G.R. No. 163072 (Manila
International Airport Authority, petitioner v. City of
Promulgated:
April 2, 2009
x---------------------------------------------------------------------------------x
DISSENTING OPINION
Tinga, J.:
I maintain my dissent
expressed in the 2006 ruling in MIAA v.
City of Parañaque[1]
(the “Parañaque case.”)
The majority relies
on two main points drawn from the 2006 Parañaque
case in this instance as it rules once again that the MIAA is exempt from
realty taxes assessed by the City of
I.
Once again, attempts
are drawn to classify MIAA as a government instrumentality, and not as a
government owned or controlled corporation. Such characterization was
apparently insisted upon in order to tailor-fit the MIAA to Section 133 of the
Local Government Code, which reads:
Sec. 133. Common Limitations on the Taxing Powers of
Local Government Units.— Unless
otherwise provided herein, the exercise of the taxing powers of provinces,
cities, municipalities, and barangays shall not extend to the levy of the
following:
x x x
15.
Taxes, fees or
charges of any kind on the National Government, its agencies and
instrumentalities
and local government units. (emphasis and underscoring supplied).
How was the Parañaque case able to define the MIAA
as a instrumentality of the National Government? The case propounded that MIAA
was not a GOCC:
There is no
dispute that a government-owned or controlled corporation is not exempt from
real estate tax. However, MIAA is not a government-owned or controlled
corporation. Section 2(13) of the Introductory Provisions of the Administrative
Code of 1987 defines a government-owned or controlled corporation as follows:
SEC. 2. General
Terms Defined. — . . .
(13)
Government-owned or controlled corporation refers to any agency organized as a
stock or non-stock corporation, vested with functions relating to public needs
whether governmental or proprietary in nature, and owned by the Government
directly or through its instrumentalities either wholly, or, where applicable
as in the case of stock corporations, to the extent of at least fifty-one (51)
percent of its capital stock: . . . . (Emphasis supplied)
A
government-owned or controlled corporation must be "organized as a stock
or non-stock corporation." MIAA is not organized as a stock or non-stock
corporation. MIAA is not a stock corporation because it has no capital stock
divided into shares. MIAA has no stockholders or voting shares.
xxx
Clearly, under
its Charter, MIAA does not have capital stock that is divided into shares.
Section 3 of the
Corporation Code 10 defines a stock corporation as one whose "capital
stock is divided into shares and . . . authorized to distribute to the holders
of such shares dividends . . . ." MIAA has capital but it is not divided
into shares of stock. MIAA has no stockholders or voting shares. Hence, MIAA is
not a stock corporation.
MIAA is also not
a non-stock corporation because it has no members. Section 87 of the
Corporation Code defines a non-stock corporation as "one where no part of
its income is distributable as dividends to its members, trustees or
officers." A non-stock corporation must have members. Even if we assume
that the Government is considered as the sole member of MIAA, this will not
make MIAA a non-stock corporation. Non-stock corporations cannot distribute any
part of their income to their members. Section 11 of the MIAA Charter mandates
MIAA to remit 20% of its annual gross operating income to the National
Treasury. 11 This prevents MIAA from qualifying as a non-stock corporation.
Section 88 of
the Corporation Code provides that non-stock corporations are "organized
for charitable, religious, educational, professional, cultural, recreational,
fraternal, literary, scientific, social, civil service, or similar purposes,
like trade, industry, agriculture and like chambers." MIAA is not
organized for any of these purposes. MIAA, a public utility, is organized to
operate an international and domestic airport for public use.[2]
This “black or white”
categorization of “stock” and “non-stock” corporations utterly disregards the
fact that nothing in the Constitution prevents Congress from creating
government owned or controlled corporations in whatever structure it deems
necessary. Note that this definitions of “stock” and “non-stock” corporations
are taken from the Administrative Code, and not the Constitution. The
Administrative Code is a statute, and is thus not superior in hierarchy to any
other subsequent statute created by Congress, including the charters for GOCCs.
Since MIAA was
presumed not to be a stock or non-stock corporation, the majority in the Parañaque case then strived to fit it
into a category.
Since MIAA is
neither a stock nor a non-stock corporation, MIAA does not qualify as a
government-owned or controlled corporation. What then is the legal status of
MIAA within the National Government?
MIAA is a
government instrumentality vested with corporate powers to perform efficiently
its governmental functions. MIAA is like any other government instrumentality,
the only difference is that MIAA is vested with corporate powers. Section 2(10)
of the Introductory Provisions of the Administrative Code defines a government
"instrumentality" as follows:
SEC. 2. General
Terms Defined. –– . . .
(10)
Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction
by law, endowed with some if not all corporate powers, administering special
funds, and enjoying operational autonomy, usually through a charter. . . .
(Emphasis supplied)
When the law
vests in a government instrumentality corporate powers, the instrumentality
does not become a corporation. Unless the government instrumentality is
organized as a stock or non-stock corporation, it remains a government
instrumentality exercising not only governmental but also corporate powers.
Thus, MIAA exercises the governmental powers of eminent domain, police
authority and the levying of fees and charges. At the same time, MIAA exercises
"all the powers of a corporation under the Corporation Law, insofar as
these powers are not inconsistent with the provisions of this Executive
Order."[3]
Unfortunately,
this cited statutory definition of an "instrumentality" is
incomplete. Worse, the omitted portion from Section 2(10) completely
contradicts the premise of the ponente that
an instrumentality is mutually exclusive from a GOCC. For the provision reads
in full, with the omitted portion highlighted, thus:
(10)Instrumentality refers to any
agency of the National Government not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with
some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and
government—owned or controlled corporations.
This
previous omission had not escaped the attention of the outside world. For
example, lawyer Gregorio Batiller, Jr., has written a paper on the Parañaque case entitled "A Tale of
Two Airports," which is published on the Internet.[4] He
notes therein:
Also
of interest was the dissenting opinion of Justice Dante Tinga to the effect
that the majority opinion failed to quote in full the definition of
“government instrumentality:”
The
Majority gives the impression that a government instrumentality is a
distinct concept from a government corporation. Most tellingly, the
majority selectively cites a portion of Section 2(10) of the
Administrative Code of 1987, as follows:
Instrumentality
refers to any agency of the National Government not integrated within the
department framework, vested with special functions or jurisdiction by law,
endowed with some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. xxx (emphasis
omitted)”
However,
Section 2(10) of the Administrative Code, when read in full, makes an important
clarification which the majority does not show. The portions omitted by the
majority are highlighted below: xxx
“(10)Instrumentality
refers to any agency of the National Government not integrated within the
department framework, vested with special functions or jurisdiction by, law
endowed with some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government – owned or controlled
corporations.
So
the majority opinion effectively begged the question in finding that the MIAA
was not a GOCC but a mere government instrumentality, which is other than a
GOCC.[5]
The Office of the
President itself was alarmed by the redefinition made by the MIAA case of
instrumentalities, causing it on 29 December 2006 to issue Executive Order No.
596 creating the unwieldy category of "Government Instrumentality Vested
with Corporate Powers or Government Corporate Entities" just so that it
was clear that these newly defined "instrumentalities" or
"government corporate entities" still fell within the jurisdiction of
the Office of the Government Corporate Counsel. The E.O. reads in part:
EXECUTIVE ORDER NO. 596
DEFINING
AND INCLUDING “GOVERNMENT INSTRUMENTRALITY
VESTED WITH CORPORATE POWERS” OR “GOVERNMENT CORPORATE ENTITIES” UNDER
THE JURISDICTION OF THE OFFICE OF THE GOVERNMENT CORPORATE COUNSEL (OGCC) AS
PRINCIPAL LAW OFFICE OF GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GOCCs) AND
FOR OTHER PURPOSES.
WHEREAS, the Office of the Government Corporate Counsel (OGCC),
as the principal law office of all Government-Owned or Controlled Corporations
(GOCCs), including their subsidiaries, other corporate offsprings and
government acquired assets corporations, plays a very significant role in
safeguarding the legal interests and providing the legal requirements of all
GOCCs;
WHEREAS, there is an imperative need to
integrate, strengthen and rationalize the powers and jurisdiction of the OGCC
in the light of the Decision of the Supreme Court dated July 20, 2006, in the
case of “Manila International Airport
Authority vs. Court of Appeals, City of Parañaque, et al” (G.R. No. 155650), where the High Court differentiated
“government
corporate entities” and government
instrumentalities with corporate powers” from GOCCs for purposes of the provisions of the Local
Government Code on real estate taxes, and other fees and charges imposed by
local government units;
WHEREAS, in the interest of an effective
administration of justice, the application and definition of the term “GOCCs”
need to be further clarified and rationalized to have consistency in referring
to the term and to avoid unintended conflicts and/or confusion’
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO,
President of the Republic of the
SECTION 1. The Office of the Government
Corporate Counsel (OGCC) shall be the principal law office of all GOCCs, except
as may otherwise be provided by their respective charter or authorized by the
President, their subsidiaries, corporate offsprings, and government acquired
asset corporations. The OGCC shall
likewise be the principal law of the “government instrumentality vested with corporate
powers” or “government corporate entity,” as defined by the Supreme Court
in the case of “MIAA v. Court of
Appeals, City of Parañaque, et al.,” supra,
notable examples of which are: Manila
International Airport Authority (MIAA), Mactan International Airport Authority,
the Philippine Ports Authority (PPA), Philippine Deposit Insurance Corporation
(PDIC), Metropolitan Water and Sewerage Services (MWSS), Philippine Rice
Research Institute (PRRI), Laguna Lake Development Authority (LLDA), Fisheries Development
Authority (FDA), Bases Conversion Development Authority (BCDA), Cebu Port
Authority (CPA), Cagayan de Oro Port Authority, and San Fernando Port
Authority.
SECTION 2. As provided under PD 2029, series of 1986,
the term GOCCs is defined as a stock or non-stock corporation, whether
performing governmental or proprietary functions, which is directly chartered
by a special law or if organized under the general corporation law, is owned or
controlled by the government directly, or indirectly, through a parent
corporation or subsidiary corporation, to the extent of at least majority of
its outstanding capital stock or of its outstanding voting capital stock.
Under
Section 2(10) of the Introductory Provisions of the Administrative Code of
1987, a government “instrumentality” refers to any agency of the National
Government, not integrated within the department framework, vested with special
functions or jurisdiction by law, endowed with some, if not all corporate
powers, administering special funds, and enjoying operational autonomy, usually
through a charter.
SECTION 3. The following corporations are considered
GOCCs under the conditions and/or circumstances indicated:
a)
A corporation
organized under the general corporation law under private ownership at least a
majority of the shares of stock of which were conveyed to a government
financial institution, whether by foreclosure or otherwise, or a subsidiary
corporation of a government corporation organized exclusively to own and
manage, or lease, or operate specific assets acquired by a government financial
institution in satisfaction of debts incurred therewith and which in any case
by enunciated policy of the government is required to be disposed of to private
ownership within a specified period of time, shall not be considered a GOCC
before such disposition and even if the ownership or control thereof is
subsequently transferred to another GOCC;
b)
A corporation
created by special law which is explicitly intended under that law for ultimate
transfer to private ownership under certain specified conditions shall be
considered a GOCC, until it is transferred to private ownership;
c)
A corporation
that is authorized to be established by special law, but which is still
required under that law to register with the Securities and Exchange Commission
in order to acquire a juridical personality, shall not, on the basis of the
special law alone, be considered a GOCC.
xxx
Reading this
Executive Order, one cannot help but get the impression that the Republic of the
Notably, GOCCs are
mandated by Republic Act No. 7656 to remit 50% of their annual net earnings as
cash, stock or property dividends to the National Government. By denying
categorization of those above-mentioned corporations as GOCCs, the Court in MIAA effectively gave its
imprimatur to those entities to withhold remitting
50% of their annual net earnings
to the National Government. Hence, the necessity of E.O. No. 596 to undo the
destructive effects of the Parañaque case
on the national coffers.
In a welcome development, the majority now acknowledges the existence of that second clause in Section 2(10) of the Introductory Provisions of the Administrative Code, the clause which made explicit that government instrumentalities include GOCCs. In truth, I had never quite understood this hesitation in plainly saying that GOCCs are instrumentalities. That fact is really of little consequence in determining whether or not the MIAA or other government instrumentalities or GOCCs are exempt from real property taxes.
As
I had consistently explained, the liability of such entities is mandated by
Section 232, in relation with Section 234 of the Local Government Code. Section
232 lays down the general rule that provinces, cities or municipalities within
Metro Manila may levy an ad valorem
tax on real property “not hereinafter specifically exempted.” Such specific
exemptions are enumerated in Section 234, and the only exemption tied to
government properties extends to “real property owned by the Republic of the
Moreover, the final paragraph of Section 234 explains that “[e]xcept as provided herein [in Section 234], any exemption from payment of real property tax previously granted to, or presently enjoyed by all persons, whether natural or juridical, including all government-owned or –controlled corporations are hereby withdrawn upon the effectivity of this Code.”
What are the implications of Section 232 in relation to Section 234 as to the liability for real property taxes of government instrumentalities such as MIAA?
1) All persons, whether natural or juridical, including GOCCs are liable for real property taxes.
2) The only exempt properties are those owned by the Republic or any of its political subdivisions.
3)
So-called “government corporate entities,” so long as they have juridical personality
distinct from the Republic of the
4) After the enactment of the Local Government Code in 1991, Congress remained free to reenact tax exemptions from real property taxes to government instrumentalities, as it did with the Government Service Insurance System in 1997.
It is that simple. The most honest intellectual argument favoring the exemption of the MIAA from real property taxes corresponds with the issue of whether its properties may be deemed as “owned by the Republic or any of its political subdivisions”. The matter of whether MIAA is a GOCC or an instrumentality or a “government corporate entity” should in fact be irrelevant. However, the framework established by the ponente beginning with the Parañaque case has inexplicably and unnecessarily included the question of what is a GOCC? That issue, utterly irrelevant to settling the question of MIAA’s tax liability, has caused nothing but distraction and confusion.
It
should be remembered that prior to the Parañaque
case, the prevailing rule on taxation of GOCCs was as enunciated in Mactan Cebu International Airport v. Hon. Marcos.[7]
That rule was a highly sensible rule that gave due respect to national government
prerogatives and the devolution of taxing powers to local governments. Neither
did Mactan Cebu prevent Congress
from enacting legislation exempting selected GOCCs to be exempt from real
property taxes.
A significant portion of my Dissenting Opinion in the Parañaque case was devoted to explaining
Mactan Cebu, and criticizing the ponencia for implicitly rejecting
that doctrine without categorically saying so. In the years since, significant
confusion has arisen on whether Mactan
Cebu and the framework it established in real property taxation of
GOCCs and instrumentalities, remains extant. Batiller makes the same point
in his paper, expressly asking why “the Supreme Court did not
explicitly declare that the
Inevitably, the refusal of
the Supreme Court to clarify whether its Decision in the Mactan Cebu
International Airport case is deemed repealed would leave us with an ambiguous
situation where two (2) of our major international airports are treated
differently tax wise: one in Cebu which is deemed to be a GOCC subject to real
estate taxes and the other in Manila which is not a GOCC and exempt from real
estate taxes.
Where lies the substantial
difference between the two (2) airports? Your guess is as good as mine.[8]
There
are no good reasons why the Court should not reassert the Mactan Cebu doctrine. Under that ruling, real properties owned by
the Republic of the Philippines or any of its political subdivisions are
exempted from the payment of real property taxes, while instrumentalities or
GOCCs are generally exempted from local government taxes, save for real
property taxes. At the same time, Congress is free should it so desire to
exempt particular GOCCs or instrumentalities from real property taxes by
enacting legislation for that purpose. This paradigm is eminently more sober
than that created by the Parañaque case,
which attempted to amend the Constitution by elevating as a constitutional
principle, the real property tax exemption of all government instrumentalities,
most of which also happen to be GOCCs. Considering that the Constitution itself
is supremely deferential to the notion of local government rule and the power
of local governments to generate revenue through local taxes, the idea that not
even the local government code could subject such “instrumentalities” to local
taxes is plainly absurd.
II.
I do recognize that the present
majority opinion has chosen to lay equal, if not greater emphasis on the
premise that the MIAA properties are supposedly of public dominion, and as such
are exempt from realty taxes under Section 234(a) of the Local Government Code.
Again, I respectfully disagree.
It is Article 420 of the Civil Code which defines what are properties of public dominion. I do not doubt that Article 420 can be interpreted in such a way that airport properties, such as its runways, hangars and the like, can be considered akin to ports or roads, both of
which are among those properties considered as part of the public dominion under Article 420(1). It may likewise be possible that those properties considered as “property of public dominion” under Article 420 of the Civil Code are also “property owned by the Republic,” which under Section 234 of the Local Government Code, are exempt from real property taxes.
The necessary question to ask is whether properties which are similar in character to those enumerated under Article 420(1) may be considered still part of the public dominion if, by virtue of statute, ownership thereof is vested in a GOCC which has independent juridical personality from the Republic of the Philippines. The question becomes even more complex if, as in the case of MIAA, the law itself authorizes such GOCC to sell the properties in question.
One of the most recognizable characteristics of public dominion properties is that they are placed outside the commerce of man and cannot be alienated or leased or otherwise be the subject matter of contracts.[9] The fact is that the MIAA may, by law, alienate, lease or place the airport properties as the subject matter of contracts. The following provisions of the MIAA charter make that clear:
SECTION
5. Functions, Powers, and Duties. —
The Authority shall have the following functions, powers and duties:
xxx
xxx xxx
(i) To acquire, purchase, own, administer,
lease, mortgage, sell or otherwise dispose of any land, building, airport
facility, or property of whatever kind and nature, whether movable or
immovable, or any interest therein;
xxx
SECTION 16.
Borrowing Power. — The Authority may, after consultation
with the Minister of Finance and with the approval of the President of the
Philippines, as recommended by the Minister of Transportation and
Communications, raise funds, either from
local or international sources, by way of loans, credits or securities, and
other borrowing instruments, with the power to create pledges, mortgages and
other voluntary liens or encumbrances on any of its assets or properties.
There is thus that contradiction where property which ostensibly is classified as part of the public dominion under Article 420 of the Civil Code is nonetheless classified to lie within the commerce of man by virtue of a subsequent law such as the MIAA charter. In order for the Court to classify the MIAA properties as part of public dominion, it will be necessary to invalidate the provisions of the MIAA charter allowing the Authority to lease, sell, create pledges, mortgages and other voluntary liens or encumbrances on any of the airport properties. The provisions of the MIAA charter could not very well be invalidated with the Civil Code as basis, since the MIAA charter and the Civil Code are both statutes, and thus of equal rank in the hierarchy of laws, and more significantly the Civil Code was enacted earlier and therefore could not be the repealing law.
If
there is a provision in the Constitution that adopted the definition of and
limitations on public dominion properties as found in the Civil Code, then the
aforequoted provisions from the MIAA charter allowing the Authority to place
its properties within the commerce of man may be invalidated. The Constitution
however does not do so, confining itself instead to a general statement that “all lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are
owned by the State.” Note though that under Article 420, public dominion
properties are not necessarily owned by the State, the two subsections thereto
referring to (a) properties intended for public use; and (b) those which belong
to the State and are intended for some public service or for the development
of the national wealth.[10] In
Garcia,[11] the Court notably acknowledged that “property of public
dominion is not owned by the State but pertains to the State.” Thus, there is
no equivalence between the concept of public dominion under the Civil Code, and
of public domain under the Constitution.
Accordingly, the framework of public dominion properties is one that is statutory, rather than
constitutional in design. That being the case, Congress is able by law to
segregate properties which ostensibly are, by their nature, part of the public
dominion under Article 420(1) of the Civil Code, and place them within the
commerce of man by vesting title thereto in an independent juridical
personality such as the MIAA, and authorizing their sale, lease, mortgage and other
similar encumbrances. When Congress accomplishes that by law, the properties
could no longer be considered as part of the public dominion.
This point has been recognized by previous
jurisprudence which I had cited in my dissent in the Parañaque case. For example, in Philippine Ports Authority v. City of Iloilo, the Court stated that
“properties of public dominion are owned by the general public and cannot be
declared to be owned by a public corporation, such as [the Philippine Ports
Authority].”[12] I had likewise previously explained:
The
second Public Ports Authority case, penned by Justice Callejo, likewise lays
down useful doctrines in this regard. The Court refuted the claim that the
properties of the PPA were owned by the Republic of the Philippines, noting
that PPA's charter expressly transferred ownership over these properties to the
PPA, a situation which similarly obtains with MIAA. The Court even went as far
as saying that the fact that the PPA "had not been issued any torrens
title over the port and port facilities and appurtenances is of no legal
consequence. A torrens title does not, by itself, vest ownership; it is merely
an evidence of title over properties. . . . It has never been recognized as a
mode of acquiring ownership over real properties."
The
Court further added:
. . . The bare fact
that the port and its facilities and appurtenances are accessible to the
general public does not exempt it from the payment of real property taxes. It
must be stressed that the said port facilities and appurtenances are the
petitioner's corporate patrimonial properties, not for public use, and that the
operation of the port and its facilities and the administration of its
buildings are in the nature of ordinary business. The petitioner is clothed, under
P.D. No. 857, with corporate status and corporate powers in the furtherance of
its proprietary interests . . . The petitioner is even empowered to invest its
funds in such government securities approved by the Board of Directors, and
derives its income from rates, charges or fees for the use by vessels of the
port premises, appliances or equipment. . . . Clearly then, the petitioner is a
profit-earning corporation; hence, its patrimonial properties are subject to
tax.
There is
no doubt that the properties of the MIAA, as with the PPA, are in a sense, for
public use. A similar argument was propounded by the Light Rail Transit
Authority in Light Rail Transit Authority v. Central Board of Assessment, 118
which was cited in Philippine Ports Authority and deserves renewed emphasis.
The Light Rail Transit Authority (LRTA), a body corporate, "provides
valuable transportation facilities to the paying public." 119 It claimed
that its carriage-ways and terminal stations
are immovably attached to government-owned
national roads, and
to impose real property taxes thereupon would be to impose taxes on public
roads. This view did not persuade the Court, whose decision was penned by
Justice (now Chief Justice) Panganiban. It was noted:
Though
the creation of the LRTA was impelled by public service — to provide mass
transportation to alleviate the traffic and transportation situation in Metro
Manila — its operation undeniably partakes of ordinary business. Petitioner is
clothed with corporate status and corporate powers in the furtherance of its
proprietary objectives. Indeed, it operates much like any private corporation
engaged in the mass transport industry. Given that it is engaged in a
service-oriented commercial endeavor, its carriageways and terminal stations
are patrimonial property subject to tax, notwithstanding its claim of being a
government-owned or controlled corporation.
xxx xxx xxx
Petitioner
argues that it merely operates and maintains the LRT system, and that the
actual users of the carriageways and terminal stations are the commuting
public. It adds that the public use character of the LRT is not negated by the
fact that revenue is obtained from the latter's operations.
We do
not agree. Unlike public roads which are open for use by everyone, the LRT is
accessible only to those who pay the required fare. It is thus apparent that
petitioner does not exist solely for public service, and that the LRT
carriageways and terminal stations are not exclusively for public use. Although
petitioner is a public utility, it is nonetheless profit-earning. It actually
uses those carriageways and terminal stations in its public utility business
and earns money therefrom.
xxx xxx xxx
Even
granting that the national government indeed owns the carriageways and terminal
stations, the exemption would not apply because their beneficial use has been
granted to petitioner, a taxable entity.
There is
no substantial distinction between the properties held by the PPA, the LRTA,
and the MIAA. These three entities are in the business of operating facilities
that promote public transportation.
The
majority further asserts that MIAA's properties, being part of the public
dominion, are outside the commerce of man. But if this is so, then why does
Section 3 of MIAA's charter authorize the President of the
III.
In the present case, the City of
In the Parañaque case, I had expressed that while MIAA was liable for the
realty taxes, its properties could not be foreclosed upon by the local
government unit seeking the taxes. I explained then:
Despite
the fact that the City of
Nothing
in the Local Government Code, even with its wide grant of powers to LGUs, can
be deemed as repealing this prohibition under Section 3, even if it effectively
forecloses one possible remedy of the LGU in the collection of delinquent real
property taxes. While the Local Government Code withdrew all previous local tax
exemptions of the MIAA and other natural and juridical persons, it did not similarly
withdraw any previously enacted prohibitions on properties owned by GOCCs,
agencies or instrumentalities. Moreover, the resulting legal effect, subjecting
on one hand the MIAA to local taxes but on the other hand shielding its
properties from any form of sale or disposition, is not contradictory or
paradoxical, onerous as its effect may be on the LGU. It simply means that the
LGU has to find another way to collect the taxes due from MIAA, thus paving the
way for a mutually acceptable negotiated solution.
Accordingly,
I believe that MIAA is entitled to a writ of prohibition and injunctive relief
enjoining the City of
I
VOTE to PARTIALLY GRANT the petition and to issue the Writ of Prohibition
insofar as it would enjoin the City of
DANTE O. TINGA
Associate Justice