ROMULO L. NERI, petitioner vs.

SENATE COMMITTEE HELD:

G.R. No. 180643, March 25, 2008
The communications are covered by executive privilege
FACTS:
The revocation of EO 464 (advised executive officials
On April 21, 2007, the Department of Transportation and employees to follow and abide by the Constitution,
and Communication (DOTC) entered into a contract existing laws and jurisprudence, including, among
with Zhong Xing Telecommunications Equipment (ZTE) others, the case of Senate v. Ermita when they are
for the supply of equipment and services for the invited to legislative inquiries in aid of legislation.), does
National Broadband Network (NBN) Project in the not in any way diminish the concept of executive
amount of U.S. $ 329,481,290 (approximately P16 privilege. This is because this concept has Constitutional
Billion Pesos). The Project was to be financed by the underpinnings.
People’s Republic of China.
The Senate passed various resolutions relative to the The claim of executive privilege is highly recognized in
NBN deal. In the September 18, 2007 hearing Jose de cases where the subject of inquiry relates to a power
Venecia III testified that several high executive officials textually committed by the Constitution to the
and power brokers were using their influence to push President, such as the area of military and foreign
the approval of the NBN Project by the NEDA. relations. Under our Constitution, the President is the
Neri, the head of NEDA, was then invited to testify repository of the commander-in-chief, appointing,
before the Senate Blue Ribbon. He appeared in one pardoning, and diplomatic powers. Consistent with the
hearing wherein he was interrogated for 11 hrs and doctrine of separation of powers, the information
during which he admitted that Abalos of COMELEC tried relating to these powers may enjoy greater
to bribe him with P200M in exchange for his approval of confidentiality than others.
the NBN project. He further narrated that he informed Several jurisprudence cited provide the elements of
President Arroyo about the bribery attempt and that presidential communications privilege:
she instructed him not to accept the bribe. 1) The protected communication must relate to a
“quintessential and non-delegable presidential power.”
However, when probed further on what they discussed 2) The communication must be authored or “solicited
about the NBN Project, petitioner refused to answer, and received” by a close advisor of the President or the
invoking “executive privilege”. In particular, he refused President himself. The judicial test is that an advisor
to answer the questions on: must be in “operational proximity” with the President.
(a) whether or not President Arroyo followed up the
NBN Project, 3) The presidential communications privilege remains a
(b) whether or not she directed him to prioritize it, and qualified privilege that may be overcome by a showing
(c) whether or not she directed him to approve. of adequate need, such that the information sought
He later refused to attend the other hearings and “likely contains important evidence” and by the
Ermita sent a letter to the senate averring that the unavailability of the information elsewhere by an
communications between GMA and Neri are privileged appropriate investigating authority.
and that the jurisprudence laid down in Senate vs
In the case at bar, Executive Secretary Ermita premised
Ermita be applied. He was cited in contempt of
his claim of executive privilege on the ground that the
respondent committees and an order for his arrest and
communications elicited by the three (3) questions “fall
detention until such time that he would appear and give
under conversation and correspondence between the
his testimony.
President and public officials” necessary in “her
ISSUE: executive and policy decision-making process” and, that
Are the communications elicited by the subject three (3) “the information sought to be disclosed might impair
questions covered by executive privilege? our diplomatic as well as economic relations with the
People’s Republic of China.” Simply put, the bases are
presidential communications privilege and executive TOLENTINO VS. SECRETARY OF FINANCE, 235 SCRA
privilege on matters relating to diplomacy or foreign 630
relations.

Using the above elements, we are convinced that,

indeed, the communications elicited by the three (3) FACTS: The valued-added tax (VAT) is levied on the sale,
questions are covered by the presidential barter or exchange of goods and properties as well as
communications privilege. First, the communications on the sale or exchange of services. It is equivalent to
relate to a “quintessential and non-delegable power” of 10% of the gross selling price or gross value in money of
the President, i.e. the power to enter into an executive goods or properties sold, bartered or exchanged or of
agreement with other countries. This authority of the the gross receipts from the sale or exchange of services.
President to enter into executive agreements without Republic Act No. 7716 seeks to widen the tax base of
the concurrence of the Legislature has traditionally the existing VAT system and enhance its administration
been recognized in Philippine jurisprudence. Second, by amending the National Internal Revenue Code.
the communications are “received” by a close advisor of
the President. Under the “operational proximity” test, The Chamber of Real Estate and Builders Association
petitioner can be considered a close advisor, being a (CREBA) contends that the imposition of VAT on sales
member of President Arroyo’s cabinet. And third, there and leases by virtue of contracts entered into prior to
is no adequate showing of a compelling need that the effectivity of the law would violate the
would justify the limitation of the privilege and of the constitutional provision of “non-impairment of
unavailability of the information elsewhere by an contracts.”
appropriate investigating authority.
ISSUE: Whether R.A. No. 7716 is unconstitutional on
Respondent Committees further contend that the grant ground that it violates the contract clause under Art. III,
of petitioner’s claim of executive privilege violates the sec 10 of the Bill of Rights.
constitutional provisions on the right of the people to
information on matters of public concern.50 We might RULING: No. The Supreme Court the contention of
have agreed with such contention if petitioner did not CREBA, that the imposition of the VAT on the sales and
appear before them at all. But petitioner made himself leases of real estate by virtue of contracts entered into
available to them during the September 26 hearing, prior to the effectivity of the law would violate the
where he was questioned for eleven (11) hours. Not constitutional provision of non-impairment of contracts,
only that, he expressly manifested his willingness to is only slightly less abstract but nonetheless
answer more questions from the Senators, with the hypothetical. It is enough to say that the parties to a
exception only of those covered by his claim of contract cannot, through the exercise of prophetic
executive privilege. discernment, fetter the exercise of the taxing power of
the State. For not only are existing laws read into
The right to public information, like any other right, is
contracts in order to fix obligations as between parties,
subject to limitation. Section 7 of Article III provides:
but the reservation of essential attributes of sovereign
The right of the people to information on matters of
power is also read into contracts as a basic postulate of
public concern shall be recognized. Access to official
the legal order. The policy of protecting contracts
records, and to documents, and papers pertaining to
against impairment presupposes the maintenance of a
official acts, transactions, or decisions, as well as to
government which retains adequate authority to secure
government research data used as basis for policy
the peace and good order of society. In truth, the
development, shall be afforded the citizen, subject to
Contract Clause has never been thought as a limitation
such limitations as may be provided by law.
on the exercise of the State's power of taxation save
only where a tax exemption has been granted for a valid
consideration.
Such is not the case of PAL in G.R. No. 115852, and the
Court does not understand it to make this claim. Rather,
its position, as discussed above, is that the removal of
its tax exemption cannot be made by a general, but only
by a specific, law.

Further, the Supreme Court held the validity of Republic

Act No. 7716 in its formal and substantive aspects as
this has been raised in the various cases before it. To
sum up, the Court holds:

(1) That the procedural requirements of the

Constitution have been complied with by Congress in
the enactment of the statute;

(2) That judicial inquiry whether the formal

requirements for the enactment of statutes - beyond
those prescribed by the Constitution - have been
observed is precluded by the principle of separation of
powers;
(3) That the law does not abridge freedom of speech,
expression or the press, nor interfere with the free
exercise of religion, nor deny to any of the parties the
right to an education; and

(4) That, in view of the absence of a factual foundation

of record, claims that the law is regressive, oppressive
and confiscatory and that it violates vested rights
protected under the Contract Clause are prematurely
raised and do not justify the grant of prospective relief
by writ of prohibition.

WHEREFORE, the petitions are DISMISSED.