Espina vs.

Zamora
The Supreme Court recently upheld the constitutionality of RA 8762 (Retail Trade Liberalization
Act of 2000), which expressly repealed the law prohibiting foreign nationals from engaging in
retail trade (RA 1180). RA 8762 also allows natural-born Filipino citizens, who had lost their
citizenship and now reside in the Philippines, to engage in the retail trade business with the same
rights as Filipino citizens.
In a unanimous 11-page decision penned by Justice Roberto A. Abad, the Court En Banc
dismissed for lack of merit the petition filed a decade ago assailing RA 8762. It found no showing
that the law has contravened any constitutional mandate and that it would eventually lead to alien
control of the retail trade business.
The Court noted that while the Constitution mandates a bias in favor Filipino goods, services,
labor, and local enterprises, it also 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 only
against foreign competition and trade practices that are unfair. The Court also pointed out that
Congress has the discretion under Article XIII, sec. 10 of the Constitution to reserve to Filipinos
certain areas of investment upon recommendation of the National Economic Development
Authority (NEDA) and when the national interest requires; and that in this case Congress has
decided, without opposition from NEDA, to open certain areas of the retail trade business to
foreign investments.

The Court also found that RA 8762 has provided for strict safeguards on foreign participation in
retail trade. (GR No. 143855, Espina v. Zamora, September 21, 2010)

1
EN BANC[G.R. No. 143855, September 21, 2010]REPRESENTATIVES GERARDO S. ESPINA, ORLANDO
FUA, JR., PROSPERO AMATONG, ROBERT ACE S.BARBERS, RAUL M. GONZALES, PROSPERO
PICHAY, JUAN MIGUEL ZUBIRI AND FRANKLIN BAUTISTA,PETITIONERS, VS. HON.
RONALDO ZAMORA, JR. (EXECUTIVE SECRETARY), HON. MAR ROXAS (SECRETARYOF
TRADE AND INDUSTRY), HON. FELIPE MEDALLA (SECRETARY OF NATIONAL ECONOMIC
ANDDEVELOPMENT AUTHORITY), GOV. RAFAEL BUENAVENTURA (BANGKO SENTRAL NG
PILIPINAS) AND HON.LILIA BAUTISTA (CHAIRMAN, SECURITIES AND EXCHANGE
COMMISSION), RESPONDENTS.D E C I S I O N
ABAD, J.:
This case calls upon the Court to exercise its power of judicial review and determine the constitutionality
of the Retail Trade Liberalization Act of 2000, which has been assailed as in breach of the constitutional
mandate for the development of a self-reliant and independent national economy effectively controlled by
Filipinos.
The Facts and the Case
On March 7, 2000 President Joseph E. Estrada signed into law Republic Act (R.A.) 8762, also known as
the Retail Trade Liberalization Act of 2000. It expressly repealed R.A. 1180, which absolutely prohibited
foreign nationals from engaging inthe retail trade business. R.A. 8762 now allows them to do so under
four categories:
Category A Less than US$2,500,000.00 Exclusively for Filipino citizens and corporations whollyowned
by Filipino citizens.Category B US$2,500,000.00 up but lessthan US$7,500,000.00For the first two years of R.A.
8762's effectivity, foreignownership is allowed up to 60%. After the two-yearperiod, 100% foreign equity shall
be allowed.Category C US$7,500,000.00 or more May be wholly owned by foreigners. Foreigninvestments for establishing a
store in Categories B andC shall not be less than the equivalent in PhilippinePesos of US$830,000.00.Category D
US$250,000.00 per store of foreign enterprises specializing inhigh-end or luxury productsMay be wholly owned by
foreigners.

R.A. 8762 also allows natural-born Filipino citizens, who had lost their citizenship and now reside in the
Philippines, to engage

in the retail trade business with the same rights as Filipino citizens.On October 11, 2000 petitioners Magtanggol
T. Gunigundo I,
*
Michael T. Defensor,
*
Gerardo S. Espina, Benjamin S.Lim,
*
Orlando Fua, Jr., Prospero Amatong, Sergio Apostol,
*
Robert Ace S. Barbers, Enrique Garcia, Jr.,
*
Raul M. Gonzales,Jaime Jacob,
*
Apolinario Lozada, Jr.,
*
Leonardo Montemayor,
*
Ma. Elena Palma-Gil,
*
Prospero Pichay, Juan Miguel Zubiri and Franklin Bautista, all members of the House of Representatives,
filed the present petition, assailing the constitutionality of R.A. 8762 on the following grounds:
First
, the law runs afoul of Sections 9, 19, and 20 of Article II of the Constitution which enjoins the State to
place the national economy under the control of Filipinos to achieve equal distribution of opportunities,
promote industrialization and full employment, and protect Filipino enterprise against unfair competition
and trade policies.
Second
, the implementation of R.A. 8762 would lead to alien control of the retail trade, which taken together
with alien dominance of other areas of business, would result in the loss of effective Filipino control of
the economy.
Third
, foreign retailers like Walmart and K-Mart would crush Filipino retailers and
sari-sari
store vendors, destroy self-employment, and bring about more unemployment.
Fourth
, the World Bank-International Monetary Fund had improperly imposed the passage of R.A. 8762 on the governmentas a
condition for the release of certain loans.
Fifth
, there is a clear and present danger that the law would promote monopolies or combinations in restraint
of trade.Respondents Executive Secretary Ronaldo Zamora, Jr., Trade and Industry Secretary Mar Roxas,
National Economic andDevelopment Authority (NEDA) Secretary Felipe Medalla, Bangko Sentral ng
Pilipinas Gov. Rafael Buenaventura, andSecurities and Exchange Commission Chairman Lilia Bautista
countered that:
First
, petitioners have no legal standing to file the petition. They cannot invoke the fact that they are taxpayers
since R.A.8762 does not involve the disbursement of public funds. Nor can they invoke the fact that they
are members of Congresssince they made no claim that the law infringes on their right as legislators.
Second
, the petition does not involve any justiciable controversy. Petitioners of course claim that, as members of
Congress,they represent the small retail vendors in their respective districts but the petition does not
allege that the subject lawviolates the rights of those vendors.
Third
, petitioners have failed to overcome the presumption of constitutionality of R.A. 8762. Indeed, they could
not specify



2
how the new law violates the constitutional provisions they cite. Sections 9, 19, and 20 of Article II of the
Constitution arenot self-executing provisions that are judicially demandable.
Fourth
, the Constitution mandates the regulation but not the prohibition of foreign investments. It directs
Congress toreserve to Filipino citizens certain areas of investments upon the recommendation of the
NEDA and when the nationalinterest so dictates. But the Constitution leaves to the discretion of the
Congress whether or not to make such reservation.It does not prohibit Congress from enacting laws
allowing the entry of foreigners into certain industries not reserved by theConstitution to Filipino citizens.
The Issues Presented
Simplified, the case presents two issues:1.

Whether or not petitioner lawmakers have the legal standing to challenge the constitutionality of R.A.
8762; and2.

Whether or not R.A. 8762 is unconstitutional.
The Court's Ruling


One
. The long settled rule is that he who challenges the validity of a law must have a standing to do so.
[1]
Legal standingor
locus

standi
refers to the right of a party to come to a court of justice and make such a challenge. More
particularly,standing refers to his personal and substantial interest in that he has suffered or will suffer
direct injury as a result of thepassage of that law.
[2]
To put it another way, he must show that he has been or is about to be denied some right or privilegeto which he is
lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the law
hecomplains of.
[3]
Here, there is no clear showing that the implementation of the Retail Trade Liberalization Act prejudices
petitioners or inflictsdamages on them, either as taxpayers
[4]
or as legislators.
[5]
Still the Court will resolve the question they raise since the ruleon standing can be relaxed for
nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when as in this casethe public
interest so requires or the matter is of transcendental importance, of overarching significance to society,
or of paramount public interest.
[6]

Two.
Petitioners mainly argue that R.A. 8762 violates the mandate of the 1987 Constitution for the State to
develop a self-reliant and independent national economy effectively controlled by Filipinos. They invoke
the provisions of the Declaration of Principles and State Policies under Article II of the 1987 Constitution,
which read as follows:
Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity
andindependence of the nation and free the people from poverty through policies that provide adequate
socialservices, promote full employment, a rising standard of living, and an improved quality of life for
all.

x x x xSection 19. The State shall develop a self-reliant and independent national economy effectively
controlled byFilipinos.Section 20. The State recognizes the indispensable role of the private sector,
encourages private enterprise,and provides incentives to needed investments.
Petitioners also invoke the provisions of the National Economy and Patrimony under Article XII of the
1987 Constitution,which reads:
Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the
nationalinterest dictates, reserve to citizens of the Philippines or to corporations or associations at least
sixty
per centum
of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe,certain
areas of investments. The Congress shall enact measures that will encourage the formation andoperation
of enterprises whose capital is wholly owned by Filipinos.In the grant of rights, privileges, and
concessions covering the national economy and patrimony, the State shallgive preference to qualified
Filipinos.The State shall regulate and exercise authority over foreign investments within its national
jurisdiction and inaccordance with its national goals and priorities.x x x x

Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and
locallyproduced goods, and adopt measures that help make them competitive.Section 13. The State shall
pursue a trade policy that serves the general welfare and utilizes all forms andarrangements of exchange
on the basis of equality and reciprocity.



3
But, as the Court explained in
Taada v. Angara
,
[7]
the provisions of Article II of the 1987 Constitution, the declarations of principles and state policies, are
not self-executing. Legislative failure to pursue such policies cannot give rise to a cause of action in the
courts.The Court further explained in
Taada
that Article XII of the 1987 Constitution lays down the ideals of economic nationalism:(1) by expressing
preference in favor of qualified Filipinos in the grant of rights, privileges and concessions covering
thenational economy and patrimony and in the use of Filipino labor, domestic materials and locally-
produced goods; (2) bymandating the State to adopt measures that help make them competitive; and (3) by requiring the
State to develop a self-reliant and independent national economy effectively controlled by Filipinos.
[8]
In other words,
while Section 19, Article II of the 1987 Constitution requires the development of a self-reliant
andindependent national economy effectively controlled by Filipino entrepreneurs, it does not impose a
policy of Filipino monopoly of the economic environment.

The objective is simply to prohibit foreign powers or interestsfrom maneuvering our economic policies
and ensure that Filipinos are given preference in all areas of development.
Indeed, the 1987 Constitution takes into account the realities of the outside world as it requires the pursuit
of a trade policythat serves the general welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity;and speaks of industries which are competitive in both domestic and
foreign markets as well as of the protection of Filipinoenterprises against unfair foreign competition and
trade practices. Thus, while the Constitution mandates a bias in favor of Filipino goods, services, labor
and enterprises, it also recognizes the need for business exchange with the rest of the world onthe bases of
equality and reciprocity and limits protection of Filipino enterprises only against foreign competition and
tradepractices that are unfair.
[9]
In other words, the 1987 Constitution does not rule out the entry of foreign investments, goods, and
services. While it doesnot encourage their unlimited entry into the country, it does not prohibit them
either. In fact,
it allows an exchange onthe basis of equality and reciprocity, frowning only on foreign competition that is
unfair
.
[10]

The key, as in alleconomies in the world, is to strike a balance between protecting local businesses and
allowing the entry of foreign investments and services.
More importantly, Section 10, Article XII of the 1987 Constitution gives Congress the discretion to
reserve to Filipinos certainareas of investments upon the recommendation of the NEDA and when the
national interest requires. Thus, Congress candetermine what policy to pass and when to pass it depending
on the economic exigencies. It can enact laws allowing theentry of foreigners into certain industries not
reserved by the Constitution to Filipino citizens. In this case, Congress hasdecided to open certain areas of
the retail trade business to foreign investments instead of reserving them exclusively toFilipino citizens.
The NEDA has not opposed such policy.The control and regulation of trade in the interest of the public
welfare is of course an exercise of the police power of theState. A person's right to property, whether he is
a Filipino citizen or foreign national, cannot be taken from him without dueprocess of law. In 1954,
Congress enacted the Retail Trade Nationalization Act or R.A. 1180 that restricts the retail businessto
Filipino citizens. In denying the petition assailing the validity of such Act for violation of the foreigner's
right tosubstantive due process of law, the Supreme Court held that the law constituted a valid exercise of
police power.
[11]
TheState had an interest in preventing alien control of the retail trade and R.A. 1180 was reasonably
related to that purpose.That law is not arbitrary.Here, to the extent that R.A. 8762, the Retail Trade
Liberalization Act, lessens the restraint on the foreigners' right toproperty or to engage in an ordinarily
lawful business, it cannot be said that the law amounts to a denial of the Filipinos' rightto property and to
due process of law. Filipinos continue to have the right to engage in the kinds of retail business to
whichthe law in question has permitted the entry of foreign investors.
Certainly, it is not within the province of the Court to inquire into the wisdom of R.A. 8762 save when
itblatantly violates the Constitution.
But as the Court has said, there is no showing that the law has contravened anyconstitutional mandate.
The Court is not convinced that the implementation of R.A. 8762 would eventually lead to aliencontrol of
the retail trade business. Petitioners have not mustered any concrete and strong argument to support its
thesis.The law itself has provided strict safeguards on foreign participation in that business. Thus


First
, aliens can only engage in retail trade business subject to the categories above-enumerated;
Second
, only nationalsfrom, or juridical entities formed or incorporated in countries which allow the entry of
Filipino retailers shall be allowed toengage in retail trade business; and
Third
, qualified foreign retailers shall not be allowed to engage in certain retailingactivities outside their
accredited stores through the use of mobile or rolling stores or carts, the use of sales representatives,door-
to-door selling, restaurants and
sari-sari
stores and such other similar retailing activities.In sum,
petitioners have not shown how the retail trade liberalization has prejudiced and can prejudice the
local small and medium enterprises since its implementation about a decade ago
.
WHEREFORE
, the Court
DISMISSES
the petition for lack of merit. No costs.
SO ORDERED.

Corona, C.J., Carpio, Carpio Morales, Peralta, Bersamin, Del Castillo, Villarama, Jr.,Perez,
and
Mendoza
,
JJ
., concur.
N BANC

REPRESENTATIVES GERARDO S. G.R. No. 143855
ESPINA, ORLANDO FUA, JR., PROSPERO
AMATONG, ROBERT ACE S. BARBERS, RAUL M.
GONZALES, PROSPERO PICHAY, JUAN MIGUEL
ZUBIRI and FRANKLIN BAUTISTA,
Petitioners, Present:

CORONA, C.J.,
CARPIO,
CARPIO MORALES,
VELASCO, JR.,*
NACHURA,
*

LEONARDO-DE CASTRO,
*

- versus - BRION,
*

PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
*
and
SERENO,** JJ.
HON. RONALDO ZAMORA, JR. (Executive Secretary),
HON. MAR ROXAS (Secretary of Trade and Industry),
HON. FELIPE MEDALLA (Secretary of National
Economic and Development Authority), GOV. RAFAEL
BUENAVENTURA (Bangko Sentral ng Pilipinas) and
HON. LILIA BAUTISTA (Chairman, Securities and
Exchange Commission),
Respondents. Promulgated:

September 21, 2010





x --------------------------------------------------------------------------------------- x
DECI SI ON

ABAD, J .:


This case calls upon the Court to exercise its power of judicial review and determine the
constitutionality of the Retail Trade Liberalization Act of 2000, which has been assailed as in breach of
the constitutional mandate for the development of a self-reliant and independent national economy
effectively controlled by Filipinos.

The Facts and the Case

On March 7, 2000 President Joseph E. Estrada signed into law Republic Act (R.A.) 8762, also
known as the Retail Trade Liberalization Act of 2000. It expressly repealed R.A. 1180, which absolutely
prohibited foreign nationals from engaging in the retail trade business. R.A. 8762 now allows them to do
so under four categories:

Category A Less than
US$2,500,000.00
Exclusively for Filipino citizens
and corporations wholly owned
by Filipino citizens.
Category B US$2,500,000.00 up but less
than US$7,500,000.00
For the first two years of R.A.
8762s effectivity, foreign
ownership is allowed up to
60%. After the two-year period,
100% foreign equity shall be
allowed.
Category C US$7,500,000.00 or more May be wholly owned by
foreigners. Foreign investments
for establishing a store in
Categories B and C shall not be
less than the equivalent in
Philippine Pesos of
US$830,000.00.
Category D US$250,000.00 per store of
foreign enterprises specializing
in high-end or luxury products
May be wholly owned by
foreigners.


R.A. 8762 also allows natural-born Filipino citizens, who had lost their citizenship and now
reside in the Philippines, to engage in the retail trade business with the same rights as Filipino citizens.

On October 11, 2000 petitioners Magtanggol T. Gunigundo I, Michael T. Defensor,

Gerardo S.
Espina, Benjamin S. Lim,

Orlando Fua, Jr., Prospero Amatong, Sergio Apostol,

Robert Ace S. Barbers,

Raul M. Gonzales, Jaime Jacob,

Apolinario Lozada, Jr.,

Leonardo Montemayor,

Ma. Elena Palma-Gil,

Prospero Pichay, Juan Miguel Zubiri and Franklin Bautista, all members of the
House of Representatives, filed the present petition, assailing the constitutionality of R.A. 8762 on the
following grounds:

First, the law runs afoul of Sections 9, 19, and 20 of Article II of the Constitution which enjoins
the State to place the national economy under the control of Filipinos to achieve equal distribution of
opportunities, promote industrialization and full employment, and protect Filipino enterprise against
unfair competition and trade policies.

Second, the implementation of R.A. 8762 would lead to alien control of the retail trade, which
taken together with alien dominance of other areas of business, would result in the loss of effective
Filipino control of the economy.




Third, foreign retailers like Walmart and K-Mart would crush Filipino retailers and sari-sari store
vendors, destroy self-employment, and bring about more unemployment.

Fourth, the World Bank-International Monetary Fund had improperly imposed the passage of
R.A. 8762 on the government as a condition for the release of certain loans.

Fifth, there is a clear and present danger that the law would promote monopolies or combinations
in restraint of trade.

Respondents Executive Secretary Ronaldo Zamora, Jr., Trade and Industry Secretary Mar Roxas,
National Economic and Development Authority (NEDA) Secretary Felipe Medalla, Bangko Sentral ng
Pilipinas Gov. Rafael Buenaventura, and Securities and Exchange Commission Chairman Lilia Bautista
countered that:

First, petitioners have no legal standing to file the petition. They cannot invoke the fact that they
are taxpayers since R.A. 8762 does not involve the disbursement of public funds. Nor can they invoke
the fact that they are members of Congress since they made no claim that the law infringes on their right
as legislators.

Second, the petition does not involve any justiciable controversy. Petitioners of course claim that,
as members of Congress, they represent the small retail vendors in their respective districts but the
petition does not allege that the subject law violates the rights of those vendors.

Third, petitioners have failed to overcome the presumption of constitutionality of R.A. 8762.
Indeed, they could not specify how the new law violates the constitutional provisions they cite. Sections
9, 19, and 20 of Article II of the Constitution are not self-executing provisions that are judicially
demandable.

Fourth, the Constitution mandates the regulation but not the prohibition of foreign investments. It
directs Congress to reserve to Filipino citizens certain areas of investments upon the recommendation of
the NEDA and when the national interest so dictates. But the Constitution leaves to the discretion of the
Congress whether or not to make such reservation. It does not prohibit Congress from enacting laws
allowing the entry of foreigners into certain industries not reserved by the Constitution to Filipino
citizens.

The Issues Presented

Simplified, the case presents two issues:

1. Whether or not petitioner lawmakers have the legal standing to challenge the
constitutionality of R.A. 8762; and

2. Whether or not R.A. 8762 is unconstitutional.

The Courts Ruling

One. The long settled rule is that he who challenges the validity of a law must have a standing to
do so.1[1] Legal standing or locus standi refers to the right of a party to come to a court of justice and
make such a challenge. More particularly, standing refers to his personal and substantial interest in that he
has suffered or will suffer direct injury as a result of the passage of that law.2[2] To put it another way,
he must show that he has been or is about to be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens or penalties by reason of the law he complains
of.3[3]

Here, there is no clear showing that the implementation of the Retail Trade Liberalization Act
prejudices petitioners or inflicts damages on them, either as taxpayers4[4] or as legislators.5[5] Still the
Court will resolve the question they raise since the rule on standing can be relaxed for nontraditional
plaintiffs like ordinary citizens, taxpayers, and legislators when as in this case the public interest so
requires or the matter is of transcendental importance, of overarching significance to society, or of
paramount public interest.6[6]














Two. Petitioners mainly argue that R.A. 8762 violates the mandate of the 1987 Constitution for
the State to develop a self-reliant and independent national economy effectively controlled by Filipinos.
They invoke the provisions of the Declaration of Principles and State Policies under Article II of the 1987
Constitution, which read as follows:

Section 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.

x x x x

Section 19. The State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.

Section 20. The State recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed investments.


Petitioners also invoke the provisions of the National Economy and Patrimony under Article XII
of the 1987 Constitution, which reads:

Section 10. The Congress shall, upon recommendation of the economic and
planning agency, when the national interest dictates, reserve to citizens of the
Philippines or to corporations or associations at least sixty per centumof whose
capital is owned by such citizens, or such higher percentage as Congress may
prescribe, certain areas of investments. The Congress shall enact measures that will
encourage the formation and operation of enterprises whose capital is wholly owned
by Filipinos.

In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.

The State shall regulate and exercise authority over foreign investments
within its national jurisdiction and in accordance with its national goals and
priorities.

x x x x

Section 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.

Section 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.


But, as the Court explained in Taada v. Angara,7[7] the provisions of Article II of the 1987
Constitution, the declarations of principles and state policies, are not self-executing. Legislative failure to
pursue such policies cannot give rise to a cause of action in the courts.

The Court further explained in Taada that Article XII of the 1987 Constitution lays down the
ideals of economic nationalism: (1) by expressing preference in favor of qualified Filipinos in the grant of
rights, privileges and concessions covering the national economy and patrimony and in the use of Filipino
labor, domestic materials and locally-produced goods; (2) by mandating the State to adopt measures that
help make them competitive; and (3) by requiring the State to develop a self-reliant and independent
national economy effectively controlled by Filipinos.8[8]

In other words, while Section 19, Article II of the 1987 Constitution requires the development of
a self-reliant and independent national economy effectively controlled by Filipino entrepreneurs, it does
not impose a policy of Filipino monopoly of the economic environment. The objective is simply to
prohibit foreign powers or interests from maneuvering our economic policies and ensure that Filipinos are
given preference in all areas of development.






Indeed, the 1987 Constitution takes into account the realities of the outside world as it requires
the pursuit of a trade policy that serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity; and speaks of industries which are competitive in both
domestic and foreign markets as well as of the protection of Filipino enterprises against unfair foreign
competition and trade practices. Thus, while the Constitution mandates a bias in favor of Filipino goods,
services, labor and enterprises, it also recognizes the need for business exchange with the rest of the world
on the bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign
competition and trade practices that are unfair.9[9]

In other words, the 1987 Constitution does not rule out the entry of foreign investments, goods,
and services. While it does not encourage their unlimited entry into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign
competition that is unfair.10[10] The key, as in all economies in the world, is to strike a balance between
protecting local businesses and allowing the entry of foreign investments and services.

More importantly, Section 10, Article XII of the 1987 Constitution gives Congress the discretion
to reserve to Filipinos certain areas of investments upon the recommendation of the NEDA and when the
national interest requires. Thus, Congress can determine what policy to pass and when to pass it
depending on the economic exigencies. It can enact laws allowing the entry of foreigners into certain
industries not reserved by the Constitution to Filipino citizens. In this case, Congress has decided to open
certain areas of the retail trade business to foreign investments instead of reserving them exclusively to
Filipino citizens. The NEDA has not opposed such policy.






The control and regulation of trade in the interest of the public welfare is of course an exercise of
the police power of the State. A persons right to property, whether he is a Filipino citizen or foreign
national, cannot be taken from him without due process of law. In 1954, Congress enacted the Retail
Trade Nationalization Act or R.A. 1180 that restricts the retail business to Filipino citizens. In denying
the petition assailing the validity of such Act for violation of the foreigners right to substantive due
process of law, the Supreme Court held that the law constituted a valid exercise of police power.11[11]
The State had an interest in preventing alien control of the retail trade and R.A. 1180 was reasonably
related to that purpose. That law is not arbitrary.

Here, to the extent that R.A. 8762, the Retail Trade Liberalization Act, lessens the restraint on the
foreigners right to property or to engage in an ordinarily lawful business, it cannot be said that the law
amounts to a denial of the Filipinos right to property and to due process of law. Filipinos continue to
have the right to engage in the kinds of retail business to which the law in question has permitted the entry
of foreign investors.

Certainly, it is not within the province of the Court to inquire into the wisdom of R.A. 8762 save
when it blatantly violates the Constitution. But as the Court has said, there is no showing that the law has
contravened any constitutional mandate. The Court is not convinced that the implementation of R.A. 8762
would eventually lead to alien control of the retail trade business. Petitioners have not mustered any
concrete and strong argument to support its thesis. The law itself has provided strict safeguards on
foreign participation in that business. Thus

First, aliens can only engage in retail trade business subject to the categories above-enumerated;
Second, only nationals from, or juridical entities formed or incorporated in countries which allow the
entry of Filipino retailers shall be allowed to engage in retail trade business; and Third, qualified foreign
retailers shall not be allowed to engage in certain retailing activities outside their accredited stores



through the use of mobile or rolling stores or carts, the use of sales representatives, door-to-door selling,
restaurants and sari-sari stores and such other similar retailing activities.

In sum, petitioners have not shown how the retail trade liberalization has prejudiced and can
prejudice the local small and medium enterprises since its implementation about a decade ago.

WHEREFORE, the Court DISMISSES the petition for lack of merit. No costs.

SO ORDERED.