Economic analysis of annulment of marriage cosgayon new

UNIVERSITY OF THE PHILIPPINES IN THE VISAYAS
A Cost Benefit Analysis of
Moving On and Letting Go
(Walang Forever)
An economic analysis of severing the marital bond
in the Philippines
Marcelo Augusto A. Cosgayon
BM 201 Economics

M A R C E L O A U G U S T O A . C O S G A Y O N
Door no. 3 Ground Floor Molino Building, Roxas Avenue, Roxas City, Capiz 5800
 (036) 6216 243  0920 925 4268 cosgayonlawoffice@gmail.com
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TABLE OF CONTENTS
INTRODUCTION.......................................................................................3
HISTORY 3
DIVORCE VS. ANNULMENT 4
OBJECTIVE 4
ISSUES AND PROBLEMS..........................................................................4
LEGAL ISSUES 4
DEVELOPMENTS IN JURISPRUDENCE 5
COSTS 7
BENEFITS 9
SUCCESS RATE 10
EFFECTS 10
Children 10
Property regime 11
AREAS OF CONSIDERATION: ...............................................................11
SWOT ANALYSIS 12
Strengths 12
Weaknesses 12
Opportunities 13
Threats 13
PESTE CONSIDERATIONS 14
Political Considerations 14
Economic Considerations 14
Socio Cultural Considerations 15
Technological Considerations 15
Legal Considerations 15
ECONOMIC ANALYSIS OF ANNULMENTS OF MARRIAGE........... 16
CONCLUSION .......................................................................................... 16
RECOMMENDATION............................................................................. 17
REFERENCES .......................................................................................... 18

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INTRODUCTION
HISTORY
As of 2011, the Philippines remains the only country in the world that does not
recognize nor allow divorce, aside from the Vatican Ecclesiastical State.1
The only other
country that did not recognize divorce, Malta, finally joined the rest of the world in 2011.2
With a predominantly Catholic population and strong resistance from the Catholic Church
and other religious groups, divorce seems a distant option for those whose marital bonds
are already destroyed. So, until a law is passed recognizing divorce as a means of severing
the ties that bind two people together in marital union, Filipinos are left with no other
option but to have their marriage annulled.
Unlike divorce, the annulment of a marriage declares that no marriage actually took
place. By legal fiction, the marital bonds are considered null and void ab initio, as if no ties
were ever created between two people, as if two hearts were never made as one, as if two
people never vowed to stay together as husband and wife until death did they part. But like
divorce, the existence and legitimacy of the children born during the marriage are
recognized and their status as such is not taken away.
The enactment of Executive Order no. 209, otherwise known as the Family Code,
on 3 August 1988, codified in a single codex the grounds and bases for the civil
termination of a marriage. While there are several grounds for the termination of the
marital bond, from lack of or inability to give consent due to minority or insanity,
incestuous relationships, and psychological incapacities, this paper shall focus only on the
1 http://newint.org/blog/majority/2011/07/05/philippines-last-bastion-divorce-illegal/
2 http://www.huffingtonpost.com/2011/07/25/malta-divorce-bill-divorce-legal-after-vote_n_908635.html

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ground provided for by Article 36 of the Family Code, which is the declaration of the
nullity of marriage based on psychological incapacity.
DIVORCE VS. ANNULMENT
Divorce refers to the termination of a marriage or marital union. It dissolves the
bonds of matrimony between a married couple under the law and allows both spouses to
remarry. It recognizes the valid existence of a previous marriage and severs the bonds that
it created.
Annulment, on the other hand, while the effects may be similar, has a more far
reaching effect. It declares that no marriage ever took place between two people and
reverts both parties back to where they were prior to their marriage.
Divorce recognizes that a marriage took place while annulment declares that no
such union ever happened. For this reason, divorce allows alimony or support to a spouse
because it acknowledges the prior existence of one while annulment does not.
OBJECTIVE
The objective of this paper is to provide a layman with an overview of the cost of
terminating the bonds of marriage and the grounds thereof.
ISSUES AND PROBLEMS
LEGAL ISSUES
In order for a marriage to be declared null and void ab initio based on psychological
incapacity, it must be proven that one of the spouses was psychologically incapacitated to
comply with the essential marital obligations of marriage at the time the marriage was
celebrated, even if it manifested after the wedding.

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The 1987 Constitution, in Section 2 of Article XV, recognizes the family as the
basic autonomous social institution and marriage as its foundation. Thus, any doubt
should be resolved in favour of the validity of the marriage. The burden of proof to show
the nullity of the marriage belongs to the plaintiff and any doubt should be resolved in
favor of the existence and continuation of the marriage and against its dissolution and
nullity.3
This is rooted in the fact that both our Constitution and our laws cherish the
validity of marriage and unity of the family. The 1987 Constitution even devotes an entire
Article on the Family, recognizing it as the foundation of the nation, decreeing marriage as
legally inviolable, thereby protecting it from dissolution at the whim of the parties. The
Family Code echoes this constitutional edict on marriage and the family and emphasizes
their permanence, inviolability and solidarity.
DEVELOPMENTS IN JURISPRUDENCE
Article 36 of the Family Code requires that the incapacity must be psychological,
not physical, although its manifestations and/or symptoms may be physical. The evidence
must convince the court that one of the parties, or even both, was mentally or
psychologically ill to such an extent that the person could not have known the obligations
he was assuming, or knowing them, could not have given valid assumption thereof.
Although no example of such incapacity need be given so as not to limit the application of
the provision under the principle of ejusdem generis, nevertheless such root cause must be
identified as a psychological illness and its incapacitating nature fully explained. Expert
evidence may be given by qualified psychiatrists and clinical psychologists.
In 1995, the Supreme Court ruled that the psychological incapacity referred to by
the law must be characterized by (a) gravity; (b) juridical antecedence;
3 Hernandez vs. Court of Appeals, General Reports no. 126010, December 8, 1999, 320 SCRA 76 as cited in
Mendoza vs. Republic of the Philippines and Mendoza, General Reports no. 157649 12 Nov. 2012

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and (c) incurability. It should refer to no less than a mental (not physical) incapacity that
causes a party to be truly incognitive of the basic marital covenants that concomitantly
must be assumed and discharged by the parties to the marriage. It must be confined to the
most serious cases of personality disorders clearly demonstrative of an utter insensitivity or
inability to give meaning and significance to the marriage.4
More definitive guidelines in the interpretation and application of the law were laid
down by the Supreme Court in 1997 when it stated that the root cause of the
psychological incapacity must be (a) medically or clinically identified, (b) alleged in the
complaint, (c) sufficiently proven by experts and (d) clearly explained in the decision.5
The
Supreme Court stated that the incapacity must be proven to be existing at the time of the
celebration of the marriage. The evidence must show that the illness was existing when
the parties exchanged their I do's. The manifestation of the illness need not be perceivable
at such time, but the illness itself must have attached at such moment, or prior thereto.
Such incapacity must also be shown to be medically or clinically permanent or incurable.
Such incurability may be absolute or even relative only in regard to the other spouse, not
necessarily absolutely against everyone of the same sex. Furthermore, such incapacity must
be relevant to the assumption of marriage obligations, not necessarily to those not related
to marriage, like the exercise of a profession or employment in a job.
Such illness must be grave enough to bring about the disability of the party to
assume the essential obligations of marriage. Thus, mild characteriological peculiarities,
mood changes, occasional emotional outbursts cannot be accepted as root causes. The
illness must be shown as downright incapacity or inability, not a refusal, neglect, or
difficulty, much less ill will to comply with marital obligations. In other words, there is a
4 Santos vs. Court of Appeals, 310 Philippine Reports 21
5 Republic vs. Court of Appeals (Molina), G.R. No. 108763, February 13, 1997, 268 SCRA 198, 207

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natal or supervening disabling factor in the person, an adverse integral element in the
personality structure that effectively incapacitates the person from really accepting and
thereby complying with the obligations essential to marriage.6
These rules were later on relaxed in 2000 when the Supreme Court clarified that
there is no requirement that the respondent spouse should be personally examined by a
physician or psychologist as a condition sine qua non for the declaration of nullity of
marriage based on psychological incapacity. Accordingly, it is no longer necessary to
introduce expert opinion in a petition under Article 36 of the Family Code if the totality of
evidence shows that psychological incapacity exists and its gravity, juridical antecedence,
and incurability can be duly established.7
The foregoing guidelines do not require that a
physician examine the person to be declared psychologically incapacitated. In fact, the root
cause may be “medically or clinically identified.” What is important is the presence of
evidence that can adequately establish the party’s psychological condition. For indeed, if
the totality of evidence presented is enough to sustain a finding of psychological
incapacity, then actual medical examination of the person concerned need not be resorted
to.8
COSTS
Petitions for the declaration of nullity of marriages are one of the most arduous,
time consuming, acrimonious, and adversarial proceedings in Philippine courts. No other
case demeans the soul, not just of the parties to the case, but also the counsels whose
opinions of their clients are severely diminished from the retelling of every sordid intimate
detail of their private lives.
6 Republic vs. Court of Appeals (Molina), General Reports no. 108763, February 13, 1997, 268 SCRA 198, 207
7 Marcos vs. Marcos, 397 Philippine Reports 840, 850 (2000).
8 Marcos vs. Marcos General Reports no. 136490, October 19, 2000, 343 SCRA 755

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The professional fees lawyers charge range from a low of P75,000.00 in the
provinces to as high as P300,000.00 for high priced celebrity lawyers from recognizable
law firms. Where the parties are celebrities, politicians, or have vast riches, these fees
skyrocket to astronomical proportions. Where property relations and the partition of
conjugal assets come into the picture, these fees go even higher and sometimes double,
depending on the value of these assets. While some lawyers agree to a package deal,
wherein a set sum is agreed upon for the entire case, there are still some instances when
lawyers charge an acceptance fee for their engagement and appearance fees for every court
appearance and other incidental expenses during the trial and appeals.
While the recent case of Marcos vs. Marcos9
has relaxed the rules somewhat,
nevertheless, the quantum of evidence required to successfully prosecute a petition for
annulment still requires that the psychological incapacity be clearly identified. And because
not many lawyers are conversant in these matters, the services of a psychiatrist and, in a
few instances, a psychologist, are required. These medical practitioners usually charge
between P50,000.00 for simple cases where both parties cooperate to as high as
P250,000.00 for high profile cases involving either celebrity or well known parties or
where there is an acrimonious rift that may pose a risk to the life, career, or wellbeing of
the witness.
The State will not be denied its just share in the loot in cases. Thus, it levies filing
fees and other expenses from the parties for the privilege of allowing them to present their
case and, hopefully, to have their misery ended while still alive.
Rule 141 of the Revised Rules of Court provide for a schedule of fees for cases
filed in any court in the country. Where there is no property involved, special civil actions
9 397 Philippine Reports 840, 850 (2000)

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such as petitions for the declaration of nullity of a marriage are levied a docket fee of
P2,000.00, a mediation fee of P500.00, sheriff’s fees of P1,000.00, and other miscellaneous
fees.
1. Actions where the value of the subject matter cannot be estimated P 2,000.00
2. Special civil actions, except judicial foreclosure of mortgage,
EXPROPRIATION PROCEEDINGS, PARTITION AND QUIETING
OF TITLE which shall be governed by paragraph (a) above
P 2,000.00
3. All other actions not involving property P 2,000.00
However, where the Petition includes a prayer for the partition and distribution of
conjugal assets, additional docket fees based on a graduated scale are levied, starting from
P1,000.00 for assets with an aggregate fair market value of less than P100,000.00.
1. Less than P100,000.00 P 1,000.00
2. P100,000.00 or more but less than P150,000.00 1,600.00
7. P350,000.00 or more but not than P400,000.00 4,500.00
8. For each P1,000.00 in excess of P400,000.00 20.00
BENEFITS
Unlike the costs of annulment, which can be defined in monetary terms, most of
the benefits are non monetary such as freedom from a broken relationship, the right to
enter into another relationship from which one might have annulled later on, peace of
mind, and separation of assets.
Annulment also allows both spouses to live their lives separately, free from the
duties and obligations to each other that marriage entailed. However, their duties to their

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offspring still subsist until those reach the age of majority. Thus, while the spouses are
freed from giving support, financial or emotional, to the other, they are not free from the
obligation to give support to their minor children.
SUCCESS RATE
Due to the confidential nature of such proceedings, data on the success rate of
such petitions are not available.
Also due to the highly discretionary nature of our judicial process, the decisions on
such petitions are extremely dependent on the disposition and moral standing of the
judges who hear them.
EFFECTS
The declaration that a marriage was null and void ab initio based on a psychological
incapacity to comply or even recognize with the essential requisites of marriage has the
effect of removing such marriage from the time-space continuum.
By legal fiction if not in actual reality, the court removes the vows uttered, the
ceremony attended, the vestments, the guests, the entourage, and the reception from all
existence. It is as if the two were never married, as if no priest, minister, or official ever
told them that where once there were twain, there now shall be one, that from that
moment on, they were husband and wife.
CHILDREN
The law recognizes the existence of offspring and does not declare that the
children of such a union never existed. Again, by legal fiction, legitimate children born
during wedlock are considered legitimate for all intents and purposes, and all the duties
and obligations of the spouses towards them are not extinguished or modified. Minor

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children are still entitled to all the support and love that the law requires had the spouses
remained married.
PROPERTY REGIME
Another effect of a declaration of nullity is that all conjugal or community property
be partitioned between the spouses.
Prior to the enactment of Executive Order no. 209, otherwise known as the Family
Code, the default property regime imposed by the Civil Code of the Philippines was one of
Conjugal Partnership of Gains. The Conjugal Partnership of Gains property regime
declared all property belonging to each spouse before the marriage as belonging to that
spouse, exclusive for the husband and paraphernal for the wife. However, property
acquired during the marriage, acquired onerously or by means of the sweat, blood, and
tears of either spouse, shall be considered as conjugal property, to which both spouses are
entitled.
When the Family Code took effect, however, the default became the Absolute
Community of Property regime wherein all property, regardless of when and how
acquired, becomes property of both spouses, to which each is entitled to half.
The declaration that a marriage has been annulled brings both parties back to
where they were prior to their marriage, except for those properties that became part of
their conjugal assets and those acquired after the marriage. These are partitioned equally
between the parties.
AREAS OF CONSIDERATION:
These analyses are made from the viewpoint of a prospective client.

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SWOT ANALYSIS
STRENGTHS
An annulment of an existing marriage allows spouses to finally sever the bonds of
marriage that have stifled them for so long, allowing each to live their own lives separately
from each other without the obligations and responsibilities a marriage imposes.
Property bonds are severed and ownership is partitioned between the spouses,
allowing each to use, enjoy, and dispose of them to their hearts’ desires.
WEAKNESSES
The long and arduous process of annulment provides a strong barrier against the
whimsical termination of the marital bond. While, like the death sentence, it does not
provide much of a deterrent against getting married on a whim, it does serve the purpose
of trying to preserve the family as the basic unit of society, making couples think twice or
more before they undergo the rigors of trial.
The adversarial character of annulments also provides a means to let the truth
come out and justice to be done. Formerly intimate secrets known only to the ones present
in the bedroom are exposed to the curious ears of strangers and the souls of the parties are
laid bare, in an effort to prove that one or both are unfit to be contracting parties to a
marital union.
The discretionary character of our judicial process leaves much to the opinion of
the magistrate, allowing the presiding judge to wield the power of life after marriage or a
slow death strangled in the ties that bind. The guidelines on the quantum of evidence
required are not set in stone, and it is the mind of the presiding judge that must be
convinced that one must be released from the constriction of the marital bond because
one did not have the psychic fortitude to fulfil one’s bounded duties to one’s spouse. This

Page 13 of 18
is exacerbated by the religious convictions of the magistrate, whose moral and religious
strictures might not allow for the granting of an annulment of a marriage for no other
cogent reason.
Putting barriers to what people want provides a breeding ground for corruption,
with those who want it badly enough resorting to bribery or threats just to secure a
favourable decision.
OPPORTUNITIES
Better rules and judicial procedures to eliminate red tape that leads to corruption
will greatly ease the process.
Better mediation and dispute resolutions to resolve marital disputes might declog
the dockets of the court and make the process easier and less expensive.
THREATS
The difficult process of securing an annulment drives some couples to resort to
extralegal and extrajudicial means in remarriage, among which are falsified certificates of
no marriage (CeNoMar), simulated weddings, and even ceremonies in remote places where
no one would question their union.
The antagonistic nature of annulment and the dearth of lawyers and psychiatrists
specializing in this field due to its acrimonious nature has driven the costs up, in line with
the law on supply and demand.
Difficult cases require higher fees. This provides a good opportunity for lawyers to
charge more for annulment cases than for others. For most practicing lawyers, annulment
and drug cases provide the chunk of their income from cases because these are the ones
that pay more.

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The need for expert medical testimony also provides psychiatrists and
psychologists an opportunity for financial gain.
PESTE CONSIDERATIONS
POLITICAL CONSIDERATIONS
The issue of recognizing divorce has long been a contentious matter in Congress,
with religious groups, such as the influential Catholic Church, protesting and objecting
every step of the way. At the moment, annulment is the only way to get out of a bad
marriage.
ECONOMIC CONSIDERATIONS
There is no study of the long term effects of annulment on the economy, either on
the macro or micro scales. However, on a personal basis, where the obligation to provide
financial support ceases to exist, a newly freed spouse finds more disposable income at
hand and almost immediately begins to acquire material possessions and avail of services
that were considered extravagant or too expensive before. This has a minor but telling
effect on the local economy.
The lack of a provision for alimony or spousal support allows spouses to have
more disposable income at hand.
The dissolution of the property regime allows spouses to acquire property in their
own name, without having it become part of the conjugal or community property. The
benefit of owning something without it being also owned by another spurs more
investments and purchases, thereby pumping in more money into the local economy,
albeit at a very small scale.

Page 15 of 18
SOCIO CULTURAL CONSIDERATIONS
The social stigma of giving up on a marriage, regardless of how broken and
abusive, will always be present in Philippine society. This and other factors tend to reduce
the number of couples filing for an annulment.
The deleterious effects on children not having two parents is also a factor in
preventing couples from seeking a permanent solution to a problem that might have been
solved by talking.
TECHNOLOGICAL CONSIDERATIONS
The Supreme Court has instituted reforms to reduce the use of paper in court
proceedings with Administrative Circular 11-9-4-Supreme Court, otherwise known as the
Efficient Use of Paper Rule, prescribing a specific font, margin, and spacing for pleadings
and requiring the inclusion of a CD or a USB drive when sending documents. However, it
has not yet been widely used and is not overly efficient.
Reforms to address innovations in technology that allow teleconferencing have
been instituted but are not yet efficient and widely accepted. This would address situations
where one party is not in the country.
LEGAL CONSIDERATIONS
Present laws and jurisprudence require a lengthy and costly process. While making
annulments easier would benefit the parties, this might not be bode well for marriages in
the long run and might erode the fundamentals of marriage which the Constitution seeks
to protect and preserve.
Unlike divorce, there is no compromise or collusion allowed in annulments of
marriage. The severance of the marital bond must and needs be one of irreconcilable

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differences because of a valid reason, not just because the spouses have given up on each
other.
ECONOMIC ANALYSIS OF ANNULMENTS OF MARRIAGE
The demand for annulment is relatively inelastic, with the increase in cost and price
not making much of a dent in the desire of warring couples to avail of the service. Some
have even been known to have sold or mortgaged properties just to pay for the costs and
expenses of removing unwanted baggage from their lives. For those who can afford it, no
other substitute can suffice, considering that their level of fame or notoriety prohibits
them from concealing their subsequent unions, unlike those who are relatively unknown,
who can simply sweep their past mistake under the rug and move on to the next mistake.
Weighed against the cost of staying in a loveless marriage, couples consider the
marginal benefit of going back to living a life of single blessedness, free from an unloved
and unloving spouse, as priceless and worth every single centavo.
While demand for the service is high, there are few lawyers who engage in these
suits in the Province of Capiz, thus the price for their services remains inequitably high.
Add to this the fact that there are only two (2) practicing and licensed psychiatrists who
accept such engagements, albeit not exclusively.
CONCLUSION
Annulment is a lengthy, costly, and acrimonious process but because couples in
failed marriages have no other substitute for it, demand remains constant and inelastic. A
change in the law or a relaxation of the rules would create a huge shift in the demand,
making it more appealing, but at what cost?

Page 17 of 18
RECOMMENDATION
Aside from the admonition to choose the right partner at the right time so as not
to break the bank and each others’ hearts in the process, only the legalization of divorce
would shake the firmament of the annulment world. However, a good pre-emptive
measure would be the execution of a prenuptial agreement prior to the wedding. While
only the property regime can be the object of the agreement, nevertheless, a clear
definition of which property should belong to which spouse can ensure a smooth
distribution and partition of assets.

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REFERENCES
https://www.olvis.com/blog/annulments-philippines
http://deborjalaw.com/2009/04/11/philippine-annulment-top-ten-10-questions/
http://jlp-law.com/blog/annulment-divorce-legal-separation-in-the-philippines-questions-
and-answers/
http://www.theatlantic.com/international/archive/2015/06/divorce-philippines-
annulment/396449/
www.judiciary.gov.ph

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