Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-63318 November 25, 1983

PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,

Tomas C. Llamas for petitioner.

The Solicitor General for respondent NTC.

Graciano C. Regala and Eliseo B. Alampay for respondent PLDT.

RELOVA, J.: ñé+.£ªwph!1

Petition for certiorari seeking to set aside and annul the decision, dated November 22, 1982, of
public respondent National Telecommunications Commission (NTC, for short), approving the
application of the Philippine Long Distance Telephone Company (PLDT, for short) of its revised
schedule for its Subscriber Investment Plan (SIP) for the entire service area, including the ex-
RETELCO area; as well as the order of January 14, 1983 which denied the motion for
reconsideration of petitioner Philippine Consumers Foundation, Inc. (PCFI, for short).

Records show that on March 20, 1980, private respondent PLDT filed an application with the NTC
for the approval of a revised schedule for its Subscriber Investment Plan (SIP), docketed as Case
No. 82-27.

On April 14, 1982, the NTC issued an ex-parte order provisionally approving the revised schedule
which, however, was set aside by this Court on August 31, 1982 in the case of "Samuel Bautista vs.
NTC, et al.," 116 SCRA 411. The Court therein ruled that "there was necessity of a hearing by the
Commission before it should have acted on the application of the PLDT so that the public could air
its opposition, particularly the herein petitioner and the Solicitor General, representing the
government. They should be given the opportunity to substantiate their objection that the rates under
the subscriber investment plan are excessive and unreasonable and, as a consequence, the low
income and middle class group cannot afford to have telephone connections; and, that there is no
need to increase the rate because the applicant is financially sound."

On November 22, 1982, the NTC rendered the questioned decision permanently approving PLDT's
new and increased SIP rates, the dispositive portion of which reads:  têñ.£îhqwâ£

IN VIEW OF ALL THE FOREGOING, this Commission finds that applicant's reduced
proposals for its revised Subscriber Investment Plan Schedule, upon further
reductions herein ordered with respect to subscriber investments for new installations
of single residential telephones in the Metro Manila and Provincial Service Areas, are
all within the 50%-of-cost limit provided in P.D. 217; that they are just and reasonable
and in consonance with the public policies declared in said decree; and that it is in
the public interest that applicant's revised SIP Schedule be, as it is hereby
APPROVED, as follows:

REVISED SIP SCHEDULE

Service Category Revised SIP Rates

Metro Manila Provincial  têñ.£îhqwâ£

1. PBX/PABX Trunk P 5,000 P3,000

2. Business Phone:

Single line 3,500 2,000

Party line 2,000 1,600

3. Residential Phone:

Single line 1,800 1,300

Party line 900 800

4. Leased Line 2,500 2,500

5. Tie trunk or tie line 2,500 2,500

6. Outside local 2,500 2,500

II. Transfers –

1. PBX/PABX 1,500 1,200

2. Business Phone:

Single line 800 600

Party line 600 500

3. Residential Phone:

Single line 600 500

Party line 500 300

4. Leased Line 800 800

Revised SIP Rates

Metro Manila Provincial

5. Tie trunk or tie line P800 P800

6. Outside Local 800 800

(pp. 34-35, Rollo)

Petitioner filed a motion for reconsideration of the above judgment on December 14, 1982, and after
a month, or on January 14, 1983, NTC denied said motion for reconsideration.

It is the submission of petitioner that the SIP schedule presented by the PLDT is pre-mature and,
therefore, illegal and baseless, because the NTC has not yet promulgated the required rules and
regulations implementing Section 2 of Presidential Decree No. 217 which provides:  têñ.£îhqwâ£

Section 2. The Department of Public Works, Transportation and Communications

Petitioner avers that the "substitute procedural vehicle utilized by NTC in allowing the establishment
of SIP by PLDT was by treating the appropriate Petition of PLDT as if the same were a rate
case over which the Rules of Practice was applicable. NTC proceeded to invoke the summary
powers provided for in the Rules of Practice to fully bear on the hapless consumer, notably the
repressive 'Provisional Reliefs;' (pp. 5-6, Rollo) that at the hearings thereof, "NTC limited the
numerous oppositors in the instant Application, among them PCFI, by applying the two oppositor-
rule. This means that only two of the oppositors will be heard in representation of all the oppositors,
again pursuant to the procedure laid down in the Rules of Practice." (p. 130, rollo) Further, the NTC
invoked its extraordinary powers pursuant to Section 3 of Rule 15 of the Rules of Practice, "whereby
even without an iota or proof to substantiate its application, NTC allowed the desired increase
purportedly on a provisional basis. " (p. 129, rollo)

The question is whether or not respondent acted with grave abuse of discretion when it approved the
Revised Subscriber Investment Plan (SIP) of respondent PLDT in the absence of specific rules and
regulations implementing Presidential Decree No. 217. Petitioner claims that these implementing
rules and regulations are mandatory pre-requisite for the approval of said SIP rates.

Respondent NTC admits the absence of rules and regulations referred to in PD 217. However, it
contends that nowhere in said decree is there any legal provision making the promulgation of rules a
mandatory pre-requisite to the establishment of SIP and the determination of its schedules; that
since respondent NTC is enjoined to implement the declared policies of the decree, for its immediate
implementation, it may rely on existing Rules of Practice; that under the same Rules of Practice all
existing subscriber investment plans were presented, considered and approved by the NTC; that the
promulgation of the rules is inherently an internal and administrative matter and therefore, is not a
proper subject of litigation, much less a duty of the NTC to accomplish; and, that public respondent
may or may not promulgate the rules in the immediate implementation of said decree as the word
used there is "may."

We are not persuaded.

Presidential Decree No. 217 was promulgated on June 16, 1973 and paragraph 4 of Section 1
thereof provides: têñ.£îhqwâ£

4. In line with the objective of spreading ownership among a wide base of the people,
the concept of telephone subscriber self-financing is hereby adopted whereby a
telephone subscriber finances part of the capital investments in telephone
installations through the purchase of stocks, whether common or preferred stock, of
the telephone company. (Emphasis supplied)

There is merit in the contention of petitioner that it is the duty of respondent NTC to promulgate rules
and regulations because:  têñ.£îhqwâ£

1. P.D. 217 deals with matters so alien, innovative and untested such that existing
substantive and procedural laws would not be applicable. Thus, the Subscriber
Investment Plan (SIP) was so set up precisely to ensure the financial viability of
public telecommunications companies which in turn assures the enjoyment of the
population at minimum cost the benefits of a telephone facility.

The SIP has never been contemplated prior to P.D. 217.

The existing law on the other hand, the Public Service Act, diametrically runs counter
to the spirit and intention, if not the purpose of P.D. 217. It may even be gainsaid that
as long as the optimum number of individuals may enjoy telephone service, there is
no limitation on the profitability of such companies. Hence, while P.D. 217
encourages the profitability of public telecommunication companies, the Public
Service Act limits the same.

2. In the absence of such rules and regulations, there is outright confusion among
the rights of PLDT, the consumers and the government itself. As may clearly be
seen, how can the Decision be said to have assured that most of the population will
 enjoy telephone facilities? Did the Decision likewise assure the financial viability of
PLDT? Was the government's duty to provide telephone service to its constituents
subserved by the Decision? These questions can never be answered unless such
rules and regulations are set up.

3. Finally, it should be emphasized that NTC is estopped from claiming that there is
no need to promulgate such rules and regulations. In the case of PCFI vs. NTC, G.R.
No. 61892, now pending resolution before this Honorable Tribunal, NTC totally
refused to act on a petition filed by PLDT precisely for the promulgation of such rules
and regulations.

Why then did NTC refuse to act on such petition if and when there is no need for the
promulgation of such rules and regulations? After all NTC could have simply ruled
that the petition in G.R. No. 61892 is unnecessary because such rules and
regulations are also unnecessary. (pp. 135-136, Rollo)

At any rate, there is no justification for the rate increase of the revised schedule of PLDT's
Subscriber Investment Plan. It is to say the least, untimely, considering the present economic
condition obtaining in the country. The approved rate defeats the purpose of the decree which is to
spread ownership among the wide base of investors. The State, in Presidential Decree No. 217
promulgated on June 16, 1973, adopted the basic policies of the telephone industry, which, among
others, are: (1) the attainment of efficient telephone service for as wide an area as possible at the
lowest reasonable costs to the subscriber; (2) the capital requirements of telephone utilities obtained
from ownership funds shall be raised from a broad base of investors, involving as large a number of
individual investors as may be possible; and (3) in any subscriber self-financing plan, the amount of
subscriber self-financing will, in no case, exceed fifty per centum (50%) of the cost of the installed
telephone line, as may be determined from time to time by the regulatory bodies of the State.

The load on the back of our people is heavy enough. Let us not increase its weight further.
Noteworthy is the concurrence of Justice Vicente Abad Santos in the case of Bautista vs. NTC
(supra) that "the PLDT which is reported to have made over 100 million pesos in profits in just six
months but with its service so poor that even the First Lady has taken notice should think of
improved service before increased profits."

Indeed, let t us not aggravate the situation of the populace by raising the revised SIP schedule plan
of the PLDT. A rate increase would be an additional burden on the telephone subscribers. The plan
to expand the company program and/or improve its service is laudable, but the expenses should not
be shouldered by the telephone subscribers. Considering the multi-million profits of the company,
the cost of expansion and/or improvement should come from part of its huge profits.

Anent the question that petitioner should have appealed the decision of respondent NTC, instead of
filing the instant petition, suffice it to say that certiorari is available despite existence of the remedy of
appeal where public welfare and the advancement of public policy so dictate, or the orders
complained of were issued in excess of or without jurisdiction (Jose vs. Zulueta, 2 SCRA 574).

ACCORDINGLY, the DECISION of the public respondent National Telecommunications

SO ORDERED. 1äwphï1.ñët

Fernando, C.J., Teehankee, Makasiar, Guerrero, Abad Santos, Melencio- Herrera, Escolin and
Gutierrez, Jr., JJ., concur.

Aquino, Concepcion Jr., and De Castro, JJ., took no part.

Plana, J., I reserve my vote.