Facts: 

On 27 June 2002, BANAT filed a Petition to Proclaim the Full Number of Party-List
Representatives Provided by the Constitution, docketed as NBC No. 07-041 (PL) before the NBC.
BANAT filed its petition because "the Chairman and the Members of the COMELEC have
recently been quoted in the national papers that the COMELEC is duty bound to and shall
implement the Veterans ruling, that is, would apply the Panganiban formula in allocating party-
list seats."

     BANAT filed a petition for certiorari and mandamus assailing the ruling in NBC Resolution No.
07-88. BANAT did not file a motion for reconsideration of NBC Resolution No. 07-88. 

     On 9 July 2007, Bayan Muna, Abono, and A Teacher asked the COMELEC, acting as NBC, to
reconsider its decision to use the Veterans formula as stated in its NBC Resolution No. 07-60
because the Veterans formula is violative of the Constitution and of Republic Act No. 7941 (R.A.
No. 7941). On the same day, the COMELEC denied reconsideration during the proceedings of
the NBC.
 

Issue:  Considering the allegations in the petitions and the comments of the parties in these
cases, we defined the following issues in our advisory for the oral arguments set on 22 April
2008:
     1. Is the twenty percent allocation for party-list representatives in Section 5(2), Article VI of
the Constitution mandatory or merely a ceiling?
     2. Is the three-seat limit in Section 11(b) of RA 7941 constitutional?
     3. Is the two percent threshold prescribed in Section 11(b) of RA 7941 to qualify for one seat
constitutional?
     4. How shall the party-list representative seats be allocated?
     5. Does the Constitution prohibit the major political parties from participating in the party-
list elections? If not, can the major political parties be barred from participating in the party-list
elections?
 

Held: WHEREFORE we PARTIALLY GRANT the petition. We SET ASIDE the Resolution of the

COMELEC dated 3 August 2007 in NBC No. 07-041 (PL) as well as the Resolution dated 9 July
2007 in NBC No. 07-60. We declare unconstitutional the two percent threshold in the
distribution of additional party-list seats.
 

Ratio: Neither the Constitution nor R.A. No. 7941 mandates the filling-up of the entire 20%
allocation of party-list representatives found in the Constitution. However, we cannot allow
the continued existence of a provision in the law which will systematically prevent the
constitutionally allocated 20% party-list representatives from being filled. The three-seat cap,
as a limitation to the number of seats that a qualified party-list organization may occupy,
remains a valid statutory device that prevents any party from dominating the party-list
elections. 

     We rule that, in computing the allocation of additional seats, the continued operation of the
two percent threshold for the distribution of the additional seats as found in the second clause
of Section 11(b) of R.A. No. 7941 is unconstitutional. This Court finds that the two percent
threshold makes it mathematically impossible to achieve the maximum number of available
party list seats when the number of available party list seats exceeds 50. The continued
operation of the two percent threshold in the distribution of the additional seats frustrates the
attainment of the permissive ceiling. 

     In declaring the two percent threshold unconstitutional, we do not limit our allocation of
additional seats to the two-percenters. The percentage of votes garnered by each party-list
candidate is arrived at by dividing the number of votes garnered by each party by 15,950,900,
the total number of votes cast for party-list candidates. There are two steps in the second
round of seat allocation. First, the percentage is multiplied by the remaining available seats, 38,
which is the difference between the 55 maximum seats reserved under the Party-List System
and the 17 guaranteed seats of the two-percenters. The whole integer of the product of the
percentage and of the remaining available seats corresponds to a party’s share in the remaining
available seats. Second, we assign one party-list seat to each of the parties next in rank until all
available seats are completely distributed. We distributed all of the remaining 38 seats in the
second round of seat allocation. Finally, we apply the three-seat cap to determine the number
of seats each qualified party-list candidate is entitled. 

     Neither the Constitution nor R.A. No. 7941 prohibits major political parties from
participating in the party-list system. On the contrary, the framers of the Constitution clearly
intended the major political parties to participate in party-list elections through their sectoral
wings. In fact, the members of the Constitutional Commission voted down, 19-22, any
permanent sectoral seats, and in the alternative the reservation of the party-list system to the
sectoral groups. In defining a "party" that participates in party-list elections as either "a political
party or a sectoral party," R.A. No. 7941 also clearly intended that major political parties will
participate in the party-list elections. Excluding the major political parties in party-list elections
is manifestly against the Constitution, the intent of the Constitutional Commission, and R.A. No.
7941. This Court cannot engage in socio-political engineering and judicially legislate the
exclusion of major political parties from the party-list elections in patent violation of the
Constitution and the law. 

In view of the inclusion of major political parties (according to Puno, J.)

     The Court today effectively reversed the ruling in Ang Bagong Bayani v. COMELEC with
regard to the computation of seat allotments and the participation of major political parties in
the party-list system. I vote for the formula propounded by the majority as it benefits the party-
list system but I regret that my interpretation of Article VI, Section 5 of the Constitution with
respect to the participation of the major political parties in the election of party-list
representatives is not in direct congruence with theirs, hence 

     There is no gainsaying the fact that the party-list parties are no match to our traditional
political parties in the political arena. This is borne out in the party-list elections held in 2001
where major political parties were initially allowed to campaign and be voted for. The results
confirmed the fear expressed by some commissioners in the Constitutional Commission that
major political parties would figure in the disproportionate distribution of votes: of the 162
parties which participated, the seven major political parties made it to the top 50. These seven
parties garnered an accumulated 9.54% of the total number of votes counted, yielding an
average of 1.36% each, while the remaining 155 parties (including those whose qualifications
were contested) only obtained 90.45% or an average of 0.58% each. Of these seven, three
parties or 42.8% of the total number of the major parties garnered more than 2% of the total
number of votes each, a feat that would have entitled them to seat their members as party-list
representatives. In contrast, only about 4% of the total number of the remaining parties,
or only 8 out of the 155 parties garnered more than 2%.

     In sum, the evils that faced our marginalized and underrepresented people at the time of the
framing of the 1987 Constitution still haunt them today. It is through the party-list system that
the Constitution sought to address this systemic dilemma. In ratifying the Constitution, our
people recognized how the interests of our poor and powerless sectoral groups can be
frustrated by the traditional political parties who have the machinery and chicanery to
dominate our political institutions. If we allow major political parties to participate in the party-
list system electoral process, we will surely suffocate the voice of the marginalized, frustrate
their sovereignty and betray the democratic spirit of the Constitution. That opinion will serve
as the graveyard of the party-list system.

     IN VIEW WHEREOF, I dissent on the ruling allowing the entry of major political parties into
the party-list system. 

  
In view of 2% being unconstitutional (according to Nachura, J.)

     However, I wish to add a few words to support the proposition that the inflexible 2%
threshold vote required for entitlement by a party-list group to a seat in the House of
Representatives in Republic Act (R.A.) No. 7941 is unconstitutional. This minimum vote
requirement ─ fixed at 2% of the total number of votes cast for the party list system ─ presents
an unwarranted obstacle to the full implementation of Section 5 (2), Article VI, of the Philippine
Constitution. As such, it effectively defeats the declared constitutional policy, as well as the
legislative objective expressed in the enabling law, to allow the people’s broadest
representation in Congress,the raison d’etre for the adoption of the party-list system. 

     Today, a little over eight (8) years after this Court’s decision in Veterans Federation Party, we
see that in the 14th Congress, 55 seats are allocated to party-list representatives, using the
Veterans formula. But that figure (of 55) can never be realized, because the 2% threshold vote
requirement makes it mathematically impossible to have more than 50 seats. After all, the total
number of votes cast for the party-list system can never exceed 100%.

    Lest I be misunderstood, I do not advocate doing away completely with a threshold vote
requirement. The need for such a minimum vote requirement was explained in careful and
elaborate detail by Chief Justice Puno in his separate concurring opinion in Veterans Federation
Party. I fully agree with him that a minimum vote requirement is needed --

1. to avoid a situation where the candidate will just use the party-list system as a fallback
position; 

2. to discourage nuisance candidates or parties, who are not ready and whose chances are very
low, from participating in the elections;

3. to avoid the reserve seat system by opening up the system;

4. to encourage the marginalized sectors to organize, work hard, and earn their seats within the
system;

5. to enable sectoral representatives to rise to the same majesty as that of the elected
representatives in the legislative body, rather than owing to some degree their seats in the
legislative body either to an outright constitutional gift or to an appointment by the President
of the Philippines;

6. if no threshold is imposed, this will actually proliferate political party groups and those who
have not really been given by the people sufficient basis for them to represent their
constituents and, in turn, they will be able to get to the Parliament through the backdoor under
the name of the party-list system; and

7. to ensure that only those with a more or less substantial following can be represented.9

     However, with the burgeoning of the population, the steady increase in the party-list seat
allotment as it keeps pace with the creation of additional legislative districts, and the
foreseeable growth of party-list groups, the fixed 2% vote requirement is no longer viable. It
does not adequately respond to the inevitable changes that come with time; and it is, in fact,
inconsistent with the Constitution, because it prevents the fundamental law from ever being
fully operative. 

     It is correct to say, and I completely agree with Veterans Federation Party, that Section 5 (2),
Article VI of the Constitution, is not mandatory, that it merely provides a ceiling for the number
of party-list seats in Congress. But when the enabling law, R.A. 7941, enacted by Congress for
the precise purpose of implementing the constitutional provision, contains a condition that
places the constitutional ceiling completely beyond reach, totally impossible of realization, then
we must strike down the offending condition as an affront to the fundamental law. This is not
simply an inquiry into the wisdom of the legislative measure; rather it involves the duty of this
Court to ensure that constitutional provisions remain effective at all times. No rule of statutory
construction can save a particular legislative enactment that renders a constitutional provision
inoperative and ineffectual.