G.R. No. 181274 ; June 23, 2010
PHILIPPINE ECONOMIC ZONE AUTHORITY, represented herein by DIRECTOR GENERAL LILIA B. DE LIMA, Petitioner, vs. JOSEPH JUDE CARANTES, ROSE CARANTES, and all the other HEIRS OF MAXIMINO CARANTES, Respondents.

FACTS

Respondents, the heirs of Maximino Carantes, are in possession of a parcel of land in Baguio City and hold a Certificate of Ancestral Land Claim (CALC) issued by the DENR. Relying on this CALC, they secured building and fencing permits from the Baguio City Building Official and proceeded to construct a residential building and fence the property. The Philippine Economic Zone Authority (PEZA) informed respondents that their structure overlapped the territorial boundary of the Baguio City Economic Zone (BCEZ) and ordered its demolition within sixty days, threatening to undertake the demolition at respondents’ expense if they failed to comply.
Without responding to PEZA’s demand, respondents filed a Petition for Injunction before the Regional Trial Court (RTC) of Baguio City. The RTC granted the injunction, ruling that the CALC vested rights in respondents, segregating the land from public domain and making it immune from the effects of Proclamation No. 1825, which established the BCEZ. The Court of Appeals affirmed the RTC decision. PEZA, through the Office of the Solicitor General, filed the present Petition for Review, which was filed almost three months after receipt of the CA decision.

ISSUE

Whether PEZA can require respondents to demolish the structures they built within the BCEZ territory.

RULING

Yes. The Supreme Court granted PEZA’s petition, reversing the CA and RTC decisions. The Court first addressed the procedural issue, finding the petition was filed out of time. The reglementary period for filing a petition under Rule 45 is fifteen days. The OSG’s excuses of inadvertence and heavy workload do not constitute compelling reasons to relax this procedural rule. Thus, the CA decision had become final and executory.
On substantive grounds, the Court clarified that even if the petition were timely, PEZA’s authority would prevail. Under Section 6 of P.D. No. 1716, as amended, the power to issue building permits within export processing zones is vested exclusively in the PEZA Administrator or his authorized Building Officials. Furthermore, Section 14(i) of R.A. No. 7916 grants PEZA the concurrent authority to require the removal or demolition of structures built without the necessary PEZA permit. The building and fencing permits issued by the Baguio City Building Official were therefore invalid for constructions within the BCEZ. The respondents’ CALC does not exempt them from complying with the National Building Code and related laws, including the specific regulatory regime governing economic zones. Their rights under the CALC are subject to existing laws, which include PEZA’s exclusive jurisdiction over constructions within its territorial jurisdiction.