Republic Act No. 8762 (Retail Trade Liberalization Act of 2000) is constitutional; the constitutional provisions on developing a self-reliant and independent national economy effectively controlled by Filipinos (Art. II, Sec. 19) and related state policies are not self-executing commands imposing a Filipino monopoly, but rather guiding principles, and Congress has the discretion under the Constitution (Art. XII, Sec. 10) to determine when and how to regulate or allow foreign investments in the national interest, including in the retail trade sector.

Prior to R.A. 8762, Republic Act No. 1180 (Retail Trade Nationalization Act) enacted in 1954 absolutely prohibited foreign nationals and corporations from engaging in the retail trade business in the Philippines. R.A. 8762, signed into law in 2000, expressly repealed R.A. 1180 and liberalized the retail trade sector by allowing foreign investment under specific capitalization thresholds and categories, prompting constitutional challenges based on economic nationalism principles enshrined in the 1987 Constitution.

• On March 7, 2000, President Joseph E. Estrada signed R.A. 8762, the Retail Trade Liberalization Act of 2000, repealing R.A. 1180 which had nationalized the retail trade.
• R.A. 8762 permits foreign participation in the Philippine retail sector based on capitalization: Category A (less than US$2,500,000) is exclusively for Filipinos; Category B (US$2,500,000 to less than US$7,500,000) allowed up to 60% foreign equity initially, then 100% after two years; Category C (US$7,500,000 or more) allows 100% foreign ownership; Category D (US$250,000 per store for luxury items) allows 100% foreign ownership.
• The law also allows natural-born Filipinos who lost citizenship and reside in the Philippines to engage in retail trade.
• On October 11, 2000, several members of the House of Representatives filed a petition directly with the Supreme Court challenging the constitutionality of R.A. 8762.

• R.A. 8762 violates Sections 9, 19, and 20 of Article II of the Constitution, which mandate a self-reliant national economy controlled by Filipinos, promotion of social justice, industrialization, full employment, and protection against unfair competition.
• The law would lead to alien control of the retail trade and, consequently, the loss of effective Filipino control over the national economy.
• Entry of large foreign retailers (like Walmart, K-Mart) would destroy small Filipino retailers and sari-sari stores, increase unemployment, and harm self-employment.
• The passage of R.A. 8762 was improperly imposed by the World Bank-International Monetary Fund as a condition for loans.
• The law poses a clear and present danger of promoting monopolies or combinations in restraint of trade.

• Petitioners lack legal standing (locus standi) as taxpayers (no public fund disbursement involved) or as legislators (no infringement of legislative powers claimed).
• The petition does not present a justiciable controversy as it fails to show violation of the rights of small retail vendors whom petitioners claim to represent.
• Petitioners failed to overcome the presumption of constitutionality of R.A. 8762.
• Sections 9, 19, and 20 of Article II are non-self-executing principles and state policies, not judicially demandable rights.
• The Constitution mandates regulation, not absolute prohibition, of foreign investments; Article XII, Section 10 grants Congress discretion to reserve investment areas upon NEDA recommendation, which was not done here, thus Congress is free to allow foreign entry.
• Congress is not prohibited from enacting laws allowing foreign entry into industries not constitutionally reserved for Filipinos.

• Whether or not the petitioner lawmakers have the legal standing (locus standi) to challenge the constitutionality of R.A. 8762.
• Whether or not R.A. 8762 is unconstitutional for violating the provisions of the 1987 Constitution, particularly those concerning national economy and patrimony.

• The Court ruled that although petitioners lacked a clear showing of direct injury required for legal standing as taxpayers or legislators, the rule on standing could be relaxed due to the transcendental importance and paramount public interest involved in the case concerning the constitutionality of a major economic law.
• The Court upheld the constitutionality of R.A. 8762, dismissing the petition for lack of merit.
• The Court reasoned that the provisions in Article II (Declaration of Principles and State Policies) invoked by petitioners are generally not self-executing and cannot give rise to a cause of action in courts based on legislative failure to pursue them.
• While Article XII (National Economy and Patrimony) embodies economic nationalism, it does not mandate a Filipino monopoly; it expresses preferences for Filipinos, requires the State to make local industries competitive, and mandates development of a self-reliant economy controlled by Filipinos, but also recognizes the need for trade based on equality and reciprocity and allows Congress discretion (under Art. XII, Sec. 10) to reserve investment areas or allow foreign participation when national interest dictates.
• Congress' decision to liberalize retail trade via R.A. 8762, instead of reserving it exclusively for Filipinos, falls within its constitutional discretion, especially since NEDA did not oppose it.
• Regulating trade, including allowing foreign participation under certain conditions, is a valid exercise of the State's police power; R.A. 8762, by lessening restrictions on foreigners' right to property and engage in lawful business, does not deny Filipinos their rights, as they can still engage in retail.
• The wisdom of R.A. 8762 is a political question beyond the Court's province, absent a clear constitutional violation, which petitioners failed to demonstrate. The law includes safeguards against alien control and unfair practices.

• Judicial Review: The power of the Court to determine the constitutionality of laws; invoked by petitioners asking the Court to strike down R.A. 8762.
• Legal Standing (Locus Standi): The requirement that a party challenging a law must have a personal and substantial interest, suffering direct injury; the Court found petitioners lacked strict standing but relaxed the rule due to the case's importance.
• Transcendental Importance: An exception to the strict rule on legal standing, allowing courts to take cognizance of cases with far-reaching implications for the public; applied here to permit the review despite weak standing.
• Presumption of Constitutionality: Laws are presumed valid unless clearly shown to be otherwise; respondents argued petitioners failed to overcome this presumption, and the Court implicitly applied it by requiring a clear showing of constitutional breach.
• Non-Self-Executing Principles: Constitutional provisions, particularly declarations of principles and state policies (like Art. II), that are considered guidelines for government action rather than sources of judicially enforceable rights; the Court applied this to Art. II, Secs. 9, 19, 20, citing Tañada v. Angara.
• Police Power: The inherent power of the State to enact regulations to promote public health, safety, morals, and general welfare; the Court recognized the regulation of trade (both R.A. 1180 and R.A. 8762) as an exercise of police power.
• Economic Nationalism: Constitutional principle favoring Filipino control over the national economy and patrimony (Art. XII); the Court interpreted this not as requiring absolute prohibition of foreign investment but as allowing Congress discretion to balance protectionism with participation based on national interest, equality, and reciprocity.

• "But, as the Court explained in Tañada v. Angara, the provisions of Article II of the 1987 Constitution, the declarations of principles and state policies, are not self-executing. Legislative failure to pursue such policies cannot give rise to a cause of action in the courts."
• "In other words, while Section 19, Article II of the 1987 Constitution requires the development of a self-reliant and independent national economy effectively controlled by Filipino entrepreneurs, it does not impose a policy of Filipino monopoly of the economic environment."
• "Indeed, the 1987 Constitution takes into account the realities of the outside world as it requires the pursuit of a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity..."
• "In other words, the 1987 Constitution does not rule out the entry of foreign investments, goods, and services. While it does not encourage their unlimited entry into the country, it does not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair."
• "More importantly, Section 10, Article XII of the 1987 Constitution gives Congress the discretion to reserve to Filipinos certain areas of investments upon the recommendation of the NEDA and when the national interest requires. Thus, Congress can determine what policy to pass and when to pass it depending on the economic exigencies."
• "Certainly, it is not within the province of the Court to inquire into the wisdom of R.A. 8762 save when it blatantly violates the Constitution. But as the Court has said, there is no showing that the law has contravened any constitutional mandate."

• Tañada v. Angara, 338 Phil. 546 (1997): Cited to establish that the declarations of principles and state policies in Article II of the Constitution are non-self-executing, and to explain the nuances of economic nationalism under Article XII, which balances preference for Filipinos with the need for foreign exchange based on equality and reciprocity.
• Ichong v. Hernandez, 101 Phil. 1155 (1957): Referenced as the case that previously upheld the constitutionality of R.A. 1180 (Retail Trade Nationalization Act) as a valid exercise of police power aimed at preventing alien control of retail trade. This highlights the shift in legislative policy now validated in the current case.
• Jumamil v. Cafe, G.R. No. 144570 (2005): Cited for the general rule on legal standing.
• Abaya v. Ebdane, Jr., G.R. No. 167919 (2007): Cited for the definition of legal standing (direct injury).
• BAYAN v. Executive Secretary Zamora, 396 Phil. 623 (2000): Cited for the definition of legal standing (denial of right/privilege or imposition of burden).
• Public Interest Center, Inc. v. Roxas, G.R. No. 125509 (2007): Cited regarding taxpayer standing.
• Province of North Cotabato v. GRP, G.R. Nos. 183591, et al. (2008): Cited regarding legislator standing.
• Bagatsing v. Committee on Privatization, 316 Phil. 404 (1995): Cited regarding legislator standing.
• Automotive Industry Workers Alliance (AIWA) v. Hon. Romulo, 489 Phil. 710 (2005): Cited for the principle of relaxing the standing rule based on transcendental importance.

• 1987 Constitution, Article II (Declaration of Principles and State Policies):
  • Section 9 (Promotion of just and dynamic social order)
  • Section 19 (Development of self-reliant and independent national economy effectively controlled by Filipinos)
  • Section 20 (Role of private sector, incentives for investment)
• 1987 Constitution, Article XII (National Economy and Patrimony):
  • Section 10 (Reservation of investment areas to Filipinos upon NEDA recommendation; State regulation of foreign investments)
  • Section 12 (Preferential use of Filipino labor, domestic materials, locally produced goods)
  • Section 13 (Trade policy serving general welfare based on equality and reciprocity)
• Republic Act No. 8762 (Retail Trade Liberalization Act of 2000): The law whose constitutionality is challenged.
• Republic Act No. 1180 (Retail Trade Nationalization Act): The law repealed by R.A. 8762, previously prohibiting foreign participation in retail trade.