III.

Our Ruling

A. The RTC legally erred when it gave due course to GAMCA's

petition for certiorari and prohibition.

The present case reached us through an appeal by certiorari (pursuant to

Rule 45) of an RTC ruling, assailing the decision based solely on questions of
law. The RTC decision, on the other hand, involves the grant of the petitions
for certiorari and prohibition (pursuant to Rule 65) assailing the DOH CDO
letters for grave abuse of discretion.

The question before us asks whether the RTC made a reversible

error of law when it issued writs of certiorari and prohibition against
the DOH CDO letters.

AMCOW questions the means by which GAMCA raised the issue of the
legality of RA No. 10022 before the RTC. AMCOW posits that GAMCA availed
of an improper remedy, as certiorari and prohibition lie only against quasi-
judicial acts, and quasi-judicial and ministerial acts, respectively. Since the
disputed cease and desist order is neither, the RTC should have dismissed
the petition outright for being an improper remedy.

We agree with the petitioners' assertion that the RTC erred when it gave
due course to GAMCA's petition for certiorari and prohibition, but we do
so for different reasons.

1. Certiorari under Rules of Court and under the courts' expanded

jurisdiction under Art VIII, Section 1 of the Constitution, as
recognized by jurisprudence.

A.1.a. The Current Certiorari Situation

The use of petitions for certiorari and prohibition under Rule 65 is a remedy
that judiciaries have used long before our Rules of Court existed.29 As
footnoted below, these writs - now recognized and regulated as remedies
under Rule 65 of our Rules of Court - have been characterized a "supervisory
writs" used by superior courts to keep lower courts within the confines of
their granted jurisdictions, thereby ensuring orderliness in lower courts'
rulings.

We confirmed this characterization in Madrigal Transport v. Lapanday

Holdings Corporation,30 when we held that a writ is founded on the
supervisory jurisdiction of appellate courts over inferior courts, and is issued
to keep the latter within the bounds of their jurisdiction. Thus, the writ
corrects only errors of jurisdiction of judicial and quasi-judicial bodies, and
cannot be used to correct errors of law or fact. For these mistakes of
judgment, the appropriate remedy is an appeal.31

This situation changed after 1987 when the new Constitution "expanded" the
scope of judicial power by providing that -

Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government. (italics supplied)32
In Francisco v. The House of Representatives,33 we recognized that this
expanded jurisdiction was meant "to ensure the potency of the power of
judicial review to curb grave abuse of discretion by 'any branch or
instrumentalities of government.'" Thus, the second paragraph of Article
VIII, Section 1 engraves, for the first time in its history, into black letter law
the "expanded certiorari jurisdiction" of this Court, whose nature and
purpose had been provided in the sponsorship speech of its proponent,
former Chief Justice Constitutional Commissioner Roberto Concepcion:

xxxx

The first section starts with a sentence copied from former

Constitutions. It says:

The judicial power shall be vested in one Supreme Court and in such lower
courts as may be established by law.

I suppose nobody can question it.

The next provision is new in our constitutional law. I will read it first and
explain.

Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government.

Fellow Members of this Commission, this is actually a product of our

experience during martial law. As a matter of fact, it has some antecedents
in the past, but the role of the judiciary during the deposed regime was
marred considerably by the circumstance that in a number of cases against
the government, which then had no legal defense at all, the solicitor general
set up the defense of political question and got away with it. As a
consequence, certain principles concerning particularly the writ of habeas
corpus, that is, the authority of courts to order the release of political
detainees, and other matters related to the operation and effect of martial
law failed because the government set up the defense of political question.
And the Supreme Court said: "Well, since it is political, we have no authority
to pass upon it." The Committee on the Judiciary feels that this was not a
proper solution of the questions involved. It did not merely request an
encroachment upon the rights of the people, but it, in effect, encouraged
further violations thereof during the martial law regime. x x x

xxxx

Briefly stated, courts of justice determine the limits of power of the agencies
and offices of the government as well as those of its officers. In other words,
the judiciary is the final arbiter on the question whether or not a branch of
government or any of its officials has acted without jurisdiction or in excess
of jurisdiction, or so capriciously as to constitute an abuse of discretion
amounting to excess of jurisdiction or lack of jurisdiction. This is not only a
judicial power but a duty to pass judgment on matters of this nature.

This is the background of paragraph 2 of Section 1, which means that the

courts cannot hereafter evade the duty to settle matters of this nature, by
claiming that such matters constitute a political question.34 (italics in the
original; emphasis and underscoring supplied)
Meanwhile that no specific procedural rule has been promulgated to enforce
this "expanded" constitutional definition of judicial power and because of the
commonality of "grave abuse of discretion" as a ground for review under
Rule 65 and the courts expanded jurisdiction, the Supreme Court based on
its power to relax its rules35 allowed Rule 65 to be used as the medium for
petitions invoking the courts' expanded jurisdiction based on its power to
relax its Rules.36 This is however an ad hoc approach that does not fully
consider the accompanying implications, among them, that Rule 65 is an
essentially distinct remedy that cannot simply be bodily lifted for application
under the judicial power's expanded mode. The terms of Rule 65, too, are
not fully aligned with what the Court's expanded jurisdiction signifies and
requires.37

On the basis of almost thirty years' experience with the courts' expanded
jurisdiction, the Court should now fully recognize the attendant distinctions
and should be aware that the continued use of Rule 65 on an ad hoc basis as
the operational remedy in implementing its expanded jurisdiction may, in
the longer term, result in problems of uneven, misguided, or even incorrect
application of the courts' expanded mandate.

The present case is a prime example of the misguided reading that may take
place in constitutional litigation: the procedural issues raised apparently
spring from the lack of proper understanding of what a petition
for certiorari assails under the traditional and expanded modes, and the
impact of these distinctions in complying with the procedural requirements
for a valid petition.

2. The Basic Distinctions

A.2.a. Actual Case or Controversy

Basic in the exercise of judicial power whether under the traditional or in the
expanded setting - is the presence of an actual case or controversy. For a
dispute to be justiciable, a legally demandable and enforceable right must
exist as basis, and must be shown to have been violated.38

Whether a case actually exists depends on the pleaded allegations, as

affected by the elements of standing (translated in civil actions as the
status of being a "real-party-in-interest," in criminal actions as
"offended party" and in special proceedings as "interested
party"),39ripeness,40prematurity, and the moot and academic
principle that likewise interact with one another. These elements and their
interactions are discussed m greater detail below.

The Court's expanded jurisdiction - itself an exercise of judicial power -

does not do away with the actual case or controversy requirement in
presenting a constitutional issue, but effectively simplifies this requirement
by merely requiring a prima facie showing of grave abuse of discretion in the
assailed governmental act.

A.2.b. Actions Correctable by Certiorari

A basic feature of the expanded jurisdiction under the constitutional

definition of judicial power, is the authority and command for the courts to
act on petitions involving the commission by any branch or instrumentality
of government of grave abuse of discretion amounting to lack or excess of
jurisdiction.

This command distinctly contrasts with the terms of Rule 65 which confines
court certiorari action solely to the review of judicial and quasi-
judicial acts.41 These differing features create very basic distinctions that
must necessarily result in differences in the application of remedies.

While actions by lower courts do not pose a significant problem because they
are necessarily acting judicially when they adjudicate, a critical question
comes up for the court acting on certiorari petitions when governmental
agencies are involved - under what capacity does the agency act?

This is a critical question as the circumstances of the present case

show. When the government entity acts quasi-judicially, the petition
for certiorari challenging the action falls under Rule 65; in other instances,
the petition must be filed based on the courts' expanded jurisdiction.

A.2.c. Grave Abuse of Discretion

Another distinction, a seeming one as explained below, relates to the cited

ground of a certiorari petition under Rule 65 which speaks of lack or excess
of jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction, as against the remedy under the courts' expanded jurisdiction
which expressly only mentions grave abuse of discretion amounting to lack
or excess of jurisdiction.

This distinction is apparently not legally significant when it is considered that

action outside of or in excess of the granted authority necessarily involves
action with grave abuse of discretion: no discretion is allowed in areas
outside of an agency's granted authority so that any such action would be a
gravely abusive exercise of power. The constitutional grant of power, too,
pointedly addresses grave abuse of discretion when it amounts to lack or
excess of jurisdiction,42 thus establishing that the presence of jurisdiction is
the critical element; failure to comply with this requirement necessarily leads
to the certiorari petition's immediate dismissal.43

As an added observation on a point that our jurisprudence has not fully

explored, the result of the action by a governmental entity (e.g., a law or an
executive order) can be distinguished from the perspective of its legality as
tested against the terms of the Constitution or of another law (where
subordinate action like an executive order is involved), vis-a-vis the legality
of the resulting action where grave abuse of discretion attended the
governmental action or the exercise of the governmental function.

In the former, the conclusion may be plain illegality or legal error that
characterized the law or exec order (as tested, for example, under the
established rules of interpretation); no consideration is made of how the
governmental entity exercised its function. In the latter case, on the other
hand, it is the governmental entity's exercise of its function that is examined
and adjudged independently of the result, with impact on the legality of the
result of the gravely abusive action.

Where the dispute in a case relates to plain legal error, ordinary court action
and traditional mode are called for and this must be filed in the lower courts
based on rules of jurisdiction while observing the hierarchy of courts.

Where grave abuse of discretion is alleged to be involved, the expanded

jurisdiction is brought into play based on the express wording of the
Constitution and constitutional implications may be involved (such as grave
abuse of discretion because of plain oppression or discrimination), but this
must likewise be filed with the lowest court of concurrent jurisdiction, unless
the court highest in the hierarchy grants exemption. Note that in the
absence of express rules, it is only the highest court, the Supreme Court,
that can only grant exemptions.

From these perspectives, the use of grave abuse of discretion can spell the
difference in deciding whether a case filed directly with the Supreme Court
has been properly filed.

A.2.d. Exhaustion of Available Remedies

A basic requirement under Rule 65 is that there be "no other plain, speedy
and adequate remedy found in law,"44 which requirement the expanded
jurisdiction provision does not expressly carry. Nevertheless, this
requirement is not a significant distinction in using the remedy
of certiorari under the traditional and the expanded modes. The doctrine of
exhaustion of administrative remedies applies to a petition for certiorari,
regardless of the act of the administrative agency concerned, i.e., whether
the act concerns a quasi-judicial, or quasi-legislative function, or is purely
regulatory.45

Consider in this regard that once an administrative agency has been

empowered by Congress to undertake a sovereign function, the agency
should be allowed to perform its function to the full extent that the law
grants. This full extent covers the authority of superior officers in the
administrative agencies to correct the actions of subordinates, or for collegial
bodies to reconsider their own decisions on a motion for reconsideration.
Premature judicial intervention would interfere with this administrative
mandate, leaving administrative action incomplete; if allowed, such
premature judicial action through a writ of certiorari, would be a usurpation
that violates the separation of powers principle that underlies our
Constitution.46
In every case, remedies within the agency's administrative process must be
exhausted before external remedies can be applied. Thus, even if a
governmental entity may have committed a grave abuse of discretion,
litigants should, as a rule, first ask reconsideration from the body itself, or a
review thereof before the agency concerned. This step ensures that by the
time the grave abuse of discretion issue reaches the court, the
administrative agency concerned would have fully exercised its jurisdiction
and the court can focus its attention on the questions of law presented
before it.

Additionally, the failure to exhaust administrative remedies affects

the ripeness to adjudicate the constitutionality of a governmental
act, which in turn affects the existence of the need for an actual case
or controversy for the courts to exercise their power of judicial
review.47 The need for ripeness - an aspect of the timing of a case or
controversy does not change regardless of whether the issue of
constitutionality reaches the Court through the traditional means, or through
the Court's expanded jurisdiction. In fact, separately from ripeness, one
other concept pertaining to judicial review is intrinsically connected to it; the
concept of a case being moot and academic.48

Both these concepts relate to the timing of the presentation of a controversy

before the Court ripeness relates to its prematurity, while mootness relates
to a belated or unnecessary judgment on the issues. The Court cannot
preempt the actions of the parties, and neither should it (as a rule) render
judgment after the issue has already been resolved by or through external
developments.

The importance of timing in the exercise of judicial review highlights and

reinforces the need for an actual case or controversy an act that may violate
a party's right. Without any completed action or a concrete threat of injury
to the petitioning party, the act is not yet ripe for adjudication. It is merely a
hypothetical problem. The challenged act must have been accomplished or
performed by either branch or instrumentality of government before a court
may come into the picture, and the petitioner must allege the existence of
an immediate or threatened injury to itself as a result of the challenged
action.

In these lights, a constitutional challenge, whether presented through the

traditional route or through the Court's expanded jurisdiction, requires
compliance with the ripeness requirement. In the case of administrative
acts, ripeness manifests itself through compliance with the doctrine of
exhaustion of administrative remedies.
In like manner, an issue that was once ripe for resolution but whose
resolution, since then, has been rendered unnecessary, needs no resolution
from the Court, as it presents no actual case or controversy and likewise
merely presents a hypothetical problem. In simpler terms, a case is moot
and academic when an event supervenes to render a judgment over the
issues unnecessary and superfluous.

Without the element of ripeness or a showing that the presented issue is

moot and academic, petitions challenging the constitutionality of a law or
governmental act are vulnerable to dismissal.

Not to be forgotten is that jurisprudence also prohibits litigants from

immediately seeking judicial relief without first exhausting the available
administrative remedies for practical reasons.49

From the perspective of practicality, immediate resort to the courts on issues

that are within the competence of administrative agencies to resolve, would
unnecessarily clog the courts' dockets. These issues, too, usually involve
technical considerations that are within the agency's specific competence
and which, for the courts, would require additional time and resources to
study and consider.50 Of course, the Supreme Court cannot really avoid the
issues that a petition for certiorari, filed with the lower courts may present;
the case may be bound ultimately to reach the Court, albeit as an appeal
from the rulings of the lower courts.

3. Situations Where a Petition for Certiorari May Be Used

There are two distinct situations where a writ of certiorari or prohibition may
be sought. Each situation carries requirements, peculiar to the nature of
each situation, that lead to distinctions that should be recognized in the use
of certiorari under Rule 65 and under the courts' expanded jurisdiction.

The two situations differ in the type of questions raised. The first is
the constitutional situation where the constitutionality of acts are
questioned. The second is the non-constitutional situation where acts
amounting to grave abuse of discretion are challenged without raising
constitutional questions or violations.

The process of questioning the constitutionality of a governmental action

provides a notable area of comparison between the use of certiorari in the
traditional and the expanded modes.

Under the traditional mode, plaintiffs question the constitutionality of a

governmental action through the cases they file before the lower courts; the
defendants may likewise do so when they interpose the defense of
unconstitutionality of the law under which they are being sued. A petition for
declaratory relief may also be used to question the constitutionality or
application of a legislative (or quasi-legislative) act before the court.51

For quasi-judicial actions, on the other hand, certiorari is an available

remedy, as acts or exercise of functions that violate the Constitution are
necessarily committed with grave abuse of discretion for being acts
undertaken outside the contemplation of the Constitution. Under both
remedies, the petitioners should comply with the traditional requirements of
judicial review, discussed below.52 In both cases, the decisions of these
courts reach the Court through an appeal by certiorari under Rule 45.

In contrast, existing Court rulings in the exercise of its expanded

jurisdiction have allowed the direct filing of petitions for certiorari and
prohibition with the Court to question, for grave abuse of discretion, actions
or the exercise of a function that violate the Constitution.53 The
governmental action may be questioned regardless of whether it is quasi-
judicial, quasi-legislative, or administrative in nature. The Court's expanded
jurisdiction does not do away with the actual case or controversy
requirement for presenting a constitutional issue, but effectively simplifies
this requirement by merely requiring a prima facie showing of grave abuse
of discretion in the exercise of the governmental act.54

To return to judicial review heretofore mentioned, in constitutional cases

where the question of constitutionality of a governmental action is raised,
the judicial power the courts exercise is likewise identified as the power of
judicial review - the power to review the constitutionality of the actions of
other branches of government.55 As a rule, as required by the hierarchy of
courts principle, these cases are filed with the lowest court with
jurisdiction over the matter. The judicial review that the courts undertake
requires:

1) there be an actual case or controversy calling for the exercise of judicial

power;

(2) the person challenging the act must have "Standing" to challenge; he
must have a personal and substantial interest in the case such that he
has sustained, or will sustain, direct injury as a result of its
enforcement;

(3) the question of constitutionality must be raised at the earliest possible

 opportunity; and

(4) the issue of constitutionality must be the very lis mota of the case.56
The lower court's decision under the constitutional situation reaches the
Supreme Court through the appeal process, interestingly, through a petition
for review on certiorari under Rule 45 of the Rules of Court.

In the non-constitutional situation, the same requirements essentially

apply, less the requirements specific to the constitutional issues. In
particular, there must be an actual case or controversy and the compliance
with requirements of standing, as affected by the hierarchy of courts,
exhaustion of remedies, ripeness, prematurity, and the moot and academic
principles.

A.3.a. The "Standing" Requirement

Under both situations, the party bringing suit must have the necessary
"standing." This means that this party has, in its favor, the demandable and
enforceable right or interest giving rise to a justiciable controversy after the
right is violated by the offending party.

The necessity of a person's standing to sue derives from the very definition
of judicial power. Judicial power includes the duty of the courts to settle
actual controversies involving rights which are legally demandable and
enforceable. Necessarily, the person availing of a judicial remedy must show
that he possesses a legal interest or right to it, otherwise, the issue
presented would be purely hypothetical and academic. This concept has
been translated into the requirement to have "standing" in judicial
review,57or to be considered as a "real-party-in-interest" in civil actions,58 as
the "offended party" in criminal actions59 and the "interested party" in
special proceedings.60

While the Court follows these terms closely in both non-constitutional cases
and constitutional cases under the traditional mode, it has relaxed the rule in
constitutional cases harrdled under the expanded jurisdiction mode. in the
latter case, a prima facie showing that the questioned governmental act
violated the Constitution, effectively disputably shows an injury to the
sovereign Filipino nation who approved the Constitution and endowed it with
authority, such that the challenged act may be questioned by any Philippine
citizen before the Supreme Court.61 In this manner, the "standing"
requirement is relaxed compared with the standard of personal stake or
injury that the traditional petition requires.
The relaxation of the standing requirement has likewise been achieved
through the application of the "transcendental importance doctrine" under
the traditional mode for constitutional cases.62 (Under the traditional mode,
"transcendental importance" not only relaxes the standing requirement, but
also allows immediate access to this Court, thus exempting the petitioner
from complying with the hierarchy of courts requirement.)63

More importantly perhaps, the prima facie showing of grave abuse of

discretion in constitutional cases also implies that the injury alleged is actual
or imminent, and not merely hypothetical.

Through this approach, the Court's attention is directed towards the

existence of an actual case or controversy - that is, whether the government
indeed violated the Constitution to the detriment of the Filipino people
without the distractions of determining the existence of transcendental
importance indicators unrelated to the dispute and which do not at all
determine whether the Court properly exercises its power of judicial review.

Parenthetically, in the traditional mode, the determination of the

transcendental importance of the issue presented,64 aside from simply
relaxing the standing requirement, may result in the dilution of the actual
case or controversy element because of the inextricable link between
standing and the existence of an actual case or controversy.

Consider, in this regard, that an actual case or controversy that calls for the
exercise of judicial power necessarily requires that the party presenting it
possesses the standing to mount a challenge to a governmental act. A case
or controversy exists when there is an actual dispute between parties over
their legal rights, which remains in conflict at the time the dispute is
presented before the court.65 Standing, on the other hand, involves a
personal and substantial interest in the case because the petitioner has
sustained, or will sustain, direct injury as a result of the violation of its
right.66

With the element of "standing" (or the petitioner's personal or substantial

stake or interest in the case) relaxed, the practical effect is to dilute the
need to show that an immediate actual dispute over legal rights did indeed
take place and is now the subject of the action before the court.67

In both the traditional and the expanded modes, this relaxation carries a
ripple effect under established jurisprudential rulings,68 affecting not only the
actual case or controversy requirement, but compliance with the doctrine of
hierarchy of courts, discussed in greater detail below.
A.3.b. The Hierarchy of Courts Principle

Another requirement that a certiorari petition carries, springs from the

principle of "hierarchy of courts" which recognizes the various levels of
courts in the country as they are established under the Constitution and by
law, their ranking and effect of their rulings in relation with one another, and
how these different levels of court interact with one another.69 Since courts
are established and given their defined jurisdictions by law, the hierarchy of
the different levels of courts should leave very little opening for flexibility
(and potential legal questions), but for the fact that the law creates courts at
different and defined levels but with concurrent jurisdictions.

The Constitution itself has partially determined the judicial hierarchy in the
Philippine legal system by designating the Supreme Court as the highest
court with irreducible powers; its rulings serve as precedents that other
courts must follow70 because they form part of the law of the land.71 As a
rule, the Supreme Court is not a trial court and rules only on questions of
law, in contrast with the Court of Appeals and other intermediate
courts72 which rule on both questions of law and of fact. At the lowest level
of courts are the municipal and the regional trial courts which handle
questions of fact and law at the first instance according to the jurisdiction
granted to them by law.

Petitions for certiorari and prohibition fall under the concurrent jurisdiction of
the regional trial courts and the higher courts, all the way up to the Supreme
Court. As a general rule, under the hierarchy of courts principle, the petition
must be brought to the lowest court with jurisdiction;73 the petition brought
to the higher courts may be dismissed based on the hierarchy principle.
Cases, of course, may ultimately reach the Supreme Court through the
medium of an appeal.

The recognition of exceptions to the general rule is provided by the Supreme

Court through jurisprudence, i.e., through the cases that recognized the
propriety of filing cases directly with the Supreme Court. This is possible as
the Supreme Court has the authority to relax the application of its own
rules.74

As observed above, this relaxation waters down other principles affecting the
remedy of certiorari. While the relaxation may result in greater and closer
supervision by the Court over the lower courts and quasi-judicial bodies
under Rule 65, the effect may not always be salutary in the long term when
it is considered that this may affect the constitutional standards for the
exercise of judicial power, particularly the existence of an actual case or
controversy.
The "transcendental importance" standard, in particular, is vague, open-
ended and value-laden, and should be limited in its use to exemptions from
the application of the hierarchy of courts principle. It should not carry any
ripple effect on the constitutional requirement for the presence of an actual
case or controversy.

4. The petition for certiorari and prohibition against the DOH Letter
was filed before the wrong court.

In the present case, the act alleged to be unconstitutional refers to the cease
and desist order that the DOH issued against GAMCA's referral decking
system. Its constitutionality was questioned through a petition
for certiorari and prohibition before the RTC. The case reached this Court
through a Rule 45 appeal by certiorari under the traditional route.

In using a petition for certiorari and prohibition to assail the DOHCDO

letters, GAMCA committed several procedural lapses that rendered its
petition readily dismissible by the RTC. Not only did the petitioner present
a premature challenge against an administrative act; it also committed
the grave jurisdictional error of filing the petition before the wrong
court.

A.4.a. The DOH CDO letters were issued in the exercise of the DOH's
quasi-judicial functions, and could be assailed through Rule 65
on certiorari and prohibition.

A cease and desist order is quasi-judicial in nature, as it applies a legislative

policy to an individual or group within the coverage of the law containing the
policy.

The Court, in Municipal Council of Lemery, Batangas v. Provincial Board of

Batangas,75 recognized the difficulty of d fining the precise demarcation line
between what are judicial and what are administrative or ministerial
functions, as the exercise of judicial functions may involve the performance
of legislative or administrative duties, and the performance of administrative
or ministerial duties may, to some extent, involve the exercise of functions
judicial in character. Thus, the Court held that the nature of the act to be
performed, rather than of the office, board, or body which performs
it, should determine whether or not an action is in the discharge of a judicial
or a quasi-judicial function.76

Generally, the exercise of judicial functions involves the determination of

what the law is, and what the legal rights of parties are under this law with
respect to a matter in controversy. Whenever an officer is clothed with this
authority and undertakes to determine those questions, he acts judicially.77

In the administrative realm, a government officer or body exercises a quasi-

judicial function when it hears and determines questions of fact to which the
legislative policy is to apply, and decide, based on the law's standards,
matters relating to the enforcement and administration of the law.78

The DOH CDO letter directed GAMCA to cease and desist from engaging in
the referral decking system practice within three days from receipt of the
letter. By issuing this CDO letter implementing Section 16 of RA No. 10022,
the DOH (1) made the finding of fact that GAMCA implements the referral
decking system, and (2) applied Section 16 of RA No. 10022, to conclude
that GAMCA's practice is prohibited by law and should be stopped.

From this perspective, the DOH acted in a quasi-judicial capacity: its CDO
letter determined a question of fact, and applied the legislative policy
prohibiting the referral decking system practice.

Notably, cease and desist orders have been described and treated as quasi-
judicial acts in past cases, and had even been described as similar to the
remedy of injunction granted by the courts.79

A.4.b. The petitions for certiorari and prohibition against the DOH
CDO letters fall within the jurisdiction of the Court of Appeals.

Since the CDO Letter was a quasi-judicial act, the manner by which GAMCA
assailed it before the courts of law had been erroneous; the RTC should not
have entertained GAMCA's petition.

First, acts or omissions by quasi-judicial agencies, regardless of whether the

remedy involves a Rule 43 appeal or a Rule 65 petition for certiorari, is
cognizable by the Court of Appeals. In particular, Section 4, Rule 65 of the
Rules of Court provides:

Section 4. When and where petition filed. The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution. In
case a motion for reconsideration or new trial is timely filed, whether such
motion is required or not, the sixty (60) day period shall be counted from
notice of the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in
the Regional Trial Court exercising jurisdiction over the territorial area as
defined by the Supreme Court. It may also be filed in the Court of Appeals
whether or not the same is in aid of its appellate jurisdiction, or in the
Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the
acts or omissions of a quasi-judicial agency, unless otherwise
provided by law or these Rules, the petition shall be filed in and
cognizable only by the Court of Appeals. (emphasis, italics, and
underscoring supplied)
Since the DOH is part of the Executive Department and has acted in its
quasi-judicial capacity, the petition challenging its CDO letter should have
been filed before the Court of Appeals. The RTC thus did not have
jurisdiction over the subject matter of the petitions and erred in giving due
course to the petition for certiorari and prohibition against the DOH CDO
letters. In procedural terms, petitions for certiorari and prohibition against a
government agency are remedies available to assail its quasi-judicial acts,
and should thus have been filed before the CA.

The provision in Section 4, Rule 65 requiring that certiorari petitions

challenging quasi-judicial acts to be filed with the CA is in full accord with
Section 9 of Batas Pambansa Blg. 12980 on the same point. Section 9
provides:

Section 9. Jurisdiction.- The Court of Appeals shall exercise:

1. Original jurisdiction to issue writs of mandamus, prohibition,

certiorari, habeas corpus, and quo warranto, and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction;

xxxx

3. Exclusive appellate jurisdiction over all final judgments,

resolutions, orders or awards of Regional Trial Courts and quasi--
judicial agencies, instrumentalities, boards or commission, including the
Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission,
except those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph 4 of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.

xxxx

(emphases, italics, and underscoring supplied)

Thus, by law and by Supreme Court Rules, the CA is the court with the
exclusive original jurisdiction to entertain petitions for certiorari and
prohibition against quasi-judicial agencies. In short, GAMCA filed its remedy
with the wrong court.

A.4.c The petitions for certiorari and prohibition against the DOH
CDO letters were premature challenges - they failed to comply with
the requirement that there be "no other plain, speedy and adequate
remedy" and with the doctrine of exhaustion of administrative
remedies.

Second, the Regional Trial Court of Pasay City unduly disregarded the
requirements that there be "no other plain, speedy and adequate remedy at
law" and the doctrine of exhaustion of administrative remedies, when it gave
due course to the certiorari and prohibition petition against the DOH's CDO.

Under Chapter 8, Book IV of Executive Order (EO) No. 292,81 series of 1987,
the DOH Secretary "shall have supervision and control over the bureaus,
offices, and agencies under him"82 and "shall have authority over and
responsibility for x x x operation" of the Department.

Section 1, Chapter 1, Title I, Book III of EO No. 292 in relation with Article
VII, Sections 1 and 17 of the Constitution,83 on the other hand, provides that
the "President shall have control of all the executive departments, bureaus,
and offices."

These provisions both signify that remedies internal to the Executive Branch
exist before resorting to judicial remedies: GAMCA could ask the DOH
Secretary to reconsider or clarify its letter-order, after which it could appeal,
should the ruling be unfavorable, to the Office of the President.

Significantly, this was what GAMCA did in the past when the DOH issued
Memorandum Order No. 2008-0210 that prohibited the referral decking
system. GAMCA then asked for the DOH Secretary's reconsideration, and
subsequently appealed the DOH's unfavorable decision with the Office of the
President. The OP then reversed Memorandum Order No. 2008-0210 and
allowed the referral decking system to continue.

That GAMCA had earlier taken this course indicates that it was not unaware
of the administrative remedies available to it; it simply opted to disregard
the doctrine of exhaustion of administrative remedies and the requirement
that there be no other plain, speedy, and adequate remedy in law when it
immediately filed its petition for certiorari with the RTC.
This blatant disregard of the Rule 65 requirements clearly places GAMCA's
petition outside the exceptions that we recognized in the past in relaxing
strict compliance with the exhaustion of administrative remedies
requirement.

Jurisprudence84 shows that this Court never hesitated in the past in relaxing
the application of the rules of procedure to accommodate exceptional
circumstances when their strict application would result in injustice. These
instances, founded as they are on equitable considerations, do not include
the undue disregard of administrative remedies, particularly when they are
readily available.85

A.4.d. The petitions for certiorari and prohibition against the DOH
CDO letters should have been dismissed outright, as Rule 65
Petitions for Certiorari and Prohibition are extraordinary remedies
given due course only upon compliance with the formal and
substantive requirements.

Note, at this point, that Rule 65 petitions for certiorari and prohibition are
discretionary writs, and that the handling court possesses the authority to
dismiss them outright for failure to comply with the form and substance
requirements. Section 6, Rule 65 of the Rules of Court in this regard
provides:

Section 6. Order to comment. - If the petition is sufficient in form and

substance to justify suclr process, the court shall issue an order
requiring the respondent or respondents to comment on the petition within
ten (10) days from receipt of a copy thereof. Such order shall be served on
the respondents in such manner as the court may direct together with a
copy of the petition and any annexes thereto. (emphasis, italics, and
underscoring supplied)
Thus, even before requiring the DOH to comment, the RTC could have
assessed the petition for certiorari and prohibition for its compliance with the
Rule 65 requirements. At that point, the petition for certiorari and prohibition
should have been dismissed outright, for failing to comply with Section 1 and
Section 4 of Rule 65. When the court instead took cognizance of the petition,
it acted on a matter outside its jurisdiction.

Consequently, the RTC's resulting judgment is void and carries no legal

effect. The decision exempting GAMCA from the application of the referral
decking system should equally have no legal effect.

Noncompliance with the Section 1, Rule 65 requirement that there be no

other plain, speedy, and adequate remedy in law, on the other hand, is more
than just a pro-forma requirement in the present case. Since the petitions
for certiorari and prohibition challenge a governmental act - i.e. action under
the DOH CDO letters, as well as the validity of the instruments under which
these letters were issued - compliance with Section 1, Rule 65 and the
doctrine of exhaustion of administrative remedies that judicial review
requires is also mandatory. To recall a previous discussion, the exhaustion of
administrative remedies is also an aspect of ripeness in deciding a
constitutional issue.

Thus, GAMCA's disregard of the Rules of Court not only renders the petition
dismissible for failure to first exhaust administrative remedies; the
constitutional issues GAMCA posed before the RTC were not also ripe for
adjudication.

5. The Regional Trial Court erred in finding grave abuse of discretion

on the part of the DOH's issuance of the DOH CDO letters.

On the merits, we find that the RTC of Pasay reversibly erred in law when it
held that the DOH acted with grave abuse of discretion m prohibiting GAMCA
from implementing the referral decking system.

In exempting GAMCA from the referral decking system that RA No. 10022
prohibits, the RTC of Pasay City noted that the regulation per se was not
unconstitutional, but its application to GAMCA would violate the principle of
sovereign equality and independence.

While we agree with the RTC's ultimate conclusion upholding the

constitutionality of the prohibition against the referral decking system under
RA No. 10022, our agreement proceeds from another reason; we disagree
that the prohibition does not apply to GAMCA and with the consequent ruling
nullifying the DOH's CDO Letter.

A.5.a. The prohibition against the referral decking system under

Section 16, RA No. 10022, is a valid exercise of police power.

In its comment, GAMCA asserts that implementing the prohibition against

the referral decking system would amount to an undue taking of property
that violates Article II, Section 2 of the 1987 Constitution.

It submits that the Securities and Exchange Commission had in fact

approved its Articles of Incorporation and Bylaws that embody the referral
decking system; thus, the DOH cannot validly prohibit the implementation of
this system.
GAMCA further claims that its members made substantial investments to
upgrade their facilities and equipment. From this perspective, the August 23,
2010 order constitutes taking of property without due process of law as its
implementation would deprive GAMCA members of their property.

AMCOW responded to these claims with the argument that the DOH CDO
letters implementing RA No. 10022 are consistent with the State's exercise
of the police power to prescribe regulations to promote the health, safety,
and general welfare of the people. Public interest justifies the State's
interference in health matters, since the welfare of migrant workers is a
legitimate public concern. The DOH thus merely performed its duty of
upholding the migrant workers' freedom to consult their chosen clinics for
the conduct of health examinations.

We agree with AMCOW.

The State's police power86 is vast and plenary87 and the operation of a
business,88 especially one that is imbued with public interest (such as
healthcare services),89 falls within the scope of governmental exercise of
police power through regulation.

As defined, police power includes (1) the imposition of restraint on liberty or

property, (2) in order to foster the common good.90 The exercise of police
power involves the "state authority to enact legislation that may interfere
with personal liberty or property in order to promote the general welfare."91

By its very nature, the exercise of the State's police power limits individual
rights and liberties, and subjects them to the "far more overriding demands
and requirements of the greater number."92 Though vast and plenary, this
State power also carries limitations, specifically, it may not be exercised
arbitrarily or unreasonably. Otherwise, it defeats the purpose for which it is
exercised, that is, the advancement of the public good.93

To be considered reasonable, the government's exercise of police power

must satisfy the "valid object and valid means" method of analysis: first,
the interest of the public generally, as distinguished from those of a
particular class, requires interference; and second, the means employed are
reasonably necessary to attain the objective sought and not unduly
oppressive upon individuals.94

These two elements of reasonableness are undeniably present in Section 16

of RA No. 10022. The prohibition against the referral decking system is
consistent with the State's exercise of the police power to prescribe
regulations to promote the health, safety, and general welfare of the people.
Public interest demands State interference on health matters, since the
welfare of migrant workers is a legitimate public concern.

We note that RA No. 10022 expressly reflects the declared State policies to
"uphold the dignity of its citizens whether in the country or overseas, in
general, and Filipino migrant workers," and to "afford full protection to labor,
local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all. Towards this
end, the State shall provide adequate and timely social, economic and legal
services to Filipino migrant workers." The prohibition against the referral
decking system in Section 16 of RA No. 10022 is an expression and
implementation of these state policies.

The guarantee under Section 16 for OFWs to be given the option to choose a
quality healthcare service provider as expressed in Section 16 (c)95 of RA
No. 10022 is guaranteed by the prohibition against the decking practice and
against monopoly practices in OFW health examinations.96

Section 16 likewise requires employers to accept health examinations from

any DOH-accredited health facility; a refusal could lead to their temporary
disqualification under pertinent rules to be formulated by the Philippine
Overseas Employment Authority (POEA).97

These rules are part of the larger legal framework to ensure the Overseas
Filipino Workers' (OFW) access to quality healthcare services, and to curb
existing practices that limit their choices to specific clinics and facilities.

Separately from the Section 16 prohibition against the referral decking

system, RA No. 10022 also prohibits and penalizes the imposition of a
compulsory exclusive arrangement requiring OFWs to undergo health
examinations only from specifically designated medical clinics, institutions,
entities or persons. Section 5, in relation to Section 6 of RA No. 10022,
penalizes compulsory, exclusive arrangements98 by imprisonment and fine
and by the automatic revocation of the participating medical clinic's license.

The DOH's role under this framework is to regulate the activities and
operations of all clinics conducting health examinations on Filipino migrant
workers as a requirement for their overseas employment. The DOH is tasked
to ensure that:

(c.3) No group or groups of medical clinics shall have a monopoly of

exclusively conducting health examinations on migrant workers for certain
receiving countries;
(c.4) Every Filipino migrant worker shall have the freedom to choose any of
the DOH-accredited or DOH-operated clinics that will conduct his/her health
examinations and that his or her rights as a patient are respected. The
decking practice, which requires an overseas Filipino worker to go first to an
office for registration and then farmed out to a medical clinic located
elsewhere, shall not be allowed;99
While Section 16 of RA No. 10022 does not specifically define the
consequences of violating the prohibition against the referral decking
system, Republic Act No. 4226 (Hospital Licensure Act), which governs the
licensure and regulation of hospitals and health facilities, authorizes the DOH
to suspend, revoke, or refuse to renew the license of hospitals and clinics
violating the law.100

These consequences cannot but apply to the violation of the prohibition

against the referral decking system under RA No. 10022. If, under the law,
the DOH can suspend, revoke, or refuse to renew the license of these
hospitals upon the finding that they violated any provision of law (whether
those found in RA No. 4226 or in RA No. 10022), it follows- as a necessarily
included lesser power - that the DOH can likewise order these clinics and
their association to cease and desist from practices that the law deems to be
undesirable.

A.5.b. The DOH did not gravely abuse its discretion in issuing the
assailed DOH CDO letters.

As discussed above, the letter-order implementing the prohibition against

the referral decking system is quasi-judicial in nature. This characteristic
requires that procedural due process be observed - that is, that the clinics
concerned be given the opportunity to be heard before the standard found in
the law can be applied to them.

Thus, prior to the issuance of the disputed CDO letter, the DOH should have
given GAMCA the opportunity to be heard on whether the prohibition applies
to it. Lest this opportunity to be heard be misunderstood, this DOH
obligation raises an issue different from the question of whether Congress
can, under the exercise of police power, prohibit the referral decking
system; this latter issue lies outside the scope of the DOH to pass upon. The
required hearing before the DOH relates solely to whether it properly
implemented, based on the given standards under the law, the prohibition
that Congress decreed under RA No. 10022.

Under normal circumstances, the issuance of a CDO without a prior hearing

would violate GAMCA's procedural due process rights, and would amount to
more than a legal error, i.e., an error equivalent to action without
jurisdiction. Rendering a decision quasi-judicial in nature without providing
the opportunity to be heard amounts to a grave abuse of discretion that
divests a quasi-judicial agency of its jurisdiction.

Factual circumstances unique to the present case, however, lead us to

conclude that while it was an error of law for the DOH to issue a CDO
without complying with the requirements of procedural due process, its
action did not amount to a grave abuse of discretion.

Grave abuse of discretion amounts to more than an error of law; it refers to

an act that is so capricious, arbitrary, and whimsical that it amounts to a
clear evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law, as where the power is exercised in an arbitrary and
despotic manner because of passion or hostility.101

Prior to the issuance of its CDO Letter, the DOH had more than sufficient
basis to determine that GAMCA practices the prohibited referral decking
system under RA No. 10022. Notably, the DOH had earlier allowed and
recognized the referral decking system that GAMCA practiced through AO 5-
01. This recognition was made with GAMCA's practice in mind. The
subsequent administrative orders and department memorandum suspending
and terminating the referral decking system, respectively, all pertain to the
practice that the DOH had authorized under AO 5-01. Even the subject
matter of these issuances do not just pertain to any other referral decking
system, but to the "GAMCA referral decking system."

GAMCA likewise had more than several opportunities to contest the

suspension and eventual revocation of the referral decking system initially
pe1mitted under AO 5-01. Its appeal even reached the Office of the
President, which overturned the DOH Memorandum Order terminating the
referral decking system.

That the referral decking system had been subsequently prohibited by law
shows the intent of Congress to prevent and prohibit the practice that
GAMCA initiated and which the President had allowed. The President's duty
under our political system is to implement the law; hence, when Congress
subsequently prohibited the practice that GAMCA initiated, the Executive -
including the President -has no choice but to implement it.

Based on these circumstances, while the DOH erred when it issued its CDO
letters without first giving GAMCA the opportunity to prove whether the
practice conducted by GAMCA is the same practice prohibited under RA No.
10022, the DOH conclusion to so act, in our view, did not constitute grave
abuse of discretion that would have divested it of jurisdiction.
We note that the DOH had sufficient basis when it determined that the
referral decking system prohibited under RA No. 10022 was the same
decking system practiced by GAMCA. To reiterate, the referral decking
system was not something new; it was an old system that GAMCA practiced
and was known to all in its scope and operating details. That GAMCA had
previously questioned the DOH prohibition and had been given ample
opportunity to be heard when it filed an appeal before the OP, negate the
conclusion that GAMCA had been aggrieved by precipitate and unfair DOH
action.

To be sure, these factual circumstances do not make the CDO letter

compliant with procedural due process. They mitigate, however, the error
committed and render it less than the capricious, arbitrary, and patent
refusal to comply with a positive legal duty that characterizes an act
committed with grave abuse of discretion.

The Court furthermore, in several instances,102 has recognized that an

administrative agency may issue an ex parte cease and desist order, where
vital public interests outweigh the need for procedural due process." In these
instances, the Court noted that the affected establishment may contest
the ex parteorder, upon which the administrative agency concerned must
conduct a hearing and allow the establishment to be heard. While
jurisprudence has so far used the "vital public interests" standard to
pollution cases, it had not been a grave abuse of discretion on the part of
the DOH to consider that GAMCA's referral decking practice falls within this
category. The DOH has long made the factual finding that the referral
decking system hinders our Filipino seafarers' access to quality and
affordable healthcare in its A.O. No. 106, series of 2002.

These circumstances further mitigate whatever legal error the DOH has
committed and render the conclusion that grave abuse of discretion had
taken place misplaced.

Since the writs of certiorari and prohibition do not issue against legal errors,
but to acts of grave abuse of discretion, the RTC erred in issuing these writs
against the DOH CDO letters.

6. The prohibition against the referral decking system against

GAMCA does not violate the principle of sovereign equality and
independence.

The RTC based its decision to grant the writs of certiorari and prohibition
against the DOH letter-order on the principle of sovereign equality and
independence; applying the referral decking system prohibition against
GAMCA violates this principle.

The RTC reasoned out that the prohibition against the referral decking
system under Section 16 of RA No. 10022 must be interpreted to apply only
to clinics conducting health examinations on migrant workers bound for
countries that do not require the referral decking system for the issuance of
visas to job applicants.

The RTC observed, too, that the refer al decking system is part of the
application procedure in obtaining visas to enter the GCC States, a
procedure made in the exercise of the sovereign power of the GCC States to
protect their nationals from health hazards, and of their diplomatic power to
regulate and screen entrants to their territories.

It also reasoned out that under the principle of sovereign equality and
independence of States, the Philippines cannot interfere with this system
and in fact must respect the visa-granting procedures of foreign states in the
same way that they respect our immigration procedures. Moreover, to
restrain GAMCA which is a mere adjunct of HMC (an agent of GCC States) is
to restrain the GCC States themselves.

AMCOW contests the RTC's conclusion, arguing that the principles of

sovereign equality and independence of States do not apply to the present
case. According to AMCOW, the subject matter of this case pertains to a
domestic concern as the law and the regulations that GAMCA assails relate
to the operation of medical clinics in the Philippines.

It points out that the Philippines gave GAMCA and its members the privilege
of conducting their businesses domestically; hence, their operations are
governed by Philippine laws, specifically by RA No. 10022 which serves as
one of the limitations on the privilege granted to them. GAMCA's right to
engage in business should yield to the State's exercise of police power. In
legal contemplation, therefore, the DOH CDO letters did not prejudice
GAMCA's right to engage in business; nor did they hamper the GAMCA
members' business operations.

AMCOW further insists that the August 23, 2010 and November 2, 2010
orders are consistent with the State's exercise of the police power to
prescribe regulations to promote the health, safety, and general welfare of
the people. Public interest demands State interference on health matters,
since the welfare of migrant workers is a legitimate public concern. The DOH
thus merely performed its duty of upholding the migrant workers' freedom
to choose any of its accredited or operated clinics that will conduct health
examinations.

The DOH, for its part, adds that the implementation of RA No. 10022 cannot
be defeated by agreements entered into by GAMCA with the GCC States. The
GCC States, the DOH points out, are not empowered to determine the
Philippines' courses of action with respect to the operation, within Philippine
territory, of medical clinics; the conduct of health examinations; and the
freedom of choice of Filipino migrant workers.

GAMCA responds to these arguments by asserting that the referral decking

system is a part of the application procedure for obtaining visas to enter the
GCC States. Hence, it is an exercise of the sovereign power of the GCC
States to protect their nationals from health hazards, and their diplomatic
power to regulate and screen entrants to their territories. To restrain an
agent of the GCC States under the control and acting in accordance with the
direction of these GCC States, restrains the GCC States.

GAMCA also points out that the OFWs would suffer grave and irreparable
damage and injury if the DOH CDO letters would be implemented as the
GCC States would not issue working visas without the GAMCA seal attesting
that the OFWs had been medically examined by GAMCA member clinics.

After considering all these arguments, we find that the RTC's decision
misapplied the principle of sovereign independence and equality to the
present case. While the principles of sovereign independence and equality
have been recognized in Philippine jurisprudence, our recogmtmn of this
principle does not extend to the exemption of States and their affiliates from
compliance with Philippine regulatory laws.

A.6. The principle of sovereign equality and independence of states

does not exempt GAMCAfrom the referral decking system prohibition
under RA No. 10022.

In Republic of Indonesia v. Vinzon,103 we recognized the principle of

sovereign independence and equality as part of the law of the land. We used
this principle to justify the recognition of the principle of sovereign immunity
which exempts the State - both our Government and foreign governments -
from suit. We held:

International law is founded largely upon the principles of reciprocity,

comity, independence, and equality of States which were adopted as part of
the law of our land under Article II, Section 2 of the 1987 Constitution. The
rule that a State may not be sued without its consent is a necessary
consequence of the principles of independence and equality of States. As
enunciated in Sanders v. Veridiano II, the practical justification for the
doctrine of sovereign immunity is that there can be no legal right against the
authority that makes the law on which the right depends. In the case of
foreign States, the rule is derived from the principle of the sovereign
equality of States, as expressed in the maxim par in parem non habet
imperium. All states are sovereign equals and cannot assert jurisdiction over
one another. A contrary attitude would "unduly vex the peace of nations."
Our recognition of sovereign immunity, however, has never been
unqualified. While we recognized the principles of independence and equality
of States to justify a State's sovereign immunity from suit, we also restricted
state immunity to acts jus imperii, or public acts. We said that once a State
enters into commercial transactions (jus gestionis), then it descends to the
level of a private individual, and is thus not immune from the resulting
liability and consequences of its actions.104

By this recognition, we acknowledge that a foreign government acting in

its jus imperii function cannot be held liable in a Philippine court. Philippine
courts, as part of the Philippine government, cannot and should not take
jurisdiction over cases involving the public acts of a foreign government.
Taking jurisdiction would amount to authority over a foreign government,
and would thus violate the principle of sovereign independence and
equality.105

This recognition is altogether different from exempting governments whose

agents are in the Philippines from complying with our domestic laws.106 We
have yet to declare in a case that the principle of sovereign independence
and equality exempts agents of foreign governments from compliance with
the application of Philippine domestic law.

In the present case, GAMCA has not adduced any evidence in the court
below, nor has it presented any argument before us showing that the
principle of sovereign equality and independence has developed into an
international custom shielding state agents from compliance with another
state's domestic laws. Under this situation, the Court is in no position to
determine whether the practice that GAMCA alleges has indeed crystallized
into an international custom.

GAMCA has never proven in this case, too, that the GCC has extended its
sovereign immunity to GAMCA. Sovereign immunity belongs to the State,
and it must first be extended to its agents before the latter may be
considered to possess sovereign immunity.

Significantly, the Court has even adopted a restrictive approach in

recognizing state immunity, by distinguishing between a State's jus imperii
and jus gestionis. It is only when a State acts in its jus imperii function that
we recognize state immunity.107

We point out furthermore that the prohibition against the referral decking
system applies to hospitals and clinics, as well as to OFW employers, and
does not seek to interfere with the GCC's visa requirement processes. RA
10022 prohibits hospitals and clinics in the Philippines from practicing the
referral decking system, and employers from requiring OFWs to procure their
medical examinations from hospitals and clinics practicing the referral
decking system.

The regulation applies to Philippine hospitals and clinics, as well as to

employers of OFWs. It does not apply to the GCCs and their visa processes.
That the regulation could affect the OFWs' compliance with the visa
requirements imposed by GCCs does not place it outside the regulatory
powers of the Philippine government.

In the same manner, GCC states continue to possess the prerogative to

apply their visa requirements to any foreign national, including our OFWs,
who seeks to enter their territory; they may refuse to grant them entry for
failure to comply with the referral decking system, or they may adjust to the
prohibition against the referral decking system that we have imposed. These
prerogatives lie with the GCC member-states and do not affect at all the
legality of the prohibition against the referral decking system.

Lastly, the effect of the prohibition against the referral decking system is
beyond the authority of this Court to consider. The wisdom of this prohibition
has been decided by Congress, through the enactment of RA No. 10022. Our
role in this case is merely to determine whether our government has the
authority to enact the law's prohibition against the referral decking system,
and whether this prohibition is being implemented legally. Beyond these lies
the realm of policy that, under our Constitution's separation of powers, this
Court cannot cross.
WHEREFORE, in the light of these considerations, we hereby GRANT the
petitions. Accordingly, we REVERSE and SET ASIDE the orders dated
August 10, 2012 and April 12, 2013 of the Regional Trial Court of Pasay City,
Branch 108, in Sp. Civil Action No. R-PSY-10-04391-CV.