Ernesto Maceda vs. Catalino Macaraig, Jr.

196 SCRA 771, 223 SCRA 217

FACTS:

On November 3, 1936, Commonwealth Act No. 120 (An Act Creating

The “National Power Corporation,” And Prescribing Its Powers and
Activities, Appropriating The Necessary Funds Therefor, And Reserving the
Unappropriated Public Waters For Its Use) was enacted creating the NPC,
which is a public corporation, mainly to develop hydraulic power and the
production of power from other sources in the Philippines (Com. Act No.
120, secs 1 & 2(g)).

The main source of funds for the NPC was the flotation of bonds in
the capital markets and such bonds were exempt from payment of all taxes
in order for the corporation to facilitate payment of its indebtedness. On
September 10, 1971, Republic Act No. 6395 (An Act Revising The Charter Of
The National Power Corporation) was enacted, which tasked NPC to carry
out the policy of national electrification, and provided for the details of
NPC’s tax exemption.

On January 22, 1974, Presidential Decree No. 380 was issued and
specified that NPC’s tax exemption includes all taxes imposed “directly and
indirectly” on all petroleum products used by NPC in its operation.

On May 27, 1976, Presidential Decree 938 amended R.A 6395 which
integrated the tax exemption privilege of NPC in general terms– “Section10
… To enable the Corporation to pay its indebtedness and obligations and in
furtherance and effective implementation of the policy enunciated in
Section One of this Act, the Corporation, including its subsidiaries, is hereby
declared exempt from the payment of all forms of taxes, duties, fees,
imposts as well as costs and service fees including filing fees, appeal bonds,
supersedeas bonds, in any court or administrative proceedings.”
 After a series of withdrawal and restoration of NPC’s tax exemption,
the Fiscal Incentives Review Board, possessing the power restore tax
exemptions, issued Resolution 10-85 (February 7, 1985) restoring NPC’s
exemption from June 11, 1984 to June 30, 1985.

Since 1976, oil firms never paid excise or specific and ad valorem
taxes for petroleum products sold and delivered to NPC. Such taxes were
paid on their sales of oil products to NPC only in 1984. NPC claimed for a
refund of P468.58 Million (1984-1986), and only a portion was approved
and released by Caltex. The claim for the refund of taxes paid by PetroPhil,
Shell and Caltex was denied. NPC moved for reconsideration, stating that all
the deliveries of petroleum products to NPC are tax exempt.

Petitioner contends that Presidential Decree No. 938 (1976) repealed

the indirect tax exemption of NPC as Sec 10 thereof does not expressly
include “indirect taxes”.

ISSUE: Whether the National Power Corporation still possessed

indirect tax exemption after the repeal made in PD 938

RULING:

YES. NPC still possess the exemption to indirect taxes. NPC laws show
that it has been the lawmaker’s intention that the NPC was to be
completely tax exempt from all forms of taxes – direct and indirect.

One common theme in all these laws is that the NPC must be able to
pay its indebtedness which, as of P.D. No. 938, was P12 Billion in total
domestic indebtedness, at any one time, and U$4 Billion in total foreign
loans at any one time. The NPC must be and has to be exempt from all
forms of taxes if this goal is to be achieved. In addition to this, the then
President Marcos mandated that 200 Million pesos be appropriated
annually to NPC, such amount should be taken from the general fund of the
government. It does not stand to reason that the then President would
order 200 million pesos to be taken partially or totally from the tax money
to be used to pay the government subscription in the NPC on one hand and
order NPC to pay its indirect tax.

Furthermore, section 10 of PD 938 was intended to be in its general

form, President Marcos must have considered all the NPC statutes from C.A
120 up to its latest amendments, PD 380, PD 395 and PD 758 and came up
with a very simple Section 13, RA 6395, as amended by PD 938.When
construing a series of statutes, they shall be taken and construed together,
as in statutes in pari materia. And in addition, repeal by implication is not
favoured unless it is manifest that the legislature so intended.

Humberto Basco vs PCGG

197 SCRA 52

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."

Petitioners filed an 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

Petitioners claim 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 in violation of the principle of local autonomy.

“Section 13 par. (2) of P.D. 1869 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.

ISSUE: Whether the local Government of Manila have the power to

impose taxes on PAGCOR?

RULING:

NO. The court rules that The City government of Manila has no
power to impose taxes on PAGCOR.

The principle of Local autonomy does not make local governments

sovereign within the state; the principle of local autonomy within the
constitution simply means decentralization. It cannot be an “Imperium in
imperio” it can only act intra sovereign, or as an arm of the National
Government.

PAGCOR has a dual role, to operate and to regulate gambling casinos.

The latter role is governmental, which places it in the category of an agency
or instrumentality of the Government. Being an instrumentality of the
Government, PAGCOR should be and actually is exempt from local taxes.

The power of local government to "impose taxes and fees" is always

subject to "limitations" which Congress may provide by law. Since PD 1869
remains an "operative" law until "amended, repealed or revoked" (Sec. 3,
Art. XVIII, 1987 Constitution), its "exemption clause" remains as an
exception to the exercise of the power of local governments to impose
taxes and fees. It cannot therefore be violative but rather is consistent with
the principle of local autonomy.
 JOSE MARI C. LOZADA vs. THE COMMISSION ON ELECTIONS
120 SCRA 337

FACTS:

Jose Mari Eulalio Lozada together with Romeo Igot filed a petition for
mandamus compelling the Commission on Elections (COMELEC) to hold an
election to fill the vacancies in the Interim Batasang Pambansa (IBP). They
anchor their contention on Section 5 (2), Art. VIII of the 1973 Constitution
which provides:

“In case a vacancy arises in the Batasang Pambansa eighteen months

or more before a regular election, the Commission on Election shall
call a special election to be held within sixty (60) days after the
vacancy occurs to elect the Member to serve the unexpired term.”

COMELEC opposed the petition alleging that 1) petitioners lack

standing to file the instant petition for they are not the proper parties to
institute the action; 2) the Supreme Court has no jurisdiction to entertain
the petition; and 3) Section 5(2), Article VIII of the 1973 Constitution does
not apply to the Interim Batasan Pambansa.

ISSUE: Whether or not the SC can compel COMELEC to hold a special

election to fill vacancies in the legislature.

RULING:

NO. The SC’s jurisdiction over the COMELEC is only to review by

certiorari the latter’s decision, orders or rulings. This is as clearly provided
in Article XII-C, Section 11 of the New Constitution which reads:

“Any decision, order, or ruling of the Commission may be brought to

the Supreme Court on certiorari by the aggrieved party within thirty
days from his receipt of a copy thereof.”
 There is in this case no decision, order or ruling of the COMELEC
which is sought to be reviewed by this Court under its certiorari jurisdiction
as provided for in the aforequoted provision, which is the only known
provision conferring jurisdiction or authority on the Supreme Court over
the COMELEC.

It is obvious that the holding of special elections in several regional

districts where vacancies exist, would entail huge expenditure of money.
Only the Batasang Pambansa (BP) can make the necessary appropriation
for the purpose, and this power of the BP may neither be subject to
mandamus by the courts much less may COMELEC compel the BP to
exercise its power of appropriation. From the role BP has to play in the
holding of special elections, which is to appropriate the funds for the
expenses thereof, it would seem that the initiative on the matter must
come from the BP, not the COMELEC, even when the vacancies would occur
in the regular not IBP. The power to appropriate is the sole and exclusive
prerogative of the legislative body, the exercise of which may not be
compelled through a petition for mandamus. What is more, the provision of
Section 5(2), Article VIII of the Constitution was intended to apply to
vacancies in the regular National Assembly, now BP, not to the IBP.

Ernesto Maceda vs. Catalino Macaraig, Jr.

196 SCRA 771, 223 SCRA 217

FACTS:

On November 3, 1936, Commonwealth Act No. 120 (An Act Creating

The “National Power Corporation,” And Prescribing Its Powers and
Activities, Appropriating The Necessary Funds Therefor, And Reserving the
Unappropriated Public Waters For Its Use) was enacted creating the NPC,
which is a public corporation, mainly to develop hydraulic power and the
production of power from other sources in the Philippines (Com. Act No.
120, secs 1 & 2(g)).

The main source of funds for the NPC was the flotation of bonds in
the capital markets and such bonds were exempt from payment of all taxes
in order for the corporation to facilitate payment of its indebtedness. On
September 10, 1971, Republic Act No. 6395 (An Act Revising The Charter Of
The National Power Corporation) was enacted, which tasked NPC to carry
out the policy of national electrification, and provided for the details of
NPC’s tax exemption.

On January 22, 1974, Presidential Decree No. 380 was issued and
specified that NPC’s tax exemption includes all taxes imposed “directly and
indirectly” on all petroleum products used by NPC in its operation.

On May 27, 1976, Presidential Decree 938 amended R.A 6395 which
integrated the tax exemption privilege of NPC in general terms– “Section10
… To enable the Corporation to pay its indebtedness and obligations and in
furtherance and effective implementation of the policy enunciated in
Section One of this Act, the Corporation, including its subsidiaries, is hereby
declared exempt from the payment of all forms of taxes, duties, fees,
imposts as well as costs and service fees including filing fees, appeal bonds,
supersedeas bonds, in any court or administrative proceedings.”

After a series of withdrawal and restoration of NPC’s tax exemption,

the Fiscal Incentives Review Board, possessing the power restore tax
exemptions, issued Resolution 10-85 (February 7, 1985) restoring NPC’s
exemption from June 11, 1984 to June 30, 1985.

Since 1976, oil firms never paid excise or specific and ad valorem
taxes for petroleum products sold and delivered to NPC. Such taxes were
paid on their sales of oil products to NPC only in 1984. NPC claimed for a
refund of P468.58 Million (1984-1986), and only a portion was approved
and released by Caltex. The claim for the refund of taxes paid by PetroPhil,
Shell and Caltex was denied. NPC moved for reconsideration, stating that all
the deliveries of petroleum products to NPC are tax exempt.

Petitioner contends that Presidential Decree No. 938 (1976) repealed

the indirect tax exemption of NPC as Sec 10 thereof does not expressly
include “indirect taxes”.

ISSUE: Whether a taxpayer has the capacity to question the legality of

the resolution issued by the FIRB restoring the tax exemptions?

RULING:

Yes. In this petition it is alleged that petitioner is "instituting this suit

in his capacity as a taxpayer and a duly-elected Senator of the Philippines."
Public respondent argues that petitioner must show that he has sustained
direct injury as a result of the action and that it is not sufficient for him to
have a mere general interest common to all members of the public. The
Court however agrees with the petitioner that as a taxpayer he may file the
instant petition following the ruling in Lozada when it involves illegal
expenditure of public money. The petition questions the legality of the tax
refund to NPC by way of tax credit certificates and the use of said assigned
tax credits by respondent oil companies to pay for their tax and duty
liabilities to the BIR and Bureau of Customs.

FRANCISCO CHAVEZ VS PCGG

120 SCRA 52

FACTS:

Petitioner Francisco I Chavez (in his capacity as taxpayer, citizen and

a former government official) initiated this original action seeking to
compel respondent[s] to make public all negotiations and agreement, be
they ongoing or perfected, and all documents related to or relating to such
negotiations and agreement between the PCGG and the Marcos heirs."

Chavez is the same person initiated the prosecution of the Marcoses

and their cronies who committed unmitigated plunder of the public
treasury and the systematic subjugation of the country's economy; he says
that what impelled him to bring this action were several news reports 2
bannered in a number of broadsheets sometime in September 1997. These
news items referred to (1) the alleged discovery of billions of dollars of
Marcos assets deposited in various coded accounts in Swiss banks; and (2)
the reported execution of a compromise, between the government
(through PCGG) and the Marcos heirs, on how to split or share these assets.

Petitioner demands that respondents make public any and all

negotiations and agreements pertaining to PCGG's task of recovering the
Marcoses' ill-gotten wealth. He claims that any compromise on the alleged
billions of ill-gotten wealth involves an issue of "paramount public interest,"
since it has a "debilitating effect on the country's economy" that would be
greatly prejudicial to the national interest of the Filipino people. Hence, the
people in general have a right to know the transactions or deals being
contrived and effected by the government.

Respondent answers that they do not deny forging a compromise

agreement with the Marcos heirs. They claim, though, that petitioner's
action is premature, because there is no showing that he has asked the
PCGG to disclose the negotiations and the Agreements. And even if he has,
PCGG may not yet be compelled to make any disclosure, since the
proposed terms and conditions of the Agreements have not become
effective and binding.

PETITIONER INVOKES

“Sec. 7 [Article III]. The right of the people to information on matters

of public concern shall be recognized. Access to official records, and
to documents, and papers pertaining to official acts, transactions, or
 decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.”

“Sec. 28 [Article II]. Subject to reasonable conditions prescribed by

law, the State adopts and implements a policy of full public
disclosure of all its transactions involving public interest.”

Respondent answers that the above constitutional provisions refer to

completed and operative official acts, not to those still being considered.

ISSUE: Whether the Court could require the PCGG to disclose to the
public the details of any agreement, perfected or not, with the Marcoses.

RULING:

Yes. The court grants the petition. The General and Supplemental
Agreement dated December 28, 1993, which PCGG and the Marcos heirs
entered into are hereby declared NULL AND VOID for being contrary to law
and the Constitution. Respondent PCGG, its officers and all government
functionaries and officials who are or may be directly or indirectly involved
in the recovery of the alleged ill-gotten wealth of the Marcoses and their
associates are DIRECTED to disclose to the public the terms of any proposed
compromise settlement, as well as the final agreement, relating to such
alleged ill-gotten wealth, in accordance with the discussions embodied in
this Decision. No pronouncement as to cost.”