Political Law

Association of Philippine Coconut Desiccators vs Philippine Coconut Authority

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G.R. No. 110526 – 286 SCRA 109 – Political Law – Constitutional Law – Declaration of State Principles – Free Enterprise – There is still a need for protective regulations

The Philippine Coconut Authority (PCA) was created by Presidential Decree No. 232 as an independent public corporation to promote the rapid integrated development and growth of the coconut and other palm oil industry in all its aspects and to ensure that coconut farmers become direct participants in, and beneficiaries of, such development and growth through a regulatory scheme set up by law.

PCA is also in charge of the issuing of licenses to would-be coconut plant operators. In March 1993, however, PCA issued Board Resolution No. 018-93 which no longer require those wishing to engage in coconut processing to apply for licenses as a condition for engaging in such business. The purpose of which is to promote free enterprise unhampered by protective regulations and unnecessary bureaucratic red tapes. But this caused cut-throat competition among operators specifically in congested areas, underselling, smuggling, and the decline of coconut-based commodities. The Association of Philippine Coconut Desiccators (APCD) then filed a petition for mandamus to compel PCA to revoke B.R. No. 018-93.

ISSUE: Whether or not the petition should be granted.

HELD: Yes. Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic principle. Although the present Constitution enshrines free enterprise as a policy, it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. As such, free enterprise does not call for the removal of “protective regulations” for the benefit of the general public. This is so because under Art. 12, Secs. 6 and 9, it is very clear that the government reserves the power to intervene whenever necessary to promote the general welfare and when the public interest so requires.

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