to inspire and facilitate private entrepreneurship, intervening only to check avarice and to level the playing field.

This is why I have consistently resisted attempts to limit, through administrative fiat, the terms of office of directors, or their number of seats, or their age qualifications. The Corporation Code has granted shareholders the right to vote and be voted into office as directors without any such limitations. Investors buy more expensive voting shares precisely to enjoy these prerogatives to freely elect and be freely elected directors.

The right to vote and be voted directors, just like the right to suffrage in a democracy, is a basic right in a corporate polity that cannot be restricted or limited by mere administrative regulation. Only Congress has the power to legislate on them. Basic is the admonition in several Supreme Court decisions that administrative regulation merely implements legislations and cannot extend, limit or amend them in any wise, even with the best of intentions. A usurpation of legislative power by an administrative agency or official is criminally, civilly and administratively sanctioned by law.

One of the strictest proponents of good corporate governance is the United States where, because of lessons learned from actual corporate debacles, the Sarbanes-Oxley Law (SOX) was enacted. Yet, PLDT – the only Philippine company listed in the New York Stock Exchange – and its directors are not required to observe term, seat or age limits.

What then can our administrative agencies do to regulate the work of IDs? Answer: They may regulate pursuant to the standard of delegation given by Congress to the SEC in the Securities Regulation Code, namely, that an ID is without a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Accordingly, the SEC may, as it had already, require IDs to take periodic seminars on corporate governance, make them compulsory chairs of certain board committees, compel stricter disclosures of private interests, etc. It can also require IDs to render annual reports of their work, especially in regard to related party transactions and disclosure rules.

The negative covenants imposed by law on independent directors are meant to free them from the baggage of self-interest so they could effectively check the excesses or over indulgence of executives who wield corporate powers and control corporate funds. Normally, these executives are nominees of the majority shareholders, and many times, they are the majority shareholders themselves.

On the other hand, IDs are expected to uphold zealously the laws of the land, the articles and bylaws of the corporation, the canons of corporate ethics and the manual of corporate governance. All in all, I believe IDs were created by law to be the guardians of good corporate governance.

 

About Being Good

Now, let me move on to the third topic which is about being “Good.” What are the attributes or qualities of a GID? In my humble opinion, there are at least five major attributes.

The first is a thirst for knowledge. This includes a thirst for:

(1) a basic knowledge of the nature, duties, responsibilities and functions of an ID; this means a working idea of the Corporation Code, the Securities Regulation Code and the basic issuances of the SEC and of the specialized agencies that oversee the special business of the companies concerned, like the BSP, LTFRB and CAB, as earlier mentioned.

(2) a basic knowledge of financial statements and generally accepted accounting and audit principles and internal controls. One need not be a certified public accountant, like one need not be a lawyer, but an ID needs to be able to read and understand a balance sheet, an income statement and a cash flow report, at the minimum.

(3) a basic knowledge of the corporation they serve – – its vision, mission, core values, people, corporate culture, specific business directions, and management.

Of course, GIDs are not expected to memorize these laws, financial data and corporate facts. But they must have a general understanding thereof, and an eye for details such that they can easily spot, compare and challenge items, ratios, variances, etc in management reports.

         The second attribute of a GID is an ample dose of courage. As I earlier discussed, the implicit assumption and unspoken expectation behind the creation of the post of independent director is the duty to fiscalize and counter-check what the other directors and the management are doing, to voice contrary opinions, and cast negative votes when necessary. They should at all times be advocates of transparency and timely disclosures. They should scrutinize related party transactions and insist on a faithful observance of good corporate governance.

         This fiscalizing role and responsibility of IDs is no small matter. Remember that they are nominated by the Nomination Committee of the Board of Directors, and elected by the majority shareholders, who also elect all the other directors who in turn appoint and install the management. Yet, IDs are expected to countercheck the very people in whose hands their nomination and election to office depend.

As a comparison, if judges were to be appointed by the President yearly and their compensation determined by Congress also yearly, can we expect them to be truly independent? By the same token, can we truly expect full independence from IDs who depend on the votes of the majority to be elected yearly, and on the board of directors (in which they are a minority) to fix their compensation periodically?[1] Surely, instead of restricting the terms of office and prerogatives of IDs, the first order of the day should be to strengthen their independence and integrity so they can perform their lonely work more effectively.

Instead of arbitrarily limiting their terms or their seat count, or ages, good IDs should be encouraged to stay on. Surely, the reappointment of the present BSP Governor to another term of six years (for a total of 12 years) did not diminish his independence and integrity. Quite the contrary, I think his longevity in office has magnified his value. So, too, who can say that the incumbent Chief Justice has less independence and integrity just because she would have a record term of 20 years in the Supreme Court, two years as associate justice and 18 years as Chief Justice? Who can say that the respected senior Justice Antonio T. Carpio has compromised his independence for having served 14 years in the Court and counting? And who can say he cannot discharge multiple undertakings beyond his many judicial responsibilities when he is the most vocal advocate of the Philippine claim in the West Philippine Sea?

Closer to our corporate world, who can say that former Prime Minister Cesar Virata, former BSP Governor Jose Cuisia, former Secretary of Finance and incumbent PSE Chair Jose Pardo, former Finance Secretary Roberto de Ocampo, veteran banker Xavier Loinaz, and of course, the venerable Washington SyCip[2] have lost their independence and integrity just because their terms, seats and ages as IDs have not been limited? True, they are very busy persons. But equally true is the adage that if you want something done well and on time, you should give it to a busy person.

Yes, who among our public officials, from whom independence is required, and who among our iconic IDs, have lost or diminished their objectivity due to their longevity in office, or multiple directorships, or old age? Instead of indulging in vague speculations or alleged foreign practices with no demonstrated local relevance, critics – with due respect – should prove their claimed need for government-imposed limitations by pointing to flesh and blood malevolent Filipino officials and corporate directors who have dimmed their independence and integrity due to their longevity in office, multiple seats or old age.

In the event IDs misbehave and lose their independence and integrity regardless of their term, seats or ages, who can take them out? Answer: In our system of free enterprise, the shareholders. They can provide restrictions or limitations, if they want to, in their companies’ Articles of Incorporation, or use their ballot during corporate elections, or their numerical strength during board meetings, or other ways now practised by some corporations and shareholders.

One final word on this point. Because of their lack of security of tenure and compensation, IDs need a lot of emotional intelligence to know when to intervene and how to intervene so the other directors will not be unnerved unnecessarily by their objections. Indeed, IDs should always find the right way to do the right thing at the right time and for the right reasons.

The third attribute of GIDs is the ability to ask searching questions and the corresponding passion to pursue the correct and timely answer. The business of publicly-listed corporations is often complicated, and many times, even the most assiduous IDs cannot have enough knowledge to guide them in making intelligent decisions or in fiscalizing management. Only by asking searching questions can they really be guided in their work.

Sometimes, the inability to get sufficient information is borne out of a need for confidentiality in protecting the secrets of the corporation. If an ID is not trusted enough to hold company secrets, then he or she has no place in the corporation. Resignation is the only respectable option in such a situation.

In my case, before accepting an independent directorship, I make sure I am able to work with the management and the controlling shareholders. If I cannot, then I do not accept the directorship. This is particularly true of subsidiaries of foreign companies. When asked to be an ID of these entities, I would first want to meet the ultimate decision maker abroad to find out whether I can work with him or her. 

         The fourth attribute of a GID is integrity. This flows necessarily from the earlier attribute of courage. When I was still in the Supreme Court, I was asked what I understood by the word integrity, which is required by the Constitution of all members of the judiciary. This was my answer: “Integrity encompasses not mere honesty; it includes intellectual decency and a deep sense of personal honor. Persons of true integrity judge themselves not only by their outward acts but by their intentions which are known only to them and to God. To have integrity implies moral courage, which means not only theoretical bravery in battle but, a priori, a purity of spirit and clarity of conscience.” I believe this definition is applicable to IDs too. Integrity includes the voluntary refusal to serve or to be re-elected due to one’s inadequacy or inability or unwillingness to discharge the responsibilities of a good independent director.

         The fifth attribute is a passion for hard work, and for organizing thoughts and communicating them well – verbally and in writing. While the IDs’ main work is attendance and active participation in board and committee meetings, the back-breaking job is in the preparation.

For instance, as an ID of a large bank, I am sent a packet of background information on credit and loan applications amounting to several billions of pesos. They are several inches thick and include footnotes written in minute font sizes. I normally reserve an evening to pour over these tomes for several hours to be ready for the board meeting. These evening sessions, free from the hustle and bustle of the day, provide me the solitude to concentrate and read fast, picking on the essentials and skipping the routinary and non-essentials. Fortunately, even at my advance age, I still have 20/20 vision thanks to the laser cornea replacement surgery I underwent in 2008.

Another example: Upon being elected ID of the largest petroleum company in our country, I used a helicopter to view the nearly $3-billion refinery modernization program of the company and to meet with the engineers, contractors and in-plant managers so I would have a good idea of the project.

 

Conclusion

Before I end, let me summarize the challenges that confront good independent directors. One, GIDs must first and foremost be good fiduciaries who owe complete fidelity to the corporation they serve, above and beyond their private and personal interest. Their main duty as such fiduciaries is to help the corporation grow and profit legally, honestly, reasonably and ethically. Because they do not contribute money or resources to the company, they need to make up for this inadequacy by providing a “killer app,” a special skill or quality that make them valuable corporate trustees.

Two, GIDs must live up to their mandate of independence; that is, they must be free of the prohibited relationships that may diminish their objectivity in performing their duties. Their main responsibility as IDs is to be guardians of good corporate governance, and to ferret out, when necessary, illegal, dishonest, unreasonable and unethical practices that violate the law, or the trust of the shareholders and of the public in general. This includes resisting illegal and unreasonable government regulations.

Third, they must have at least five attributes: an unquenchable thirst for knowledge, an ample amount of courage, an uncanny ability to ask searching questions, an unassailable integrity, and a consuming passion for hard work.

Maraming salamat po.

_______________________________

[1] Compensation, other than per diem, is subject to the approval of a majority vote of the shareholders, unless this had been previously delegated to the board of directors.

[2] According to an Inquirer article on Sept. 27, 2015 (“At 94, Mr Global slows down a wee bit”), “In the Philippines alone, he is a director or an adviser of 38 – that’s right, 38 – of the largest corporations, financial institutions and foundations.”

ASEAN: Unleashing Entrepreneurial Ingenuity

* Address delivered by retired Chief Justice ARTEMIO V. PANGANIBAN during the Opening Luncheon on February 26, 2015 of the 12th General Assembly of the ASEAN Law Association (ALA) held at the Makati Shangri-la Hotel, Makati City, Philippines. The three-day ALA General Assembly was held on February 26-28, 2015, and followed by the Summit of ASEAN Chief Justices on March 1-3, 2015 in Boracay Island, Philippines.

I thank Attorney Avelino V. Cruz, incoming President of the ASEAN Law Association or ALA, for inviting me to speak during this Opening Luncheon of the 12th ALA General Assembly. Ave and I go a long way as friends and members of ALA; we participated in many activities of our organization since its founding in 1979. He asked me to talk on our General Assembly’s theme of “Sharing Prosperity at the Crossroads of ASEAN Integration – the Legal Challenges.” I think that the theme presupposes, and I agree, that before it can be shared, prosperity must first be created.

 

Limitless truths

Let me begin with a famous quotation of Dr. Martin Luther King Jr., “If a man does not have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness.” Let me repeat that, “If a man does not have a job or an income, he has neither life nor liberty nor the possibility for the pursuit of happiness.”

It may seem ironic that in beginning my speech before the judicial and legal greats of our ASEAN region, I should be citing an American civil rights icon, a foreigner in our 10 member countries. But I quoted him not because of his nationality, color, gender or religion. I quoted him because of the truth he said so simply but so profoundly.

I cited him because precisely of my belief that truth is eternal and limitless; that truth is not bound by sovereignty, or territory, or ideology, or legality; that what is true in America is also true in the Philippines, in the ASEAN and in the world. And that truth is this: humans need both justice and jobs; freedom and food; ethics and economics; peace and development; liberty and prosperity; these twin beacons must always go together; one is useless without the other.

My friends, many of you are aware that I have always espoused “Liberty and Prosperity” as the twin anchors of my being as a lawyer and as a jurist. Many of you attended my valedictory activity as chief justice of my country when on October 18-20, 2006, I convened a “Global Forum on Liberty and Prosperity” here in this very venue of our General Assembly, the Makati Shangri-la Hotel. Thank you, indeed, for honoring me with your attendance in that global meeting of 300 jurists, legal professionals and academics.

Now, even in retirement, I still continue my advocacy for these twin beacons of liberty and prosperity. Thus in 2011, five years after my retirement from the judiciary, when I celebrated my 75th birthday, I organized the Foundation for Liberty and Prosperity, which is now honored to co-sponsor this General Assembly, together with the Philippine Supreme Court and the Philippine ALA Chapter.

To repeat, there are certain truths that transcend sovereignties, territories, ideologies and legalities. And one of those truths is this: The best way to conquer poverty, to create wealth and to share prosperity is to unleash the entrepreneurial genius of people by granting them the freedom and the tools to help themselves and society.

 

Saving the fisherman

Let me prove my thesis by quoting a popular adage from Confucius, “Give a man a fish and you feed him for a day. Teach him to fish and you feed him for a lifetime.” Indeed, to save a fisherman from destitution, we must help him learn how to fish more effectively. We must educate him in the skills needed to catch fish more efficiently, assist him in acquiring a boat, allow him the freedom to sail the vast oceans, and teach him the techniques to market the fish he catches.

Sometimes, some of us fear that the fisherman may get lost and die in the storms that batter the seas; or that he may become selfish and would want to own the entire ocean and its vast resources; or that he may become too rich and powerful and metamorphose into a rival, an enemy, or worse, a master. Such fears of possible misjudgements may indeed happen some of the time. Human arrogance, greed and avarice lurk in all undertakings. But they are the exceptions rather than the rule. We must never stop dreaming for fear that reality may shatter our dreams. That is part of the interesting reality of being human.

On the other hand, I respectfully believe that the goal of governance and of law is to provide guarantees and incentives to help the fisherman prosper, to create the institutions to support him, and to promulgate minimal regulations to prevent him from appropriating all the fishing grounds, from keeping all the earnings to himself and from forgetting his obligation to pay reasonable taxes to the government. Indeed, government must inspire him to share his consequential wealth with the rest of society.

 

Validating the truth

Let me take you briefly around the world to validate this simple truth. The United States, the most powerful country in the world and the great promoter of liberal democracy, attained affluence because of the pioneers who defied monarchical tyrannies and started a new nation that unleashed the inventive, innovative and entrepreneurial spirit of people like Thomas Edison, Nikola Tesla, Cornelius Vanderbilt, John Rockefeller, Andrew Carnegie, Henry Ford and J.P. Morgan, and of great government leaders like Franklin Delano Roosevelt and Dwight Eisenhower who provided them with the encouragement to attain their dreams and the good governance to contain their greed and share their wealth.

Then, let us go to China, the second most powerful economy in the world and the prime promoter of the communist system. True, Mao Zedong led the masses in a revolt that dislodged the corrupt and inefficient government born of an outdated monarchy. But it was Deng Xiaoping who led this nation to unparalleled economic prosperity by unleashing the entrepreneurial ingenuity of the Chinese under his “One-Country-Two-Systems” philosophy.

Finally, let me bring you to Korea. As a result of World War II, this country was divided into North and South, which unfortunately could not accept their division and engaged in a terrible war that ruined their economies and impoverished their people. Rising from the ruins, South Korea relied on the entrepreneurial spirit of the Korean people and built on their private initiative as well as on the notion that innovation, creativity, freedom and hard work would enable them to conquer their poverty, provide for their family’s well-being and attain affluence.

In contrast, North Korea – despite its technological and military bravado – wallow in abject poverty as a result of its tight grip on creativity and inordinate fear of the entrepreneurship, education, freedom and prosperity of its people.

ASEANflags2015

Entrepreneurship in ASEAN

Let us now examine ASEAN. Our region as a whole is the focus – yes, the darling – of the world. Some of its members, like Singapore, have attained first world status. Malaysia and Thailand are exemplars on how to propel economies. And during the past few years, the VIPs of the world – Vietnam, Indonesia and Philippines – have exhibited enviable records of GDP growths.

Why? Because our peoples’ entrepreneurial spirit had been unleashed even if inadequately in some places; because our permanent institutions are being strengthened and relied upon, instead of upon the apron strings of our temporary leaders; because our educational standards have been uplifted and have released the spirit of the fisherman in us; because our governments are learning that the best way of governing is to govern the least and to allow people to freely use their innovation and initiative, interfering only to check avarice and to level the playing field. Indeed, the primary role of government is to create just societies; to focus on improving access to the basic necessities of food, clean water, education, infrastructures (roads, bridges, airports, etc.), health care, decent incomes and jobs, to honor commitments made in good faith, and to protect property rights.

The peoples of the world and of ASEAN have different histories, traditions, cultures, ideologies and mindsets. But I dare say, all of them need liberty and prosperity. Some countries, taking into account their unique backgrounds, start with improving their people’s economic lives first and restrict temporarily in measured stages their political liberty. Some others begin with political liberty thinking that their economy would flourish as a necessary consequence. Still some others rise with a combination of both liberty and prosperity at the very beginning. I think that such differing starts and focus are necessary in the growth of nations. But, I also firmly believe that eventually and inevitably, all the peoples of the world need and deserve liberty and prosperity in equal measure.

 

Conquering poverty

In his speech before a convocation at Howard University in Washington, D.C., World Bank President Jim Yong Kim, an American of Korean descent whom I met during a reception hosted by our President Benigno Aquino III, grimly said that “the world/s richest 85 people have as much combined wealth as the poorest 3.6 billion.”

The 2014 “Key Indicators” of the Asian Development Bank show that this glaring disparity in wealth distribution is not as grotesque in the ASEAN region. Indeed, ASEAN as a whole is fortunate to suffer less poverty and to enjoy more affluence than many parts of the world. Still I say that we cannot ignore the injustice of wealth inequality and the need to share prosperity.

Let me illustrate why. Let us say that our next door neighbor in our village contracts the deadly dengue disease. Would we not help him fumigate his house and drain the idle water in his yard because the culprit mosquito is capable of flying into our homes, without respecting our fence and our legal certificate of home ownership?

Of course, we will – out of self protection, if not out of love for him. In the same manner, if a bird flu epidemic breaks out in Cambodia, the neighboring countries, if not the entire ASEAN community, would surely come out and help eradicate the disease, remembering that the birds causing the disease will not respect or care about the sovereignty and territorial limits of states.

The above examples are simple. But from simplicity really comes the wisdom of sharing and caring for the less fortunate, for the poor, for the least, lost and last.

 

Eliminating impediments

Indeed, our General Assembly’s theme of “Sharing Prosperity” and specifically our desire to solve the legal challenges that impede our altruistic goal should be foremost in our minds when we tackle, in full session or in separate workshops, the various topics we have drawn to meet these challenges, namely, the “Legal Profession, Alternative Dispute Resolution, International Law, Trade and Investment, and Legal Education.”

Some legal impediments to the ASEAN integration of trade, investments, services and skilled labor may be formidable, like constitutional restrictions on ownership of land, media, public utilities, natural resources and the like. Consequently, they may take some time to resolve. But some are really simple, like facilitating the opening of new businesses.

Karl Kendrick Chua, Senior Country Economist of the World Bank, in a speech before the American Chamber of Commerce on January 29, 2015, said that “in the Philippines, it takes 34 days and 16 steps to start a business, and it costs 17 percent of per capita income, compared to 6 days, 3 steps, and 7 percent of per capita income in Malaysia.” Certainly, the lawyers of ASEAN can easily help solve this simple problem by tapping Malaysia as the model. Indeed, we can solve many legal impediments by simply sharing the solutions already formulated by our ASEAN brothers.

I am sure that this afternoon and during the next two days of our General Assembly, the simple problems can be resolved immediately while the formidable ones can be planned more intensely in future meetings.

Today, at the start of our General Assembly, I see happy and optimistic faces among you my dear colleagues. And on our last day, as reports of our workshops are read, discussed and approved during our closing session, I expect to see even happier faces for, by then, we would have accomplished our mission.

Thank you. Maraming salamat po.

 

First published via: Unleashing Entrepreneurial Ingenuity
(Official Website of Chief Justice Artemio V. Panganiban)

CJ Panganiban Awarded by the Teehankee Center For The Rule of Law

DSC_3217

The Claudio Teehankee Center for the Rule of Law conferred the 2013 Rule of Law Award to retired Chief Justice Artemio V. Panganiban on 18 April 2013—same day as the public lecture of PhilJA’s Chancellor Adolfo S. Azcuna—at the Ateneo Professional Schools in Rockwell. Retired Chief Justice Hilario G. Davide, Jr. presented the award, while Ambassador Manuel A.J. Teehankee delivered a short thank-you message.

DSC_3265

Given on the 95th birth anniversary of Chief Justice Teehankee, the  21st  Chief Justice was cited  for his exemplary public service culminating in his leadership of the whole Philippine Judiciary, for his lifelong commitment and service to a judicial philosophy that is based on Liberty and Prosperity, for his continued advocacy of the need to have a judiciary with independence, integrity, industry and intelligence, a revitalization of the legal profession in the tradition of its noble roots, and promoting the twin goals of safeguarding liberty while assuring the prosperity of all citizens, as liberty is an empty vessel without economic equity, all of which contributes towards a more stable and lasting Rule of Law.

The Teehankee Center honored Retired Justice Ameurfina A. Melencio-Herrera, Chancellor Emeritus of the Philippine Judicial Academy, with the 2013 Rule of Law Award on the same occasion.

The awarding ceremonies was followed by the blessing and opening of the Advanced Legal Studies Research Offices located at the Integritas Room, Ateneo Center for the Rule of Law.


More information on the ceremonies here:
“Proud Moment”
http://lifestyle.inquirer.net/102219/busy-as-bees-at-the-hyve

 


 

 Gratitude and Appreciation*

By

Chief Justice ARTEMIO V. PANGANIBAN

After witnessing the blessed and heartwarming events this afternoon, which featured not only the enlightening lecture of Justice Adolf Azcuna titled “Supreme Court Decisions on the Economic Provisions of the Constitution” but also the presentation of the Teehankee Center Rule of Law awards to Justice Ameurfina Aguinaldo Melencio-Herrera and me, what can I really say but to express my sincere “Thank you” to all the good institutions and people who have made these blessed events possible.

At the outset, let me say “Thank you” to the Chief Justice Teehankee Rule of Law Center, especially to its Chairman, Chief Justice Hilario G. Davide Jr and its Executive Director, Ambassador Manuel A.J. Teehankee, for selecting me (together with Justice Amor) as the 2013 Recipient of the Claudio Teehankee Rule of Law Award. Though I feel thoroughly inadequate and unworthy of this distinction, I humbly accept it as a duty to work even more fervently and diligently for the promotion of the rule of law in our country. I also thank them for inviting me to join the Claudio Teehankee Foundation as one its trustees. Although I have made it a personal policy to refrain from accepting any more responsibilities now that I have retired from active public life and although I am already loaded with several private endeavors, I am making an exception to this personal policy, in deference to Chief Justice Teehankee whom I admire, to Chief Justice Davide whom I esteem and of course to Ambassador Dondi Teehankee.

I have many reasons to thank our honored lecturer today, Justice Adolf S. Azcuna, first, for his scholarly and incisive presentation of some decisions of the Supreme Court on the economic provisions of the Constitution.

          Let me at this point respond briefly to some of the cases discussed by Justice Adolf. As he said, the Manila Hotel case (Manila Prince Hotel vs GSIS, Feb. 3, 1997) was quite contentious. Chief Justice Davide and I were with the minority. I wrote a dissent saying in brief that Manila Hotel was not a one of the “rights, privileges, and concessions covering the national economy and patrimony” that Section 10 of Article XII gives “preference to Filipino citizens.”

Also, to give undue advantage to Filipinos over a clearly superior Malaysian bid for the Manila Hotel violates basic fairness encapsulated in the principle of “leveling the playing field.” Nonetheless, we should still congratulate Justice Azcuna who was counsel for the winning petitioner. He was not yet a member of the Court at that time. He won fair and square, and under the rule of law, we accept his victory.

As Justice Azcuna pointed out, I was the ponente of the second case he discussed, La Bugal-B’laan vs Ramos (Dec. 1, 2004), which upheld the constitutionality of the Mining Law of 1995 by vote of 10-4 with Justice Adolf inhibiting because his former law firm was counsel for the private respondents. In the original decision promulgated on Jan. 27, 2004, which was voted 8-5, I was the leader of the minority. However, the Court had a yearlong deliberation on the Motion for Reconsideration, which I won at 10-4. I am happy that CJ Davide voted with me. You, my dear audience, admire great and persuasive lawyers during oral arguments in the Supreme Court. But I tell you, the arguments during the internal deliberations of the Court, which are confidential and are never known by the public, are at times more passionate and more telling than those in the open hearings.

The PLDT case (Gamboa vs Teves) discussed by Justice Adolf was promulgated on June 28, 2011 when both CJ Davide and I have already retired. Before talking any further, let me disclose that I am an Independent Adviser of PLDT. As summed up by our distinguished lecturer, the Court – through Justice Antonio T. Carpio – ruled that in determining the 40 percent maximum equity that foreigners may hold in public utilities, only the voting shares should be taken into account, not the entire capital stock that includes the non-voting shares.

In several speeches, I have discussed this controversial decision, but for today, let me just say that this is the first time the Supreme Court has spoken on the subject. Since 1936, when this nationalistic provision was included in the Constitution and onwards till the present Constitution, the Executive Department, particularly the Department of Justice and the Securities and Exchange Commission, have interpreted the constitutional provision to refer to the entire capital stock, not just to the voting shares.

On this basis, many foreign investors have brought equities here. I think it would not be fair and to penalize them or to deprive them of their investments now under the new ruling. They have relied in good faith on the representation of the authorities that they were not violating the Constitution and the law in making their investments, which are now found to be irregular under the new ruling. I think the decision should be made prospective, and investors should be given time to divest or to adjust to the new decision.

Because of the need to attract investors, there have been proposals to amend the Constitution. But some believe Charter Change is unnecessary. Only a more progressive interpretation is needed. The question is, in view of the changed and changing circumstances and requirements of our country, do we need to amend the Constitution, or just to interpret it more progressively to meet these new challenges?

As I wrote in my Inquirer column last Sunday, there are at least two ways of interpreting constitutions and laws, and I quote, “Should they be read according ‘to the letter that killeth or to the spirit that giveth life.’ Should they be construed on the basis of their text and words, or on their underlying rationale and philosophy? Should the Constitution be understood strictly on what its framers originally intended, or liberally taking into account the ever changing economic, social and political milieu?

“The textualists or originalists interpret according to the original intent of the framers, regardless of the dire consequences on current and future events. They rely on ‘dura lex sed lex.’ Their self-imposed duty is ‘to apply laws faithfully and desist from engaging in socio-economic or political experimentations,’ which they denounce as ‘judicial legislation.’

“On the other hand, the liberals or progressives believe in a living Constitution; one that grows with time, solves the vagaries of the present and anticipates the needs of the future. Chief Justices Davide, Puno, Sereno and I belong to this latter group who believe that jurists are not mere social technicians and legal automatons. Rather, they are social engineers who courageously fix their gaze on the underlying principles and overarching aspirations of the Constitution to nurture a free and prosperous nation.”

The United States Supreme Court has been struggling for a long time on these differing schools of thought of constitutional and statutory construction. During my term as Chief Justice, I visited US Justice Antonin Scalia, said to be the leader of the originalists in the US Court. I was inviting him to speak before the Global Forum on Liberty and Prosperity that our Supreme Court was sponsoring on October 18-20, 2006 just prior my retirement. He smiled and said, “Mr. Chief Justice, you do not really want me there. I would be useless in the Forum because I do not believe in international law. When I joined the US Supreme Court, I swore to defend and implement the US Constitution and nothing else. And I interpret it according to the original intent of our framers, which did not include international law. Please see my friend, Justice Anthony Kennedy. I am sure he will welcome an opportunity to expound on his international philosophies and ideas.”

True enough, when I saw Justice Kennedy later, he agreed to speak at our Global Forum even if via teleconferencing only, because he had already committed to be in another venue on those dates.

I mention this incident with Justices Scalia and Kennedy to show that we are not unique in our differences of interpretation. Even the US Supreme Court in divided on that issue.

May I further thank Justice Azcuna for being a leading member of the Panganiban Court and for espousing my philosophy of “liberty and prosperity under the rule of law.” He expressly wrote on this philosophy in his sterling ponencia in Bayan vs Ermita (April 25, 2006), in which our Supreme Court unanimously struck down the so-called “Calibrated Preemptive Response” or CPR policy of the Macapagal-Arroyo government and reiterated the maximum tolerance dictum in allowing public assemblies, rallies and demos as parts of the right of free speech. And beyond that, Justice Adolf’s decision decreed the creation and establishment of at least one freedom park in every city and municipality in our country.

Let me further thank Justice Azcuna for overseeing the completion, inauguration and full operation of the Philippine Judicial Academy Training Center in Tagaytay which was started by Justice Amor as the first Chancellor of PHILJA. I am sorry that I overlooked mentioning his name in my Inquirer column two weeks ago when I wrote on this topic.

The PHILJA Training Center was funded by a P300 million no-strings grant given by the Japanese government during my term as Chief Justice even if at that time, we did not have any architectural plans and specifications. Then Japanese Ambassador Ryuichiro Yamazaki handed me the check for P300 million on January 26, 2006 without any condition, not even the usual grant requirement to hire Japanese consultants and to use Japanese equipment in the project. Instead, my good friend, the ambassador, relied on my verbal assurance that the Center would be built and competed at the best terms and at the earliest time possible.

May likewise I thank Metrobank Foundation, especially its energetic president, former Cabinet Secretary Aniceto Sobrepena, not only for co-sponsoring the Professorial Chairs Program of the Foundation for Liberty and Prosperity, but also for hosting today’s merienda.

Finally, may I express my appreciation and gratitude to all the participants in this afternoon’s event, especially Dean Sedfrey Candelaria, himself one of the ten holders of the “Chief Justice Panganiban Professorial Chair on Liberty and Prosperity,” and the Ateneo de Manila for never tiring host activities of the Foundation for Liberty and Prosperity here at the Ateneo Professional Schools.

Maraming, maraming salamat po sa inyong lahat.

 

Chief Justice Panganiban Photo

The 21st Chief Justice of the Philippines, Hon. Artemio  Panganiban receives the CJ Teehankee Rule of Law Award, 2013 from former Chief Justice and Foundation Chairman, Hilario G. Davide. Looking on are Mrs. Elenita Carpio Panganiban, Amb. Manuel A.J. Teehankee and Dean of  Ateneo Law School, Sedfrey M. Candelaria. 

DSC_3343

JBC Member Mitoy Fernan Cayosa, Trustee of the Foundation cutting the ribbon for the blessing and opening of Integritas Research Offices

DSC_3552

Left to right: Dean Sedfrey M. Candelaria (Ateneo Law School), Mr. Jose G. Araullo (Founding Partner, Punongbayan & Araullo and Treasurer, Teehankee Foundation), Chief Justice Hilario G. Davide, Jr. (Ret.), Chief Justice Artemio V. Panganiban (Ret.), Justice Adolfo S. Azcuna (Chancellor, PhilJA), Mr Simeon Cua (Trustee, Teehandkee Foundation), and Ambassador Manuel A. J. Teehankee

 


* Transcript of the extemporaneous Closing Remarks of retired Chief Justice ARTEMIO V. PANGANIBAN during the Public Lecture of retired Justice Adolfo S. Azcuna, Chancellor of the Philippine Judicial Academy, held on April 18, 2013 at the Justitia Room, Ateneo Professional Schools, Rockwell Center, Makati, sponsored by the Philippine Judicial Academy of the Supreme Court and the Foundation for Liberty and Prosperity.

Global Forum on Liberty and Prosperity

How the Judiciary Can Help the Economy

* Address delivered by retired Chief Justice ARTEMIO V. PANGANIBAN during the “2012 ACCRA LAW-MAP BUSINESS LAW FORUM” held on November 29, 2012 at the Manila Golf Club, Makati City.


I thank my esteemed compañero, Atty. Avelino V. Cruz, Chairman of the ACCRA Law Office, for inviting me to speak during this wholeday forum commemorating the 40th Anniversary of his venerable law firm. I have known Ave and his wife Helen for many decades.

After the EDSA people power revolution in 1986, President Corazon Aquino offered him a seat in the Supreme Court. However, he respectfully declined, preferring to remain in his job as then Deputy Prime Minister, second in command to then Vice-President Salvador Laurel, who was named concurrent Prime Minister.

If you will remember, the government at that time was organized according to the 1973 Constitution, which instituted a semi-parliamentary government. This was the form of government inherited by Mrs. Aquino, to which she conformed her government when it began in February 1986. However, a year later, the 1987 Constitution was crafted. It restored the presidential system and abolished the Offices of the Prime Minister and the Deputy Prime Minister.

That’s the saga of how Ave lost his stratospheric government job. Had he accepted the offer for him to be an associate justice, he could have been Chief Justice a decade later. And there would have been no Chief Justice Hilario G. Davide Jr and Chief Justice Artemio V. Panganiban because, though younger in years than both Chief Justice Davide and me, he would have been more senior to us in the totem pole of the Supreme Court. And I would not have been invited here as a retired Chief Justice!

I am glad to meet the members of the Management Association of the Philippines, especially BPI President and CEO Aurelio R. Montinola, whom I congratulate for having been just named MAP Management Man of the Year 2012. Prior to my Supreme Court stint, I was active in the MAP and, in fact, was at one time the Chairman of the Management Man of the Year Committee. I therefore know how stringent the standards are for this award. And having known Gigi for many years now, and being an independent director of BPI, I also know that the award is well deserved and, in fact, long overdue. Palakpakan po natin si Gigi.

 

Liberty and Prosperity Under the Rule of Law

In inviting me here, Ave Cruz asked me to speak on the interdependence between law and the economy, and specifically to discuss landmark Supreme Court decisions affecting the economy and business. I am glad to do so because my own legal and judicial philosophy, “liberty and prosperity under the rule of law,” calls for a symbiotic calibration of the relationship of law and business, and of good governance and good economics.

I recall that to close my term as Chief Justice, I convened a Global Forum on Liberty and Prosperity on October 18-20, 2006. More than 300 jurists and lawyers from all over the world, including several chief justices, came. The Chief Justice of Canada, the Honorable Beverley McLachlin so enjoyed her visit here that she and her husband stayed for three more days after the Forum. In fact, she said that my legal philosophy works best “under the rule of law” which she spouses as her own philosophy. Hence, I agreed to label my legal philosophy in its complete form as “liberty and prosperity under the rule of law.”

Global Forum on Liberty and Prosperity

The academe added flavor to the Forum by awarding honorary doctoral degrees in law to three notables, Chief Justice McLachlin by the Ateneo de Manila, Russian Chief Justice Vyacheslav Levedev by the University of Santo Tomas and French Chief Justice Guy Canivet by the Far Eastern University. McLachlin and Levedev are still sitting but Canivet, like me, has retired.

Ladies and gentlemen, amid the serious economic crisis engulfing the developed world, the Philippines has shown remarkable resilience. This year, our economy grew 6.3 percent in the first quarter, 5.9 percent in the second, and a fantastic 7.1 percent in the third, for an over-all 6.5 percent growth for the first nine months of the year, making the Philippines the best performer in the ASEAN Region and the second best in Asia – second only to China. Small wonder, Christine Legarde, the first woman Managing Director of the International Monetary Fund, hailed the Philippines for being “probably the only country in which (the IMF) increased the growth forecast as opposed to other places in the world where (the IMF) actually decreased (its) forecast.”

Concededly, the responsibility for propelling our economy and alleviating poverty rests primarily with our President and Congress, together with the private business sector, which is the recognized engine of economic growth in our democratic free enterprise system.

Nonetheless, the question frequently asked is how the judiciary can help the economy. My stock answer is that, in judging controversies involving the economy, the judiciary must defer as much as possible to the political branches of government, the President and Congress in collaboration with the private sector.

In my humble view, jurists and lawyers should not only safeguard the liberty of our people but must also nurture their prosperity under the rule of law. Thus, their objective should be two-fold: justice and jobs; freedom and food; ethics and economics; democracy and development. Liberty and prosperity must always go together; one is useless without the other.

During my term as a jurist, I tried to implement this legal philosophy by interpreting the Constitution and the laws in this manner: In litigations involving political and civil liberties, the scales of justice should weigh heavily against the government and in favor of the people, pursuant to the doctrine of strict scrutiny. However, in matters affecting the economy of the country and the prosperity of our people, courts – in the absence of grave abuse of discretion and a blatant violation of our Constitution – must defer to the Executive and Legislative branches of government, in accordance with the principle of deferential interpretation of laws and executive issuances.

The first part of the philosophy – the safeguarding of liberty – is a long-held tradition of the legal profession and the judiciary, both here and abroad. The primacy of liberty is universal. It is enshrined in the Magna Charta of the British; the Bill of Rights of the Americans and in the struggle for freedom of our own people, from Lapu-Lapu to Andres Bonifacio to Jose Rizal and to Ninoy Aquino. It is reflected in many Supreme Court decisions that uphold the rights to free speech, to peaceful assembly, to liberty of abode, to due process, and to travel freely.

The second part of the philosophy– the nurturing of prosperity under the rule of law – is fairly new. Not given enough emphasis in the past are the economic freedoms of our people, like the right to own and enjoy property, to the pursuit of happiness, to adequate social services, to a rising standard of living, to an improved quality of life, to economic well-being and to be free from poverty, disease, disability and destitution. In this morning’s session, I will concentrate on this part of my legal philosophy by discussing three landmark decisions of our Supreme Court, (1) Tañada vs Angara, (2) La Bugal B’laan vs Ramos and (3) Gamboa vs Teves.

Let me preface my discussion by saying that the judiciary is a passive branch of government and is not required or expected to initiate or espouse actions or programs to improve the economy or to upgrade the living conditions of our people. On the other hand, the political branches of government, namely, the President and Congress, are actively mandated to develop the economy and to promote the well being of our nation. In the fulfilment of this duty, our people shall judge them. And if they fail in fulfilling such duty, our people can replace them during periodic elections. Consequently, on matters involving the economy and prosperity, judges should defer to our political leaders.

To promote this legal philosophy, I formed last year, with the help of several friends like retired Chief Justice Hilario G. Davide Jr., business icon Washington Sycip and former Education Secretary Edilberto C. de Jesus, the Foundation for Liberty and Prosperity. Last September 18, 2012, the FLP with the co-sponsorship of the Metrobank Foundation and the Metro Pacific Investments Corporation launched, as its initial project, 10 professorial chairs on liberty and prosperity in nine leading law schools and one in the Philippine Judicial Academy.

Parenthetically, let me add that it is not easy to convince the judiciary to embrace the economy and business. In its March 16, 2008 issue, the New York Times Magazine reported that it took the US Chamber of Commerce more than 30 years to make the US Supreme Court understand and “be receptive to business.” We have yet to do that in our country.

Globalization, Deregulation, Privatization, Liberalization

Let me now discuss the three decisions I earlier mentioned. For many decades since World War II till the early 1990’s, the protection of native goods and local services was the popular policy here and in many other countries. Pursuant thereto, Congress barred the importations of foreign goods and services, and set up high tariff walls and taxes to bar them. In this way, local manufactures and service products were protected, promoted and patronized.

Later, however, nations became more interdependent, and protectionism became obsolete. The World Trade Organization (WTO) was organized to tear down tariffs, duties, import quotas and other trade barriers. Economic paradigms shifted from government control to deregulation, from government ownership to privatization, from national sovereignty to globalization and liberalization of trade. Joining this worldwide trend, our Senate ratified the Philippine adherence to WTO.

Citing the provisions of our Constitution mandating “economic nationalism,” some minority senators challenged the constitutionality of the Senate ratification of the WTO Treaty. Using deferential interpretation in Tañada vs. Angara (May 2, 1997), the Supreme Court, in a decision I had the honor of authoring, unanimously upheld the ratification, ruling in this wise:

“While the Constitution has a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity, and limits the protection of Philippine enterprises only against foreign competition and trade practices that are unfair.”

Exercising judicial restraint, the Court refused to pass upon the wisdom or viability of deregulation and globalization. It said, “Ineludibly, what the Senate did (in ratifying the WTO Treaty) was a valid exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the elected policymakers and the people.”

Looking back, let me reminisce that initially, I had some difficulty explaining to my Supreme Court colleagues the meaning of the new buzzwords of globalization, deregulation, privatization and liberalization detailed in the WTO Treaty, which was contained in 36 book-size volumes. The justices were schooled and believed in protectionism as the road to economic prosperity. Further, the petitioners indeed had struck a familiar argument that the Constitution, which was crafted in 1987, was protective of homegrown products and services. However, I had to point out that the Charter also recognized and adopted the generally accepted principles of international law as part of the law of the land.

At the start, there were dissenting and doubting voices; later however they all concurred. But when I circulated the decision I crafted for their signatures, only four fully concurred while 10 concurred only “in the result,” meaning they agreed to dismiss the petition but not necessarily with my reasons. I felt it was a disservice to the nation to do that, because our people will not know the collective reasons for our judgment.

So, I asked for a re-deliberation and challenged the unbelievers to write their own positions. But in the end, 13 of the 15 justices (including me) concurred in full, with only two retaining their “in the result” agreement, thereby unanimously enshrining in our jurisprudence the doctrine of deferential interpretation on issues involving the economy and prosperity.

At bottom, the case could have been decided either way by the citation of the proper parts of the Constitution that supported one’s legal philosophy. What carried the day was my call for deference to the political branches, to Congress and to the President whom our people mandated to save them from destitution, disease and disability.

Constitutionality of the Mining Law

Let me now move to another major decision affecting business, La Bugal-B’laan Tribal Association vs Ramos, involving the constitutionality of the Mining Law of 1995 (RA 7942), the Implementing Rules and Regulations or IRR of that law (namely, DENR Administrative Order or DAO 96-40 issued December 20, 1996), and the Financial and Technical Assistance Agreement (FTAA) entered into by President Fidel V. Ramos with the Western Mining Corporation, a foreign company. The original decision of the Supreme Court issued on January 27, 2004, by vote of 8-5 (with one justice taking no part and one seat vacant) struck down as unconstitutional the major provisions of the Mining Law, the IRR and the FTAA.

However, on reconsideration, the Court on December 1, 2004 reversed itself by a more definitive vote of 10-4 (with one justice still abstaining). It vigorously and fully upheld the constitutionality of the Mining Law, the IRR and the FTAA. The issues revolved around the proper interpretation of the word “control” in the exploration, development and utilization of natural resources, particularly as they related to FTAAs. As the ponente or writer of that decision, I relied once more on my legal philosophy of deferring the political branches of government in resolving controversies affecting the economy, Thus, I roped the Decision on this anchor:

“The Constitution should be read in broad, life-giving strokes. It should not be used to strangulate economic growth or to serve narrow, parochial interests. Rather, it should be construed to grant Congress and the President sufficient discretion and reasonable leeway to enable them to attract foreign investments and expertise, as well as to secure for our people and our posterity the blessings of prosperity and peace.”

However, the four dissenters led by Justice Antonio T. Carpio, wanted the Court to restrict the President’s discretion in defining the specific terms and condition of FTAAs, especially the grant of management prerogatives and financial benefits to foreign entities entering into FTAAs with the government.

Given however the nature and complexity of FTAAs, the humongous capital required, the complicated technology needed, and the intricacies of international trade, the Court gave a wide degree of discretion to the President who had the advantage of getting the needed technical expertise to enable him to discharge his mandate to eradicate “the grinding poverty of our people.”

 

Interpreting the 60-40 Rule in Public Utilities

Finally, let me discuss a very recent decision, Gamboa vs Teves, promulgated by the Supreme Court on June 28, 2011, that involved also the interpretation of the word “control,” this time as it applies to public utilities in general and to the Philippine Long Distance Telephone Company in particular.

Inasmuch as this case involves PLDT, let me formally disclose what is already contained in my personal website that I have been sitting as an independent member of the board of advisers (not board of directors) of PLDT since mid-2009. That was well after I had retired from the Supreme Court in 2006. In that independent capacity, I do not represent PLDT’s management or any stockholder. So the views I express are mine, and not necessarily those of PLDT.  Having clarified that, let me now go back to the main subject of my discourse.

Section 11 of Article XII of the Constitution states that (1) only Filipino citizens or “corporations… at least 60 per centum of whose capital is owned by such citizens” may operate a public utility such as a telephone company; (2) “the participation of foreign investors in the (board of directors) of any public utility enterprise shall be limited to their proportionate share in its capital,” and (3) “all the executive and managing officers of such corporations must be citizens of the Philippines.”

As we all know, the capital stock of a corporation may be divided into (a) “voting” or “common” and (b) “non-voting” or “preferred” shares. Only voting or common shares can be used to elect members of the board of directors. Non-voting or preferred shares cannot; but they may legally be used in voting on eight very important issues, like in disposing of all or substantially all of the corporate assets; in incurring or increasing bonded indebtedness; or in merging the corporation with another; or in dissolving the corporation; etc.

The Supreme Court disposed, by vote of 10-3 with two seats vacant and with Justice Carpio as ponente, that the word “capital” in the cited Charter provision “refers only to shares of stock entitled to vote in the election of directors and thus in the present case only to the common shares, and not to the total outstanding capital stock (common and non-voting preferred shares).”  Hence, according to this Decision, foreign investments in public utilities, like PLDT, should be limited to only 40 per cent of the voting shares. The Decision said that this interpretation will ensure that Filipinos will “effectively control” public utilities because “it is the board of directors that controls or manages a corporation.”

To assure such control, the dispositive portion of the Decision directed the chairperson of the Securities and Exchange Commission (SEC) “to apply this definition of the term ‘capital’ in determining the extent of allowable foreign ownership in respondent Philippine Long Distance Telephone Company, and if there is a violation of… the Constitution, to impose the appropriate sanctions under the law.” Parenthetically, while the dispositive portion of the Decision alluded to “respondent” PLDT, the petitioner did not implead the telephone company in his petition.

The dissenters, led by Justice Presbitero J. Velasco Jr., argued that the word “capital” should include not only the voting but also the preferred and all other shares because this was the interpretation given by the framers of the current and previous Constitutions since 1935.

The Velasco dissent further said that the Constitution already assures Filipino control of public utilities because, in electing directors, foreigners can use only 40 percent of the common shares they hold, even if they owned more than that percentage. Hence, “they will never be in a position to elect majority of the members of the Board of Directors… although they (may) actually own more than 50 % of the common shares.” Consequently, Filipinos will always control the board. Also, only Filipinos may be “executive and managing officers” of public utilities, thus doubly ensuring Filipino control. In point of fact, of the 13 directors of PLDT, only two are foreigners (Japanese) while the rest, or to be exact, 11 are Filipinos.

I will discuss later in this speech the main ruling of the Court that only the voting shares should be considered in computing the 40 percent maximum equity that foreigners may own in partly nationalized corporations like public utilities.

In the meantime, let me take up, with due respect, some egregious errors of facts in the Court’s Decision and its misconception of business principles. The Decision observed that the par value of PLDT’s voting or common shares is only P5.00, yet they each earned P70 in cash dividends in 2009. (Parenthetically, this is erroneous because cash dividends declared in 2009 were double that amount. But for purposes of our discussion, let us assume the Court’s findings of fact are correct.) In contrast, the non-voting or preferred shares have a par value of P10.00, but their cash dividends was “a measly P1.00 per share… In other words, preferred shares have twice the par value of common shares but they cannot elect directors and have only 1/70 of the dividends of common shares.”

Then, it concluded, “This undeniably shows that beneficial interest in PLDT is not with the non-voting preferred shares (mostly owned by Filipinos) but with the common shares (mostly owned by aliens), blatantly violating the constitutional requirement of 60 percent…  Filipino beneficial ownership in a public utility… In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60 percent of the dividends of PLDT.” (bold types in original)

The pure legalists and the uninitiated in business may find logical the foregoing disquisition in the Decision. But I respectfully submit that it is neither legal nor logical. It is not legal because the Constitution does not speak of dividends. Nowhere does it talk of how much each kind of shares should earn. The Charter speaks only of the ownership or “effective control” of the “capital” of a corporation engaged in public utilities, not of “benefits.”

It is not logical because it ignored the market value of the shares and their rates of returns. The decision itself noted that “the PLDT common shares with a par value of P5.00 have a current stock market value of P2,328 per share, while PLDT preferred shares with a par value of P10.00 per share have a current stock market value ranging from… P10.92 to P11.06 per share.”

However, the Decision failed to use this critical information in computing the actual and real financial benefits. Clearly, on the basis of the facts given by the majority, an investor needs about P11.00 to buy a PLDT preferred share, which would earn P1.00. Here, the rate of return on the investment is nine percent. On the other hand, to acquire a common share, an investor must pay P2,328 yet earn only P70 or only about three percent (the correct figure is P140 which yields a rate of return on investment of six percent).

On this basis, preferred shares, which are mostly held by Filipinos, earn three times more than the common shares. So, it is neither logical nor correct to say that “beneficial ownership” in PLDT rests with foreigners just because they hold more common shares than Filipinos.

Clearly, the par values of shares are not determinative of their real worth or earning potential. Investors buy shares from the company or from the stock market, depending on their appetite for risks, not on the shares’ par values. Conservatives invest in preferred shares because they are less risky and their earnings, like bank deposits, are fixed. The adventurous choose common shares because they could potentially be worth much more. Or much less, if the company flops.

While common shares may yield smaller dividends, they can – in time – increase their market value. Sometimes, a company strikes oil, or perfects its high tech products. When this happens, the market value of common shares exponentially grows while the yields of preferred shares remain fixed.

A classic example of exponential growth is Microsoft, which made Bill Gates the richest American almost overnight. Another example. In 2001, PLDT’s net income was about P3.4 billion; its common shares had a market price of P417. Then, it expanded into the high-risk but high-reward wireless digital cell phone technology. In just four years, in 2005, its net income exponentially soared ten times to P34 billion. And kept on growing since then. In 2010, its net income was P40 billion and its common shares’ market price rose to P2,554.

Of course, in bad times, common shares could collapse and reduce billionaires to paupers, as has happened in the Philippines in 1997, and in the US in 2008. To recall, in 1997, the Asian financial crisis hit Thailand first and then spread everywhere. Because of this, the real estate business in the Philippines collapsed. The foray of Metro Pacific Holdings into Fort Bonifacio failed and almost bankrupted the company. We are also familiar with the financial crisis in 2008 that started in the United States and resulted in the collapse of several heretofore financial untouchables like Lehman Brothers, Merrill Lynch, American International Group (AIG) and Washington Mutual, the largest savings and loan association in the United States.

But then, that’s what business is all about. It is about taking and managing risks, not about legislating profits or promulgating decisions awarding economic benefits. It is not for the faint-hearted or for jurists to intrude into unnecessarily and imprudently.

In sum, the Decision’s theoretical requirement that 60 percent of all financial benefits in a public utility must go to Filipinos regardless of how much they invested is totally unfair and blatantly ignores the most fundamental tenets of investments. Under this absurd thesis, no foreigner will invest in our country. For the most basic rule in a free market economy is that investors share in the profits and other benefits of an enterprise based on the amount they invested and the risks they assumed.

 

Applicable to All Kinds of Shares?

The Court’s ruling on the 60-40 capital stock sharing did not end with the Decision. On October 9, 2012, it issued a Resolution – again by vote of 10-3, with one justice taking no part, with one seat vacant – that not only denied the motions for reconsideration with finality but also expanded the coverage of the original Decision dated June 28, 2011.

This original Decision held that “Mere legal title is insufficient to meet the 60 percent Filipino-owned “capital” required in the Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60 percent of the voting rights, is required. The legal and beneficial ownership of the 60 percent of the outstanding capital stock must rest in the hands of Filipino nationals.”

This statement was expanded in the subsequent Resolution of October 9, 2012 to mean that “such requirement appl(ies) uniformly and across the board to all classes of shares, regardless of nomenclature and category, comprising the capital of a corporation.” Hence, even preferred shares, which have no voting rights for directors, should be owned at least 60 percent by Filipinos because such preferred shares may still vote in eight instances, like in the amendment of the articles of incorporation and in the increase or decrease of the capital stock.

“Thus,” the Court said, “if a corporation, engaged in a partially nationalized industry, issues a mixture of common and preferred non-voting shares, at least 60 percent of the common shares and at least 60 percent of the preferred non-voting shares must be owned by Filipinos… In short, the 60-40 ownership requirement in favor of Filipino citizens must apply separately to each class of shares, whether common, preferred non-voting, preferred voting or any other class of shares.”

This expansion means that the present practice of issuing preferred voting shares to cover the shortfall in common shares might no longer be deemed compliant with the 60-40 constitutional requirement. For example, let us say that a public utility corporation has 1,000 common shares, 1,000 voting preferred shares and 1,000 non-voting preferred shares.

Let us further assume that foreigners owned 600 of the common shares, but none of the voting preferred and none of the non-voting preferred. Under the expanded ruling, the corporation would still be in violation of the Constitution because, even if all the voting preferred and non-voting preferred are Filipino owned, still 60 per cent of the common are owned by foreigners.

Note that of the 2,000 voting shares composed of 1,000 common and 1,000 voting preferred, foreigners own only 600 or only 30 percent of all voting shares, yet the Decision would still consider the corporation to be in violation of the Constitution despite the plain fact that, under this example, foreigners cannot, repeat cannot, be in control of the corporation.

One more point, corporations in the Philippines, in the United States and elsewhere issue what are called Deposit Receipts, which are bought and sold in the stock markets. Under this program, Filipino corporations purchase shares of stock and then sells Philippine Deposit Receipts or PDRs corresponding to each of the shares, with the buyers of the PDR receiving the dividends and other benefits due the underlying shares but the Filipino sellers remain the owners and exercise the voting rights of the underlying shares. Subject to nationality requirements, PDRs could even be exchanged with the underlying shares.

PDRs were not tackled by the Supreme Court, neither in the original Decision or in the subsequent Resolution, giving rise to the conclusion that the PDR program remains constitutional and legal even under the strict interpretation given in the Gamboa case, and may be a way by which foreigners who are interested only in reaping the economic benefits may participate when the 40 percent foreign equity limit in partly nationalized corporations is reached.

Recently, the Securities and Exchange Commission has issued draft “Guidelines, Rules and Regulations” to comply with the order of the Supreme Court to apply the newly minted definition of the term “capital.”

Prudently, the SEC has called for a public hearing and for position papers by various stakeholders before finalizing these guidelines. I believe, it is not just the SEC that should be at work here but also the entire Executive Branch because ultimately, the Rules will reflect the entire Philippine government’s economic policy, especially vis-à-vis foreign investments.

The Supreme Court, it seems to me, has revived the old debate on the whether the Constitution of the Philippines should be interpreted to focus on economic protectionism, or whether economic protectionism should be balanced with the world reality that no nation can isolate itself in these times of liberalization and globalization, as was done in Tanada vs Angara.

Otherwise stated, should the Court impose upon itself the responsibility of propelling the economy, of creating jobs, of alleviating poverty, of creating wealth and enhancing prosperity? In short, should the Supreme Court clothe itself with the prerogative to choose which economic paradigm is more beneficial or wise for our people: protectionism or globalization and liberalization. Or, should it continue to use self-restraint and deference to the political branches of government on matters involving the economy?

As I said at the beginning, our economy has shown resilience amid the gloom shrouding the traditional bulwarks of prosperity, the Eurozone and the United States. How our government handles this most recent Supreme Court Decision involving the interpretation of the 60-40 ownership structure in the key businesses and industries, especially those engaged in public utilities, transportation, and natural resources, will certainly affect our momentum of growth that is the envy of many countries and economists. My own position should be clear to everyone by this time: In matters affecting the prosperity of our people, the judiciary can help the economy by deferring to the political branches of the government and to the private business sector which, to stress, is the recognized engine of growth in a regime of free enterprise.

 

Maraming salamat po.

Liberty & Prosperity for the Peoples of the World

 

by Chief Justice ARTEMIO V. PANGANIBAN (Ret.)

 

           Since my graduation from the Far Eastern University Institute of Law in 1960 and throughout my legal career, especially during my more than 11 years in the Supreme Court, I espoused “Liberty and Prosperity Under the Rule of Law” as my legal philosophy.

Upon becoming Chief Justice of the Philippines, I pursued these twin ideals of liberty and prosperity even more fervently.  Indeed, they have become the cornerstones of my magistracy.  For that reason exactly, I brought the philosophy to other countries and embarked on a knowledge- sharing-cum-lecture circuit in May and June of 2006, my last year in the judiciary. My aim was to broach and carry forward these twin beacons to jurists, legal practitioners, business heads, civil society leaders, diplomats, academics, and developmental agencies in several countries — especially the United States, Spain, France, the Netherlands and the United Kingdom.

 

Global Forum on Liberty and Prosperity

In all the meetings I attended during that year (2006), I proposed the holding of a Global Forum on Liberty and Prosperity, which served as the valedictory of my chief justiceship.  The Forum was held in the Shangri-la Makati Hotel on October 18-21, 2006.  It preceded my formal retirement ceremony on December 6, 2006.  Over 300 jurists and lawyers from all over the world attended the Forum.

Noteworthy among the attendees were the Chief Justices of Canada, Russia and France who were all bestowed honorary doctoral degrees by Ateneo de Manila University, University of Santo Tomas and our own Far Eastern University.

Several distinguished judicial and bar leaders of the world could not make it because of conflicts in schedules, but they sent their personal greetings, among them, President Rosalyn Higgins of the International Court of Justice; Chief Justice Willibord Davids of the Netherlands; President Francisco Jose Hernando Santiago of the Spanish Supreme Court; Lord Philipps of Worth Matravers, the Chief Justice of England and Wales; and Ms Karen Mathis, president of the American Bar Association.

To prepare our people for this international gathering, several fora were conducted in our country.  In these gatherings were discussed not only the theoretical foundations of these twin beacons of justice but, more important, concrete ways of implementing them locally.

The first of these domestic fora was the National Academic Forum attended by distinguished and renowned scholars of the law in our country on July 20, 2006.  The National Forum on Liberty and Prosperity followed on August 24-25, 2006. It was participated in not just by justices and judges, but also by representatives of our legislative and executive branches of government. Also in attendance were law practitioners, business leaders and civil society advocates.

On top of these efforts, I wrote a book entitled Liberty and Prosperity.  This book, together with a searchable compact disc (CD) version, was circulated to all delegates.

My aspirations drew financial and logistical support from the United Nations Development Programme (UNDP), the World Bank, the Asian Development Bank (ADB), the Canadian International Development Agency (CIDA), and the US Agency for International Development (USAID) through The Asia Foundation (TAF), the American Bar Association (ABA), and the Rule of Law Effectiveness (ROLE).

Let me briefly explain the various events, especially during my final three years in the judiciary in 2004 to 2006 that propelled Liberty and Prosperity as twin beacons of justice.

 

Safeguarding Liberty

The history of the world shows a long and arduous road to freedom.  From the Magna Carta of the British to the French Revolution, and from the Declaration of Independence of the Americans to the struggle for nationhood of the Filipinos, calls for civil and political liberties reverberated in the annals of our past.  Liberté, égalité, fraternité, ou la mort! Tierra y libertad!  Mabuhay ang Republika ng Pilipinas!  These were some of the battle cries for nationhood and freedom.

Indeed, history rings for the peoples’ right to be free — free to live peacefully, to earn a living, to participate in political processes, to vote and to be voted for; as well as to speak, to assemble peaceably for the redress of grievances, and to worship one’s Creator the way one deigns, among others.

In these battles to uphold freedom throughout the past centuries, the judiciaries of the world have had to cope and innovate with a never-ending saga of fortitude and forthrightness.  So, too, must they face up to new challenges brought about by the advances in technology and the demands of our global community.  Thus, even now, laws and judicial doctrines safeguarding liberty are continuously tested to the limit.

Indeed, traditional conceptions of liberty have paved the way to new freedoms. In the Philippines, for example, the right to conduct public opinion polls and to publish their results, a right born recently of the information age, is now considered an essential part of the traditional freedom of speech and expression.[1] I am sure that many countries have had to face similar questions in the past; and that they have given wise counsel, as well as guidance, on the legality of exit polls as part of the freedom of speech.[2]

Furthermore, recent money-laundering activities and threats of terror have become new objects of calibration in the defense of human freedom.

 

Jurisprudence Upholding Liberty

During my term as chief justice, the Supreme Court promulgated three landmark Decisions upholding liberty.  These are (1) the right of Congress to summon executive officials for investigations in aid of legislation, in conjunction with the people’s right to information on matters of public concern;[3] (2) the right of citizens to peaceful assembly for redress of grievances;[4] and (3) the rights of the people under a declaration of a “state of national emergency.”[5]  In all these cases, our Supreme Court upheld the primacy of civil liberties over governmental actions.

The struggles for civil and political liberties by other judiciaries are, of course, just as long and difficult.  An example is the Cour de Cassation (the highest court of France). In a case involving a former official whose employment had been terminated by the African Development Bank, the French court ruled on January 25, 2005 that the right to a hearing before an impartial tribunal prevailed over the jurisdictional immunity granted by a State to international organizations.[6]  It explained that a party’s inability to refer its claim to a competent judge constituted a denial of justice and thus established the competence of the French judiciary to acquire jurisdiction.  Thus, it upheld the former bank official’s fundamental right to a day in court.

Jameel v. Wall Street Journal Europe Sprl[7](promulgated on October 11, 2006), which echoes the landmark Reynolds v. Times Newspapers Ltd.,[8] has been hailed as a triumph of the freedom of expression and of the press.  On the other hand, the Lords of Appeal of the House of Lords, the court of last resort in the United Kingdom at that time, upheld the right to publish allegations about public figures on matters of public interest, as long as the journalist acted responsibly.

Further, on April 26, 2005, the Spanish Supreme Court ruled in favor of a Complaint filed by three non-governmental organizations on the regulation and management of detention centers for foreigners.  The ruling annulled certain provisions of a ministerial Order, particularly with respect to stringent discipline measures (such as the isolation and the regulation of the behavior of detainees, as well as the rules on visits and communications).[9]

Indeed, courts have the duty to safeguard the liberty of all peoples.  In Hamdan v. Rumsfeld (decided on June 29, 2006), the United States Supreme Court held that a military commission convened to try a Yemeni national captured in Afghanistan lacked the power to proceed, “because its structure and procedures violate both the Uniform Code of Military Justice and the Geneva  Conventions” on the matter.  Holding that the military commission afforded less protection than that guaranteed under those laws, the US Supreme Court noted substantial deviations from the fundamental rights accorded to the accused, such as those precluding defendants and their counsel from learning what evidence was to be presented against them during any part of the proceeding; and those involving the admission of any evidence, such as hearsay testimony that had not been sworn to and statements gathered through coercion.

In Rasul v. Bush (decided on June 28, 2004), a case also originating from the hostilities in Afghanistan, the US Supreme Court ruled that its district courts had jurisdiction to consider challenges to the legality of the detention of aliens (who in this case were Australians and Kuwaitis) captured abroad and incarcerated at Guantanamo Bay.

 

Nurturing Prosperity

While safeguarding liberty is a traditional and fairly common task for the judiciary, the nurturing of prosperity may not be too familiar to the courts.  Some jurisdictions may even take the view that the judiciary need not exert conscious thought and effort to nurture progress.  Nonetheless, I maintain that whatever the status of a country’s economic progress, courts must contribute to the achievement or nurturance of prosperity; or, at the very least, to the alleviation of poverty, disease and disability.

Important world events showed the necessary — nay, indispensable — nexus between political liberty and economic prosperity.

 

Mandate to Uphold Economic Rights

          First. The Universal Declaration of Human Rights (UDHR), which was adopted by the General Assembly of the United Nations on December 10, 1948, has emerged as the fundamental law of human rights. The UDHR recognizes the entitlement of the common people to liberty and prosperity.  This fact is evident in the following provisions of its Preamble:

“Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,

x x x                             x x x                           x x x

“Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promotesocial progress and better standards of life in larger freedom,”

The UDHR also recognizes — aside from the basic right to life, liberty and security of persons (Articles 3 to 21) — their right to economic, cultural and social rights (Articles 22 to 27).[10]

In the Philippines, our 1987 Constitution[11] commands the State to “promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty x x x.”

Equally significant, Article XII on the National Economy and Patrimony mandates “a more equitable distribution of opportunities, income and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.”[12] Our Constitution likewise demands the institutionalization of social justice.[13]

That these provisions are not self-executory does not in any way diminish their legal significance.  They direct the legislature to enact laws to alleviate poverty, and they provide the courts with a juridical context within which to interpret other constitutional provisions and laws.

 

Global Efforts to Solve Economic Deprivation

Second. Another impetus to my twin advocacies pertains to developments in the private sector. More and more people around the world are realizing the need to fight poverty and deprivation and are pooling enormous resources and talents to combat this common menace.

Time magazine’s “Persons of the Year” for 2005 — the world’s richest multi-billionaire couple, Bill and Melinda Gates — staged their own campaign for vaccinations and public health care.  Their target: to save 700,000 lives.[14]

Billionaire investment guru Warren Buffett has joined the crusade with a mind-boggling $30 billion donation of blue-chip Berkshire Hathaway stocks to the Gates Foundation.[15]

In September 2006, billionaire financier George Soros announced that he was contributing $50 million to the Millennium Villages Project.  This nongovernmental initiative seeks to show that closely focused development projects can alleviate severe poverty within a few years.[16]

Even the famed Nobel Peace Foundation has veered its lenses to poverty alleviation, as it has awarded the Nobel Peace Prize to Bangladeshi Muhammad Yunus on October 14, 2006.  He and his Grameen Bank had pioneered microcredit and proved that the poor’s misfortunes could be transformed by helping them become self-employed.  Over 6.6 million impoverished Bangladeshis have availed themselves of microloans.[17]

Philanthropic endeavors in Asia have likewise brought back hope to the homeless, the blind, the poor, and the neglected.  In 2006, my last year in the Supreme Court, six exceptional Asians and one exemplary organization were awarded the Ramon Magsaysay Awards[18] — Asia’s equivalent of the Nobel Prize. One Ramon Magsaysay Awardee, Antonio Meloto of Gawad Kalinga, has been largely instrumental in building private mass housing projects for slum dwellers in the Philippines.

 

Need for a Stable Judiciary

Third. Still another factor behind the call for both liberty and prosperity is the growing consensus among developmental institutions that a stable judiciary and a firmly established rule-of-law system are necessary means to achieve liberty and prosperity.  Institutions, like the United Nations Development Program (UNDP), the World Bank (WB), and the Asian Development Bank (ADB), have realized that poverty alleviation and economic growth cannot be attained, unless there is “a well-functioning judicial system [that] enables the State to regulate the economy and empower private individuals to contribute to economic development by confidently engaging in business, investments and other transactions.”

This stance explains why the UNDP is passionate about broadening the poor’s access to justice; why the WB wants “an effective and efficient judicial system that protects citizens from the abuses of government and safeguards the rights of the poor”;[19]and why the ADB desires “to enhance the effectiveness and the accountability of the judiciary.”[20]

During the Global Forum, ADB President Haruhiko Kuroda and WB’s Joachim von Amsberg discussed the necessary nexus between progress and a stable rule-of-law environment.  Both agreed that the rule of law formed the foundation of sustained economic development.

If I may paraphrase Mr. Amsberg, law and justice are basic ingredients of development.  Thus, there is no choice to be made between liberty and prosperity. Both are imperative paradigms in society. For the same reason, President Kuroda observed that the People’s Republic of China was undergoing a massive law reform program, so that it could continue to play a critical role in the world economy.

These three developments, among several others, affirmed to me that the prosperity of the peoples of the world requires as much nurturing in the present century as that accorded to liberty in the past. These developments have instilled in me my advocacy of justice and jobs, freedom and food, integrity and investments, ethics and economics, democracy and development; in short, liberty and prosperity.

 

Liberty and Prosperity as a Philippine Judicial Policy

Pursuant to this effort to protect liberty and to promote prosperity, our Philippine judiciary – at least during my term – leaned towards a dual standard of judicial review.  First, in cases involving liberty, the scales of justice weigh heavily against government and in favor of the people — especially the poor, the oppressed, the marginalized, the dispossessed and the weak.  Laws and actions of government and its instrumentalities restricting the fundamental rights of our people come to the courts highly suspect in their constitutional validity.  Second, in cases involving prosperity and development issues, deference is generally accorded to the political branches of our government; namely, the Presidency and Congress.

A very good example of how the legal profession and the judiciary coped with the increasing importance of deferring to the political branches of government in matters involving the economy and well being of our people is the case of Tanada vs Angara[21] in which the Supreme Court unanimously upheld the constitutionality of the Senate’s ratification of the World Trade Organization (WTO) Agreement.

In that case, the petitioners assailed the Philippine adherence to the WTO because, allegedly, (1) the WTO requires the “Philippines to place nationals and products of member-countries on the same footing as Filipinos and local products; and (2) the WTO intrudes, limits and/or impairs the constitutional powers of both Congress and the Supreme Court” thereby violating the mandate of the 1987 Constitution “to develop a self-reliant and independent national economy effectively controlled by Filipinos x x x and (to) give preference to qualified Filipinos (and to) promote the preferential use of Filipino labor, domestic materials and locally produced goods.” In short, the WTO Agreement allegedly collided with the “economic nationalism” or “Filipino First” policy of our fundamental law.

In its unanimous decision that I, as ponente, had the honor of writing, the Supreme Court held, “All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the rest of the world on the basis of equality and reciprocity and limits protection of Filipino enterprises against foreign competition and trade practices that are unfair. In other words, the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in the development of the Philippine economy. While the Constitution does not encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them either. It fact, it allows an exchange on the basis of equality and reciprocity, frowning only on competition that is unfair.”

Since the matter at hand involved national economic development, the Court’s decision adhered to the deferential policy I explained earlier, thus: “Ineludably, what the Senate did was a valid exercise of its authority. As to whether that exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the elected policymakers and the people. As to whether the nation should join the worldwide march toward trade liberalization and economic globalization is a matter that our people should determine in electing their policymakers.”

It would have been easier for me to have written a decision debunking the Senate’s ratification of the WTO Treaty because – at the time, in the 90’s – “Filipino First” was the popular economic jargon. But I had to adhere to my own philosophy of respecting the decisions of the policy makers in matters involving the economy and well being of our people.

A later decision[22] also involving the economy, specifically the constitutionality of the Mining Law, which I also wrote for the Court, laid down this prosperity doctrine in clearer language, “The Constitution must be read in broad, life-giving strokes. It should not be used to strangulate economic growth or to serve narrow, parochial interests. Rather, it should be construed to grant the President and Congress sufficient discretion and reasonable leeway to enable them to attract foreign investments and expertise, as well as to secure for our people and our posterity the blessings of prosperity and peace.”          

Elsewhere, courts had also to perform a delicate balancing act between the demands of liberty and the needs of prosperity.   In British Columbia Securities Commission v. Branch,[23] the Supreme Court of Canada had to choose between the freedom from testimonial compulsion and the right of the government to compel a company’s officers to attend an examination under oath and to produce all pieces of information and records in their possession as provided under that country’s Securities Act. Ruling in favor of the securities commission, the Canadian Court noted that the “effective implementation of securities legislation, which has obvious implications on the nation’s material prosperity, depends on the willingness of those who choose to engage in the securities trade to comply with the defined standards of conduct.”

 

Search for a Model for Economic Development

          As the world searches for the proper balance between liberty and prosperity and a model for economic development, various theories have been proposed. For instance, Professor William Easterly in his book entitled Elusive Quest for Growth[24] opined that most economically advanced countries had adopted liberal democracy, in which human rights were zealously protected.[25]  He added that under those benign regimes, entrepreneurs felt comfortable and thus invested their money for the long term, thereby propelling stable economies. But when confronted with the other models of economic prosperity in Asia, Latin America and Eastern Europe, he conceded that there was no single formula for rapid economic growth.

Another theory proposed to explain how progress has been made possible in some countries of the world relates a country’s stability and progress to the degree to which it is “open,” both within its borders and to the outside world.[26]  What is interesting about this theory is that it attempts to provide a framework both for countries that owe their stability and progress to their success in isolating themselves from the outside world,[27] on the one hand; and, on the other, those whose stability may be traced to their openness to social, political, and economic change.[28]

A group of four economists have tried to find an explanation of progress in various countries’ legal systems — whether common law or civil law.  They are Rafael La Porta, an Argentinian; Florencio Lopez-de-Silanes, a Mexican; Andrei Sheifler, a Russian who immigrated to the US when he was 15; and Robert Vishny.  Their theory has given rise to what is now known as “law and finance.”[29] According to this school of thought, common-law countries are more economically advanced than those subscribing to civil law. The former allegedly tend to be less corrupt and purport to protect both shareholders and creditors better than civil law countries do.[30]

WB’s Amsberg described how various countries dealt with the issues of liberty and prosperity within their social, cultural, economic and political milieus.  According to him, historically, the United States placed greater emphasis on individual freedoms; European societies, on equality; while some Asian countries with flourishing economies, on strong states.

Our own experience in the Philippines demonstrates that liberty and prosperity must go hand and hand.  One cannot be sacrificed for the other. After all, during the years of Martial Law, authoritarian rule was proven to be incapable of producing meaningful long-term economic progress.  Even more important, our people value their freedoms very dearly and will not exchange them for food.  Indeed, Filipinos may endure occasional hunger, but they will never tolerate injustice and indignity for long.

 

Epilogue

I have attempted, as best as I can, to present the twin beacons of liberty and prosperity in the context of history, as well as of existing and emerging realities in many countries.

How to find the right balance between these two paradigms may be found in each country’s unique circumstances.  By no means is the perception of balance in one country to be taken as an absolute prescription for others. Indeed, each country and each sector of society[31] has its own history, experience, temperament, economics, culture and politics, which should determine how viable liberty and prosperity would be in its jurisdiction.

Nonetheless, I present liberty and prosperity as a framework within which the various countries’ courts, congresses, parliaments, cabinets, bar associations, judicial institutes, academes, business communities, and civil society may formulate their missions and visions for the future.  They may do well to rally around the commonalities of our countries’ experiences, rather than our differences.

As science and technology march on, the scope of the rights safeguarding liberty and nurturing prosperity also expands.  Thus, the right to travel has been broadened by the gas combustion engine, the jet plane and soon, by rockets and time machines.  The freedom to communicate, initially inspired by the spoken and printed word, has been exponentially stretched during the last 20 years by television, cell phones, personal computers, Internet, broadband and social media like Facebook and Twitter. Magic Jack, Skype and similar new technologies have also dramatically reduced the cost of telecommunications.

These bursts of technology in communications have been matched by the dramatic rise in population and the demand of the poor for a more equitable distribution of the wealth of this planet.  The need for food, medicine, health and general well being has likewise escalated.

Governments are no longer the sole source of benevolence and economic power.  Entrepreneurship has made gigantic strides both in our country and in the world such that many multinational companies and international banks have gained bigger assets and earned more revenues than some governments.

All these advances in the political and economic spheres should not escape the attention of lawyers and jurists who must adjust their sights and goals, their attention and agenda, their focus and work. They must not only safeguard liberty; they must, at the same time, nurture the prosperity and well being of the world’s ever-growing population.

 


[1] ABS-CBN Broadcasting Corporation v. Commission on Elections (380 Phil. 780, January 28, 2000, per Panganiban, J.)  In this case, the Court emphatically explained that, “when faced with borderline situations in which the freedom of a candidate or a party to speak and the freedom of the electorate to know are invoked against actions allegedly made to assure clean and free elections, “this Court shall lean in favor of freedom.” This ruling recognizing public opinion polls as a species of the freedom of expression was echoed one year later in Social Weather Stations v. Comelec (357 SCRA 496, 501, May 5, 2001, per Mendoza, J.)  In this case, the Court stressed, “because of the preferred status of the constitutional rights of speech, expression, and the press, a law prohibiting the publication of pre-election surveys is vitiated by a weighty presumption of invalidity.”

[2] For a sampling of how other countries have construed exit polls, please see PANGANIBAN, Reforming the Judiciary 154-169 (2000).

[3] Senate v. Ermita, GR No. 169777, April 20, 2006.  More accurately, the Court invalidated the major provisions of Executive Order No. 464. In simplest terms, the Decision held that Congress had the right to compel the appearance of executive officials in congressional investigations, because the power of legislative inquiry was as broad as the power to legislate. Hence, deemed unconstitutional were the provisions of EO 464 barring officials from attending legislative inquiries.  This executive order allowed the executive branch to evade congressional requests for information without properly invoking executive privilege in recognized instances.  Nonetheless, the Court directed Congress to indicate, in its invitation to executive officials, the subject matter of the inquiry and of related questions, so that the President or the executive secretary could properly invoke executive privilege, if warranted. To the extent that investigations in aid of legislation were to be generally conducted in public, the Court held that “any executive issuance tending to unduly limit disclosures of information in such investigations necessarily deprives the people of information which, being presumed to be in aid of legislation, is presumed to be a matter of public concern. The citizens are thereby denied access to information, which they can use in formulating their own opinions on the matter before Congress — opinions which they can communicate to their representatives and other government officials through the various legal means allowed by their freedom of expression. x x x.”

[4] Bayan v. Ermita, GR No. 169838, April 25, 2006. This ponencia, penned by Justice Adolfo S. Azcuna, stated thus:

x x x[T]his Court reiterates its basic policy of upholding the fundamental rights of our people, especially freedom of expresión and freedom of assembly.  In several policy addresses, Chief Justice Artemio V. Panganiban has repeatedly vowed to uphold the liberty of our people and to nurture their prosperity.  He said that ‘in cases involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak.  Indeed, laws and actions that restrict fundamental rights come to the courts with a heavy presumption against their validity.  These laws and actions are subjected to heightened scrutiny.’”

[5]             David v. Arroyo, GR No. 171396, May 3, 2006. Writing for the majority in this case, Justice Angelina Sandoval-Gutierrez ruled as follows:

“All powers need some restraint; practical adjustments rather than rigid formula are necessary.  Superior strength –the use of force – cannot make wrongs into rights.  In this regard, the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically their liberty.

            “Chief Justice Artemio V. Panganiban’s philosophy of liberty is thus most relevant.  He said: ‘In cases involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak.’  Laws and actions that restrict fundamental rights come to the courts ‘with a heavy presumption against their constitutional validity.’”

[6] Bull n˚16, Chambre sociale. http://www/courdecassation.fr/jurisprudence, last accessed on October 16, 2006.

[7] [2006] UKHL 44.

[8] [1999] UKHL 45.

[9] Recurso De Casacion Num. 1888/2001, Tribunal Supremo, Sala de Lo Contencioso-Administrativo, D. Enrique Lecumberri Marti, ponente.

[10] It is well to note that from the Universal Declaration of Human Rights, two solemn agreements emerged: (1) the Covenant on Civil and Political Rights; and (2) the Covenant on Economic, Social and Cultural Rights.  Commentators on international law are wont to distinguish the two in terms of the executory character of civil and political rights as against the ideal or developmental character of economic and social rights.

[11]             The following provisions of the Constitution, among others, mandate the State to promote economic prosperity:

Article II (Declaration of Principles and State Policies)

“Sec.  9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.”

“Sec. 17. The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development.”

Article XII (National Economy and Patrimony)

“Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.

“The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

“In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.”

”Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”

“Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”

[12]             Art. XII, Sec. 1.

[13]             Art. XIII, Sec. 1:

“The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

“To this end, the State shall regulate the acquisition, ownership, use and disposition of property and its increments.”

[14] Bono, the other Time “Person of the Year”, on the other hand, “charmed and bullied and morally blackmailed the leaders of the world’s richest countries into forgiving $40 billion in debt owed by the poorest.”  He believes that money saved from debt relief can be spent, instead, on health and schools rather than interest payments.

[15] This sum will be given gradually, beginning in July 2006 and continuing every year for as long as one of the couple — Bill or Melinda — is active in the Gates Foundation. But each installment must be spent in the year it is given.  For 2006, Buffett has given 602,500 Berkshire B shares valued at about $1.5 billion, which must be spent by the Gates Foundation within the year.

[17] Philippine Daily Inquirer, October 16, 2006, p. 1.

[18] The 2006 Ramon Magsaysay Awardees are: Eugenia Duran Apostol,who was cited for her unrelentingly espousal of truth, independence and integrity in Philippine media; Ek Sonn Chan, who found fulfillment in providing safe, clean, and cheap drinking water for millions of Phnom Penh’s poor residents; Arvind Kejriwal,who made it his relentless crusade to educate New Delhi’s poorest citizens on their right to information and to empower them to fight corruption; Antonio Meloto who, together with the Gawad Kalinga Community Development Foundation, has demonstrated the meaning of deep commitment by building homes for slum dwellers in the Philippines; Dr. Sanduk Ruit who, by his abiding love, has bestowed munificent gifts of sight to the poverty-stricken people of Nepal; and Park Won Soon, who has fostered social justice, fair business practices, clean government, and a generous spirit in South Korea’s young democracy.

[19] See Legal and Judicial Sector Manual (2002), a World Bank publication.

[20]             Law and Policy Reform, ADB Report, January 2005, pp. 26-28.

[21]  G.R. No. 118295, May 2, 1997

[22]           La Bugal-B’laan Tribal Association vs. Ramos, G.R. 127882, December 1, 2004

[23]             2 S.C.R. 3, April 13, 1995.

[24] MIT Press, Cambridge and London. Romain Wacziarg of Stanford University describes Easterly’s work as a “superb book [that] draws on what we have learned from almost two decades of cross-country growth comparisons” about “supposedly miracle growth policies [that] have proven disastrous or ineffective,” but wisely “avoids proposing a new panacea x x x.” Wacziarg, Review of Easterly’sThe Elusive Quest for Growth, XL Journal of Economic Literature 907-918, September 2002.

[25] The discussion was summarized by Prof. Alex Magno, a participant in a relevant roundtable discussion, in his column in the Philippine Star on January 19, 2006.

[26] Ian Bremmer, The J Curve: A New Way to Understand Why Nations Rise and Fall ( 2006). The framework is represented by the “J Curve.” The vertical axis of the curve  measures a state’s stability; the horizontal axis, its “openness.” Nations higher on the graph are more stable; those lower are less stable.  Nations to the right of the dip in the “J” are more open; those to the left are less so. http://www.jcurvebook.com/ and http://en.wikipedia.org/wiki/J_curve, last accessed on October 14, 2006.

[27] Among these countries are North Korea, Iran, and Cuba.

[28] France, the United States, and Japan have been identified to be among these countries.

[29] “Law and Finance,” Journal of Political Economy, Vol. 106, No. 6, 1113-1155 (December 1998).

[30] According to research published by the scholars beginning in 1998, countries that come from a French civil-law tradition struggle to create effective financial markets, while countries having a British common-law tradition succeed far more frequently.

[31] The religious sector, too, has genuine concerns about the alleviation of poverty and the sharing of resources.  Thus, the Gospel reminds us of the young rich man’s question, “What must I do to inherit eternal life?” and of the Lord Jesus’ answer, “Go, sell what you have and give to the poor, and you will have treasures in heaven; then come, follow me.” (MK 10:17-30)