The Supreme Court (SC) has denied the petitions which challenged the 2016 Court of Appeals’ (CA) decision that stopped the National Telecommunications Commission (NTC) from implementing its 2012 order which directed three telecommunications companies to reduce text messaging rates and refund subscribers.

In a decision written by Associate Justice Rodil V. Zalameda, the SC denied the petition filed by former Bayan Muna Party-List congressmen Neri Colmenares and Carlos Isagani Zarate against Digitel Mobile Philippines, Globe Telecommunications, Inc., and Smart Communications, Inc., and the NTC.

Also denied was the petition filed by the NTC against the three telecommunications companies.

Court records show that on Oct. 24, 2011, the NTC issued Memorandum Circular No. 02-10-2011 on Interconnection Charge for Short Messaging Service (SMS). The circular aims to reduce communications costs, maintain and foster fair competition in the telecommunications industry, and make SMS, known as text message, more affordable to the public.

Interconnection pertains to "the linkage, by wire, radio, satellite, or other means, of two or more existing telecommunications carriers or operators with one another for the purpose of allowing or enabling the subscribers of one carrier or operator to access or reach the subscribers of the other carriers or operators."

In its circular, the NTC – noting that the SMS retail price consists of the cost of the network sending the text, plus the cost of the network receiving the text, plus the cost of the interconnection facilities – directed the lowering of the interconnection charge for SMS between two separate networks or "off-net SMS" from P0.35 to not more than P0.15 per SMS.

With the effectivity of the circular on Dec. 1, 2011, the three telecom firms amended their interconnection agreements to reduce the interconnection charge from P0.35 to P0.15.

However, on Dec. 12, 2011, Froilan Jamias, head of the One-Stop Public Assistance Center (QSPAC) of the NTC, filed a complaint-affidavit and alleged that from Dec. 5 to 9, 2011, he received complaints from several SMS subscribers to the effect that the three telecom firms are still charging P1 for every SMS sent to a subscriber of a different SMS provider despite the issuance of the Interconnection Circular.

Administrative cases were filed against Digitel/Sun Cellular, Globe and Smart.

The NTC directed the three firms to explain their failure to lower their regular SMS rates by at least P0.20 as a necessary consequence of the lowering of the interconnection charge from P0.35 to P0.15 in line with the Interconnection Circular.

On Nov. 20, 2012, the NTC issued three separate decisions and ruled against the three telecom firms which were ordered to reduce their SMS retail price to other networks from P1 to not more than P0.80; refund subscribers of the excess charge of P0.20 per off-net SMS from the effectivity of the circular until fully settled; and pay a fine at the rate of P200 per day from Dec. 1, 2011 until the date of compliance.

The commission ruled that the purpose of the Interconnection Circular is to reduce the SMS interconnection rate for the benefit of the public, and the primary objective was for the three telecom firms to pass on their savings from the reduced interconnection charges to their subscribers through lower SMS rates.

It pointed out that with the reduction of the interconnection charge from P0.35 to P0.15, the basic SMS charge should be reduced because the interconnection charge is a component of the SMS retail price.

With the denial of their motions for reconsideration, the three firms elevated their cases to the CA.

On Oct. 3, 2024, Bayan Muna filed its motion for intervention and petition-in-intervention. The CA consolidated the cases.

In its June 27, 2026 decision, the CA nullified the NTC rulings and enjoined the commission from implementing them.

The CA held that the NTC’s order to reduce the SMS retail rate was done without due process of law, and that the reduction of interconnection charges under the Interconnection Circular does not result in the lowering of the SMS retail rate.

It also ruled that the NTC's rate-fixing power is not absolute, and the commission may also not exercise its residual powers relative to value-added service in the absence of exempting circumstances.

Both the NTC, through the Office of the Solicitor General (OSG), and Bayan Muna elevated the case to the SC.

In resolving the issue, the SC said that the NTC’s Interconnection Circular only directs the reduction of the interconnection charge for off-net SMS from P0.35 to P0.15, and the corresponding amendment of the interconnection agreements.

It also said that the circular has been complied with by the parties.

However, the SC pointed out that “it is also clear that there is no directive or requirement in the circular about the reduction of the SMS retail rates.”

It said that another basic rule of statutory construction is that ''a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein by construction."

Thus, the SC stressed that “there is no merit in the NTC's argument that the Interconnection Circular ‘does not only direct the reduction of the interconnection rates, but also the reduction of the SMS retail rates.’"

“The NTC cannot construe or interpret the circular as directing the reduction of the SMS retail rates when the very language of the circular does not state or reflect such directive,” it said.

It added that the NTC cannot also rely on the Interconnection Circular's "whereas" clauses, which argues that "the reduction of the interconnection charges should bring forth the intended reduction of SMS rates to the benefit of the general public."

The SC ruled: “Clearly, the Interconnection Circular does not order or direct the reduction of the SMS retail rates. The Court cannot judicially supply such omission in the circular even if it was the intention of the NTC. The Court is not authorized to insert into the circular what should have been in it, or to supply what the NTC would have supplied if its attention had been called to the omission.”

“Considering all the foregoing, it is clear that the NTC cannot order the reduction of the SMS retail rates based on the Interconnection Circular as it does not direct such reduction. Neither can the NTC order the reduction of the SMS retail rates pursuant to its residual powers under Section 17 of Republic Act No. 7925 in view of the absence of the required conditions for the exercise of such powers,” it said.

Thus, the three telecom firms cannot be held liable or be penalized for violation of the circular when they did not reduce their SMS retail rates despite the issuance of the Interconnection Circular, the SC also ruled.

The dispositive portion of the SC’s decision: “Accordingly, the Petitions for Review on Certiorari filed by petitioners Bayan Muna Party-List Representatives Neri Colmenares and Carlos Isagani Zarate, and the National Telecon11nunications Commission are denied. The June 27, 2016 Decision and the July 25, 2017 Resolution of the Court of Appeals in CA-G.R. S.P. Nos. 135400, 135440, and 135449 are affirmed.”