The trial court dismissed the action on the grounds that the plaintiffs had no cause of action; that the issue involved a political question over which the court could not assume jurisdiction; and that the TLA is a contract which could not be impaired.
 
First Issue  : Whether or not there was a cause of action

The Supreme Court held that there was a cause of action.  The complaint in fact focused on the right to a balanced and healthful ecology. Since such right carries with it the correlative duty to refrain from impairing the environment.  It implies the judicious management and conservation of the country’s forest.  A denial or violation of that right by the other who has the correlative duty or obligation to respect the same gives rise to a cause of action.

Second Issue :  Whether or not the issues raised were political questions.

The Supreme Court held that the issues raised were not political question. 
The foregoing considered, the case couldn’t be said to raise a political question. Policy formulation or determination by the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. (section 1, Article 8):

Third Issue :  Whether or not TLA’s are contracts protected by the non-impairment clause?

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the Constitution.
In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose, such a law could have only been passed in the exercise of the police power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general welfare. 

Intergenerational Responsibility

This case, however, has a special and novel element. Petitioner minors assert that they represent their generation as well as generations yet unborn. The SC held that they could, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded, considers the "rhythm and harmony of nature." 

The legal implications of the case are the following:

1. In ruling that the plaintiffs had the capacity to sue, a precedent was established that a class suit might be brought in the name of present and future generations for the protection of the environment.

2. The right of the people to a balanced and healthful ecology,  as expressly stated  in Article II (Declaration of Principles and State Policies), Section 16 of the 1987 Constitution, is an enforceable right even in the absence of legislation, making such provision the only self-executing provision in the Declaration of Principles and State Policies.

3. In so far as actions for the protection of the environment are concerned, it would seem that each and every Filipino might bring suit against anyone who endangers the right to a balanced ecology.