33 Philippine Consumers Foundation V NTC

33. Philippine Consumers Foundation v.
NTC RESOLUTION pertinent portions of Act 3436 and the Public Service Act [which is a general law
131 SCRA 200 (Seechung) regulating all manner of public franchises] and that the Board of Communications,
Aug 18 1984 | Makasiar | Practice & procedure before NTC the immediate predecessor of the NTC was adequately served by their own rules
of procedure. This meant that the acts complained of by NCF, i.e. the fixing of
*this is a resolution of the previous case*
provisional rates without public hearing (Sec 16 of the Public Service Act), was a
PETITIONER: Philippine Consumers Foundation, Inc.
valid act.
RESPONDENTS: National Telecommunications Commission (NTC),
However, in the case at bar compelling reasons dictate that the provision of the
Philippine Long Distance Telephone Co. (PLDT)
decree should be construed as mandatory rather than merely directory. There is no
SUMMARY: justification for the rate increase of the revised schedule of PLDT's SIP. It is
PLDT filed an application with the NTC for the approval of a revised schedule for untimely, considering the present economic condition obtaining in the country.
its Subscriber Investment Plan (SIP). Respondent NTC promulgated a decision The approved rate defeats the purpose of the decree which is to spread ownership
(NTC decision) dated November 22, 1982 which approved a revised schedule of among the wide base of investors. NTC decision was annulled and set aside.
rates (translation: phone bills went up) which was within the limits of P.D. No.
217, the law which regulated the telephone industry. It is the submission of DOCTRINE:
Philippine Consumer Foundation, Inc. (PCFI) that the SIP schedule presented by It is the duty of NTC to first promulgate rules and regulations. The existing laws
the PLDT is pre-mature and, therefore, illegal and baseless, because the NTC has and rules on rate-making are more than sufficient for a proper determination of
not yet promulgated the required rules and regulations implementing Section 2 of such amounts of investments of individual subscribers and the profitability of the
Presidential Decree No. 217. PCFI filed a petition seeking to annul the NTC venture.
decision.
On November 25, 1983, the Supreme Court promulgated a decision annulling the FACTS:
NTC decision. This decision interpreted the following phraseology of Section 2 1. PLDT filed an application with the NTC for the approval of a revised
of P.D. No. 217 as mandatory: schedule for its Subscriber Investment Plan (SIP).
2. NTC issued an ex-parte order provisionally approving the revised schedule
“The Department of Public Works, Transportation and Communications, through which, however, was set aside by this Court on August 31, 1982. The Court
its Board of Communications and/or appropriate agency shall see to it that the therein ruled that "there was necessity of a hearing by the Commission before
herein declared policies for the telephone industry are immediately implemented it should have acted on the application of the PLDT”.
and for this purpose, pertinent rules and regulations may be promulgated” 3. On November 22, 1982, the NTC rendered the questioned decision
permanently approving PLDT's new and increased SIP rates. It is the
Issue: WON NTC acted with grave abuse of discretion when it approved the submission of Philippine Consumer Foundation, Inc. (PCFI) that the SIP
schedule presented by the PLDT is pre-mature and, therefore, illegal and
Revised Subscriber Investment Plan (SIP) of PLDT in the absence of specific rules
baseless, because the NTC has not yet promulgated the required rules and
and regulations implementing Presidential Decree No. 217? - YES regulations implementing Section 2 of Presidential Decree No. 217.
4. PCFI filed this petition seeking to annul the NTC decision.
The basic canon of Statutory Construction is that the word used in the law must 5. On November 25, 1983, the Supreme Court promulgated a decision annulling
be given its ordinary meaning, unless the contrary intent is manifested. The phrase the NTC decision. This decision interpreted the following phraseology of
“may be promulgated” cannot be construed to mean “shall” or “must”. Section 2 Section 2 of P.D. No. 217 as mandatory:
must therefore be interpreted in its ordinary sense as permissive or discretionary
and not mandatory on the part of the delegate, NTC. “The Department of Public Works, Transportation and Communications,
What is mandatory however, is the immediate implementation of the policies through its Board of Communications and/or appropriate agency shall see to
declared in P.D. No. 217. Note that both words “shall” and “may be” are used in it that the herein declared policies for the telephone industry are immediately
the same section which demonstrates that the ordinary, usual or normal distinction implemented and for this purpose, pertinent rules and regulations may be
between these words is preserved. promulgated”
It must be emphasized that P.D. No. 217 [which is a special law] only repeals
ISSUE: untimely, considering the present economic condition obtaining in the
1. WON NTC acted with grave abuse of discretion when it approved the country. The approved rate defeats the purpose of the decree which is to
Revised Subscriber Investment Plan (SIP) of PLDT in the absence of specific spread ownership among the wide base of investors.
rules and regulations implementing Presidential Decree No. 217? - YES 7. Accordingly, the decision of NTC is annulled and set aside.
RULING: WHEREFORE, the Decision of November 25, 1983 should be as it is

hereby RECONSIDERED and SET ASIDE and the petition is hereby DISMISSED.
No costs.
RATIO: Petition dismissed
1. There is merit in the contention of PCFI that it is the duty of NTC to

promulgate rules and regulations.
2. In the separate opinion of Justice Abad Santos, it is said that the case involves
a simple problem of statutory construction - that of Section 2 of Presidential
Decree No. 217.
3. The decision sustained the PCFI’s contention that it is the duty of NTC to
first promulgate rules and regulations.
4. The resolution does not subscribe to the view that the NTC should or
must promulgate rules and regulations because the decree must be given
its ordinary meaning; the word used is the permissive "may" and not the
mandatory "shall." The non-unanimous resolution thus relies on the canons
index animi sermo est (speech is the indication of intent) and a verba legis
non est recedendum (from the words of the statute there should be no
departure). Any lawyer of modest sophistication knows that canons of
statutory construction march in pairs of opposite. Thus with the canons above
mentioned we have the following opposite: verba intentioni, non e contra,
debent inservire (words ought to be more subservient to the intent and not the
intent to the words). It is an elementary rule in statutory construction that the
word "may" in a statute is permissive while the word "shall" is mandatory.
The rule, however, is not absolute. The literal interpretation of the words of
an act should not prevail if it creates a result contrary to the apparent intention
of the legislature and if the words are sufficiently flexible to admit of a
construction which will effectuate the legislative intention.
5. The existing substantive and procedural laws as well as the rules promulgated
by the Public Service Commission under and pursuant to the Public Service
Law, otherwise known as CA No. 146, as amended, are more than adequate
to determine the reasonability of the amounts of investment of telephone
subscribers, the viability of the company and the other factors that go into
determining such amounts and such viability. The existing laws and rules
on rate-making are more than sufficient for a proper determination of
such amounts of investments of individual subscribers and the
profitability of the venture.
6. In the case at bar compelling reasons dictate that the provision of the decree
should be construed as mandatory rather than merely directory. There is no
justification for the rate increase of the revised schedule of PLDT's SIP. It is

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33. Philippine Consumers Foundation v.

RULING: WHEREFORE, the Decision of November 25, 1983 should be as it is

RATIO: Petition dismissed

1. There is merit in the contention of PCFI that it is the duty of NTC to

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