Topic: Government as Protector & People as Defender of the State Case: Basco vs.

PAGCOR Decision: May 14, 1991 Ponente: Judge Paras Facts: January 1, 1977: PAGCOR (as corporation) created by virtue of PD 1967-A (creation) and PD 1967-B (granted franchise) to establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines. July 11, 1983: PAGCOR (as government entity/agency) 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, with main objectives of reducing corruption in unregulated gambling and generate sources of additional revenue to fund infrastructure and socio-civic projects. Case is an instant petition seeking to annul P.D. 1869 PAGCOR Charter because it is allegedly contrary to morals, public policy and order, and for further reasons: o (specific) waived Manila Citys right to impose taxes o (general) law intruded into local governments rights to tax, going against constitutional principle of local autonomy o violates equal protection clause of the Constitution because it legalizes PAGCOR (conducted gambling) while other forms of gambling are illegal o violates Cory governments goal of free enterprise (saying that PAGCOR is a monopoly)

Issues (in order of importance according to topic): Held: Petition DISMISSED due to lack of merit. Legalizing PAGCOR was an act of the government while exercising its police power to promote the general welfare. Gambling is generally prohibited, but its regulation is not against the constitutional provisions that promote order and morality. PAGCOR is beneficial not just to the Government but to society in general. It is a reliable source of much needed revenue for social impact projects, and subjects gambling to close scrutiny, regulation, supervision and control of the Government to minimize or completely extinguish corruption in unregulated gambling. Therefore, the main intent of PD 1896 is public welfare. As to violation of local government powers, it was ruled that PAGCOR, as a regulatory body, makes it an agent of National Government, which cannot be taxed by local governments while performing its functions (doctrine of supremacy of national government). Also, only national government has the power to issue licenses or permits for the operation of gambling (P.D. 771). WoN legalizing PAGCOR violates constitutional provisions for morality, public policy, and order (as stated in Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 par. 2 of Article XIV) WoN legalizing PAGCOR violates local governments rights to impose taxes and fees