More on RA 4200 and Admissibility of Wiretap Materials

A lot has been said about RA 4200 but a thorny issue has been the admissibility of wiretapped material.

Let us try to start from the indisputable.

1. The Bill of Rights (Section 3 (1) and (2) of Article III of the 1987 Constitution) expressly provides that evidence acquired in violation of privacy of communication and correspondence shall be inadmissible except if acquired as provided by law.
2. RA 4200, otherwise known as the Anti-Wiretapping Law, authorizes the use of wiretapping and other similar methods provided the following is observed:

Section 3. Nothing contained in this Act, however, shall render it unlawful or punishable for any peace officer, who is authorized by a written order of the Court, to execute any of the acts declared to be unlawful in the two preceding sections in cases involving the crimes of treason, espionage, provoking war and disloyalty in case of war, piracy, mutiny in the high seas, rebellion, conspiracy and proposal to commit rebellion, inciting to rebellion, sedition, conspiracy to commit sedition, inciting to sedition, kidnapping as defined by the Revised Penal Code, and violations of Commonwealth Act No. 616, punishing espionage and other offenses against national security: Provided, That such written order shall only be issued or granted upon written application and the examination under oath or affirmation of the applicant and the witnesses he may produce and a showing: (1) that there are reasonable grounds to believe that any of the crimes enumerated hereinabove has been committed or is being committed or is about to be committed: Provided, however, That in cases involving the offenses of rebellion, conspiracy and proposal to commit rebellion, inciting to rebellion, sedition, conspiracy to commit sedition, and inciting to sedition, such authority shall be granted only upon prior proof that a rebellion or acts of sedition, as the case may be, have actually been or are being committed; (2) that there are reasonable grounds to believe that evidence will be obtained essential to the conviction of any person for, or to the solution of, or to the prevention of, any of such crimes; and (3) that there are no other means readily available for obtaining such evidence.

The order granted or issued shall specify: (1) the identity of the person or persons whose communications, conversations, discussions, or spoken words are to be overheard, intercepted, or recorded and, in the case of telegraphic or telephonic communications, the telegraph line or the telephone number involved and its location; (2) the identity of the peace officer authorized to overhear, intercept, or record the communications, conversations, discussions, or spoken words; (3) the offense or offenses committed or sought to be prevented; and (4) the period of the authorization. The authorization shall be effective for the period specified in the order which shall not exceed sixty (60) days from the date of issuance of the order, unless extended or renewed by the court upon being satisfied that such extension or renewal is in the public interest.

All recordings made under court authorization shall, within forty-eight hours after the expiration of the period fixed in the order, be deposited with the court in a sealed envelope or sealed package, and shall be accompanied by an affidavit of the peace officer granted such authority stating the number of recordings made, the dates and times covered by each recording, the number of tapes, discs, or records included in the deposit, and certifying that no duplicates or copies of the whole or any part thereof have been made, or if made, that all such duplicates or copies are included in the envelope or package deposited with the court. The envelope or package so deposited shall not be opened, or the recordings replayed, or used in evidence, or their contents revealed, except upon order of the court, which shall not be granted except upon motion, with due notice and opportunity to be heard to the person or persons whose conversation or communications have been recorded.

The court referred to in this section shall be understood to mean the Court of First Instance within whose territorial jurisdiction the acts for which authority is applied for are to be executed.

Now, let us go to the questions.

• Is the wiretapped material admissible as evidence against the wiretapper?

Yes.

• Can the basis of that be found in RA 4200?

No.

DJB of Philippine Commentary argues otherwise. He argues that the basis can be found in Section 3. He says:

Most people misinterpreted the meaning of Court Orders as being valid only when they are issued BEFORE a wiretapping is done. But that is for legitimate wiretapping by the authorities, such as in kidnapping cases. A judge would never give a foreign spy this type of authorization!

But Section 3 says "before, during or after" a crime against national security is committed, Court orders may be issued authorizing "any of the acts" prohibited in Sections 1 and 2, such as possessing, copying and distributing the same.

Look how else can we prosecute real spies if we can NEVER use their illegally wiretapped products because they were illegally wiretapped.

As long as a Court says we can, we can!

That's an erroneous reading of the law. The Court Order mentioned in Section 3 of RA 4200 only pertains to acquisition of evidence through wiretapping and similar means and excludes the possession and distribution of already existing illegal wiretapped material DJB is alluding to. He missed the fact that the provision qualifies the issuance of such order on the following:

1. that there are reasonable grounds to believe that any of the crimes enumerated hereinabove has been committed or is being committed or is about to be committed: Provided, however, That in cases involving the offenses of rebellion, conspiracy and proposal to commit rebellion, inciting to rebellion, sedition, conspiracy to commit sedition, and inciting to sedition, such authority shall be granted only upon prior proof that a rebellion or acts of sedition, as the case may be, have actually been or are being committed;
2. that there are reasonable grounds to believe that evidence will be obtained essential to the conviction of any person for, or to the solution of, or to the prevention of, any of such crimes; and
3. that there are no other means readily available for obtaining such evidence.

How can possession and distribution of illegally wiretapped material pass the requirement No. 2 and 3? Once an illegal wiretap, always an illegal wiretap. It cannot be cured.

• So, what's the basis of the position that wiretapped material can be used against the wiretapper?

Because the prohibition of admitting wiretapped material as evidence against the wiretapper was not intended under RA 4200. It is a law intended to protect the privacy of communication and correspondence. Contrary to the letter of the law, it was not intended to protect everyone, including the person who violates it. Basic of statutory construction, "stay away from interpreting the law in a way that makes the law absurd." It is the person who was wiretapped that is afforded protection because it is his right that was violated.

DJB argues this wise:

Suppose a real spy practices espionage and tries to leave the country bearing his illegally wiretapped recordings. He is accidentally detained at the airport and is caught with the illegally wiretapped material.

The material contains scandalous conversations of govt officials, editors, publishers, private people, etc. and is prima facie evidence of the spy's violations of Section 1 of ra4200.

If the policemen decide to sell the material to the media or make lots of copies and give them away, I think they would be guilty of Section 2 violations of ra 4200 for using the illegally wiretapped materials.

But if the police submit this illegally wiretapped material to an RTC judge who authorizes them to use it as evidence in a case of espionage, this allows them to legally use the illegally wiretapped material.

Now, did the judge "CURE" (your term) the illegally wiretapped material.

Given this example, only a stupid, stupid spy would conspicuously label "wiretapped materials" as such. If the customs police or other law enforcement officer would play a CD on the suspicion that it is wiretapped material, it would constitute an illegal search. Thus, it would still be inadmissible as evidence.

It is also erroneous to say that law enforcement officers need to ask permission from the Court to use wiretapped materials in prosecuting the wiretapper. Such officer would be using it to prove that the anti-wiretapping law was violated, not to prove whatever is contained in the CD. The contents, in this instance, would be irrelevant. If the acquired wiretapped CDs, for example, were obtained through a valid search warrant or in those instances that justify a search without a warrant, why would the law enforcement officer need to ask from the Court permission to use them? Of course, they are admissible. The Court, on the other hand, is obligated to issue orders that would protect the rights of those who were wiretapped, to include hiding their identity from the public.

"Play It Again, Garci"

Two lawyers weighed in on the issue of admissibility of the so-called "Garci tapes" as evidence on the revived Senate investigations on the wiretapping scandal.

Prof. Harry Roque and Atty. Edwin Lacierda argue that the Senate can accept the tapes as evidence, both heavily relying on the Supreme Court pronouncement in the case of Gaanan vs IAC.

Prof. Roque wrote:

Gaanan vs. Intermediate Appellate Court, [145 SCRA 112 (1986)]: the use of a telephone extension for the purpose of overhearing a private conversation without authorization did not violate R.A. 4200 because a telephone extension devise was neither among those "device(s) or arrangement(s)" enumerated therein, following the principle that "penal statutes must be construed strictly.”

The “Hello Garci” tape is a taped conversation conducted through cellular phones. The wording of the prohibition is relative to tapping “any wire or cable”, and cellular technology does away with both wires and cables. Thus, RA 4200 is inapplicable.

On the other hand, Atty. Lacierda averred that:

It must be remembered that at the time of its enactment, there were no wireless cellular or cordless phones in existence. Since no such equipment existed, R. A. No. 4200 could not be stretched to include "wiretapping" of cell phone conversations. In addition to this, in 1986, the Supreme Court, in the case of GAANAN v. INTERMEDIATE APPELLATE COURT, defined "device" to secretly overhear or record conversations as an instrument that taps the main line of a telephone. In other words, R. A. No. 4200 was envisioned to apply only to telephone lines or what we call now in this wireless age as "landlines". The law is silent on cordless and cellular phones.

With all due respect, I submit that their reliance on the abovementioned case is misplaced.

First and foremost, Gaanan vs IAC was not about admissibility of evidence. As the Supreme Court stated at the very outset of the decision:

We are confronted in this case with the interpretation of a penal statute and not a rule of evidence. The issue is not the admissibility of evidence secured over an extension line of a telephone by a third party. The issue is whether or not the person called over the telephone and his lawyer listening to the conversation on an extension line should both face prison sentences simply because the extension was used to enable them to both listen to an alleged attempt at extortion.

Second, the gravamen of the offense/s defined by RA 4200 is the "act of using a device to secretly overhear, intercept, or record private communication or spoken word". While its short title says "Anti-Wiretapping Law", its title is actually "An Act to Prohibit Wiretapping and Other Violations of the Privacy of Communication, And for Other Purposes".

Parsing Section 1 of RA 4200, there are two type of acts that are made punishable under it:

• to tap any wire or cable, or by using any other device or arrangement, to secretly overhear, intercept, or record such communication or spoken word
• to secretly overhear, intercept, or record such communication or spoken word by using a device commonly known as a dictaphone or dictagraph or dictaphone or walkie-talkie or tape recorder, or however otherwise described

The first is your conventional telephone wiretap. The second, on the other hand, involves the use of covert listening devices more commonly known as "bugs". They are absolutely correct that when Congress passed RA 4200, the legislators could not have envisioned the use of cellphones which have no wires or cables which in effect negates "wiretapping".

However, the wisdom of the authors of the law is on the second way of committing a violation of Section 1, RA 4200, i.e., the use of covert listening devices "however otherwise described". By overhearing, intercepting or recording the private communication or spoken word, the cellphone acts as the covert listening device. It is technically a "bug". Thus, while a cellphone may not be "wiretapped", tapping into it makes it a covert listening device (as a side note, the geeks at the FBI have reportedly been able to develop the capability to convert a cellphone into a conventional "bug" by remotely activating the phone's microphones and transmitting audio within the vicinity of the phone).

Third, even admitting for the sake of argument that RA 4200 does not cover tapping cellphones, it does not make it automatically legal. It merely says that the act is not punishable under such law. For the tapes to be validly admitted as evidence before the Senate, it must pass the muster of the constitutional provision that says:

Section 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise, as prescribed by law.

(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any proceeding.

Clearly, a violation of the privacy of communication and correspondence can only be admitted as evidence if it was acquired as prescribed by law. Since no law authorizes the act of overhearing, intercepting and recording of private communication over cellphones, any evidence acquired through such acts, though they may not be criminal (admitting for the sake of argument that they are not covered by RA 4200), are still inadmissible. Not all matters that are considered of public interest justify the setting aside of constitutional rights. There must be a law!

I can only imagine of one scenario where such tapes will be accepted as evidence, i.e., in a criminal proceeding against the wiretapper as object evidence where the content shall be irrelevant.

In contrast to the paeans of praise The Philippine Commentary is heaping on Sen. Chiz Escudero, I think he got swatted like a pesky fly by Brenda. Chiz was basically arguing that the tapes be conditionally admitted as evidence subject to a declaration of inadmissibility in case it is subsequently proven to be wiretapped material. What? In effect, he suggests that the Senate accept the tapes, play it, analyze it, turn it upside down, and when they are sure that it is wiretapped, declare that it is inadmissible as evidence. Doble comes to the Senate presenting alleged wiretapped material and the Senate says, "Ows, baka naman spliced lang sa studio yan? Hane, tingnan natin." Such sophistry, Chiz! No wonder DJB is beginning to worship at your feet.

Frankly, I cannot understand why the opposition senators insist on playing the tapes. Everybody who cared to hear it has already done so. An inquiry in aid of legislation that intends to prevent or discourage "wiretapping" need not go into the contents of the tape. They need to ask Doble who he did it with, how it is done, with the help of whom, how extensive is the operation, who orders it, etc. They will not find the answers to such questions listening to Gloria telling Garci, "Yung dagdag, yung dagdag."

If they want to go back to the electoral fraud issue, they better convince their counterparts at the Lower House to impeach her.

"SB 1862: A Slippery Slope" Part 1

Senate Bill 1862 seeks to provide a fixed term for the CSAFP and major service commanders of the AFP. Originally introduced as Senate Bill 1284, after committee hearings it was substituted with SB 1862 which is a result of a merger of SB 1284 and SB 67 of Sen Loi Estrada which intended that no officer be appointed as CSAFP when he has less than a year in the active service. It also includes the qualification that the CSAFP and the major service commanders "can only be removed for cause."

The objectives of the bill, according to its principal sponsor Sen. Biazon, are as follows:

1. To prevent the trivialization of the position of the Chief of Staff thereby preserving its integrity; and
   
2. To provide stability to the leadership of the Armed Forces of the Philippines by fixing the duration of the term of corps leadership so as to ensure continuity and consistency in the formulation and implementation of policies and programs.
   

I am afraid the legislation might have unintended consequences. This is a piece of legislation too preoccupied with the present, it disregards the future.

In intending to depoliticize processes concerning the armed forces, it might undermine the principle of civilian control of the military. In attempting to make the armed forces apolitical, we are courting them to throw their hat into the political ring. In attempting to insulate the armed forces from politics, it might lead to an armed forces who has a separate definition of "national interest" from the civilian authorities.

In the book "The Man on Horseback", Samuel Finer avers that:

"The moment the military draws this distinction between national interest and the government in power, they begin to invent their own private notion of national interest, and from this it is only a skip to the constrained substitution of this view for that of the civilian government; and this is precisely what we have defined as the very meaning of 'military intervention'."

My position that making the CSAFP a statutory position with a fixed term clashes with the principle of civilian control of the military rests on the fact that the CSAFP remains in the chain of command of the AFP. Reference has been made in the Senate deliberation proceedings to the Nichols-Goldwater Act of 1986 which reorganized the US armed forces following the slew of debacles it encountered, primarily concerning inter-service rivalry and service inter-operability. The said law prescribes a term of office for the Joint Chiefs of Staff and limits the US President's choice for the position to the major service commanders (chiefs of staff), vice chairmen of the Joint Chief of Staff and the unified commands (Centcom, CPAC, etc).

There is, however, one very glaring difference. The Joint Chief of Staff has no operational command of the troops. He is not part of the chain of command. Without authorization from the President or the Secretary of Defense, he cannot command the troops on the ground on his own authority. He is, however, not powerless. He is the most influential military man on the President's round table. And this is why many consider that the Nichols-Goldwater Act makes the Joint Chief of Staff too powerful. If he can monopolize the President's ear, he is the kingmaker!

Contrast that situation here. The CSAFP and the service commanders retain their position in the chain of command. There is a unified commander in the field but I do not know of any operational guideline that straightens out the matter of accountability and conflicting orders.

Now, if the CSAFP already exercises operational command of the troops, is the senior military adviser of the President, and with the subject bill, equipped with a fixed term, what are the consequences? Further, as the proposed law intends, he can only be removed "for cause" which the proposed law strangely fails to provide.

At the center of this question lies the principle of civilian control of the military. At the outset, let me make it clear that this principle is not the same as the principle of "civilian authority is supreme over the military". The former is only a component of the latter. The former emanates from the so-called "commander-in-chief powers" of the President. The 1987 Constitution makes the President the sole entity who has operational command and control of the troops.

So, what happens when the CSAFP disagrees with the President over a matter of policy or strategy, even privately? Who wins? Is this a "cause" that would justify getting fired?

If the President replaces or fires the CSAFP, he would be opening himself/herself to accusations that he/she is attempting to subvert the integrity of the armed forces. Under the proposed law, the burden of proving that the termination or replacement of the CSAFP was for a legal cause would be upon the President. Every action or omission of the President will be scrutinized and analyzed for politicking. What we will then have is a President who will have to tiptoe around all issues concerning the military. The President is virtually a hostage.

An Apology to MLQIII

I guess I owe an apology to MLQIII because of an earlier blog piece where I wrote:

Had he asked his lawyer friends, they would probably tell him that Trillanes and Jalosjos, at the time the said SC ruling was handed down, are basically on the same boat as far as the presumption of innocence is concerned. Jalosjos, while convicted by the trial court, was still presumed to be innocent because his conviction was on appeal. At that point, he remains an accused and not a convict by final judgment. You don't grade the presumption of innocence by the stage of the proceeding. Until such conviction is by final judgment, i.e., there is no more appeal or the right to appeal has been lost by inaction, the right of the accused to be presumed innocent remains.

I basically generalized that a trained eye would spot the error in MLQ's article. He wrote:

Pimentel justified his decision by citing the case of Romeo Jalosjos, who'd been convicted of statutory rape and reelected congressman, but was refused permission to attend sessions of the House of Representatives because the Supreme Court said he had to serve his sentence. In a word, Pimentel decided that an individual facing trial is on par with someone who has already been convicted of a crime.

MLQIII asked Atty. Lacierda to weigh in on the matter and the lawyer affirmed MLQIII's position. He wrote:

If you read the Jalosjos decision, the background scenario is that he has already been convicted and is sitting in prison. The equal protection of the laws says that all persons similarly situated should be similarly treated. Jalosjos and Trillanes are not in the same situation. Trillanes has not been convicted so far. His detention is due to the fact that the crime he committed is non-bailable, not because he has been convicted. Thus, he continues to enjoy the presumption of innocence. That is the big difference. By all accounts, your analysis is clear and correct.

What followed was an exhaustive argument on MLQIII's blog on the right to be presumed innocent and the effects of a finding of conviction by the trial court on such right. In hindsight, I think we need to revisit what MLQIII wrote and parse it line by line so that we can see what was erroneous in it which should have been seen by a trained eye.

So here it is again:

Pimentel justified his decision by citing the case of Romeo Jalosjos, who'd been convicted of statutory rape and reelected congressman, but was refused permission to attend sessions of the House of Representatives because the Supreme Court said he had to serve his sentence. In a word, Pimentel decided that an individual facing trial is on par with someone who has already been convicted of a crime. (Emphasis mine)

There was nothing of that sort in the SC ruling. Jalosjos was not serving his sentence. He is detained because the accusation against him is a capital offense. Even prior to conviction, he is denied bail. His conviction actually plays little part on the issue of his detention. What is operative here is the offense charged. Section 78 of the Revised Penal Code states "No penalty shall be executed except by virtue of a final judgment."

A judgment of conviction becomes final (a) when no appeal is seasonably filed, (b) when the accused commences to serve the sentence, (c) when the right to appeal is expressly waived in writing, except where the death penalty was imposed by the trial court, and (d) when the accused applies for probation, thereby waiving his right to appeal.

An appeal of the conviction of Jalosjos pending with the Supreme Court leads us to the only conclusion, Jalosjos was not yet serving his sentence.

Which leads to the question, what is the effect of an appeal? Atty. Lacierda wrote:

The constitutional presumption of innocence really means that accusation is not synonymous with guilt. But if one is convicted, then it showed that the presumption has been overturned and it is now the turn of the accused to prove that the judgment of conviction is wrong. Moreover, to be very technical about it, an appeal is a statutory right, not a constitutional right.

He seems to mistake an appeal of a criminal case with that of an appeal in a civil case. He seems to be placing a burden on the accused to prove that the conviction was wrong, which was agreed to by some of the commenters.

However, jurisprudence holds that an appeal of a criminal conviction "throws open the entire case wide open for review, and the appellate court can correct errors, though unassigned, that may be found in the appealed judgment" (People vs Feliciano, GR 127759, Sept. 24, 2001). The appeals court may even reverse the trial court's decision on the basis of grounds other than those that the parties raised as errors. The burden of proof never shifts and the quantum of proof that the conviction be beyond reasonable doubt remains, even on appeal. As the SC said in People vs Lagmay (1999), "the presumption of innocence is not a mere procedural tool of the law. It is not overcome by the presumption of regularity; indeed, it can be rebutted only by proof beyond reasonable doubt."

It shows how painstaking the standards the law and the rules have set for the judiciary before it finally convicts an accused. To hold otherwise is to cheapen the Constitution's guarantee to a person's right to life and liberty.

Legal Advocacy and Political Advocacy: Discerning the Difference

Deliberate failure to discern between the two has been, for a long time, an exclusive enclave of lawyers who would rather have their cases tried in the "court of public opinion" rather than by the judge. Hoping that a strong public clamor would influence to a certain extent the judge's ruling, it takes a judge with unwavering moral courage and nerves of steel in disregarding public opinion in making his decision.

This has been the seeming approach of the defense counsel in the Sonny Trillanes case who, as the ruling of Judge Pimentel said, exerted "undue pressure" upon the court by citing the wrong precedents. By citing and insisting that Trillanes deserves the same treatment that the other courts have given to Nur Misuari and Erap, they pushed the wrong button and instead were awarded a mild rebuke from the judge.

I don't know where the counsel of Trillanes got the idea that orders of other courts bind another because such order sets a "precedent". Under the principle of stare decisis, only final judgments of the Supreme Court and appellate courts become precedents and bind lower courts to follow the settled rule. Thus, the order of the other courts regarding the case of Nur Misuari and Erap are, at most, persuasive only in character.

By taking a rather "combative" stance, the defense counsel - probably taking the cue from his client - has been playing to the gallery on the issue of Trillanes' temporary liberty to be able to take his position in the Senate. They have been playing to the hilt the "bad boy with the heart of gold" (Robin Padilla) formula in the court that has given them success in the last elections. But that is still par for the course. Ultimately the court still has the power to cite in contempt a lawyer who would continue to cross the line.

What is disconcerting however is the growing penchant of the media, particularly of political commentators who, wittingly or unwittingly, blur the line between legal advocacy and political advocacy. Take for instance the columns of Manuel L. Quezon III and Conrado de Quiros on the decision of Judge Pimentel.

MLQIII wrote:

Pimentel justified his decision by citing the case of Romeo Jalosjos, who'd been convicted of statutory rape and reelected congressman, but was refused permission to attend sessions of the House of Representatives because the Supreme Court said he had to serve his sentence. In a word, Pimentel decided that an individual facing trial is on par with someone who has already been convicted of a crime.

Had he asked his lawyer friends, they would probably tell him that Trillanes and Jalosjos, at the time the said SC ruling was handed down, are basically on the same boat as far as the presumption of innocence is concerned. Jalosjos, while convicted by the trial court, was still presumed to be innocent because his conviction was on appeal. At that point, he remains an accused and not a convict by final judgment. You don't grade the presumption of innocence by the stage of the proceeding. Until such conviction is by final judgment, i.e., there is no more appeal or the right to appeal has been lost by inaction, the right of the accused to be presumed innocent remains.

On the other hand, De Quiros wrote:

Frankly, I don’t know how Pimentel became a judge. His wife certainly may not trust him to go to the market to buy apples and oranges, or indeed bananas -- he can’t judge the difference. Trillanes’ and Jalosjos’ cases are the same banana? Pimentel probably had in mind the banana National Security Adviser Norberto Gonzales shoved into his mouth while being grilled by senators about his attempt to sell Philippine security to the US Congress and being reduced to speechlessness in the process. The banana failed to revive his voice and Gonzales excused himself from further torture by citing high blood pressure. That’s the same banana Pimentel is eating.

I don't know if he is trying to be cute. He does not know Judge Pimentel and clearly he lacks the qualification to question the judge's competency and ability. Well, he could be an expert on fruits, that people can give him.

He further wrote:

Pimentel may not know it (which is probably why he is a judge in Gloria Macapagal-Arroyo’s courts), but there is something in law called “precedent.” Lawyers quote it to show that there has been a ruling by other courts on the same case, and a judge would be well advised to heed it. As far as I know, neither in the United States nor in Timbuktu, neither here nor there, has citing precedent ever been called applying undue pressure. It is all very well to be independent -- though one must wonder at the independence of a court that swallows hook, line and sinker a prosecution’s argument -- but it is not all very well to be independent of thought.

Again, if only De Quiros researched or asked his lawyer friends, he would come to know that not all rulings or orders of the courts are precedent-setting. While you may use those orders and rulings to persuade the courts to rule in your favor, it is not duty-bound to follow it.

It is one thing to argue before the courts the merit of one's case and another to take your issues to the bar of public opinion through a very supportive and biased media. I am reminded of the actuations of some media personalities (Ricky Carandang easily comes to mind) who readily express legal opinions and then immediately issue a blanket disclaimer that he/she is not a lawyer. If it wasn't an informed opinion, why even say it?

Rene Saguisag in his column clearly disagreed with the decision of Judge Pimentel but he clearly does not believe that Judge Pimentel is a nincompoop (as de Quiros did) and stopped short of insinuating that there were political considerations in the decision (as what MLQIII did).

Preventing Urban Landlessness: Putting A Cap on the Interest of Loan Agreements with Mortgage of Family Homes as Security

The past few years, Cavite bore witness to the rise of several lending and financing companies and personalities. With an eye to make a quick and effortless buck, they provide credit and financing at iniquitous, unconscionable and exorbitant rates. The prevailing rates stand at 5% monthly interest. Computed at annual rates, it would sum up to a neat 60% interest on loans ranging from P 100,000.00 to P 500,000.00.

What makes it doubly wrong is that these lending and financing companies have taken a liking to requiring residential house and lots as collateral with verbal assurances that they will not foreclose as long as the debtors pay interest monthly. As verbal assurances go, they fly in the face of what these lending and financing companies do when our provincemates fail to pay their obligation.

Of course, our provincemates can run to the courts to have the mortgage instruments reformed and the interest rates lowered to a more equitable and reasonable rate as enunciated in the decisions of the Supreme Court in Spouses Solangon vs Salazar (GR 125944, June 21, 2001) and Medel vs CA (GR 131622, November 7, 1998). However, the nature of judicial proceedings being passive and such remedy largely unknown to our provincemates, rare are instances that victims resort to courts. Sad to say, there remains a prevailing apprehension among our poor provincemates with regards our courts of justice, seeing them as exclusive for those who have money. It also does not help that these lending and financing companies are fronted by supposed lawyers. Thus, they are forced by circumstances to sell their land instead of being judicially or extrajudicially foreclosed by these lending and financing companies.

Letting these credit and financing companies go unfettered in their business would run to the ground the spirit and intent of various social justice legislations, especially those that involve redistributing residential lands to the landless. As it stands, a good number of my oldtime neighbors face the danger of being mere transients.

I gathered that there are pending bills before both Houses of Congress intending to regulate these lending companies and the way they do business. I am referring to House Bill 120 authored by former Representative now Budget Secretary Joey Salceda and its counterpart Senate Bill 1180 introduced by Sen. Ramon B. Magsaysay both titled “AN ACT REGULATING THE ESTABLISHMENT AND OPERATION OF LENDING COMPANIES IN THE PHILIPPINES AND FOR OTHER PURPOSES.”

However, Section 9 of the proposed legislation weakly states:

“Amount and Charges on Loans -An LC shall grant loans in such amounts and reasonable interest rates and charges as may be agreed upon between the LC and the borrower or debtor. Provided, however, that the agreement shall be in compliance with the provisions of Republic Act No. 3765, otherwise known as the Truth in Lending Act and Republic Act No. 7394, otherwise known as the Consumer Act of the Philippines; And provided however, that, the Monetary Board, in consultation with DTI and the industry, may prescribe such interest rate as may be warranted by prevailing economic and social conditions.”

It would be unwise to put a cap on the interest rates on all loan agreements because it might unduly restrict the free flow of capital and trade. What the situation entails, in my opinion, is a legislation that would put a cap on interest rates of loan agreements secured by a mortgage of the residential house and lots of the mortgagor. The Rules of Court under Rule 39, Section 13 exempts the family home from attachment. However, as an exception, the family home can be foreclosed if subject of a mortgage.

Thus, the said legislation should have the following salient features:

a. The cap for the interest rate of loan agreements covered by a mortgage of the mortgagor’s residential house and lot should be pegged at the legal interest rate, 12% per annum.

The Supreme Court’s decisions on matters involving the rate of interest (as stated above in the cases of Solangon vs Salazar GR 125944, June 21, 2001) and Medel vs CA GR 131622, November 7, 1998) have been uniform in this respect.

b. Should be applicable only to residential house and lots with a value of 2 million pesos or below

This proviso is just one of the limitations to make it applicable only to those who belong in the lower brackets of our society. However, to make it applicable nationwide, we may use the zonal valuation of the BIR to determine the proper threshold in the respective provinces or administrative regions.

c. The said house and lot is the family home

The intent of this legislation is the prevention of the uprooting of families and making them mere transients though landlessness. Congress has crafted various legislations to solve landlessness. This proposed legislation intends to make sure that such laws do not go to waste.

d. It is the only house and lot owned by the mortgagor

To prevent abuse, it must be stressed that the subject family home is the only house and lot owned by the mortgagor.