G.R. No. 207246 , November 22, 2016
JOSE M. ROY III, PETITIONER, VS. CHAIRPERSON TERESITA HERBOSA, THE SECURITIES AND EXCHANGE COMMISSION, AND PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, RESPONDENTS.

FACTS

Petitioner Jose M. Roy III filed a special civil action for certiorari and prohibition seeking to declare Section 2 of SEC Memorandum Circular No. 8, Series of 2013 (MC No. 8) unconstitutional. He alleged that the circular contravened the ruling in Gamboa v. Teves regarding the nationality requirement for public utility ownership. Specifically, Roy argued that MC No. 8, which required the 60-40 Filipino-foreign equity ratio to be applied to both (a) the total number of outstanding voting shares and (b) the total number of outstanding shares of stock, effectively limited the constitutional rule to voting shares alone. He contended this constituted grave abuse of discretion by the SEC.

ISSUE

Whether the petition for certiorari and prohibition is the proper remedy to assail the constitutionality of SEC Memorandum Circular No. 8.

RULING

The Court, through the Concurring Opinion of Justice Bersamin, voted to dismiss the petition. The legal logic rests on the improper choice of remedy. The writs of certiorari and prohibition under Rule 65 are available only against the exercise of judicial, quasi-judicial, or ministerial functions. The issuance of MC No. 8 was a regulatory function of the SEC, not a quasi-judicial one. A quasi-judicial function involves investigating facts, holding hearings, and drawing conclusions from those facts as a basis for official action. In contrast, MC No. 8 was a general interpretative rule issued to implement the Gamboa decision.
Furthermore, the Court cannot take cognizance of the petition under its expanded judicial power to review acts of any government branch for grave abuse of discretion. This expanded jurisdiction, introduced in the 1987 Constitution , applies to co-equal branches of government (the Executive or the Legislature) or their instrumentalities. The SEC, as a regulatory body, does not fall under this specific ambit for the purpose of challenging its purely regulatory issuances via certiorari. Since the SEC acted within its rule-making authority and in strict compliance with Gamboa, no grave abuse of discretion—defined as arbitrary, despotic, or whimsical exercise of power—was present. Therefore, the petition was dismissed for employing an incorrect remedial measure.