Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=84244:59917&amp;catid=1594&amp;Itemid=566
Timestamp: 2019-04-19 14:20:12+00:00

Document:
THE DEPARTMENT OF HEALTH, REPRESENTED BY SECRETARY ENRIQUE T. ONA, AND THE FOOD AND DRUG ADMINISTRATION (FORMERLY THE BUREAU OF FOOD AND DRUGS), REPRESENTED BY ASSISTANT SECRETARY OF HEALTH NICOLAS B. LUTERO III, OFFICER-IN-CHARGE, Petitioners, v. PHILIP MORRIS PHILIPPINES MANUFACTURING, INC., Respondent.
Assailed in this petition for review on certiorari1 are the Decision2 dated August 26, 2011 and the Resolution3 dated August 3, 2012 rendered by the Court of Appeals (CA) in CA-G.R. SP No. 109493, finding grave abuse of discretion on the part of petitioners the Department of Health (DOH) and the Food and Drug Administration (FDA), then known as the Bureau of Food and Drugs (BFAD), for denying respondent Philip Morris Philippines Manufacturing, Inc.’s (PMPMI) permit applications for its tobacco sales promotions.
Aggrieved, PMPMI elevated the matter to the CA via petition for certiorari and mandamus,22 docketed as CA G.R. SP No. 109493, ascribing grave abuse of discretion upon the DOH in refusing to grant its sales promotional permit applications, maintaining, inter alia, that RA 9211 still allows promotion activities notwithstanding the phase-out of advertising and sponsorship activities after July 1, 2008.
Section 39. Repealing Clause. – DOH Administrative Orders No. 10[,] s. 1993 and No. 24[,] s. 2003 are hereby repealed. Article 94 of Republic Act No. 7394, as amended, otherwise known as the Consumer Act of the Philippines, is hereby amended.
All other laws, decrees, ordinances, administrative orders, rules and regulations, or any part thereof, which are inconsistent with this Act are likewise repealed or amended accordingly.
Dissatisfied, the DOH, through the Office of the Solicitor General (OSG), moved for the reconsideration28 of the said Decision, which the CA denied in a Resolution29 dated August 3, 2012, hence, this petition.
The essential issues to be resolved are: (a) whether or not the CA erred in finding that the authority of the DOH, through the BFAD, to regulate tobacco sales promotions under Article 116 in relation to Article 109 of RA 7394 had already been impliedly repealed by RA 9211, which created the IAC-Tobacco and granted upon it the exclusive authority to administer and implement the provisions thereof; and (b) whether or not the CA erred in ascribing grave abuse of discretion upon the DOH when the latter held that RA 9211 has also completely prohibited tobacco promotions as of July 1, 2008.
It is the CA’s pronouncement that the creation of the IAC-Tobacco effectively and impliedly repealed30 the above-quoted provisions of RA 7394, thereby removing the authority of the DOH to rule upon applications for sales promotional permits filed by tobacco companies such as those filed by PMPMI subject of this case.
On the other hand, while the DOH and the BFAD concede that the creation of the IAC-Tobacco expressly grants upon the IAC-Tobacco the exclusive power and function to administer and implement its provisions, they nevertheless maintain that RA 9211 did not remove their authority under RA 7394 to regulate tobacco sales promotions.31 They point out that this much can be deduced from the lack of provisions in RA 9211 and its implementing rules laying down the procedure for the processing of applications for tobacco sales promotions permit.32 As such, the DOH, through the BFAD, retains the authority to rule on PMPMI’s promotional permit applications.
The Court agrees with the CA.
After a meticulous examination of the above-quoted pertinent provisions of RA 7394 and RA 9211, the Court finds that the latter law impliedly repealed the relevant provisions of the former with respect to the authority of the DOH to regulate tobacco sales promotions.
At this point, the Court notes that both laws separately treat “promotion” as one of the activities related to tobacco: RA 7394 defines “sales promotion” under Article 4 (bm), while RA 9211 speaks of “promotion” or “tobacco promotion” under Section 4 (l).
Identifying its Gear Up Promo and Golden Stick Promo to be activities that fall under sales promotion as contemplated in the said provision, PMPMI filed its permit applications under Article 116 of RA 7394 before the BFAD.
As adverted to elsewhere, the IAC-Tobacco shall have the exclusive power and function to administer and implement the provisions of RA 9211, which includes the conduct of regulating promotion.
In order to fully understand the depth and scope of these marketing activities, the Court finds it necessary to go beyond the ambit of the definitions provided in our laws.
Consequently, if “sales promotion” is considered as one of the subcategories of “promotion,” it is clear, therefore, that “promotion” necessarily incorporates the activities that fall under “sales promotion.” Considering that the common and fundamental purpose of these marketing strategies is to raise customer awareness in order to increase consumer demand or sales, drawing a demarcation line between “promotion” and “sales promotion” as two distinct and separate activities would be unnecessarily stretching their meanings and, accordingly, sow more confusion. Moreover, the techniques, methods, and devices through which “sales promotion” are usually accomplished can likewise be considered as activities relating to “promotion,” like raffle contests, which necessarily require prizes and drawing of winners, discounts, and freebies.
Furthermore, the declared policy of RA 9211 where “promotion” is defined includes the institution of “a balanced policy whereby the use, sale and advertisements of tobacco products shall be regulated in order to promote a healthful environment and protect the citizens from the hazards of tobacco smoke x x x.”43 Hence, if the IAC-Tobacco was created and expressly given the exclusive authority to implement the provisions of RA 9211 in accordance with the foregoing State policy, it signifies that it shall also take charge of the regulation of the use, sale, distribution, and advertisements of tobacco products, as well as all forms of “promotion” which essentially includes “sales promotion.” Therefore, with this regulatory power conferred upon the IAC-Tobacco by RA 9211, the DOH and the BFAD have been effectively and impliedly divested of any authority to act upon applications for tobacco sales promotional permit, including PMPMI’s.
In fine, the Court agrees with the CA that it is the IAC-Tobacco and not the DOH which has the primary jurisdiction to regulate sales promotion activities as explained in the foregoing discussion. As such, the DOH’s ruling, including its construction of RA 9211 (i.e., that it completely banned tobacco advertisements, promotions, and sponsorships, as promotion is inherent in both advertising and sponsorship), are declared null and void, which, as a necessary consequence, precludes the Court from further delving on the same. As it stands, the present applications filed by PMPMI are thus remanded to the IAC-Tobacco for its appropriate action. Notably, in the proper exercise of its rule-making authority, nothing precludes the IAC-Tobacco from designating any of its pilot agencies (which, for instance, may even be the DOH45) to perform its multifarious functions under RA 9211.
WHEREFORE, the petition is DENIED. The Decision dated August 26, 2011 and the Resolution dated August 3, 2012 of the Court of Appeals in CA-G.R. SP No. 109493 are hereby AFFIRMED with the MODIFICATION in that the present permit applications filed by respondent Philip Morris Philippines Manufacturing, Inc. for its tobacco sales promotions are hereby REMANDED to the Inter-Agency Committee-Tobacco for appropriate action.
2 Id. at 70-90. Penned by Associate Justice Noel G. Tijam with Associate Justices Marlene Gonzales-Sison and Jane Aurora C. Lantion concurring.
4 Inadvertently mentioned as Section 16; id. at 71.
5 Approved on April 13, 1992.
8 See letter dated January 8, 2009; id. at 474.
12 Entitled “AN ACT REGULATING THE PACKAGING, USE, SALE, DISTRIBUTION AND ADVERTISEMENTS OF TOBACCO PRODUCTS AND FOR OTHER PURPOSES”; approved on June 23, 2003.
13Rollo, p. 72. See also memorandum dated February 16, 2009; id. at 131.
14 See letter of PMPMI, through its counsel, dated January 19, 2009; id. at 476.
17 Id. at 135-143. Penned by Secretary of Health Francisco T. Duque, III, MD, MSC.
20 See id. at 138-141.
21 See id. at 141-142.
22 Dated July 13, 2009. Id. at 478-516.
24 Id. at 82, citing Bolos v. Bolos, 648 Phil. 630, 637 (2010).
26 See id. at 84.
28 See Motion for Reconsideration dated September 20, 2011; id. at 408-432.
30 See Section 39 of RA 9211.
33 Charles M. Futrell. Just the Facts 101 Textbook Key Facts: Fundamentals of Selling, 11th Ed., 2015. (visited February 28, 2015). 34 Rob Peters. The Social Media Marketing Handbook – Everything You Need to Know About Social Media, 2012. (visited April 20, 2015).
37 See Hasan, K. and Khan, R. (2011). Building International Brand Through Promotional Strategy. University of Skovde, Sweden.
T01 (visited April 20, 2015).
38 Kurtz, Dave. (2010). Contemporary Marketing Mason, OH: South-Western Cengage Learning, cited in (visited April 20, 2015).
39 See Supra note 34.
42Associated Communications & Wireless Services-United Broadcasting Networks v. NTC, 445 Phil. 621, 643 (2003).
43 SECTION 2. Policy. – It is the policy of the State to protect the populace from hazardous products and promote the right to health and instill health consciousness among them. It is also the policy of the State, consistent with the Constitutional ideal to promote the general welfare, to safeguard the interests of the workers and other stakeholders in the tobacco industry. For these purposes, the government shall institute a balanced policy whereby the use, sale and advertisements of tobacco products shall be regulated in order to promote a healthful environment and protect the citizens from the hazards of tobacco smoke, and at the same time ensure that the interests of tobacco farmers, growers, workers and stakeholders are not adversely compromised.
44 See Nieves v. Duldulao, G.R. No. 190276, April 2, 2014, citing Jalosjos v. Commission on Elections, G.R. No. 205033, June 18, 2013, 698 SCRA 742, 762.
45 See Inter-Agency Committee on Tobacco Memorandum Circular (I-ACT MC No. 1 s. 2008), wherein the DOH was designated as pilot agency in the implementation of provisions on Healthful Environment and Advertising and Promotions.

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