Bagatsing vs Committee on Privitization, 246 SCRA 334

Bagatsing v Committee on Privitization 246 SCRA 334

         

PETRON was originally registered with the Securities and Exchange Commission (SEC) in 1966 under the corporate name "Esso Philippines, Inc." (ESSO) as a subsidiary of Esso Eastern, Inc. and Mobil Petroleum Company, Inc.

          

In 1973, at the height of the world-wide oil crisis brought about by the Middle East conflicts, the Philippine government acquired ESSO through the PNOC. ESSO became a wholly-owned company of the government under the corporate name PETRON and as a subsidiary of PNOC.

            

In acquiring PETRON, the government aimed to have a buffer against the vagaries of oil prices in the international market. It was felt that PETRON can serve as a counterfoil against price manipulation that might go unchecked if all the oil companies were foreign-owned. Indeed, PETRON helped alleviate the energy crises that visited the country from 1973 to 1974, 1979 to 1980, and 1990 to 1991.

            

On December 8, 1986, President Corazon C. Aquino promulgated Proclamation No. 50 in the exercise of her legislative power under the Freedom Constitution.

            

The Proclamation is entitled "Proclaiming and Launching a Program for the Expeditious Disposition and Privatization of Certain Government Corporations and/or the Assets thereof, and Creating the Committee on Privatization and the Asset Privatization Trust." Implicit in the Proclamation is the need to raise revenue for the Government and the ideal of leaving business to the private sector. The Government can then concentrate on the delivery of basic services and the performance of vital public functions.

            

On March 25, 1993, the Government Corporate Monitoring and Coordinating Committee (GCMCC) recommended a 100% privatization of PETRON.

            

Petitioners claims, among others, that there was a failed bidding, contend that there were only three bidders. One of them, PETRONAS, submitted a bid lower than the floor price while a second, failed to pre-qualify. Citing Section V-2-a of COA Circular No. 89-296 dated January 27, 1989, they argue that where only one bidder qualifies, there is a failure of public auction.

            

Under said COA Circular, there is a failure of bidding when: 1) there is only one offeror; or (2) when all the offers are non-complying or unacceptable.

In the case at bench, there were three offerors: SAUDI ARAMCO, PETRONAS and WESTMONT.

            

While two offerors were disqualified, PETRONAS for submitting a bid below the floor price and WESTMONT for technical reasons, not all the offerors were disqualified. To constitute a failed bidding under the COA Circular, all the offerors must be disqualified.

            

Petitioners urge that in effect there was only one bidder and that it can not be said that there was a competition on "an equal footing". But the COA Circular does not speak of accepted bids but of offerors, without distinction as to whether they were disqualified.

            

The COA itself, the agency that adopted the rules on bidding procedure to be followed by government offices and corporations, had upheld the validity and legality of the questioned bidding. The interpretation of an agency of its own rules should be given more weight than the interpretation by that agency of the law it is merely tasked to administer.