PHILIPPINE CONSUMERS FOUNDATION, INC., PETITIONERS, VS. NATIONAL TELECOMMUNICATIONS COMMISSION AND PHILIPPINE LONG DISTANCE TELEPHONE CO., RESPONDENTS.

I

On March 2, 1983, petitioner filed the instant petition praying,
among others, that the decision of respondent NTC dated November 22,
1982 and the order dated January 14, 1983 be annulled and set aside on
the grounds therein stated (pp. 2-19, rec.).

After the petitioner, the private respondent, and the Solicitor General
for public respondent NTC filed their respective comments and memoranda
(pp. 47-53, 96-106, 109-116, 127-142, 147-164, 206-221, rec.), on
November 25, 1983, the decision sought to be reconsidered was
promulgated, annulling and setting aside the challenged decision and
order, respectively dated November 22, 1982 and January 14, 1983 (pp.
225-232, rec.).

Said decision is not unanimous as it bears the concurrence of only 9
members of this Court, while 3 members took no part and 1 member
reserved his vote (p. 232, rec.).

In a resolution dated January 10, 1984 and released on January 17, 1984,
the Court granted respondent PLDT’s motion for 15-day extension from
the expiration of the reglementary period within which to file a motion
for reconsideration (pp. 233, 236, rec.).

On January 12, 1984, PLDT filed its motion for reconsideration (pp. 237-268, rec.).

On February 27, 1984, respondent PLDT filed a motion to admit attached
supplemental motion for reconsideration (pp. 281-301, rec.).

On February 27, 1984, public respondent NTC, thru the Solicitor General,
filed a manifestation and motion that it is joining co-respondent PLDT
in its motion for reconsideration thereby adopting the same as its own
(pp. 302-303, 305-306, rec.).

In a resolution dated March 1, 1984 and issued on March 2, 1984, the
Court admitted the supplemental motion for reconsideration of PLDT,
noted the manifestation and motion of the Solicitor General for and in
behalf of respondent NTC that it is joining the motion for
reconsideration of PLDT and adopting it as its own, and required
petitioner to comment within 10 days from notice on the aforesaid
supplemental motion for recon­sideration of PLDT (p. 304-A, rec.).

On March 28, 1984, petitioner filed its comment on respondent’s motion for reconsideration (pp. 310-317, rec.).

In a resolution dated April 3, 1984 and issued on April 11, 1984, the
Court denied the motion for reconsideration (p. 318-A, rec.).

On April 6, 1984, respondent PLDT filed a motion to strike out
“discussion (e)” in peti­tioner’s “comment on respondents’ motions”
dated March 20, 1984 (pp. 319-321, rec.).

In a resolution dated April 12, 1984 and issued on April 16, 1984, the
Court required petitioner’s counsel Atty. Tomas Llmas to comment within
10 days from notice on the aforesaid motion to strike out (p. 323,
rec.).

On April 17, 1984, respondent PLDT, thru counsel, filed a motion for
leave to file within 15 days from date a second motion for
reconsideration (pp. 324-326, rec.).

On April 27, 1984, petitioner filed an opposition to the aforesaid
motion for PLDT for leave to file within 15 days to file a second motion
for reconsideration (pp. 328-330, rec.).

On May 2, 1984, private respondent PLDT filed a second motion for reconsideration with an annex (pp. 332-344, rec.).

In a resolution dated May 8, 1984 but issued on May 11, 1984, the Court
granted the motion of PLDT to file a second motion for reconsideration
within 15 days from April 16, 1984, noted the opposition of petitioner
to said motion, and required petitioner to comment within 15 days from
notice on the aforesaid second motion for reconsideration of PLDT for
the reconsideration of the decision of November 25, 1983 (p. 345, rec.).

On May 4, 1984, petitioner filed its comment on the second motion for reconsideration of private respondent (pp. 346-350, rec.).

In a resolution dated May 10, 1984 and issued on May 16, 1984, the Court
required respondents to file a reply within 10 days from notice on the
aforesaid comment of petitioner on private respondent PLDT’s motion
praying that the discussion (par. 3) in peti­tioner’s comment on the
first motion for reconsidera­tion and the supplemental motion for
reconsideration be deleted (p. 352, rec.).

On May 21, 1984, public respondent NTC filed a manifestation joining
private respondent PLDT and adopting the latter’s second motion for
reconsideration (pp. 353-354, rec.), which the Court granted in a
resolution dated May 29, 1984 and issued on June 6, 1984 (p. 355-A).

On May 28, 1984, respondent PLDT filed a motion for extension of 10 days
or until June 7, 1984 within which to submit the required reply in the
resolution of May 10, 1984 and issued on May 16, 1984 (pp. 356-357,
rec.), which was granted in a resolution dated June 5, 1984 and issued
on July 3, 1984 (p. 357-A, rec.).

On June 1, 1984, petitioner filed its comment on PLDT’s second motion
for reconsideration, with a motion to declare final the decision with
respect to public respondent NTC (pp. 358-362, rec.).

A day before June 1, 1984, or on May 31, 1984, private respondent PLDT
filed its reply to petitioner’s “comment on motion of private
respondent” dated May 4, 1984 [motion to strike] (pp. 366-369, rec.).

On July 16, 1984, after its motions for exten­sion were granted, public
respondent NTC, thru the Solicitor General, finally filed its reply (pp.
370­-371, 372-A, 373, 375-381, rec.).

It should be emphasized that the resolution of this Court dated
April 3, 1984 but issued on April 11, 1984, denying the first motion for
recon­sideration, did not state that the denial is final (see p. 318-A, rec.).

And the motion of May 29, 1984 but filed on June 1, 1984 of petitioner
to declare as final the decision of November 25, 1983 (which motion was
included in plaintiff’s comment on PLDT’s second motion for
reconsideration) with respect to public respondent NTC (pp. 361-362,
rec.), was not acted upon by this Court, ostensibly because as early as
May 21, 1984, public respondent NTC, thru the Solicitor General, filed a
manifestation that it is joining private respondent PLDT in its second
motion for reconsideration dated May 18, 1984 and adopting it as its own
(pp. 353-354, rec.).

II

It is not disputed — and should be emphasized — that on August 31,
1982, this Court set aside the NTC order dated April 14, 1982 in the
case of Samuel Bautista vs. NTC, et al. (16 SCRA 411) provisionally
approving the revised schedule of rates for the Subscriber Investments
Plan, on the ground that there was necessity of a hearing by the
Commission before it could have acted on the PLDT application for said
revised schedule, to give opportunity to the public, especially herein
petitioner and the Solicitor General, to substantiate their objections
to the said schedule as excessive and unreasonable, especially for the
low-income and middle-income groups, which cannot afford telephone
connections and that there is no need to increase the rate because PLDT
is financially sound.

Thereafter, in NTC Case No. 82-27 entitled “Re Philippine Long Distance
Telephone Co.,” respondent NTC conducted several hearings on PLDT’s
revised Subscriber Investments Plan schedule at which written
oppositions were filed by herein petitioner PCFI, the Solicitor General,
Atty. Samuel Bautista, Flora Alabanza, the municipality of Marikina,
and the Integrated Telecommunications Suppliers’ Association of the
Philippines (ITESAP). Other oppositors failed to file their written
oppositions. The hearings on the merits actually started on August 4,
1982 and continued for four (4) subsequent dates.

The oppositors, thru counsel, thoroughly cross-examined the witness for
the applicant, Mr. Romeo Sisteban, applicant’s Vice-President for Budget
and Financial Planning.

None of the oppositors opted to present evidence but merely filed
Memoranda and thereafter manifested that the case is submitted for
decision. Because PLDT made some concessions in favor of the
oppositors, oppositors ITESAP, Eastern Telecommunications, Inc.,
Philippine Global Communications, Inc. (Philcom), Globe-Mackay Cable and
Radio Corporation (GMCR) withdrew their opposition and manifested that
they are no longer opposing the application, after which respondent NTC
issued the challenged decision of November 22, 1982.

Respondent NTC rendered the challenged decision dated November 22, 1982,
approving the revised schedule on the ground that the rates are within
the 50% of-cost limit provided in P.D. No. 217, that they are just and
reasonable and in consonance with the public policies declared in said
decree, and that such approval is in the public interest (see NTC
decision of Nov. 22, 1982, pp. 2-19, rec.).

It is undisputed therefore that petitioner and the other oppositors were accorded due process.

From said decision dated November 22, 1982, petitioner filed the instant petition.

III

The decision promulgated on November 25, 1983 interprets the rule-making
authority delegated in Section 2 of P.D. No. 217 to the then Department
of Public Works, Transportation and Communications as mandatory, which construction is not supported by the actual phraseology of said Section 2, which reads thus:

“The Department of Public Works, Transportation and
Communications, through its Board of Communications and/or appropriate
agency shall see to it that the herein declared policies for the telephone industry are imme­diately implemented and for this purpose, pertinent rules and regulations may be promulgated” (Italics supplied).

The basic canon of statutory interpretation is that the word used in the
law must be given its ordinary meaning, unless a contrary intent is
manifest from the law itself. Hence, the phrase “may be promulgated”
should not be construed to mean “shall” or “must”. It shall be
interpreted in its ordinary sense as permissive or discretionary on the
part of the delegate — department or the Board of Communications then,
now the National Telecommunications Commission — whether or not to
promulgate pertinent rules and regulations. There is nothing in P.D.
No. 217 which commands that the phrase “may be promulgated” should be construed as “shall
be promulgated.” The National Telecommunications Commission can
function and has functioned without additional rules, aside from the
existing Public Service Law, as amended, and the existing rules already
issued by the Public Service Commission, as well as the 1978 rules
issued by the Board of Communications, the immediate predecessor of
respondent NTC. It should be recalled that the PLDT petition for
approval of its revised SIP schedule was filed on March 20, 1980.

P.D. No. 217 does not make the rules and regulations to be promulgated
by the respondent NTC as essential to the exercise of its jurisdiction
over applications for SIP schedules. In Ang Tibay vs. CIR (69 Phil.
635), this Court, through Mr. Justice Jose P. Laurel, did not include
the promulgation of rules and regulations as among the seven (7)
requirements of due process in quasi-judicial proceedings before a
quasi-judicial body such as the respondent NTC.

What is patently mandatory on the ministry or National Telecommunications Commission is the immediate implementation of
the policies declared in P.D. No. 217. To repeat, the ministry or the
NTC “shall see to it that the herein declared policies for the telephone
industry are immediately implemented xx x.” The formulation of rules
and regulations is purely discretionary on the part of the delegate.

Both words “shall” and “may be” are employed in the lone sentence of
Section 2 of P.D. No. 217. This graphically demonstrates that P.D. No.
217 preserves the distinction between their ordinary, usual or normal
senses.

This is emphasized by the fact that under Section 3 of P.D. No. 217,
only “the pertinent provisions” of the Public Service Act, as amended,
which are in conflict with the provisions of P.D. No. 217, had been
repealed or modified by said P.D. No. 217.

Section 3 of P.D. No. 217 states:

“The pertinent provisions of the Public Service Act, as amended,
the franchise of the Philippine Long Distance Telephone Company under
Act 3436, as amended, all existing legislative and/or municipal
franchises and other laws, executive orders, proclamations, rules and
regulations or parts thereof, as are in conflict with the provisions of
this Decree are hereby repealed or modified accordingly.”

And under the Public Service Act, as amended (C.A. No. 146), the Board of Communications then, now the NTC, can fix a provisional amount for the subscriber’s investment to be effective immediately, without hearing (par. 3 of Sec. 16, C.A. 146, as amended).

Section 16(c) of C.A. No. 146, as amended, provides:

“(c) To fix and determine individual or joint rates, toll,
charges, classifications, or schedules thereof, as well as commutation,
mileage, kilometrage, and other special rates which shall be imposed,
observed, and followed thereafter by any public service: Provided,
That the Commission may, in its discretion, approve rates proposed by
public services provisionally and without necessity of any hearing; but
it shall call a hearing there on within thirty days thereafter, upon
publication and notice to the concerns operating in the territory
affected: Provided, further, That in case the public service
equipment of an operator is used principally or secondarily for the
promotion of a private business, the net profits of said private
business shall be considered in relation with the public service of such
operator for the purpose of fixing the rates.”

The Rules of Practice and Procedures promulgated on January 25, 1978 by
the Board of Communications, the immediate predecessor of respondent
NTC, pursuant to Section 11 of the Public Service Act, otherwise known
as Commonwealth Act No. 146, as amended, govern the rules of practice
and procedure before the BOC then, now respondent NTC. Section 2 of
said Rules defines their scope, including exempting parties from the
application of the rules in the interest of justice and to best serve
the public interest, and the NTC may apply such suitable procedure to
improve the service in the transaction of public service. Thus, Section
2 of Rule 1 of said Rules reads:

“Sec. 2. Scope — These rules govern pleadings, practice and
procedure before the Board of Communications in all matters of hearing,
investigation and proceedings within the jurisdiction of the Board.
However, in the broader interest of justice and in order to best serve
the public interest, the Board may, in any particular matter, except it
from these rules and apply such suitable procedure to improve the
service in the transaction of the public business.”

Sections 4 and 5 of Rule 2 of said rules insure the appearance of the
Solicitor General and other consumers or users. The notice of hearing
is required to be published and to be served on the affected parties by
Section 2 of Rule 8; while Section 1 of Rule 9 allows the filing of
written oppositions to the application. Under Section 3 of Rule 15, the
BOC then, now the NTC, may grant, on motion of the applicant or on its
own initiative, provisional relief based on the pleading, supporting
affidavits and other documents attached thereto, without prejudice to a
final decision after completion of the hearing which shall be called
within thirty (30) days from the grant of the provisional relief.

Finally, Section 1 of Rule 19 provides for the suppletory application of
the Rules of Court governing proceedings before the Court of First
Instance then, now the Regional Trial Courts, which are not inconsistent
with the rules of practice and procedure promulgated by the BOC on
January 25, 1978.

There is nothing in P.D. No. 217 modifying, much less repealing Section 16(c) of the Public Service Act, as amended.

It is true that P.D. No. 1874 promulgated on July 21, 1983 amending
Section 2 of P.D. No. 217 expressly authorizes the National
Telecommunications Commission (now the successor of the Board of
Communications) to approve “such amounts for subscriber investments as
applied for provisionally and without the necessity of a
hearing; but shall call a hearing thereon within thirty (30) days
thereafter, upon publication and notice to all parties affected.” But
such amendment merely reiterates or confirms paragraph (c) of Section 16
of C.A. No. 146, as amended, otherwise known as the Public Service Law,
and serves merely to clarify the seeming ambiguity of the repealing
clause in Section 3 of P.D. No. 217 to dissipate all doubts on such
power of the National Telecommunications Commis­sion.

The construction of the majority decision of November 25, 1983 of the
word “may” to mean “shall” is too strained, if not tortured.

IV

WE cannot subscribe to the view that the National Telecommunications
Commission should or must promulgate “pertinent rules and regulations”;
because 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.

The adequacy of the existing Public Service Law, otherwise known as C.A.
No. 146, as amended, and rules had been demonstrated, because they have
been applied in the following cases involving PLDT:

1. PLDT vs. PSC, G.R. No. L-26762, Aug. 31, 1970, 34 SCRA 609;

2. Republic vs. PLDT, G.R. No. L-18841, Jan. 27, 1969, 26 SCRA 620;

3. PLDT vs. PSC, G.R. Nos. L- 24198 & L-24207-10, Dec. 18, 1968, 26 SCRA 427;

4. Republic Telephone Co. vs. PLDT, G.R. No. L-21070; PLDT vs.
Republic Telephone Co., G.R. No. L-21075, both decided on Sept. 23,
1968, 25 SCRA 80;

5. PLDT vs. Medina, G.R. No. L-24658, April 3, 1968, 23 SCRA 1; and

6. PLDT vs. Medina, G.R. Nos. L-24340-44, July 18, 1967, 20 SCRA 659.

As heretofore stated, as early as January 25, 1978, other pertinent
rules of practice and procedure were promulgated by the then Board of
Communications, now the respondent National Telecommunications
Commission, implementing P.D. No. 217, in addition to the applicable
provisions of the Public Service Law, as amended, and the rules
previously issued by the Public Service Commission (Annex 2 to the Memo
of respondent PLDT filed on August 15, 1983, pp. 147-165, rec.).

Even before 1978, respondent applied the procedure prescribed by the
Public Service Law, as amended, and the rules previously issued by the
Public Service Commission, the NTC predecessor, in several cases
involving similar applications for SIP schedules of Filipino Telephone
Corporation (BOC Case No. 73-064; see BOC decision in said cases dated
December 5, 1974, May 11, 1978, March 15, 1977, Feb. 19, 1976 and Aug.
31, 1978 – Annexes 3, 4, 4-A, 5, pp. 166-195, rec.).

The majority opinion recognizes that for the last three years, the PLDT
had earned a yearly average net profit of over P100 million and the
existing subscribers have been receiving their corresponding quarterly
dividends on their investments.

It should be stressed that Section 5 of Article XIV of the 1973 Constitution, as amended, expressly directs that “the State shall encourage
equity participation in public utilities by the general public”. As
above-stated, the existing individual subscribers of PLDT had been
sharing in the net profits of the company every quarter after the
promulgation of P.D. 217 on June 16, 1973.

The amount that is provisionally approved under the subscriber’s
investment plan for PBX/PAEX trunks and for business telephones in Metro
Manila and the provinces, whether new installations or transfers,
appears to be reasonable, including those for the leased lines or
outside local.

To lighten the burden of subscribers, investments may be paid in
installments or under some convenient arrangements which the NTC may
authorize, which is now expressly provided for in Section 1 of P.D. 1874
amending Sec. 6 of P.D. 217.

Section 1 of P.D. 1874 directs that:

“Section 1, paragraph 6 of the Presidential Decree No. 217 is hereby amended to read as follows:

“‘6. In any subscriber self-financing plan, the amount of
subscriber self-financing will, in no case, exceed fifty per centum
(50%) of the amount which results from dividing the telephone utility’s
gross investment in telephone plant in service by its number of primary
stations in service, both as reported in the utility’s latest audited
annual report rendered to the National Telecommunications Commission; PROVIDED, however, that
the amount payable by the telephone subscriber may be paid on
installment or under such payment arrangement as the National
Telecommunications Commission may authorize.”

V

It should be likewise emphasized that pursuant to the mandate of Section
5, Article XIV of the 1973 Constitution, as amended, the law-making
authority, in issuing both P.D. Nos. 217 and 1874, established the
all-important policy of making available on regular and uninterrupted
basis the telephone service because

it is “a crucial element in the conduct of business activity, xx xx and is essential for the smooth and efficient function of industry;

“xx x efficient telephone service contributes directly to national development by facilitating trade and commerce;

“xx x the telephone industry is one of the most highly capital intensive industries;

“xx x the telephone industry has fundamentally different
financing characteristics from other utilities in that capital
requirements per telephone unit installed increase as the number of
customers serviced also increases instead of decreasing in cost per unit
as in power and water utilities;

“xx x continued reliance on the traditional sources of capital
funds through foreign and domestic borrowing and through public
ownership of common capital stock will result in a high cost of capital,
heavy cash requirements for amortization and thus eventually in higher
effective cost of telephone service to subscribers;

“xx x the subscribers to telephone service tend to be among
the residents of urban areas and among the relatively higher income
segment of the population;

“xx x it is in the interest of the national economy to encourage savings and to place these savings in productive enterprises; and

“xx x it is the announced policies of the government to encourage
the spreading out of ownership in public utilities” (see Whereases of
P.D. 217; Italics supplied).

P.D. No. 217 further states as the basic policies of the State
concerning the telephone industry “in the interest of social, economic
and general well-being of the people x x x —

“1. The attainment of efficient telephone service for as wide
an area as possible at the lowest reasonable cost to the subscriber;

“2. The expansion of telephone service shall be financed
through an optimal combination of domestic and foreign sources of
financing and an optimal combination of debt and equity funds so as to
minimize the aggregate cost of capital of telephone utilities;

“3. Consistent with the declared policy of the State to
attain widespread ownership of public 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;

“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;

“5. As part of any subscriber self-financing plan, when
the issuance of preferred stock is contemplated, it is required that the
subscriber be assured, in all cases of a fixed annual income from his
investment and that these preferred capital stocks be convertible into
common shares, after a reasonable period and under reasonable terms, at
the option of the preferred stockholder; and

“6. 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 same policies and objectives are sub­stantially re-stated and
capsulized in the three Whereases of P.D. No. 1874 amending P.D. No. 217
as pointed out in the basic policies aforestated in P.D. No. 217 that
the cost per telephone unit increases in proportion to the increase in
the number of customers served; and that foreign borrow­ing will impose
heavy cash requirements for amortizations of such foreign loans which
would result in the higher effective costs of telephone service to
subscribers and ultimately would be a heavy drain on our dollar
reserves, which will result in our inability to meet our other foreign
commitments and mar the image of the Republic of the Philippines in
international trade relations. Thus, P.D. No. 217 stresses that in the
interest of the national economy it is essential to encourage savings
and to place these savings (subscriber’s investments) in productive
enterprises.

PLDT is profitable for the subscribers-investors as shown by its net
profit and the dividends received quarterly by the existing subscribers.

There is no showing — not even an allegation — that the net profits
realized by PLDT all these years have been dissipated and not plowed
back into the firm to improve its service.

But the rising cost of materials and labor needed to improve the PLDT
service, aggravated by the devaluation of our currency, all the more
justify the revised SIP schedule approved by the respondent NTC.

The approved revised SIP schedule, which appears reasonable and fair is herein reproduced:

“REVISED SIP SCHEDULE
	Revised SIP Rates
“ Service Category	Metro Manila	Provincial
“I. New Installations –
“1. PBX/PABX Trunk	P5,000	P3,000
2. Business Phone:
Single line	3,500	2,000
Party line	2,000	1,500
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
5. Tie trunk or tie line	800	800
6. Outside local	800	800”
(pp. 34-35, rec.).

With the dividends that will be received quarterly under the revised
SIP schedule, the subscribers (whether of phone installations for
business with or without trunk lines, as well as transfers of the same;
or of residential phones whether single or party line as well as
transfers of the same), will recover their investments after some years
and will thereafter remain stockholders and part-owners of PLDT. All
the subscribers therefore, are assured not only of profits from, but
also preservation of, their investments, which are not donations to
PLDT.

There are always two sides — sometimes more — to a case or proposition
or issue. There are many cases decided by this Court where this Court
had reconsidered Its decisions and even reversed Itself, conformably to
the environmental facts and the applicable law.

After a re-study of the facts and the law, illuminated by mutual
exchange of views, the members of the Court may and do change their
minds.

To repeat, the decision of November 25, 1983 was not a unanimous
decision for it has the concurrence of only nine (9) members of the
Court, because three (3) took no part and one (1) reserved his vote (p. 232, rec.).

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.

SO ORDERED.

Concepcion, Jr., Guerrero, Escolin, De La Fuente, and Cuevas, JJ., concur.

Fernando, C.J., did not take part.

Teehankee and Melencio-Herrera., JJ., join in the dissents of JJ. Abad Santos and Relova.

Aquino and Plana, JJ., in the result.

Gutierrez, Jr., see separate concurring opinion.

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SEPARATE OPINION

GUTIERREZ, JR., J.:

My concurrence in Mr. Justice Makasiar’s ponencia is not without
certain misgivings. I agree with the Court’s views on the powers of the
National Telecommunications Commission, the applicability of existing
rules and regulations, and the policy declarations in P.D. Nos. 217 and
1874. However, while now convinced that the increase in mandatory
investments for subscribers is based on law and that there is no showing
of arbitrariness in the law’s implementation, I must confess that I see
no justification for the continued inefficient services rendered by the
respondent telephone company. When the Court was deliberating on the
motion for reconsideration, my own residential telephone was out of
order. And I believe that our experiences in our neighborhood do not
represent isolated cases. I have yet to hear from or about satisfied
PLDT customers.

My point is — increased rates and increases in the
“subscribers’ self-financing plan” must be matched by equivalent and
demonstrably improved telephone services. More than its duty to increase
rates and subscribers’ fees whenever warranted, the respondent
Commission has the statutory and greater obligation to supervise “the
attainment of efficient telephone service for as wide an area as possible at the lowest reason­able cost to the subscribers.”

I am aware that almost all major components of our telephone
system must be imported from foreign sources. Since the Philippine peso
is now worth one American nickel, the cost of services based on imported
materials must increase. Loans contracted when the foreign exchange
rate was not so disadvantageous now require double or treble
amortizations in depreciated pesos. The Court cannot assume the role of
King Canute. Only the financial experts in the political departments can
return the peso to a respectable value. Moreover, it is indeed to the
nation’s advantage to look for local capital sources instead of
resorting to more foreign borrowings.

I must stress, however, that consumers would not mind paying
reasonable increases if they get satisfactory services. The respondent
telephone company has yet to solve this elementary and glaringly obvious
problem. Pinpointing the cause and applying the solution should be the
company’s number one concern.

---

DISSENTING OPINION

ABAD SANTOS, J.:

I vote to deny the second Motion for Reconsideration. I am
amazed that the decision which was promulgated as recently as November
25, 1983, with no dissenting opinion to dilute its acceptability should
now be reconsidered. My amazement is heightened by the fact that when
the case was discussed on July 26, 1984, I had the impression that the
motion was doomed so that a request to defer action on it would have met
the same fate had not the request been put on a pag-bigyan basis.

The case involves a simple problem of statutory construction -that of
Section 2 of Presidential Decree No. 217. It reads as follows:

“The Department of Public Works, Transportation and Communications,
through its Board of Communications and/or appropriate agency shall see
to it that the herein declared policies for the telephone industry are
immediately implemented and for this purpose, pertinent rules and
regulations may be promulgated.”

The issue is whether or not the National Telecommunications Commission
(NTC) must first promulgate the rules and regulations mentioned in the
decree before it can approve the Subscriber Investment Plan (SIP) of
private respondent Philippine Long Distance Telephone Co. (PLDT).

The decision, without any dissenting opinion sustained the petitioner’s
contention that it is the duty of NTC to first promulgate rules and
regulations.

The resolution, which is not unanimous, does not subscribe to the view
that the NTC should or must promulgate rules and regulations because, it
is said, 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). Sutherland explains the limits of literalism thus:

“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. The
intention prevails over the letter, and the letter must if possible be
read so as to conform to the spirit of the act. ‘While the intention of
the legislature must be ascertained from the words used to express it,
the manifest reason and obvious purpose of the law should not be
sacrificed to a literal interpretation of such words.’ Thus words or
clauses may be enlarged or restricted to harmonize with other provisions
of an act. The particular inquiry is not what is the abstract force of
the words or what they may comprehend, but in what sense were they
intended to be understood or what understanding do they convey as used
in the particular act.” (Vol. 2A Statutory Construction, pp. 65-66
[1972].)

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. Thus Professor Luis J. Gonzaga states:

“According to Black, ‘Where the statute provides for the doing of
some act which is required by justice or public duty, or where it
invests a public body, municipality or officer with power and authority
to take some action which concerns the public interest or rights of
individuals, the permissive language will be construed as mandatory and
the execution of the power may be insisted upon as a duty.’ Thus, where
the statute provided that ‘the commissioners may take into consideration
the enhanced value to the remaining land of an owner whose land was
taken for highway purposes,’ it was held that the word ‘may’ should be
given a mandatory meaning and is the same as the word ‘shall’, since it
directs the doing of a thing for the sake of justice or the public good.
Similarly, a statute by which municipal corporations are ‘authorized
and empowered’ to provide for the support of indigent persons within
their limits or to make public improvements as to open and repair
streets, remove obstructions from highways, construct sewers and the
like, are to be construed as mandatory although they only purport to
grant permission or authority since the public has an interest in such
matters and the grant of authority is therefore equiva­lent to the
imposition of duty.” (Statutes and their Construction, pp. 98-99
[1969].)

In the case at bar compelling reasons dictate that the provision of the
decree should be construed as mandatory rather than merely directory.
They are stated in the unanimous decision as follows:

“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 a
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)”

The above reasons also rebut the contention in the non-unanimous
resolution that the existing substantive and procedural laws as well as
the rules promulgated by the Public Service Commission are more than
adequate to determine the reasonableness of the amounts of investment of
telephone subscribers, etc.

The PLDT’s SIP is an unreasonable imposition by a utility company on a
captive public. The injury is compounded by the fact that although the
company makes mega profits its service, to use a McEnroe expression, is
the pits.

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DISSENTING OPINION

RELOVA, J.:

For the reasons stated in my ponencia of November 25, 1983, I vote to
DENY the second motion for reconsideration, dated May 2, 1984, filed by
private respondent Philippine Long Distance Telephone Company, through
counsel. The argument advanced in the motion that Presidential Decree
No. 217 was amended by Presidential Decree No. 1874 which was issued on
July 21, 1983, is without merit. Section 4 of said PD 1874 specifically
provides that “all decisions or orders of the National
Telecommunications Commission heretofore issued approving subscribers
investment plans or revisions thereof, are hereby declared valid and
legal in all respects, excepting such decisions or orders as, on the date of this decree, “are pending review by the Supreme Court.” The case at bar was filed with this Court on March 3, 1983 or before the issuance of Presidential Decree No. 1874.

Besides, Section 1 of Presidential Decree No. 217 which was promulgated
on June 16, 1973 declares that “in the interest of the social, economic
and general well being of the people, the State hereby adopts the
following basic policies of the telephone industry:

1. The attainment of efficient telephone service for as wide an area as possible at the lowest reasonable cost to the subscriber.”

xxx                            xxx                   xxx

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DISSENTING OPINION

TEEHANKEE, J.:

I join the dissents of Justices Abad Santos and Relova. I only wish to
add that there has been a departure here from the Court’s usual practice
and rules (cf. Rule 52, sec. 2; Rule 51, sec. 1; and Rule 56, secs. 1
and 11) of setting the case for rehearing and hearing the parties in
oral argument when a new majority (because of a change of votes or new
members or for whatever reason) is inclined to reconsider and overturn
the original majority; more so, on a second motion for reconsideration,
the first motion for reconsideration having been denied without a
dissenting vote and the parties not having been previously heard in oral
argument.