G.R. No. 92024 November 9, 1990
CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner, vs. THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND INDUSTRY, LUZON PETROCHEMICAL CORPORATION, and PILIPINAS SHELL CORPORATION, respondents.

FACTS

This petition seeks to annul the decision of the Board of Investments (BOI) and the Department of Trade and Industry (DTI) approving the transfer of a proposed petrochemical plant’s site from Bataan to Batangas and a shift in its feedstock from naphtha only to naphtha and/or liquefied petroleum gas (LPG). The case is a sequel to G.R. No. 88637 , where the Supreme Court ordered the BOI to conduct a hearing on petitioner Congressman Garcia’s opposition to the transfer. The Court later noted Garcia’s non-appearance at the scheduled hearing, which it deemed a waiver. In a subsequent resolution, the Court clarified that an investor has no “right of final choice” of plant site under the 1987 Constitution or the Omnibus Investments Code, as such choice is subject to BOI approval.
Petitioner Garcia argues that Presidential Decree Nos. 949 and 1803 designated Limay, Bataan, as a petrochemical industrial zone, making the BOI’s approval of the transfer to Batangas a violation of law. He contends the transfer undermines the economic benefits intended for Bataan, where a government-owned refinery produces the necessary naphtha feedstock. The respondents, including the investor Luzon Petrochemical Corporation, maintain that the BOI’s decision was a valid exercise of its administrative discretion based on technical and economic feasibility studies.

ISSUE

Whether the Board of Investments committed grave abuse of discretion amounting to lack or excess of jurisdiction in approving the transfer of the petrochemical plant site from Bataan to Batangas and the change in its feedstock.

RULING

The Supreme Court DISMISSED the petition, finding no grave abuse of discretion by the BOI. The Court held that the determination of the plant site and the appropriate feedstock is a policy decision within the BOI’s administrative expertise and discretion, pursuant to its mandate under the Omnibus Investments Code to evaluate the feasibility and desirability of registered projects.
The legal logic is anchored on the principle of separation of powers and the limited scope of judicial review over administrative actions. The Court emphasized that its role is not to assess the wisdom or soundness of the BOI’s decision but only to determine its legality or constitutionality. The Court found that PD Nos. 949 and 1803, which reserved an area in Bataan for a petrochemical zone, did not prohibit the establishment of such plants in other locations. Therefore, the BOI’s approval of the Batangas site did not contravene these decrees. Furthermore, the Court reiterated its earlier ruling that an investor has no vested “right of final choice”; the BOI retains the sovereign prerogative to approve or disapprove applications based on national interest. Absent a clear showing of caprice, arbitrariness, or a violation of law, the Court will not substitute its judgment for that of the competent administrative agency. The alleged financial arrangements for the project (“petroscam”) were deemed irrelevant to the legal issue of site transfer and did not constitute a ground for annulment.