G.R. No. 143855 – 645 Phil. 269 – 631 SCRA 17 – Political Law – Constitutional Law – Powers of the State – Police Power; Valid Exercise – Trade Protectionism
In 2000, the Retail Trade Liberalization Act (R.A. No. 8762) was enacted. RA 8762 repealed the Retail Trade Nationalization Act (R.A. No. 1180, enacted 1954). RA 8762 now allows foreigners to engage in the retail trade – this is the exact opposite of RA 1180 which prohibited foreigners from engaging in the retail trade.
Cong. Gerardo Espina and several other lawmakers from the lower house filed a petition questioning the constitutionality of RA 8762. They argued that the law violates 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; that 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; and that foreign retailers like Walmart and K-Mart would crush Filipino retailers and sari-sari store vendors, destroy self-employment, and bring about more unemployment.
ISSUE: Whether or not RA 8762 is constitutional.
HELD: Yes. It is a valid exercise of police power. Section 19, Article II of the 1987 Constitution indeed requires the development of a self-reliant and independent national economy effectively controlled by Filipino entrepreneurs, but 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.
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.
The control and regulation of trade in the interest of the public welfare is an exercise of the police power of the State. A person’s right to property, whether he is a Filipino citizen or foreign national, cannot be taken from him without due process of law. RA 8762 does not amount 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 it merely permitted the entry of foreign investors. Nevertheless, the Court cannot inquire into the wisdom of RA 8762 save when it blatantly violates the Constitution. There is no showing that RA 8762 would eventually lead to alien control of the retail trade business.
