Phillips Seafood (Philippines) Corporation vs. Board of Investments

The proper mode of appeal from a Board of Investments decision denying an Income Tax Holiday application is a petition for review with the Court of Appeals under Rule 43, as such denial falls under the catch-all provision for judicial relief in Article 82 of E.O. No. 226, not the appeal to the Office of the President provided under Articles 7 and 36.

Petitioner Phillips Seafood (Philippines) Corporation registered with the Board of Investments (BOI) in 1993 as a non-pioneer enterprise located in Masbate, a less-developed area, entitling it to a six-year Income Tax Holiday (ITH). After acquiring assets of an affiliate in Bacolod City, petitioner relocated its plant and office to Roxas City in October 1999. The BOI subsequently informed petitioner that its ITH under its original registration would be extended only until its transfer to a "not less-developed area," effectively limiting the tax incentive. Petitioner sought reconsideration from the BOI, which was denied.

• Registration and Initial ITH: Petitioner registered with the BOI in January 1993 as an existing and expansion producer of soft shell crabs in Masbate. As a non-pioneer enterprise in a less-developed area, it was granted a six-year ITH from July 1993 to July 1999.
• Subsequent Registrations: In 1997 and 1998, petitioner acquired the canning facilities and assets of its affiliate, Phillips Seafood (Phils.), Inc. (PSPI), in Bacolod City. In October 1999, petitioner relocated its plant to Roxas City and applied for new registrations. The BOI granted these new registrations in 2000, classifying petitioner as a new producer on non-pioneer status with a four-year ITH.
• ITH Limitation: In September 2003, the BOI informed petitioner that its ITH under the original 1993 certificate would apply only from August 13, 1999, to October 21, 1999—the period before its transfer to a "not less-developed area."
• Erroneous Appeal to the Office of the President: Petitioner's motion for reconsideration was denied by the BOI in May 2004. Instead of filing a petition for review with the Court of Appeals, petitioner elevated the matter to the Office of the President, which dismissed the appeal for lack of jurisdiction in September 2004.
• Court of Appeals Petition: On April 5, 2005, petitioner filed a petition for review with the Court of Appeals under Rule 43. The CA dismissed the petition for having been filed out of time, as petitioner had erroneously appealed to the OP instead of directly to the CA. The CA also denied petitioner's omnibus motion to amend the petition and to suspend the period for filing a reply, finding it intended to delay the case.

• Proper Venue for Appeal: Petitioner maintained that the executive power of control over the acts of department secretaries must not be rendered illusory by rules of procedure; thus, appeal to the Office of the President from the BOI decision should be allowed.
• Omnibus Motion: Petitioner argued that the omnibus motion seeking to amend the petition for review was filed to avoid multiplicity of suits, not to delay the proceedings.
• ITH Entitlement: Petitioner asserted entitlement to the Income Tax Holiday.

• Improper Appeal: Respondent countered that the appeal from the BOI decision should have been brought directly to the Court of Appeals under Rule 43, not to the Office of the President.
• Delay: Respondent argued that the omnibus motion filed by petitioner was intended to delay the case.

• Proper Appellate Remedy: Whether an appeal from the BOI's denial of an Income Tax Holiday application should be brought to the Office of the President or the Court of Appeals.
• Executive Control vs. Rule-making Power: Whether the President's constitutional power of control over executive departments allows an appeal to the Office of the President despite special laws and rules of procedure providing for direct judicial review.

• Proper Appellate Remedy: The appeal must be brought to the Court of Appeals under Rule 43. Executive Order No. 226 provides specific modes of appeal depending on the nature of the controversy. Appeals to the Office of the President are expressly limited to two instances: controversies between registered enterprises and government agencies under Article 7, and decisions concerning registration applications under Article 36. The denial of an ITH application does not fall under these exceptions. By the principle of expressio unius est exclusio alterius, other controversies outside these specific instances must invoke only the appellate judicial relief provided under Article 82, the catch-all provision for immediate judicial relief. Rule 43 expressly includes the BOI as a quasi-judicial agency whose decisions are appealable to the CA.
• Executive Control vs. Rule-making Power: The President's power of control over executive departments is not absolute and may be limited by the Constitution, law, or judicial decisions. Appellate procedure is remedial in nature and subject to the Supreme Court's constitutional rule-making power under Section 5, Article VIII of the Constitution. Furthermore, Administrative Order No. 18, which governs appeals to the Office of the President, expressly recognizes an exception when a special law provides a different mode of appeal. E.O. No. 226, being a special law, prevails over A.O. No. 18.

• Right to Appeal — The right to appeal is not a constitutional, natural, or inherent right but a statutory privilege of statutory origin. It may be exercised only in the manner prescribed by and in accordance with the provisions of law. Applied to determine the proper mode of appeal from the BOI, the Court looked to the legislative enactment creating the agency.
• Expressio Unius Est Exclusio Alterius — The express mention of one thing in a law excludes others not mentioned. Applied to E.O. No. 226, the express enumeration of instances where appeal to the Office of the President is allowed (Arts. 7 and 36) excludes other controversies, such as the denial of an ITH, from availing of that remedy.
• Executive Control vs. Judicial Rule-Making — The President's constitutional power of control over executive departments is not absolute and may be limited by the Constitution, law, or judicial decisions. Appellate procedure is constitutionally subject to the Supreme Court's rule-making power, and special laws providing for a different mode of appeal prevail over Administrative Order No. 18.

• "The right to appeal is not a constitutional, natural or inherent right – it is a statutory privilege and of statutory origin and, therefore, available only if granted or provided by statute. It may be exercised only in the manner prescribed by, and in accordance with, the provisions of the law." — Reiterates the statutory nature of the right to appeal, dictating that the procedure must conform strictly to the enabling law.
• "E.O. No. 226 apparently allows two avenues of appeal from an action or decision of the BOI, depending on the nature of the controversy." — Clarifies that the mode of appeal under the Omnibus Investments Code is contingent on the specific subject matter of the BOI decision.
• "Such 'executive control' is not absolute. The definition of the structure of the executive branch of government, and the corresponding degrees of administrative control and supervision is not the exclusive preserve of the executive. It may be effectively limited by the Constitution, by law, or by judicial decisions." — Limits the scope of the President's power of control, subordinating it to statutory modes of appeal and the judiciary's rule-making authority.

• De La Cruz v. Ramiscal, G.R. No. 137882, 04 February 2005 — Cited as controlling precedent for the principle that the right to appeal is a statutory privilege, not a natural or constitutional right.
• Namuhe v. The Ombudsman, 358 Phil. 782 (1998) — Followed for the rule that appeals from judgments and final orders of quasi-judicial agencies are required to be brought to the Court of Appeals on a verified petition for review under Rule 43.
• Southern Cross Cement Corporation v. Cement Manufacturers Association of the Philippines, G.R. No. 158540, 03 August 2005 — Followed for the principle that the President's power of control over the executive branch is not absolute and may be limited by the Constitution, law, or judicial decisions.

• Article 7, Executive Order No. 226 (Omnibus Investments Code of 1987) — Provides that the Board shall decide controversies concerning the implementation of the Code arising between registered enterprises and government agencies, with an appeal to the President within thirty days. Applied to limit appeals to the OP to this specific instance.
• Article 36, Executive Order No. 226 — Allows an appeal to the Office of the President from an order or decision of the Board within thirty days. Applied as a specific instance where appeal to the OP is permitted.
• Article 82, Executive Order No. 226 — Provides that all appeals from orders or decisions of the Board involving the provisions of the Code shall be filed directly with the Supreme Court. Applied as the catch-all provision for judicial relief from BOI decisions not covered by Arts. 7 and 36, now cognizable by the Court of Appeals under Rule 43.
• Section 1, Rule 43, 1997 Rules of Civil Procedure — Includes the BOI as one of the quasi-judicial agencies whose judgments or final orders are appealable to the Court of Appeals. Applied to mandate that appeals from the BOI's denial of an ITH must be brought to the CA.
• Section 17, Article VII, 1987 Constitution — Vesting the President with control of all executive departments, bureaus, and offices. Invoked by petitioner but ultimately subordinated to the specific modes of appeal provided by law and the Court's rule-making power.
• Section 5, Article VIII, 1987 Constitution — Empowers the Supreme Court to promulgate rules concerning procedure in all courts. Applied to establish that appellate procedure is subject to the Court's rule-making power, superseding executive control arguments.
• Administrative Order No. 18 — Prescribes rules governing appeals to the Office of the President. Applied to show that even the OP's own rules recognize exceptions when special laws provide a different mode of appeal.

Leonardo A. Quisumbing, Conchita Carpio Morales, Presbitero J. Velasco, Jr., Arturo D. Brion.