The Supreme Court held that petitioners, including minors representing their generation and generations yet unborn, have the legal standing (locus standi) to sue for the enforcement of their fundamental constitutional right to a balanced and healthful ecology, which is self-executing and judicially enforceable. Furthermore, Timber License Agreements (TLAs) are not contracts but mere privileges granted by the State, which can be amended, modified, replaced, or rescinded when the national interest so requires, and thus are not protected by the non-impairment of contracts clause.

The case arose amidst growing concerns over rapid deforestation in the Philippines and its detrimental environmental consequences. Petitioners highlighted the significant reduction in the country's rainforest cover over 25 years, from approximately 16 million hectares to about 1.2 million hectares by 1987, and further to a mere 850,000 hectares of virgin old-growth rainforests. This deforestation was attributed largely to commercial logging operations sanctioned by Timber License Agreements (TLAs) issued by the Department of Environment and Natural Resources (DENR), leading to severe environmental degradation, including water shortages, soil erosion, loss of biodiversity, and climate change impacts.

• The principal petitioners are minors, represented by their parents, who asserted their right to a balanced and healthful ecology and their representation of their generation as well as generations yet unborn.
• The Philippine Ecological Network, Inc. (PENI), a non-profit corporation for environmental protection, was an additional plaintiff.
• The original defendant was Fulgencio S. Factoran, Jr., then Secretary of the DENR, later substituted by Angel C. Alcala.
• The complaint, filed as a taxpayers' class suit, alleged that the Philippines, an archipelago of 7,100 islands with 30 million hectares of land, was endowed with rich rainforests essential for ecological balance.
• Petitioners claimed that deforestation led to environmental tragedies like water shortages, salinization, massive erosion, extinction of flora and fauna, dislocation of indigenous cultures, siltation of rivers and seabeds, droughts, increased typhoon velocity, flooding, and reduced capacity to process carbon dioxide.
• Twenty-five years prior, the Philippines had 16 million hectares of rainforests (53% of land mass); by 1987, satellite images showed only 1.2 million hectares (4%) remained, and more recent surveys indicated only 850,000 hectares of virgin old-growth rainforests were left (2.8% of land mass).
• Defendant's predecessors had granted TLAs covering an aggregate area of 3.89 million hectares for commercial logging.
• The rate of deforestation was alleged to be about 200,000 hectares per annum, threatening to deplete forest resources within a decade.
• Petitioners asserted that continued allowance of TLAs would cause irreparable injury to them and their successors, constituting a misappropriation or impairment of natural resource property held in trust.
• On March 2, 1990, petitioners served a final demand on the defendant to cancel all logging permits, which was refused.
• Petitioners sought a judgment ordering the defendant to cancel all existing TLAs and to cease and desist from receiving, accepting, processing, renewing, or approving new TLAs.

• The complaint states a clear cause of action based on their right to a sound environment, supported by the Civil Code (Human Relations), E.O. No. 192 (DENR Charter), P.D. No. 1151 (Philippine Environmental Policy), and Section 16, Article II of the 1987 Constitution.
• The minors represent their generation and generations yet unborn, invoking intergenerational responsibility and justice.
• The DENR Secretary has a correlative obligation to safeguard the people's right to a healthful environment, and the granting of TLAs beyond sustainable limits constitutes grave abuse of discretion.
• The issue of the Secretary's alleged grave abuse of discretion in granting TLAs is a judicial question, not a political one.
• The non-impairment of contracts clause does not apply because TLAs are not contracts but licenses or privileges.
• Even if TLAs were contracts, they can be revoked by the State when public interest, such as environmental protection, so requires, under the exercise of police power.

• The petitioners failed to allege a specific legal right violated by the respondent Secretary for which any relief is provided by law; their allegations concerning an "environmental right" are vague and nebulous and do not constitute a valid cause of action.
• The question of whether logging should be permitted in the country is a political question properly addressed to the executive or legislative branches of Government, not the courts.
• The petitioners' recourse should be to lobby Congress for a bill banning logging, not to file a court action.
• Cancellation of TLAs cannot be done without due process of law; a TLA, once issued, remains effective for its term (usually 25 years) and cannot be revised or cancelled unless the holder violates its terms or forestry laws, after due notice and hearing.
• Indiscriminate cancellation of all TLAs without the requisite hearing would violate due process.
• The RTC, in its dismissal order (though not argued by the Secretary in the motion to dismiss), added that granting the reliefs prayed for would result in the impairment of contracts prohibited by the Constitution.

• Whether the petitioners have a cause of action in their complaint.
• Whether the complaint raises a political question.
• Whether the relief sought, specifically the cancellation of Timber License Agreements (TLAs), would violate the non-impairment of contracts clause.
• Whether the petitioners, particularly the minors, have the legal standing (locus standi) to file the class suit on behalf of their generation and generations yet unborn.

• Yes, the petitioners have a cause of action. Their complaint focuses on the fundamental legal right to a balanced and healthful ecology, explicitly provided in Section 16, Article II of the 1987 Constitution. This right is self-executing and judicially enforceable, carrying with it the correlative duty of the State (through the DENR) to protect and advance it. A denial or violation of this right, such as the alleged grave abuse of discretion in granting TLAs leading to deforestation, gives rise to a cause of action.
• No, the complaint does not raise a political question. The case involves the enforcement of a right vis-a-vis policies already formulated and expressed in legislation. Moreover, the 1987 Constitution expanded judicial power to include determining whether there has been grave abuse of discretion amounting to lack or excess of jurisdiction by any branch of government, thereby diminishing the impenetrability of the political question doctrine.
• No, the cancellation of TLAs would not violate the non-impairment of contracts clause. Timber licenses are not contracts but mere privileges granted by the State, which do not vest in the licensee a permanent or irrevocable right. They can be validly withdrawn, amended, modified, or rescinded by executive action when public interest or welfare so dictates, as provided in Section 20 of P.D. No. 705 (Forestry Reform Code). Even if TLAs were considered contracts, the non-impairment clause must yield to the State's police power exercised for public health, safety, moral, and general welfare.
• Yes, the petitioners, including the minors, have locus standi. The civil case is a class suit, with the subject matter (environmental protection) being of common and general interest to all citizens. The minors can file a class suit for themselves, for others of their generation, and for succeeding generations based on the concept of intergenerational responsibility regarding the right to a balanced and healthful ecology.

• Right to a Balanced and Healthful Ecology — A fundamental legal right of the Filipino people, enshrined in Section 16, Article II of the 1987 Constitution, which the State is mandated to protect and advance. The Court affirmed this right as self-executing and judicially enforceable, forming the basis of the petitioners' cause of action to prevent environmental degradation.
• Intergenerational Responsibility/Justice — The concept that present generations have a responsibility to protect the environment for future generations. The Court recognized the minors' standing to sue on behalf of succeeding generations, asserting that their right to a sound environment includes an obligation to ensure its protection for those to come.
• Locus Standi (Legal Standing) — The right of a party to appear and be heard before a court. The Court ruled that the petitioners, including minors representing their generation and future generations, possessed the requisite locus standi due to the transcendental importance of the right to a balanced and healthful ecology.
• Class Suit (Rule 3, Section 12, Revised Rules of Court) — An action where the subject matter is of common or general interest to many persons so numerous that it is impracticable to bring them all before the court, and one or more may sue or defend for the benefit of all. The Court found the case to be a proper class suit, given the common interest in environmental protection.
• Cause of Action — An act or omission of one party in violation of the legal right or rights of another. The Court held that the petitioners sufficiently alleged a cause ofaction by asserting their right to a balanced ecology and the DENR Secretary's alleged violation of this right through the issuance and non-cancellation of TLAs.
• Political Question Doctrine — The doctrine that certain questions, in their nature, are fundamentally political and not legal, and thus outside the purview of judicial review. The Court stated that this doctrine is no longer an insurmountable obstacle due to the expanded scope of judicial power under the 1987 Constitution (Art. VIII, Sec. 1), which includes determining grave abuse of discretion by any government branch. The case was deemed justiciable as it involved the enforcement of a constitutional right.
• Non-Impairment of Contracts Clause (Art. III, Sec. 10, 1987 Constitution) — The constitutional provision stating that no law impairing the obligation of contracts shall be passed. The Court ruled this inapplicable because TLAs are not contracts but licenses or privileges. Even if they were contracts, they must yield to the State's police power.
• Police Power — The inherent power of the State to enact laws and regulations to promote the health, morals, safety, and general welfare of the people. The Court stated that even if TLAs were contracts, a law passed in the exercise of police power for environmental protection could validly modify or cancel them.
• Trusteeship of Natural Resources — The concept that natural resources are held by the State in trust for the benefit of its citizens, including future generations. The petitioners alleged that the defendant's actions constituted a misappropriation or impairment of natural resource property held in trust.

• "While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-perpetuation -- aptly and fittingly stressed by the petitioners -- the advancement of which may even be said to predate all governments and constitutions."
• "The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment."
• "Petitioners minors assert that they represent their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned."
• "A timber license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare..."
• "The political question doctrine is no longer the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review."

• Tan vs. Director of Forestry — Cited to support the principle that a timber license is not a contract but a mere license or privilege that can be validly withdrawn when public interest dictates, and is not protected by the due process or non-impairment clauses.
• Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary — Referenced to reiterate that timber licenses are privileges granted by the State and do not vest a permanent or irrevocable right; they can be amended, modified, replaced, or rescinded by the Chief Executive when national interests so require, and are not contracts under the due process clause.
• Militante vs. Edrosolano — Cited for the rule that courts should exercise utmost care in dismissing a complaint for failure to state a cause of action, as the truth of hypothetically admitted facts is the test.
• Daza vs. Singson — Referenced to illustrate the expanded jurisdiction of the Supreme Court under the 1987 Constitution, which allows it to resolve issues even if assumed to be political in nature.
• Abe vs. Foster Wheeler Corp. — Cited to explain that the freedom of contract is not absolute and is subject to reasonable legislative regulation (police power) aimed at promoting public health, moral, safety, and welfare. The non-impairment clause is limited by the exercise of police power.
• Nebia vs. New York (quoted in Philippine American Life Insurance Co. vs. Auditor General) — Cited to emphasize that neither property rights nor contract rights are absolute and can be regulated by the government in the common interest.

• Section 16, Article II, 1987 Constitution — "The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature." This was the core constitutional provision upon which petitioners based their right.
• Section 15, Article II, 1987 Constitution — "The State shall protect and promote the right to health of the people and instill health consciousness among them." Cited as related to the right to a balanced and healthful ecology.
• Executive Order No. 192 (1987), Section 4 — Mandates the DENR as the primary agency for conservation, management, development, and proper use of the country's environment and natural resources, for the welfare of present and future generations.
• Executive Order No. 192 (1987), Section 3 — Declares the State policy to ensure sustainable use, development, management, renewal, and conservation of natural resources for present and future generations.
• Administrative Code of 1987, Title XIV, Book IV, Section 1 — Re-states the policy on ensuring sustainable use of natural resources for present and future generations and maintaining ecological balance.
• Administrative Code of 1987, Title XIV, Book IV, Section 2 — Outlines the mandate of the DENR to implement the foregoing policy and control/supervise natural resource exploration, development, utilization, and conservation.
• Presidential Decree No. 1151 (Philippine Environmental Policy), Section 1 — Declares the State's continuing policy to create conditions for man and nature to thrive in harmony and fulfill requirements of present and future generations.
• Presidential Decree No. 1151 (Philippine Environmental Policy), Section 2 — Speaks of the "responsibilities of each generation as trustee and guardian of the environment for succeeding generations."
• Presidential Decree No. 705 (Forestry Reform Code), Section 20 — Provides that the President may amend, modify, replace, or rescind any contract, concession, permit, or license granted for forestry when national interest so requires. This was crucial in determining TLAs are not immutable.
• Article VIII, Section 1, 1987 Constitution — Defines judicial power, including the duty to determine grave abuse of discretion by any government branch. Cited to counter the political question argument.
• Article III, Section 10, 1987 Constitution — "No law impairing the obligation of contracts shall be passed." The RTC invoked this, but the Supreme Court found it inapplicable to TLAs.
• Rule 3, Section 12, Revised Rules of Court — Governs class suits. The Court found the case to be a proper class suit under this rule.
• Rule 2, Section 1, Revised Rules of Court (referring to RRC, likely Rules of Civil Procedure) — Defines cause of action. The RTC found a lack of it, but the Supreme Court disagreed.
• Articles 19, 20, and 21 of the Civil Code (Human Relations) — Invoked by petitioners as a basis for their right to a sound environment.

• Justice Feliciano — Concurred in the result. He emphasized that while the right to a balanced and healthful ecology is fundamental and constitutionalized, it is very general. For a cause of action, petitioners must show a more specific legal right (e.g., from the Philippine Environment Code, P.D. 1152) that is or may be violated, rather than relying solely on general constitutional policy statements. He cautioned against courts being propelled into social and economic policy-making without specific, operable norms and standards. He agreed that timber companies should be impleaded to dispute the existence of the specific legal right or the factual nexus.