!"#$%&%'%&"#() )(+ && ,&-.$%$ /0120 3 01245 (%%67 $.,89.6 !(#,.

)(9&(


!:;<=-><?;@; .A;BC><D -EFGDBBD? )>HD? IGJK;F #;C;K 9;C>J $EHDBG> %;< %><@ L;KCD? L;BDK;
!" $%& '(()*)

+,"-./ 0& 1/21

lalnLlffs: Carlos Superdrug Corp (wlLh oLher drugsLores)

8espondenL: ueparLmenL of Soclal Welfare and uevelopmenL ( wlLh
uCP, uCl, uC!, ulLC)

3,+4!".5$1
leb. 26, 2004 => res. Clorla Arroyo slgned 8A no. 9237 lnLo
law and lL became effecLlve on March 21, 2004
", *678: Lxpanded Senlor ClLlzens AcL of 2003
/9:& ); ", *678 enLlLles senlor clLlzens Lo 'Lhe granL of 20
dlscounL from all esLabllshmenLs xxx and purchase of medlclnes
ln all esLabllshmenLs for Lhe excluslve use of senlor clLlzens' xxx
1he esLabllshmenL may clalm Lhe dlscounLs xxx as <=> ?9?@:<A%B
based on Lhe neL cosL of Lhe goods sold or servlces rendered xxx
1here ls a dlfference beLween <=> :C9?A< (under Cld Senlor
ClLlzens AcL) and <=> ?9?@:<A%B (under Lxpanded Senlor ClLlzens
AcL). 1hls was clarlfled by ulrecLor Lourdes 8ecenLe of Lhe uCl
(uepL of llnance).
D=> :C9?A<E 1he ls a pesos-for-peso deducLlon from a Laxpayer's
Lax llablllLy due Lo Lhe governmenL of Lhe amounL of dlscounLs
esLabllshmenL granLed Lo senlor clLlzens. 1hus Lhe governmenL
shoulders 100 of Lhe dlscounLs granLed and esLabllshmenL
recovers full amounL of dlscounL lL gave.
D=> ?9?@:<A%BE 1he esLabllshmenL ls allowed Lo deducL from
gross lncome Lhe amounLs of dlscounLs granLed Lo senlor
clLlzens. LffecLlvely, Lhe governmenL only shoulders 32 of Lhe
20 dlscounL glven by esLabllshmenLs and Lhe esLabllshmenL
shoulders Lhe remalnlng porLlon of Lhe granLed dlscounLs.
eLlLloners assall Lhe consLlLuLlonallLy of Sec 4a of Lhe Lxpanded
Senlor ClLlzens AcL based on Lhe followlng grounds
o 1he law ls conflscaLory because lL lnfrlnges Sec 9, ArL 3
of Lhe consLlLuLlon, whlch provldes LhaL prlvaLe
properLy shall noL be Laken for publlc use wlLhouL [usL
compensaLlon
o lL vlolaLes Lhe equal proLecLlon clause, Sec. 1, ArL. 3,
o 1he 20 dlscounL on medlclnes vlolaLes Lhe
consLlLuLlonal guaranLee ln Sec 11, ArL 13 LhaL makes
'essenLlal goods, healLh and oLher soclal servlces
avallable Lo oLher people aL affordable cosL'

F//5G/ D. 3G "G/.-HG1E
1. WheLher or noL /9:& ) %I ", *678 ls unconsLlLuLlonal because lL
consLlLuLes deprlvaLlon of prlvaLe properLy and because lL
vlolaLes Lhe equal proLecLlon clause

"G/.-5DF.$/ ,$1 ,"!5JG$D/
F//5G ' ! Sec. 4 of 8A 9237 ls CCnS1l1u1lCnAL
eLlLloners asserL LhaL Sec. 4 of Lhe law wlll resulL ln loss of
proflL for esLabllshmenLs because drugsLores lmpose a mark up
of only 3 Lo 10 on branded medlclnes and LhaL Lhe law falled
Lo provlde a scheme whereby drugsLores wlll be [usLly
compensaLed for Lhe dlscounL.
8ased on Lhe uCl oplnlon, Lhe Lax deducLlon scheme does noL
fully relmburse peLlLloners for Lhe dlscounL prlvllege accorded
Lo senlor clLlzens. 1hls ls because Lhe dlscounL ls LreaLed only as
a deducLlon.
1he permanenL reducLlon ln Lhelr LoLal revenues ls a forced
subsldy correspondlng Lo Lhe Laklng of prlvaLe properLy for
publlc use or beneflL. !usL compensaLlon, on Lhe oLher hand, ls
deflned as Lhe full and falr equlvalenL of Lhe properLy Laken
from lLs owner by Lhe exproprlaLor. 1herefore, Lax deducLlon
does noL meeL Lhe deflnlLlon of [usL compensaLlon because lL
does noL offer full relmbursemenL.
Powever, Lhe courL belleves LhaL Lhe SLaLe, ln promoLlng Lhe
healLh and welfare of a speclal group of clLlzens, can lmpose
!"#$%&%'%&"#() )(+ && ,&-.$%$ /0120 3 01245 (%%67 $.,89.6 !(#,.)(9&(


!:;<=-><?;@; .A;BC><D -EFGDBBD? )>HD? IGJK;F #;C;K 9;C>J $EHDBG> %;< %><@ L;KCD? L;BDK;
upon prlvaLe esLabllshmenLs Lhe burden of parLly subsldlzlng a
governmenL program.
1he law ln quesLlon ls a leglLlmaLe exerclse of pollce power
whlch has general welfare for lLs ob[ecL. When condlLlons so
demand, properLy rlghLs musL bow Lo Lhe prlmacy of pollce
power because properLy rlghLs musL yleld Lo general welfare.
Also lL ls lncorrecL for peLlLloners Lo lnslsL LhaL Lhe granL of
dlscounLs Lo senlor clLlzens ls unduly oppresslve Lo Lhelr
buslness because peLlLloners have noL Laken Llme Lo calculaLe
correcLly and come up wlLh a flnanclal reporL. 1helr calculaLlons
are based on Lhe wrong assumpLlon LhaL all Lhe cusLomers
conslsL of senlor clLlzens.
LasLly, lL ls unfalr for peLlLloners Lo crlLlclze Lhe law because Lhey
cannoL ralse Lhe prlces of Lhelr medlclne. 1hls ls a buslness
declslon on Lhe parL of Lhe peLlLloners Lo peg Lhe mark-up aL
3. rlclng ls a properLy rlghL and peLlLloners cannoL reproach
Lhe law for belng oppresslve slmply because Lhey cannoL ralse
Lhelr prlces for fear of loslng cusLomers.


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