EXEMPTION OF GOVERNMENT

NATIONAL DEVELOPMENT COMPANY v. CEBU CITY and AUGUSTO PACIS

215 SCRA 382

Is a public land reserved by the President for warehousing purposes in favor of a

government-owned or -controlled corporation, as well as the warehouse subsequently erected
thereon, exempt from real property tax?
RE: The land

The Supreme Court answered in the affirmative. The Republic, like any individual, may
form a corporation with personality and existence distinct from its own. The separate personality
allows a government-owned and -controlled corporation to hold and possess properties in its own
name and thus permit greater independence and flexibility in its operations. it may, therefore, be
stated that tax exemption of "property owned by the Republic of the Philippines" refers to properties
owned by the Government and by its agencies which do not have separate and distinct personalities
(unincorporated entities).

RE: The warehouse

As regards the warehouse constructed on a public reservation, a different rule should apply
because "(t)he exemption of public property from taxation does not extend to improvements on the
public land made by preemptioners, homesteaders and other claimants, or occupants, at their own
expense, and these are taxable by the State x x x. " Consequently, the warehouse constructed on the
reserved land by NDC should properly be assessed real estate tax as such improvement does not
appear to belong to the public.