Вы находитесь на странице: 1из 11

Magtajas Vs Pryce Properties

G.R. No. 111097 July 20, 1994


MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,
FACTS: There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro
City. Civic organizations angrily denounced the project.The trouble arose when in 1992, flush with its
tremendous success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City.he
reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7,
1992, it enacted Ordinance No. 3353.Nor was this all. On January 4, 1993, it adopted a sterner Ordinance
No. 3375-93Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as
intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of
Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their enforcement
ISSUE: WON Ordinance 3353 and 3375-93 valid
HELD: No
Local Government Code, local government units are authorized to prevent or suppress, among others,
"gambling and other prohibited games of chance." Obviously, this provision excludes games of chance
which are not prohibited but are in fact permitted by law.The rationale of the requirement that the
ordinances should not contravene a statute is obvious.Casino gambling is authorized by P.D. 1869. This
decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was
not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353
prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the
operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the
public policy announced therein and are therefore ultra vires and void.
Drilon vs LIM
GR No. 112497, August 4, 1994
FACTS:
Pursuant to Section 187 of the Local Government Code, the Secretary of Justice had, on appeal to him of
four oil companies and a taxpayer, declared Ordinance No. 7794, otherwise known as the Manila Revenue
Code, null and void for non-compliance with the prescribed procedure in the enactment of tax ordinances
and for containing certain provisions contrary to law and public policy.
In a petition for certiorari filed by the City of Manila, the Regional Trial Court of Manila revoked the
Secretarys resolution and sustained the ordinance, holding inter alia that the procedural requirements had
been observed. More importantly, it declared Section 187 of the Local Government Code as unconstitutional
because of its vesture in the Secretary of Justice of the power of control over local governments in violation
of the policy of local autonomy mandated in the Constitution and of the specific provision therein conferring
on the President of the Philippines only the power of supervision over local governments. The court cited
the familiar distinction between control and supervision, the first being the power of an officer to alter or
modify or set aside what a subordinate officer had done in the performance of his duties and to substitute
the judgment of the former for the latter, while the second is the power of a superior officer to see to it
that lower officers perform their functions is accordance with law.
ISSUES:
The issues in this case are
(1) whether or not Section 187 of the Local Government Code is unconstitutional; and
(2) whether or not the Secretary of Justice can exercise control, rather than supervision, over the local
government
HELD:
The judgment of the lower court is reversed in so far as its declaration that Section 187 of the Local
Government Code is unconstitutional but affirmed the said lower courts finding that the procedural
requirements in the enactment of the Manila Revenue Code have been observed.
Section 187 authorizes the Secretary of Justice to review only the constitutionality or legality of the tax
ordinance and, if warranted, to revoke it on either or both of these grounds. When he alters or modifies or
sets aside a tax ordinance, he is not also permitted to substitute his own judgment for the judgment of the
local government that enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but
he did not replace it with his own version of what the Code should be.
An officer in control lays down the rules in the doing of an act. It they are not followed, he may, in his
discretion, order the act undone or re-done by his subordinate or he may even decide to do it himself.
Supervision does not cover such authority. The supervisor or superintendent merely sees to it that the rules
are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or
replace them. In the opinion of the Court, Secretary Drilon did precisely this, and no more nor less than
this, and so performed an act not of control but of mere supervision.
Regarding the issue on the non-compliance with the prescribed procedure in the enactment of the Manila
Revenue Code, the Court carefully examined every exhibit and agree with the trial court that the procedural
requirements have indeed been observed. The only exceptions are the posting of the ordinance as
approved but this omission does not affect its validity, considering that its publication in three successive
issues of a newspaper of general circulation will satisfy due process.
200 SCRA 271 Political Law Control Power Local Government
Ganzon vs ca
Rodolfo Ganzon was the then mayor of Iloilo City. 10 complaints were filed against him on grounds of
misconduct and misfeasance of office. The Secretary of Local Government issued several suspension orders
against Ganzon based on the merits of the complaints filed against him hence Ganzon was facing about
600 days of suspension. Ganzon appealed the issue to the CA and the CA affirmed the suspension order by
the Secretary. Ganzon asserted that the 1987 Constitution does not authorize the President nor any of his
alter ego to suspend and remove local officials; this is because the 1987 Constitution supports local
autonomy and strengthens the same. What was given by the present Constitution was mere supervisory
power.
ISSUE: Whether or not the Secretary of Local Government, as the Presidents alter ego, can suspend and or
remove local officials.
HELD: Yes. Ganzon is under the impression that the Constitution has left the President mere supervisory
powers, which supposedly excludes the power of investigation, and denied her control, which allegedly
embraces disciplinary authority. It is a mistaken impression because legally, supervision is not
incompatible with disciplinary authority.
The SC had occasion to discuss the scope and extent of the power of supervision by the President over
local government officials in contrast to the power of control given to him over executive officials of our
government wherein it was emphasized that the two terms, control and supervision, are two different
things which differ one from the other in meaning and extent. In administration law supervision means
overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If
the latter fail or neglect to fulfill them the former may take such action or step as prescribed by law to
make them perform their duties.
Control, on the other hand, means the power of an officer to alter or modify or nullify of set aside what a
subordinate officer had done in the performance of his duties and to substitute the judgment of the former
for that of the latter. But from this pronouncement it cannot be reasonably inferred that the power of
supervision of the President over local government officials does not include the power of investigation
when in his opinion the good of the public service so requires.
The Secretary of Local Government, as the alter ego of the president, in suspending Ganzon is exercising a
valid power. He however overstepped by imposing a 600 day suspension.
National liga ng mga barangay vs paredes
Facts: DILG, appointed as interim caretaker to administer and manage the affairs of the Liga ng mga
Barangay in giving remedy to alleged violations made by the incumbent officer of the Liga in the conduct of
their elections, issued 2 memorandum circulars which alter, modify, nullify or set aside the actions of the
Liga.
Petitioner contends that DILGs appointment constitutes undue interference in the internal affairs of the
Liga, since the latter is not subject to DILG control and supervision. Respondent judge contends that DILG
exercises general supervisory jurisdiction over LGUs including the different leagues based on sec. 1 of
Admin. Order No. 267 providing for a broad premise of the supervisory power of the DILG.
Issue: WON DILG Secretary as alter-ego of the President has power of control over the Liga ng mga
Barangay.
Held: No. Sec. 4, Art. X of the Constitution provides that the President of the Philippines shall exercise
general supervision over local government, which exclude the power of control. As the entity exercising
supervision over the Liga, the DILGs authority is limited to seeing to it that the rules are followed, but it
cannot lay down such rules itself nor does it have the discretion to modify or replace the same.
AMPATUAN v. PUNO
October 26, 2012 Leave a comment
June 7, 2011 (G.R. No. 190259)
PARTIES:
Petitioners: DATU ZALDY UY AMPATUAN, ANSARUDDIN ADIONG, REGIE SAHALI-GENERALE
Respondents : HON. RONALDO PUNO, ARMED FORCES OF THE PHILIPPINES, PHILIPPINE
NATIONAL POLICE

FACTS:
On November 24, 2009, the day after the gruesome massacre of 57 men and women, then President Gloria
Macapagal-Arroyo issued Proclamation 1946, placing the Provinces of Maguindanao and Sultan Kudarat
and the City of Cotabato under a state of emergency. She directed the AFP and the PNP to undertake
such measures as may be allowed by the Constitution and by law to prevent and suppress all incidents of
lawless violence in the named places. Under AO 273, she also delegated to the DILG the supervision of
the ARMM.
The petitioners claimed that the Presidents issuances encroached the ARMMs autonomy, that it constitutes
an invalid exercise of emergency powers, and that the President had no factual basis for declaring a state
of emergency, especially in the Province of Sultan Kudarat and the City of Cotabato, where no critical
violent incidents occurred. They want Proc. 1946 and AO 273 be declared unconstitutional.
The respondents, however, said that its purpose was not to deprive the ARMM of its autonomy, but to
restore peace and order in subject places. It is pursuant to her calling out power as Commander-in-Chief.
The determination of the need to exercise this power rests solely on her wisdom.
The President merely delegated her supervisory powers over the ARMM to the DILG Secretary who was her
alter ego any way. The delegation was necessary to facilitate the investigation of the mass killings
ISSUE:
WON President Arroyo invalidly exercised emergency powers when she called out the AFP and the PNP to
prevent and suppress all incidents of lawless violence in Maguindanao, Sultan Kudarat, and Cotabato City
HELD: NO. The President did not proclaim a national emergency, only a state of emergency in the three
places mentioned. And she did not act pursuant to any law enacted by Congress that authorized her to
exercise extraordinary powers. The calling out of the armed forces to prevent or suppress lawless violence
in such places is a power that the Constitution directly vests in the President. She did not need a
congressional authority to exercise the same.
ISSUE (2): WON there is factual basis on the calling out of the Armed Forces.
HELD: Yes. The Presidents call on the armed forces to prevent or suppress lawless violence springs from
the power vested in her under Section 18, Article VII of the Constitution. While it is true that the Court may
inquire into the factual bases for the Presidents exercise of the above power, unless it is shown that such
determination was attended by grave abuse of discretion, the Court will accord respect to the Presidents
judgment.
Lino Vs Pano

HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and HON.CALIXTO
CATAQUIZ,
petitioners, vs
. HON. FRANCISCO DIZON PAO and TONYCALVENTO,
respondents
.
G.R. No. 129093
FACTS:On December 29, 1995, respondent Tony Calvento was appointed agent by the Philippine Charity
Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked Mayor Calixto
Cataquiz, Mayor of San Pedro, Laguna, for a mayors permit to open the lotto outlet. This was denied by
Mayor Cataquiz in a letter dated February 19, 1996. The ground for said denial was an ordinance passed
by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T. 1995which was issued on
September 18, 1995.As a result of this resolution of denial, respondent Calvento filed a complaint for
declaratory relief with prayer for preliminary injunction and temporary restraining order. In the said
complaint, respondent Calvento asked the Regional Trial Court of San Pedro Laguna, Branch 93, for the
following reliefs: (1) a preliminary injunction or temporary restraining order, ordering the defendants to
refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon.
Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto outlet; and (3)
an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.On February 10, 1997, the
respondent judge, Francisco Dizon Pao, promulgated his decision enjoining the petitioners from
implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995.
ISSUE: WON Kapasiyahan Blg. 508, T. 1995 is valid
HELD: As a policy statement expressing the local governments objection to the lotto, such resolution is
valid. This is part of the local governments autonomy to air its views which may be contrary to that of the
national governments. However, this freedom to exercise contrary views does not mean that local
governments may actually enact ordinances that go against laws duly enacted by Congress. Given this
premise, the assailed resolution in this case could not and should not be interpreted as a measure or
ordinance prohibiting the operation of lotto.n our system of government, the power of local government
units to legislate and enact ordinances and resolutions is merely a delegated power coming from Congress.
As held in Tatel vs. Virac, ordinances should not contravene an existing statute enacted by Congress. The
reasons for this is obvious, as elucidated in Magtajas v. Pryce Properties Corp.
Province of rizal vs executive secretary
G.R. No. 129546 December 13, 2005
Facts:
This is a petition filed by the Province of Rizal, the municipality of San Mateo, and various concerned
citizens for review on certiorari of the Decision of the Court of Appeals, denying, for lack of cause of action,
the petition for certiorari, prohibition and mandamus with application for a temporary restraining order/writ
of preliminary injunction assailing the legality and constitutionality of Proclamation No. 635.
At the height of the garbage crisis plaguing Metro Manila and its environs, parts of the Marikina
Watershed Reservation were set aside by the Office of the President [President Ramos], through
Proclamation No. 635, for use as a sanitary landfill and similar waste disposal applications.
The petioners opposed the implementation of said order since the creation of dump site under the
territorial jurisdiction would compromise the health of their constutents. Moreso, the the dump site is to be
constructed in Watershed reservation.
Through their concerted efforts of the officials and residents of Province of Rizal and Municipality of San
Mateo, the dump site was closed. However, during the term of President Estrada in 2003, the dumpsite was
re-opened.

A temporary restraining order was then filed. Although petitioners did not raised the question that the
project was not consulted and approved by their appropriate Sanggunian, the court take it into
consideration since a mere MOA does not guarantee the dump sites permanent closure.
Issue:
Whether or not the consultation and approval of the Province of Rizal and municipality of San Mateo is
needed before the implementation of the project..
Ruling:
The court reiterated again that "the earth belongs in usufruct to the living."
Yes, as lucidly explained by the court: contrary to the averment of the respondents, Proclamation No.
635, which was passed on 28 August 1995, is subject to the provisions of the Local Government Code,
which was approved four years earlier, on 10 October 1991.
Section 2(c) of the said law declares that it is the policy of the state- "to require all national agencies
and offices to conduct periodic consultation with appropriate local government units, non-governmental
and people's organization, and other concerned sectors of the community before any project or program is
implemented in their respective jurisdiction." Likewise Section 27 requires prior consultations before a
program shall be implemented by government authorities ans the prior approval of the Sanggunian is
obtained." Corollarily as held in Lina , Jr. v. Pao, Section 2 (c), requiring consultations with the
appropriate local government units, should apply to national government projects affecting the
environmental or ecological balance of the particular community implementing the project.
Relative to the case, during the oral arguments at the hearing for the temporary restraining order,
Director Uranza of the MMDA Solid Waste Management Task Force declared before the Court of Appeals
that they had conducted the required consultations. However, the ambivalence of his reply was brought to
the fore when at the height of the protest rally and barricade made by the residents of petitioners to stop
dump trucks from reaching the site, all the municipal mayors of the province of Rizal openly declared their
full support for the rally and notified the MMDA that they would oppose any further attempt to dump
garbage in their province.
Moreover, Section 447, which enumerates the powers, duties and functions of the municipality, grants
the sangguniang bayan the power to, among other things, enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipality and its inhabitants pursuant to Section 16 of
th(e) Code. These include:
(1) Approving ordinances and passing resolutions to protect the environment and impose appropriate
penalties for acts which endanger the environment, such as dynamite fishing and other forms of
destructive fishing, illegal logging and smuggling of logs, smuggling of natural resources products and of
endangered species of flora and fauna, slash and burn farming, and such other activities which result in
pollution, acceleration of eutrophication of rivers and lakes, or of ecological imbalance; [Section 447 (1)(vi)]
(2) Prescribing reasonable limits and restraints on the use of property within the jurisdiction of the
municipality, adopting a comprehensive land use plan for the municipality, reclassifying land within the
jurisdiction of the city, subject to the pertinent provisions of this Code, enacting integrated zoning
ordinances in consonance with the approved comprehensive land use plan, subject to existing laws, rules
and regulations; establishing fire limits or zones, particularly in populous centers; and regulating the
construction, repair or modification of buildings within said fire limits or zones in accordance with the
provisions of this Code;[Section 447 (2)(vi-ix)]

(3) Approving ordinances which shall ensure the efficient and effective delivery of the basic services and
facilities as provided for under Section 17 of this Code, and in addition to said services and facilities,
providing for the establishment, maintenance, protection, and conservation of communal forests and
watersheds, tree parks, greenbelts, mangroves, and other similar forest development projects .and,
subject to existing laws, establishing and providing for the maintenance, repair and operation of an efficient
waterworks system to supply water for the inhabitants and purifying the source of the water supply;
regulating the construction, maintenance, repair and use of hydrants, pumps, cisterns and reservoirs;
protecting the purity and quantity of the water supply of the municipality and, for this purpose, extending
the coverage of appropriate ordinances over all territory within the drainage area of said water supply and
within one hundred (100) meters of the reservoir, conduit, canal, aqueduct, pumping station, or watershed
used in connection with the water service; and regulating the consumption, use or wastage of
water.[Section 447 (5)(i) & (vii)]
Briefly stated, under the Local Government Code, two requisites must be met before a national project
that affects the environmental and ecological balance of local communities can be implemented:
(1) prior consultation with the affected local communities, and
(2)prior approval of the project by the appropriate sanggunian.

Absent either of these mandatory requirements, the projects implementation is illegal.
Andaya vs RTC
Posted on October 23, 2012
319 SCRA 696 (G.R. No. 126661)
February 13, 2004

FACTS:
On January 3, 1996, the position of City Director, Cebu City Police Command (chief of police) became
vacant after P/Supt. Antonio Enteria was relieved of command.
Thereafter, petitioner Andaya submitted to the City Mayor of Cebu a list of 5 eligibles from which the latter
would choose and appoint as the new chief of police. However, the mayor did not choose anyone from the
list because P/Chief Inspector Andres Sarmiento was not included therein.
Petitioner Andaya refused the Mayors request to include Major Andres Sarmiento in the list of police
officers for appointment since he was not qualified for the position under NAPOLCOM Memorandum
Circular No. 95-04.
ISSUE:
WON Mayor of Cebu City may require the inclusion of his protg in the list of 5 eligibles to be
recommended to him by the Regional Police Dir., Regional Police Command No.7, for his selection of the the
City Director, City Police Command (chief of police)
HELD:
No.
RA 6975
Sec.51 deputizes the Mayor of Cebu City as representative of the National Police Commission in his
territorial jurisdiction
grants the Mayor of Cebu City authority to choose the chief of police from a list of five (5) eligibles
recommended by the Regional Director, Regional Police Command No. 7
The City Police Station of Cebu City is under the direct command & control of the PNP Regional Director,
and is equivalent to a provincial office.
It is the prerogative of the Regional Police Director to name the 5 eligibles from a pool of eligible officers,
screened by the Senior Officers Promotion and Selection Board, without interference from local executives.
The National Police Commission issued Memorandum Circular No. 95-04 to implement RA 6975.
Memorandum Circular 95-04 provides qualifications for Chief of Police of highly urbanized cities:
(1) completion of the Officers Senior Executive Course (OSEC)
(2) holding the rank of Police Superintendent
In case of disagreement between the Regional Police Director and the Mayor, the question shall be elevated
to the Regional Director, National Police Commission, who shall resolve the issue within 5 working days
from receipt and whose decision on the choice of the Chief of Police shall be final and executory.
As deputy of the Commission, the authority of the mayor is very limited. In reality, he has no power of
appointment; he has only the limited power of selecting one from among the list of 5 eligibles to be named
the chief of police. The actual power to appoint the Chief of Police is vested in the Regional Director.
As such, the mayor cannot require the Regional Director to include the name of any officer, no matter how
qualified, in the list of 5 to be submitted to him. This is to enhance police professionalism and to isolate the
police service from political domination.

Part V governmental power of local governments
Basco vs pagcor
On July 11, 1983, PAGCOR was created under PD 1869 to enable the Government to regulate and
centralize all games of chance authorized by existing franchise or permitted by law. Basco and four others
(all lawyers) assailed the validity of the law creating PAGCOR on constitutional grounds among others
particularly citing that the PAGCORs charter is against the constitutional provision on local autonomy.
Basco et al contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes
and legal fees; that 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 is violative of the local autonomy principle.
ISSUE: Whether or not PAGCORs charter is violative of the principle of local autonomy.
HELD: NO. Section 5, Article 10 of the 1987 Constitution provides:
Each local government unit shall have the power to create its own source of revenue and to levy taxes,
fees, and other charges subject to such guidelines and limitation as the congress may provide, consistent
with the basic policy on local autonomy. Such taxes, fees and charges shall accrue exclusively to the local
government.

A close reading of the above provision does not violate local autonomy (particularly on taxing powers) as it
was clearly stated that the taxing power of LGUs are subject to such guidelines and limitation as Congress
may provide.
Further, the City of Manila, being a mere Municipal corporation has no inherent right to impose taxes. The
Charter of the City of Manila is subject to control by Congress. It should be stressed that municipal
corporations are mere creatures of Congress which has the power to create and abolish municipal
corporations due to its general legislative powers. Congress, therefore, has the power of control over
Local governments. And if Congress can grant the City of Manila the power to tax certain matters, it can
also provide for exemptions or even take back the power.
Further still, 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. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
This doctrine emanates from the supremacy of the National Government over local governments.
MANILA ELECTRIC COMPANY vs. PROVINCE OF LAGUNA
FACTS
Manila Electric Company (MERALCO) on various dates (the latest being January 19, 1983) was granted
franchises by various municipalities of Laguna. On Sept. 12 1991, RA 7160 "Local Government Code of
1991" (LGC) was enacted to take effect on Jan.1 1992 enjoining local goverment units to create their own
sources of revenue and to levy taxes, fees and charges, subject to the limitations, consistent with the basic
policy of local autonomy. Respondent Laguna Province enacted Ordinance No. 01-92 (effective Jan. 1, 1993)
providing, in part:
Sec. 2.09. Franchise Tax. There is hereby imposed a tax on businesses enjoying a franchise, at a rate of
fifty percent (50%) of one percent (1%) of the gross annual receipts, which shall include both cash sales
and sales on account realized during the preceding calendar year within this province, including the
territorial limits on any city located in the province
MERALCO was then sent a demand letter to pay the corresponding tax. MERALCO paid the tax under
protest (approx. Php19.5M) and later on filed a formal claim for refund. It contends that the stated Section
2.09 of the LGC contravened the provisions of Section 1 of PD 551, which provides:
Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all
grantees of franchises to generate, distribute and sell electric current for light, heat and power shall be two
per cent (2%) of their gross receipts received from the sale of electric current and from transactions
incident to the generation, distribution and sale of electric current.
Such franchise tax shall be payable to the Commissioner of Internal Revenue or his duly authorized
representative on or before the twentieth day of the month following the end of each calendar quarter or
month, as may be provided in the respective franchise or pertinent municipal regulation and shall, any
provision of the Local Tax Code or any other law to the contrary notwithstanding, be in lieu of all taxes and
assessments of whatever nature imposed by any national or local authority on earnings, receipts, income
and privilege of generation, distribution and sale of electric current.
MERALCO then filed a complaint for refund with a prayer for the issuance of a writ of preliminary injunction
and/or TRO at the RTC of Sta. Cruz, Laguna. The RTC dismissed the complaint and ruled that the
Ordinance was valid, binding, reasonable and enforceable.
ISSUES
1. W/N the imposition of a franchise tax under Section 2.09 of Laguna Provincial Ordinance No. 01-92,
insofar as MERALCO is concerned, is violative of the non-impairment clause of the Constitution and Section
1 of Presidential Decree No. 551? NO
2. W/N the LGC, has repealed, amended or modified Presidential Decree No. 551? YES
RULING
(As an intro for the ruling as stated by the SC:)
Local Governments do not have the inherent power to tax except to the extent that such power might be
delegated to them either by the basic law or by statute. Presently, Under Article X of the 1987 Constitution,
a general delegation of that power has been given in favor of the Local Government Units (LGU).

Under the now prevailing Constitution, where there is neither a grant nor a prohibition by statute, the tax
power must be deemed to exist although Congress may provide statutory limitations and guidelines. The
basic rationale for the current rule is to safeguard the viability and self-sufficiency of local government units
by directly granting them general and broad tax powers. Nevertheless, the fundamental law did not intend
the delegation to be absolute and unconditional; the constitutional objective obviously is to ensure that,
while the local government units are being strengthened and made more autonomous, the legislature must
still see to it that (a) the taxpayer will not be over-burdened or saddled with multiple and unreasonable
impositions; (b) each local government unit will have its fair share of available resources; (c) the resources
of the national government will not be unduly disturbed; and (d) local taxation will be fair, uniform, and
just.
1. While the Court has, not too infrequently, referred to tax exemptions contained in special franchises as
being in the nature of contracts and a part of the inducement for carrying on the franchise, these
exemptions, nevertheless, are far from being strictly contractual in nature. Contractual tax exemptions, in
the real sense of the term and where the non-impairment clause of the Constitution can rightly be invoked,
are those agreed to by the taxing authority in contracts, such as those contained in government bonds or
debentures, lawfully entered into by them under enabling laws in which the government, acting in its
private capacity, sheds its cloak of authority and waives its governmental immunity. Truly, tax exemptions
of this kind may not be revoked without impairing the obligations of contracts. These contractual tax
exemptions, however, are not to be confused with tax exemptions granted under franchises. A franchise
partakes the nature of a grant which is beyond the purview of the non-impairment clause of the
Constitution.
2. The Local Government Code of 1991 explicitly authorizes provincial governments, notwithstanding any
exemption granted by any law or other special law, x x x (to) impose a tax on businesses enjoying a
franchise". (Section 137 of the LGC)
Indicative of the legislative intent to carry out the Constitutional mandate of vesting broad tax powers to
local government units, LGC has effectively withdrawn under Section 193 thereof, tax exemptions or
incentives theretofore enjoyed by certain entities. This law states:

Section 193 Withdrawal of Tax Exemption Privileges Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical,
including government-owned or controlled corporations, except local water districts, cooperatives duly
registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions, are hereby
withdrawn upon the effectivity of this Code.
The Code, in addition, contains a general repealing clause in its Section 534; thus:
Section 534. Repealing Clause. x x x.
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this
Code are hereby repealed or modified accordingly.
3. MERALCO further contends that in a plethora of cases including Court in Province of Misamis Oriental vs.
Cagayan Electric Power and Light Company, Inc., the phrase "shall be in lieu of all taxes and at any time
levied, established by, or collected by any authority" exempted the franchise holder from any other tax
imposed by the then Internal Revenue Cod and local ordinaces. The SC holds otherwise.
In the recent case of the City Government of San Pablo, etc., et al. vs. Hon. Bienvenido V. Reyes, et al., the
Court has held that the phrase in lieu of all taxes have to give way to the peremptory language of the
Local Government Code specifically providing for the withdrawal of such exemptions, privileges, and that
upon the effectivity of the Local Government Code all exemptions except only as provided therein can no
longer be invoked by MERALCO to disclaim liability for the local tax. In fine, the Court has viewed its
previous rulings as laying stress more on the legislative intent of the amendatory law whether the tax
exemption privilege is to be withdrawn or not rather than on whether the law can withdraw, without
violating the Constitution, the tax exemption or not.
Mactan Cebu (MCIAA) vs. Marcos
GR 120082 September 11, 1996 261 SCRA 667
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.