A. PRELIMINARY CONSIDERATIONS so many islands.
There are also a lot of languages
1. GMA NETWORK, INC. VS. COMISSION
ON ELECTIONS
PONENTE: Peralta
TOPIC: Freedom of expression, of speech and of
the press, airtime limits
FACTS:
The five (5) petitions before the Court put in issue
the alleged unconstitutionality of Section 9 (a) of
COMELEC Resolution No. 9615 limiting the
broadcast and radio advertisements of candidates
and political parties for national election positions to
an aggregate total of one hundred twenty (120)
minutes and one hundred eighty (180) minutes,
respectively. They contend that such restrictive
regulation on allowable broadcast time violates
freedom of the press, impairs the peoples right to
suffrage as well as their right to information relative
to the exercise of their right to choose who to elect
during the forth coming elections Section 9 (a)
provides for an aggregate total airtime instead of
the previous per station airtime for political
campaigns or advertisements, and also required prior
COMELEC approval for candidates television and
radio guestings and appearances.
ISSUE:
Whether or not Section 9 (a) of COMELEC
Resolution No. 9615 on airtime limits violates
freedom of expression, of speech and of the press.
HELD:
YES. The Court held that the assailed rule on
aggregate-based airtime limits is unreasonable and
arbitrary as it unduly restricts and constrains the
ability of candidates and political parties to reach out
and communicate with the people. Here, the
adverted reason for imposing the aggregate-based
airtime limits leveling the playing field does not
constitute a compelling state interest which would
justify such a substantial restriction on the freedom
of candidates and political parties to communicate
their ideas, philosophies, platforms and programs of
government. And, this is specially so in the absence
of a clear-cut basis for the imposition of such a
prohibitive measure. It is also particularly
unreasonable and whimsical to adopt the aggregate-
based time limits on broadcast time when we
consider that the Philippines is not only composed of
and dialects spoken among the citizens across the
country. Accordingly, for a national candidate to
really reach out to as many of the electorates as
possible, then it might also be necessary that he
conveys his message through his advertisements in
languages and dialects that the people may more
readily understand and relate to. To add all of these
airtimes in different dialects would greatly hamper
the ability of such candidate to express himself a
form of suppression of his political speech.
B. POLICE POWER
2. BELTRAN VS. SECRETARY OF HEALTH
FACTS:
Petitioners comprise the majority of the Board
of Directors of the Philippine Association of
Blood Banks, a duly registered non-stock and
non-profit association composed of free standing
blood banks. Public respondent Secretary of
Health is being sued in his capacity as the public
official directly involved and charged with the
enforcement and implementation of RA 7719 or
the National Blood Service Act. Section 7 of RA
7719 provides phase-out of Commercial Blood
Banks. Petitioners assail the constitutionality of
the said provision on the ground, among others,
that such represents undue delegation if not
outright abdication of the police power of the
state.
ISSUE:
Whether or not RA 7719 is a valid exercise of
police power
HELD:
Petitions dismissed. The court upholds the
validity of RA 7719. The promotion of public
health is a fundamental obligation of the State.
The health of the people is a primordial
governmental concern. RA 7719 was enacted in
the exercise of the States police power in order
to promote and preserve public health and
safety. Police power of the state is validly
exercised if (a) the interest of the public
generally, as distinguished from those of a
particular class, requires the interference of the
State; and (b) the means employed are
reasonably necessary to the attainment of the
objective sought to be accomplished and not
unduly oppressive upon individuals Police
power is the State authority to enact legislation
 that may interfere with personal liberty or
property in order to promote the general welfare.
Thus, persons may be subject to certain kinds of
restraints and burdens in order to secure the
general welfare of the State and to its
fundamental aim of government, the rights of
the individual may be subordinated.
3. CARLOS SUPERDRUG CORP VS. DSWD
FACTS:
Petitioners are domestic corporations and
proprietors operating drugstores in the
Philippines. Meanwhile, AO 171 or the Policies
and Guidelines to Implement the Relevant
Provisions of Republic Act 9257, otherwise
known as the Expanded Senior Citizens Act of
2003 was issued by the DOH, providing the
grant of twenty percent (20%) discount in the
purchase of unbranded generic medicines from
all establishments dispensing medicines for the
exclusive use of the senior citizens. DOH issued
Administrative Order No 177 amending A.O.
No. 171. Under A.O. No. 177, the twenty
percent discount shall not be limited to the
purchase of unbranded generic medicines only,
but shall extend to both prescription and non-
prescription medicines whether branded or
generic. Thus, it stated that [t]he grant of
twenty percent (20%) discount shall be provided
in the purchase of medicines from all
establishments dispensing medicines for the
exclusive use of the senior citizens. Petitioners
assert that Section 4(a) of the law is
unconstitutional because it constitutes
deprivation of private property. Compelling
drugstore owners and establishments to grant the
discount will result in a loss of profit and capital
because 1) drugstores impose a mark-up of only
5% to 10% on branded medicines; and 2) the
law failed to provide a scheme whereby
drugstores will be justly compensated for the
discount.
RULING
The permanent reduction in their total revenues
is a forced subsidy corresponding to the taking
of private property for public use or benefit. This
constitutes compensable taking for which
petitioners would ordinarily become entitled to a
just compensation. Just compensation is defined
as the full and fair equivalent of the property
taken from its owner by the expropriator. The
measure is not the takers gain but the owners
loss. The word just is used to intensify the
meaning of the word compensation, and to
convey the idea that the equivalent to be
rendered for the property to be taken shall be
real, substantial, full and ample. A tax deduction
does not offer full reimbursement of the senior
citizen discount. As such, it would not meet the
definition of just compensation. Having said
that, this raises the question of whether the State,
in promoting the health and welfare of a special
group of citizens, can impose upon private
establishments the burden of partly subsidizing a
government program. The Court believes so.
The law grants a twenty percent discount to
senior citizens for medical and dental services,
and diagnostic and laboratory fees; admission
fees charged by theaters, concert halls, circuses,
carnivals, and other similar places of culture,
leisure and amusement; fares for domestic land,
air and sea travel; utilization of services in hotels
and similar lodging establishments, restaurants
and recreation centers; and purchases of
medicines for the exclusive use or enjoyment of
senior citizens. As a form of reimbursement, the
law provides that business establishments
extending the twenty percent discount to senior
citizens may claim the discount as a tax
deduction. The law is a legitimate exercise of
police power which, similar to the power of
eminent domain, has general welfare for its
object. Police power is not capable of an exact
definition, but has been purposely veiled in
general terms to underscore its
comprehensiveness to meet all exigencies and
provide enough room for an efficient and
flexible response to conditions and
circumstances, thus assuring the greatest
benefits. Accordingly, it has been described as
the most essential, insistent and the least
limitable of powers, extending as it does to all
the great public needs. It is [t]he power vested
in the legislature by the constitution to make,
ordain, and establish all manner of wholesome
and reasonable laws, statutes, and ordinances,
either with penalties or without, not repugnant to
the constitution, as they shall judge to be for the
good and welfare of the commonwealth, and of
the subjects of the same. For this reason, when
the conditions so demand as determined by the
legislature, property rights must bow to the
 primacy of police power because property rights,
though sheltered by due process, must yield to
general welfare. Police power as an attribute to
promote the common good would be diluted
considerably if on the mere plea of petitioners
that they will suffer loss of earnings and capital,
the questioned provision is invalidated.
Moreover, in the absence of evidence
demonstrating the alleged confiscatory effect of
the provision in question, there is no basis for its
nullification in view of the presumption of
validity which every law has in its favor. Given
these, it is incorrect for petitioners to insist that
the grant of the senior citizen discount is unduly
oppressive to their business, because petitioners
have not taken time to calculate correctly and
come up with a financial report, so that they
have not been able to show properly whether or
not the tax deduction scheme really works
greatly to their disadvantage. The Court is not
oblivious of the retail side of the pharmaceutical
industry and the competitive pricing component
of the business. While the Constitution protects
property rights, petitioners must accept the
realities of business and the State, in the exercise
of police power, can intervene in the operations
of a business which may result in an impairment
of property rights in the process. Moreover, the
right to property has a social dimension. While
Article XIII of the Constitution provides the
precept for the protection of property, various
laws and jurisprudence, particularly on agrarian
reform and the regulation of contracts and public
utilities, continuously serve as a reminder that
the right to property can be relinquished upon
the command of the State for the promotion of
public good.
4. MIRASOL VS. DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS
The police power is far-reaching in scope and is
the "most essential, insistent and illimitable" of
all government powers.
FACTS:
The petitioners sought to declare the
nullity of certain administrative issuances for
being inconsistent with RA 2000. Pursuant to its
mandate under RA 2000, DPWH issued DO 215
declaring the Coastal Road as limited access
area. The petitioners sought to prevent the
enforcement of the total ban on motorcycles
along the entire breadth of North and South
Luzon Expressways and the Coastal Road.
ISSUE:
1. Whether the administrative issuances are
unconstitutional.
2. Whether the prohibition on the use of
motorcycles in toll ways deprives the
petitioners their right to travel.
RULING:
1. NO. Administrative issuances have
the force and effect of law. They benefit from
the same presumption of validity and
constitutionality enjoyed by statutes. These two
precepts place a heavy burden upon any party
assailing governmental regulations. The burden
of proving unconstitutionality rests on such
party. The burden becomes heavier when the
police power is at issue.
The use of public highways by motor
vehicles is subject to regulation as an exercise of
the police power of the state. The police power
is far-reaching in scope and is the "most
essential, insistent and illimitable" of all
government powers. The tendency is to extend
rather than to restrict the use of police power.
The sole standard in measuring its exercise is
reasonableness. What is "reasonable" is not
subject to exact definition or scientific
formulation. No all-embracing test of
reasonableness exists, for its determination rests
upon human judgment applied to the facts and
circumstances of each particular case.
The court finds AO 1 does not impose
unreasonable restrictions. It merely outlines
several precautionary measures, to which toll
way users must adhere. These rules were
designed to ensure public safety and the
uninhibited flow of traffic within limited access
facilities. They cover several subjects, from
what lanes should be used by a certain vehicle,
to maximum vehicle height. The prohibition of
certain types of vehicles is but one of these.
None of these rules violates reason. The purpose
of these rules and the logic behind them are
quite evident. A toll way is not an ordinary road.
The special purpose for which a toll way is
 constructed necessitates the imposition of
guidelines in the manner of its use and
operation. Inevitably, such rules will restrict
certain rights. But the mere fact that certain
rights are restricted does not invalidate the rules.
Neither does the court find AO 1 oppressive.
Petitioners are not being deprived of their right
to use the limited access facility. They are
merely being required, just like the rest of the
public, to adhere to the rules on how to use the
facility. AO 1 does not infringe upon petitioners
right to travel but merely bars motorcycles,
bicycles, tricycles, pedicabs, and any non-
motorized vehicles as the mode of traveling
along limited access highways. Several cheap,
accessible and practical alternative modes of
transport are open to petitioners. There is
nothing oppressive in being required to take a
bus or drive a car instead of ones scooter,
bicycle, calesa, or motorcycle upon using a toll
way.
2. NO. The right to travel does not mean
the right to choose any vehicle in traversing a
toll way. The right to travel refers to the right to
move from one place to another. Petitioners can
traverse the toll way any time they choose using
private or public four-wheeled vehicles.
Petitioners are not denied the right to move from
Point A to Point B along the toll way. Petitioners
are free to access the toll way, much as the rest
of the public can. The mode by which petitioners
wish to travel pertains to the manner of using the
toll way, a subject that can be validly limited by
regulation.
Petitioners themselves admit that alternative
routes are available to them. Their complaint is
that these routes are not the safest and most
convenient. Even if their claim is true, it hardly
qualifies as an undue curtailment of their
freedom of movement and travel. The right to
travel does not entitle a person to the best form
of transport or to the most convenient route to
his destination. The obstructions found in
normal streets, which petitioners complain of
(i.e., potholes, manholes, construction barriers,
etc.), are not suffered by them alone.
5. SOCIAL JUSTICE SOCIETY VS. LIM
DATE: 25 November 2014
PONENTE: J. Perez
FACTS
On 12 October 2001, a Memorandum of
Agreement was entered into by oil companies
(Chevron, Petron and Shell) and Department of
Energy for the creation of a Master Plan to
address and minimize the potential risks and
hazards posed by the proximity of communities,
business and offices to Pandacan oil terminals
without affecting security and reliability of
supply and distribution of petroleum products.
On 20 November 2001, the Sangguniang
Panlungsod (SP) enacted Ordinance No. 8027
which reclassifies the land use of Pandacan, Sta.
Ana, and its adjoining areas from Industrial II to
Commercial I.
Owners and operators of the businesses affected
by the reclassification were given six (6) months
from the date of effectivity to stop the operation
of their businesses. It was later extended until 30
April 2003.
On 4 December 2002, a petition for mandamus
was filed before the Supreme Court (SC) to
enforce Ordinance No. 8027.
Unknown to the SC, the oil companies filed
before the Regional Trial Court of Manila an
action to annul Ordinance No. 8027 with
application for writs of preliminary prohibitory
injunction and preliminary mandatory
injunction. The same was issued in favor of
Chevron and Shell. Petron, on the other hand,
obtained a status quo on 4 August 2004.
On 16 June 2006, Mayor Jose Atienza, Jr.
approved Ordinance No. 8119 entitled An
Ordinance Adopting the Manila Comprehensive
Land Use Plan and Zoning Regulations of 2006
and Providing for the Administration,
Enforcement and Amendment thereto. This
designates Pandacan oil depot area as a Planned
Unit Development/Overlay Zone.
On 7 March 2007, the SC granted the petition
for mandamus and directed Mayor Atienza to
immediately enforce Ordinance No. 8027. It
declared that the objective of the ordinance is to
protect the residents of manila from the
catastrophic devastation that will surely occur in
case of a terrorist attack on the Pandacan
Terminals.
The oil companies filed a Motion for
Reconsideration (MR) on the 7 March 2007
Decision. The SC later resolved that Ordinance
 No. 8027 is constitutional and that it was not
impliedly repealed by Ordinance No. 8119 as
there is no irreconcilable conflict between them.
SC later on denied with finality the second MR
of the oil companies.
On 14 May 2009, during the incumbency of
Mayor Alfredo Lim (Mayor Lim), the SP
enacted Ordinance No. 8187. The Industrial
Zone under Ordinance No. 8119 was limited to
Light Industrial Zone, Ordinance No. 8187
appended to the list a Medium and a Heavy
Industrial Zone where petroleum refineries and
oil depots are expressly allowed.
Petitioners Social Justice Society Officers,
Mayor Atienza, et.al. filed a petition for
certiorari under Rule 65 assailing the validity of
Ordinance No. 8187. Their contentions are as
follows:
- It is an invalid exercise of police power
because it does not promote the general
welfare of the people
- It is violative of Section 15 and 16,
Article II of the 1987 Constitution as
well as health and environment related
municipal laws and international
conventions and treaties, such as: Clean
Air Act; Environment Code; Toxic and
Hazardous Wastes Law; Civil Code
provisions on nuisance and human
relations; Universal Declaration of
Human Rights; and Convention on the
Rights of the Child
- The title of Ordinance No. 8187
purports to amend or repeal Ordinance
No. 8119 when it actually intends to
repeal Ordinance No. 8027
On the other hand, the respondents Mayor Lim,
et.al. and the intervenors oil companies contend
that:
- The petitioners have no legal standing to
sue whether as citizens, taxpayers or
legislators. They further failed to show
that they have suffered any injury or
threat of injury as a result of the act
complained of
- The petition should be dismissed
outright for failure to properly apply the
related provisions of the Constitution,
the Rules of Court, and/or the Rules of
Procedure for Environmental Cases
relative to the appropriate remedy
available
- The principle of the hierarchy of courts
is violated because the SC only
exercises appellate jurisdiction over
cases involving the constitutionality or
validity of an ordinance under Section 5,
Article VIII of the 1987 Constitution
- It is the function of the SP to enact
zoning ordinance without prior referral
to the Manila Zoning Board of
Adjustment and Appeals; thus, it may
repeal all or part of zoning ordinance
sought to be modified
- There is a valid exercise of police power
On 28 August 2012, the SP enacted Ordinance
No. 8283 which essentially amended the
assailed Ordinance to exclude the area where
petroleum refineries and oil depots are located
from the Industrial Zone. The same was vetoed
by Mayor Lim.
ISSUES
1. WON there are violations of environmental laws
2. WON the principle of hierarchy of courts is
violated
3. WON the petitioners have legal standing to sue
4. WON Ordinance No. 8187 is unconstitutional in
relation to the Pandacan Terminals
RULING
1. None. The scope of the Rules of Procedure for
Environmental Cases is embodied in Section 2,
Part I, Rule I thereof. It states that the Rules
shall govern the procedure in civil, criminal and
special civil actions before the MeTCs, MTCCs,
MTCs and MCTCs, and the RTCs involving the
enforcement or violations of environmental and
other related laws, rules and regulations such as
but not limited to: R.A. No. 6969, Toxic
Substances and Hazardous Waste Act; R.A. No.
8749, Clean Air Act; Provisions in C.A. No.
141; and other existing laws that relate to the
conservation, development, preservation,
protection and utilization of the environment and
natural resources.
Notably, the aforesaid Rules are limited in
scope. While, indeed, there are allegations of
violations of environmental laws in the petitions,
these only serve as collateral attacks that would
support the other position of the petitioners the
protection of the right to life, security and safety.
2. No. The SC held that it is true that the petitions
should have been filed with the RTC, it having
concurrent jurisdiction with the SC over a
special civil action for prohibition, and original
jurisdiction over petitions for declaratory relief.
However, the petitions at bar are of
transcendental importance warranting a recommended the approval of the ordinance:
relaxation of the doctrine of hierarchy of courts.
This is in accordance with the well-entrenched
principle that rules of procedure are not
inflexible tools designed to hinder or delay, but
to facilitate and promote the administration of
justice. Their strict and rigid application, which
would result in technicalities that tend to
frustrate, rather than promote substantial justice,
must always be eschewed. (Jaworski v.
PAGCOR, 464 Phil. 375)
3. Yes. The SC referred to their Decision dated 7
March 2007 which ruled that the petitioners in
that case have a legal right to seek the
enforcement of Ordinance No. 8027 because the
subject of the petition concerns a public right,
and they, as residents of Manila, have a direct
interest in the implementation of the ordinances
of the city.
No different are herein petitioners who seek to
prohibit the enforcement of the assailed
ordinance, and who deal with the same subject
matter that concerns a public right.
In like manner, the preservation of the life,
security and safety of the people is indisputably
a right of utmost importance to the public.
Certainly, the petitioners, as residents of Manila,
have the required personal interest to seek relief
to protect such right.
4. Yes. In striking down the contrary provisions of
the assailed Ordinance relative to the continued
stay of the oil depots, the SC followed the same
line of reasoning used in its 7 March 2007
decision, to wit:
Ordinance No. 8027 was enacted for the
purpose of promoting a sound urban planning,
ensuring health, public safety and general
welfare of the residents of Manila. The
Sanggunian was impelled to take measures to
protect the residents of Manila from catastrophic
devastation in case of a terrorist attack on the
Pandacan Terminals. Towards this objective, the
Sanggunian reclassified the area defined in the
ordinance from industrial to commercial.
The following facts were found by the
Committee on Housing, Resettlement and Urban
Development of the City of Manila which
(1) The depot facilities
contained 313.5 million
liters of highly flammable
and highly volatile products
which include petroleum
gas, liquefied petroleum
gas, aviation fuel, diesel,
gasoline, kerosene and fuel
oil among others;
(2) The depot is open to attack
through land, water and air;
(3) It is situated in a densely
populated place and near
Malacaang Palace; and
(4) In case of an explosion or
conflagration in the depot,
the fire could spread to the
neighboring communities.
The Ordinance was intended to safeguard the
rights to life, security and safety of all the
inhabitants of Manila and not just of a particular
class. The depot is perceived, rightly or wrongly,
as a representation of western interests which
means that it is a terrorist target. As long as there
is such a target in their midst, the residents of
Manila are not safe. It therefore becomes
necessary to remove these terminals to dissipate
the threat.
The same best interest of the public guides the
present decision. The Pandacan oil depot
remains a terrorist target even if the contents
have been lessened. In the absence of any
convincing reason to persuade the Court that the
life, security and safety of the inhabitants of
Manila are no longer put at risk by the presence
of the oil depots, the SC holds that the
Ordinance No. 8187 in relation to the Pandacan
Terminals is invalid and unconstitutional.
For, given that the threat sought to be prevented
may strike at one point or another, no matter
how remote it is as perceived by one or some,
 the SC cannot allow the right to life be
dependent on the unlikelihood of an event.
Statistics and theories of probability have no
place in situations where the very life of not just
an individual but of residents of big
neighbourhoods is at stake.
DISPOSITIVE PORTION
1. Ordinance No. 8187 is declared unconstitutional
and invalid with respect to the continued stay of
the Pandacan Oil Terminals.
2. The incumbent mayor of the City of Manila is
ordered to cease and desist from enforcing
Ordinance No. 8187 and to oversee the
relocation and transfer of the oil terminals out of
the Pandacan area
3. The oil companies shall, within a non-extendible
period of forty-five (45) days, submit to the RTC
Manila, Branch 39 an updated comprehensive
plan and relocation schedule, which relocation
shall be completed not later than six (6) months
from the date the required document is
submitted.
6. MANALO VS ATENEO DE NAGA
UNIVERSITY
7. FERNANDO VS. ST. SCHOLASTICAS
COLLEGE
FACTS:
Respondents St. Scholasticas College (SSC)
and St. Scholasticas Academy-Marikina, Inc.
(SSA-Marikina) are educational institutions
organized under the laws of the Republic of the
Philippines, with principal offices and business
addresses at Leon Guinto Street, Malate, Manila,
and at West Drive, Marikina Heights, Marikina
City, respectively. Respondent SSC is the owner
of four (4) parcels of land measuring a total of
56, 306. 80 square meters, located in Marikina
Heights and covered by Transfer Certificate of
Title (TCT) No. 91537. Located within the
property are SSA-Marikina, the residence of the
sisters of Benedictine Order, the formation
house of the novices, and the retirement house
for the elderly sisters. The property enclosed by
a tall concrete perimeter fence built some thirty
(30) years ago. Abutting the fence along the
West Drive are buildings, facilities and other
improvements.
On September 30, 1994, the Sangguniang
Panglungsod of Marikina City enacted
Ordinance No. 192 entitled Regulating the
Construction of Fences and Walls in The
Municipality of Marikina. Sections 3.1 and 5 of
the ordinance are pertinent to the issue at hand,
to wit:
Section 3. The standard height of fences of
walls allowed under this ordinance are as
follows:
(1) Fences on the front yard shall be no
more than one (1) meter in height. Fences in
excess of one (1) meter shall be an open fence
type, at least eighty percent (80%) see-thru;
xxx xxxx xxx
Section 5. In no case shall walls
and fences be built within the five (5) meter
parking area allowance located between the
front monument line and the building line of
commercial and industrial establishments and
educational and religious institutions.
On April 2, 2000, the City Government of
Marikina sent a letter to the respondents
ordering them to demolish and replace the fence
of their Marikina property to make it 80% see-
thru, and at the same time, to move it back about
six (6) meters to provide parking space for
vehicles to park. On April 26, 2000, the
respondents requested for an extension of time
to comply with the directive. In response, the
petitioners, through then City Mayor Bayani F.
Fernando, insisted on the enforcement of the
subject Ordinance. The respondents filed a
petition for prohibition with an application for a
writ of preliminary injunction and temporary
restraining order arguing that the petitioners
were acting in excess of jurisdiction in enforcing
Ordinance No. 192, asserting that such
contravenes Section 1, Article III of the 1987
Constitution. That demolishing their fence and
constructing it 6 meters back would result in the
loss of at least 1, 803. 34 square meters, worth
about P9, 041, 700.00, along West Drive, and at
least 1, 954. 02 square meters, worth roughly P9,
770, 100. 00, along East Drive. The respondents,
thus, asserted that the implementation of the
ordinance on their property would be tantamount
to an appropriation of property without due
process of law; and that the petitioners could
only appropriate a portion of their property
through eminent domain. They also pointed out
that the goal of the provisions to deter lawless
elements and criminality did not exist as the
solid concrete walls of the school had served as
sufficient protection for many years.
The petitioners, on the other hand, countered
that the ordinance was a valid exercise of police
power, by virtue of which, they could restrain
property rights for the protection of public
safety, health, morals or the promotion of public
convenience and general prosperity.
ISSUE:
Whether or not Sections 3.1 and 5 of
Ordinance No. 192 are valid exercises of police
power by the City Government of Marikina.
RULING:
Police power is the plenary power
vested in the legislature to make statutes and
ordinances to promote the health, morals, peace,
education, good order or safety and general
welfare of the people. The State, through the
legislature, has delegated the exercise of police
power to local government units, as agencies of
the State. This delegation of police power is
embodied in Section 16 of the Local
Government Code of 1991 (R.A No. 7160),
known as the General Welfare Clause.
Ordinance No. 192 was passed by the City
Council of Marikina in the apparent exercise of
its police power. To successfully invoke the
exercise of police power as the rationale for the
enactment of an ordinance and to free it from the
imputation of constitutional infirmity, two tests
have been used by the Court the rational
relationship test and the strict scrutiny test. We
ourselves have often applied the rational basis
test mainly in analysis of equal protection
challenges.
Using the rational basis examination, laws or
ordinances are upheld if they are rationally
further a legitimate governmental interest.
Applying strict scrutiny test, the focus is on the
presence of compelling rather than substantial
governmental interest and on the absence of less
restrictive means for achieving that interest.
Even without going to a discussion of the strict
scrutiny test, Ordinance No. 192, series of 1994
must be struck down for not being reasonably
necessary to accomplish the Citys purpose.
More importantly, it is oppressive of private
rights. Under the rational relationship test, local
governments may be considered as having
properly exercised their police power only if the
following requisites are met:
(1) the interests of the public generally, as
distinguished from those of a particular class,
require its exercise and
(2) the means employed are reasonably
necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.
Lacking a concurrence of these two requisites,
the police power measure shall be struck down
as an arbitrary intrusion into private rights and a
violation of the due process clause.
Setback Requirement
The Court joins the CA in finding that
the real intent of the setback requirement was to
make the parking space free for use by the
public, considering that it would no longer be
for the exclusive use of the respondents as it
would also be available for use by the general
public. Section 9 of Article III of the 1987
Constitution, a provision on eminent domain,
provides that private property shall not be taken
for a public use without just compensation.
Regarding the beautification purpose of the
setback requirement, it has long been settled that
the State may not, under the guise of police
power, permanently divest owners of the
beneficial use of their property solely to
preserve or enhance the aesthetic appearance of
the community. The Court, thus, finds Section 5
to be unreasonable and oppressive as it will
substantially divest the respondents of the
beneficial use of their property solely for
aesthetic purposes. Accordingly, Section 5 of
Ordinance No. 192 is invalid.
80% See-Thru Fence Requirement
For Section 3.1 to pass the rational
relationship test, the petitioners must show the
reasonable relation between the purpose of the
police power measure and the means employed
for its accomplishment, for even under the guise
 of protecting the public interest, personal rights,
and those pertaining to private property will not
be permitted to be arbitrarily invaded. The
principal purpose of Section 3.1 is to
discourage, suppress or prevent the concealment
of prohibited or unlawful acts. The ultimate
goal of this objective is clearly the prevention of
crime to ensure public safety and security. The
means employed by the petitioners, however, is
not reasonably necessary for the
accomplishment of this purpose and is unduly
oppressive to private rights. The petitioners have
not adequately shown, and it does not appear
obvious to this Court, that an 80% see-thru fence
would provide better protection and a higher
level of security, or serve as a more satisfactory
criminal deterrent, than a tall solid concrete wall.
Compelling the respondents to construct their
fence in accordance with the assailed ordinance
is, thus, a clear encroachment on their right to
property, which necessarily includes their right
to decide how best to protect their property. The
enforcement of Section 3.1 would, therefore,
result in an undue interference with the
respondents rights to property and privacy.
Section 3.1 of Ordinance No. 192 is, thus, also
invalid and cannot be enforced against the
respondents.
Wherefore, the petition is GRANTED.
The writ of prohibition is hereby issued
commanding the petitioners to permanently
desist from enforcing or implementing Sections
3.1 and 5 of Ordinance No. 192, Series of 1994,
as amended, on the respondents property in
question located in Marikina Heights, Marikina,
Metro Manila.
8. BASCO VS. PHILIPPINE AMUSEMENTS
AND GAMING CORPORATION
FACTS:
Petitioners filed the instant petition seeking to annul
the Philippine Amusement and Gaming Corporation
(PAGCOR) Charter PD 1869, because it is
allegedly contrary to morals, public policy and order,
and because
A. It constitutes a waiver of a right prejudicial to a
third person with a right recognized by law. It
waived the Manila City government's right to
impose taxes and license fees, which is recognized
by law;
B. For the same reason stated in the immediately
preceding paragraph, the law has intruded into the
local government's right to impose local taxes and
license fees. This, in contravention of the
constitutionally enshrined principle of local
autonomy.
C. It violates the equal protection clause of the
constitution in that it legalizes PAGCOR
conducted gambling, while most other forms of
gambling are outlawed, together with prostitution,
drug trafficking and other vices;
D. It violates the avowed trend of the Cory
government away from monopolistic and crony
economy, and toward free enterprise and
privatization.
The Philippine Amusements and Gaming
Corporation (PAGCOR) was created by virtue of
P.D. 1067-A dated January 1, 1977 and was granted
a franchise under P.D. 1067-B also dated January 1,
1977 "to establish, operate and maintain gambling
casinos on land or water within the territorial
jurisdiction of the Philippines." Its operation was
originally conducted in the well known floating
casino "Philippine Tourist." The operation was
considered a success for it proved to be a potential
source of revenue to fund infrastructure and socio-
economic projects, thus, P.D. 1399 was passed on
June 2, 1978 for PAGCOR to fully attain this
objective.
Subsequently, on July 11, 1983, PAGCOR was
created under P.D. 1869 to enable the Government to
regulate and centralize all games of chance
authorized by existing franchise or permitted by law.
But the petitioners, are questioning the validity of
P.D. No. 1869. They allege that the same is "null and
void" for being "contrary to morals, public policy
and public order," monopolistic and tends toward
"crony economy", and is violative of the equal
protection clause and local autonomy as well as for
running counter to the state policies enunciated in
Sections 11 (Personal Dignity and Human Rights),
12 (Family) and 13 (Role of Youth) of Article II,
Section 1 (Social Justice) of Article XIII and Section
2 (Educational Values) of Article XIV of the 1987
Constitution.
ISSUE:
W/N the local Government of Manila have the
power to impose taxes on PAGCOR

RULING:
NO. Gambling in all its forms, unless allowed by
law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot
regulate it in the exercise of its police power.
The concept of police power is well-established in
this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere with
personal liberty or property in order to promote the
general welfare." (Edu v. Ericta, 35 SCRA 481, 487)
As defined, it consists of (1) an imposition or
restraint upon liberty or property, (2) in order to
foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general
terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v.
Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of
the times, even to anticipate the future where it
could be done, provides enough room for an
efficient and flexible response to conditions and
circumstances thus assuming the greatest benefits.
(Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain
reason that it does not owe its origin to the charter.
Along with the taxing power and eminent domain, it
is inborn in the very fact of statehood and
sovereignty. It is a fundamental attribute of
government that has enabled it to perform the most
vital functions of governance. Marshall, to whom the
expression has been credited, refers to it succinctly
as the plenary power of the state "to govern its
citizens". (Tribe, American Constitutional Law, 323,
1978). The police power of the State is a power co-
extensive with self-protection and is most aptly
termed the "law of overwhelming necessity." (Rubi
v. Provincial Board of Mindoro, 39 Phil. 660, 708) It
is "the most essential, insistent, and illimitable of
powers." (Smith Bell & Co. v. National, 40 Phil.
136) It is a dynamic force that enables the state to
meet the agencies of the winds of change.
What was the reason behind the enactment of P.D.
1869?
P.D. 1869 was enacted pursuant to the policy of the
government to "regulate and centralize thru an
appropriate institution all games of chance
authorized by existing franchise or permitted by
law" (1st whereas clause, PD 1869). As was
subsequently proved, regulating and centralizing
gambling operations in one corporate entity the
PAGCOR, was beneficial not just to the Government
but to society in general. It is a reliable source of
much needed revenue for the cash strapped
Government. It provided funds for social impact
projects and subjected gambling to "close scrutiny,
regulation, supervision and control of the
Government" (4th Whereas Clause, PD 1869). With
the creation of PAGCOR and the direct intervention
of the Government, the evil practices and
corruptions that go with gambling will be minimized
if not totally eradicated. Public welfare, then, lies at
the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a
waiver of the right of the City of Manila to impose
taxes and legal fees; that the exemption clause in
P.D. 1869 is violative of the principle of local
autonomy. They must be referring to Section 13 par.
(2) of P.D. 1869 which exempts PAGCOR, as the
franchise holder from paying any "tax of any kind or
form, income or otherwise, as well as fees, charges
or levies of whatever nature, whether National or
Local."
(2) Income and other taxes. a) Franchise Holder:
No tax of any kind or form, income or otherwise as
well as fees, charges or levies of whatever nature,
whether National or Local, shall be assessed and
collected under this franchise from the Corporation;
nor shall any form or tax or charge attach in any way
to the earnings of the Corporation, except a franchise
tax of five (5%) percent of the gross revenues or
earnings derived by the Corporation from its
operations under this franchise. Such tax shall be
due and payable quarterly to the National
Government and shall be in lieu of all kinds of taxes,
levies, fees or assessments of any kind, nature or
description, levied, established or collected by any
municipal, provincial or national government
authority (Section 13 [2]).
Their contention stated hereinabove is without merit
for the following reasons:
(a) The City of Manila, being a mere Municipal
corporation has no inherent right to impose taxes
(Icard v. City of Baguio, 83 Phil. 870; City of Iloilo
v. Villanueva, 105 Phil. 337; Santos v. Municipality mentioned under the preceding section, including,
of Caloocan, 7 SCRA 643). Thus, "the Charter or but not limited to amendments of Articles of
statute must plainly show an intent to confer that Incorporation and By-Laws, changes in corporate
power or the municipality cannot assume it" term, structure, capitalization and other matters
(Medina v. City of Baguio, 12 SCRA 62). Its "power concerning the operation of the affiliated entities, the
to tax" therefore must always yield to a legislative provisions of the Corporation Code of the
act which is superior having been passed upon by Philippines to the contrary notwithstanding, except
the state itself which has the "inherent power to tax" only with respect to original incorporation.
(Bernas, the Revised [1973] Philippine Constitution,
Vol. 1, 1983 ed. p. 445).
PAGCOR has a dual role, to operate and to regulate
(b) The Charter of the City of Manila is subject to
gambling casinos. The latter role is governmental,
control by Congress. It should be stressed that
which places it in the category of an agency or
"municipal corporations are mere creatures of
instrumentality of the Government. Being an
Congress" (Unson v. Lacson, G.R. No. 7909,
instrumentality of the Government, PAGCOR should
January 18, 1957) which has the power to "create
be and actually is exempt from local taxes.
and abolish municipal corporations" due to its
Otherwise, its operation might be burdened,
"general legislative powers" (Asuncion v. Yriantes,
impeded or subjected to control by a mere Local
28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541).
government.
Congress, therefore, has the power of control over
Local governments (Hebron v. Reyes, G.R. No. The states have no power by taxation or otherwise,
9124, July 2, 1950). And if Congress can grant the to retard, impede, burden or in any manner control
City of Manila the power to tax certain matters, it the operation of constitutional laws enacted by
can also provide for exemptions or even take back Congress to carry into execution the powers vested
the power. in the federal government. (MC Culloch v. Marland,
4 Wheat 316, 4 L Ed. 579)
(c) The City of Manila's power to impose license
fees on gambling, has long been revoked. As early as This doctrine emanates from the "supremacy" of the
1975, the power of local governments to regulate National Government over local governments.
gambling thru the grant of "franchise, licenses or
permits" was withdrawn by P.D. No. 771 and was
vested exclusively on the National Government.
Therefore, only the National Government has the
power to issue "licenses or permits" for the operation
of gambling. Necessarily, the power to demand or
collect license fees which is a consequence of the
issuance of "licenses or permits" is no longer vested
in the City of Manila.
(d) Local governments have no power to tax
instrumentalities of the National Government.
PAGCOR is a government owned or controlled
corporation with an original charter, PD 1869. All of
its shares of stocks are owned by the National
Government. In addition to its corporate powers
(Sec. 3, Title II, PD 1869) it also exercises
regulatory powers thus:
Sec. 9. Regulatory Power. The Corporation
shall maintain a Registry of the affiliated entities,
and shall exercise all the powers, authority and the
responsibilities vested in the Securities and
Exchange Commission over such affiliating entities