Basco et al vs.

PAGCOR
G.R. No. 91649 May 14, 1991

FACTS:

PD 1869 is the charter which created the Philippine Amusement and Gaming
Corporation. PAGCOR was created to enable the government to regulate and centralize
all games of chance authorized by existing franchise or permitted by law. Section 13 par
2 of the decree exempts PAGCOR, franchise holder from paying any tax of any kind or
form, income or otherwise whether national or local. According to the petitioners,
this waived the Manila City governments right to impose taxes and license fees which is
recognized by law.

ISSUE:
Whether or not the exemption clause of PD 1869 is violative of the principle of local
autonomy?

RULING:
The city of Manila, being a municipal corporation has no inherent right to impose taxes.
Its power to tax must always yield to a legislative act which is superior having been
passed upon by the state which has the inherent power of the state to tax.
The court added that since one of the roles of PAGCOR is to regulate gambling casinos,
this places it in the category of an agency or instrumentality of the government
PAGCOR should be and actually is exempted from local taxes, otherwise, its operation
might be burdened, impeded, or subjected to control by a mere local government.
The matter of regulating, taxing or otherwise dealing with gambling is a state concern
and hence, it is the sole prerogative of the state to retain it or delegate it to local
government.

Mactan Cebu (MCIAA) vs. Marcos

GR 120082 September 11, 1996 261 SCRA 667

Davide Jr., .: (CJ)

FACTS:
Mactan Cebu International Airport Authority (MCIAA) was created to principally
undertake to economical, efficient and effective control, management and supervision of
the Mactan International Airport and such other airports as may be established in
the province of Cebu Section 14 of its charter excempts the Authority from payment
of realty taxes but in 1994, the City Treasurer demanded payment for realty taxes on
several parcels of land belonging to the other. MCIAA filed a petition in RTC contending
that, by nature of its powers and functions, it has the same footing of an agency or
instrumentality of the national government. The RTC dismissed the petition based on
Section 193 & 234 of the local Government Code or R.A. 7160. Thus this petition.

ISSUE:

Whether or not the MCIAA is excempted from realty taxes?

RULING:

With the repealing clause of RA 7160 the tax exemption provided. All general and
special in the charter of the MCIAA has been expressly repeated. It state laws, acts, City
Charters, decrees, executive orders, proclamations and administrative regulations, or
part of parts thereof which are inconsistent with any of the provisions of the Code
are hereby repeated or modified accordingly. Therefore the SC affirmed the decision
and order of the RTC and herein petitioner has to pay the assessed realty tax of its
properties effective January 1, 1992 up to the present.

Manila International Airport Authority vs CA GR No. 155650, July 20,

2006, 495 SCRA 591

Facts:

Manila International Airport Authority (MIAA) is the operator of the Ninoy

International Airport located at Paranaque City. The Officers of Paranaque City sent
notices to MIAA due to real estate tax delinquency. MIAA then settled some of the
amount. When MIAA failed to settle the entire amount, the officers of Paranaque city
threatened to levy and subject to auction the land and buildings of MIAA, which they
did. MIAA sought for a Temporary Restraining Order from the CA but failed to do so
within the 60 days reglementary period, so the petition was dismissed. MIAA then
sought for the TRO with the Supreme Court a day before the public auction, MIAA was
granted with the TRO but unfortunately the TRO was received by the Paranaque City
officers 3 hours after the public auction. MIAA claims that although the charter provides
that the title of the land and building are with MIAA still the ownership is with the
Republic of the Philippines. MIAA also contends that it is an instrumentality of the
government and as such exempted from real estate tax. That the land and buildings of
MIAA are of public dominion therefore cannot be subjected to levy and auction sale. On
the other hand, the officers of Paranaque City claim that MIAA is a government owned
and controlled corporation therefore not exempted to real estate tax.

Issues:

Whether or not MIAA is an instrumentality of the government and not a government

owned and controlled corporation and as such exempted from tax.

Whether or not the land and buildings of MIAA are part of the public dominion and thus
cannot be the subject of levy and auction sale.

Ruling:

Under the Local government code, government owned and controlled corporations are
notexempted from real estate tax. MIAA is not a government owned and controlled
corporation, for to become one MIAA should either be a stock or non stock corporation.
MIAA is not a stock corporation for its capital is not divided into shares. It is not a non
stock corporation since it has no members. MIAA is aninstrumentality of the
government vested with corporate powers and government functions.Under the civil
code, property may either be under public dominion or private ownership. Thoseunder
public dominion are owned by the State and are utilized for public use, public service
and for thedevelopment of national wealth. The ports included in the public dominion
pertain either to seaports or airports. When properties under public dominion cease to
be for public use and service, they form part of the patrimonial property of the State.The
court held that the land and buildings of MIAA are part of the public dominion. Since
theairport is devoted for public use, for the domestic and international travel and
transportation. Even if MIAA charge fees, this is for support of its operation and for
regulation and does not change the character of the land and buildings of MIAA as part
of the public dominion. As part of the public dominion the landand buildings of MIAA
are outside the commerce of man. To subject them to levy and public auction iscontrary
to public policy. Unless the President issues a proclamation withdrawing the airport
land and buildings from public use, these properties remain to be of public dominion
and are inalienable. As longas the land and buildings are for public use the ownership is
with the Republic of the Philippines.

Pimentel v. Aguirre

G.R. No. 132988 (July 19, 2000)

FACTS: This is a petition for certiorari and prohibition seeking to annul Section 1 of
Administrative Order No. 372, issued by the President, insofar as it requires local
government units to reduce their expenditures by 25% of their authorized regular
appropriations for non-personal services and to enjoin respondents from implementing
Section 4 of the Order, which withholds a portion of their internal revenue allotments.

SSUES:
1.
WON
Section 1 of AO 372
, insofar as it "directs" LGUs to reduce their expendituresby 25 percent is a valid
exercise of the President's power of general supervision overlocal governments.
2.
WON
Section 4 of AO 372
, which withholds 10 percent of their internal revenueallotments, are valid exercises of
the President's power of general supervision overlocal governments.

HELD: Section 1 of the AO does not violate local fiscal autonomy. Local fiscal autonomy
does not rule out any manner of national government intervention by way of
supervision, in order to ensure that local programs, fiscal and otherwise, are consistent
with national goals. AO 372 is merely directory and has been issued by the President
consistent with his powers of supervision over local governments. A directory order
cannot be characterized as an exercise of the power of control. The AO is intended only
to advise all government agencies and instrumentalities to undertake cost-reduction
measures that will help maintain economic stability in the country. It does not contain
any sanction in case of noncompliance.

The Local Government Code also allows the President to interfere in local fiscal matters,
provided that certain requisites are met: (1) an unmanaged public sector deficit of the
national government; (2) consultations with the presiding officers of the Senate and the
House of Representatives and the presidents of the various local leagues; (3) the
corresponding recommendation of the secretaries of the Department of Finance,
Interior and Local Government, and Budget and Management; and (4) any adjustment
in the allotment shall in no case be less than 30% of the collection of national internal
revenue taxes of the third fiscal year preceding the current one.

Section 4 of AO 372 cannot be upheld. A basic feature of local fiscal autonomy is the
automatic release of the shares of LGUs in the national internal revenue. This is
mandated by the Constitution and the Local Government Code. Section 4 which orders
the withholding of 10% of the LGUs IRA clearly contravenes the Constitution and the
law.