FERRER, JR. v. BAUTISTA (G.R. No.

210551, June 30, 2015)

Facts:

Quezon City Council enacted two Ordinances:

1. Ordinance No. SP-20195, 2011 or the Socialized Housing Tax of Quezon City imposing a special
assessment equivalent to 0.5% on the assessed value of the land in excess of P 100,000.00. The
fund collected shall be utilized for the projects of the QC Government.
2. Ordinance No. SP-2235, S-2013 or An Ordinance imposing an Annual Garbage fee on all domestic
households and providing penalty for non-compliance thereof.

Issues:

1. WON SP-2095, S-2011 on the Socialized Housing Tax (SHT) is valid.

a. WON the SHT is a tax which is within the QC government to impose.
b. WON the SHT violates the rule on equality.
c. WON the SHT is confiscatory or oppressive.
2. WON SP-2235, S-2013 on Garbage Fee is valid.
a. WON the Ordinance on Garbage Fee violates the rule on double taxation.
b. WON it violates the rule on equality.
Held:
1. SP-2095, S-2011 on the Socialized Housing Tax (SHT) is VALID.

a. Yes. The SHT charged by the QC Government is a tax which is within its power to impose. Cities
are allowed to exercise such other powers and discharge such other functions and responsibilities
as are necessary, appropriate, or incidental to efficient and effective provision of the basic services
and facilities which include, among others, programs and projects for low-cost housing and other
mass dwellings. The collections made accrue to its socialized housing programs and projects. The
tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with a
regulatory purpose. The levy is primarily in the exercise of the police power for the general welfare
of the entire city. It is greatly imbued with public interest. Removing slum areas in Quezon City is not
only beneficial to the underprivileged and homeless constituents but advantageous to the real
property owners as well. The situation will improve the value of the their property investments, fully
enjoying the same in view of an orderly, secure, and safe community, and will enhance the quality of
life of the poor, making them law-abiding constituents and better consumers of business products.

b. No, the SHT does NOT violate the rule on equality. For the purpose of undertaking a
comprehensive and continuing urban development and housing program, the disparities between a
real property owner and an informal settler as two distinct classes are too obvious and need not be
discussed at length. The differentiation conforms to the practical dictates of justice and equity and is
not discriminatory within the meaning of the Constitution. Notably, the public purpose of a tax may
legally exist even if the motive which impelled the legislature to impose the tax was to favor one
over another. It is inherent in the power to tax that a State is free to select the subjects of taxation.
Inequities which result from a singling out of one particular class for taxation or exemption infringe
no constitutional limitation.

c. No, the SHT is NOT confiscatory nor oppressive. The reasonableness of Ordinance No. SP-2095
cannot be disputed. It is not confiscatory or oppressive since the tax being imposed therein is below
what the UDHA actually allows. While the law authorizes LGUs to collect SHT on lands with an
assessed value of more than P50,000.00, the questioned ordinance only covers lands with an
assessed value exceeding P100,000.00. Even better, on certain conditions, the ordinance grants a
tax credit equivalent to the total amount of the special assessment paid beginning in the sixth (6th)
year of its effectivity. Far from being obnoxious, the provisions of the subject ordinance are fair and
just.
2. SP-2235, S-2013 on Garbage Fee is INVALID. Although it does not violate the rule on double taxation, it
nonetheless violates the rule on equality.

a. SP-2235 does NOT violate the rule on double taxation.

The fee imposed for garbage collections under Ordinance No. SP-2235 is a charge fixed for the
regulation of an activity. In Progressive Development Corporation v. Quezon City, the Court
declared that “if the generating of revenue is the primary purpose and regulation is merely
incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that incidentally
revenue is also obtained does not make the imposition a tax.” In a U.S. case, the garbage fee was
considered as a "service charge" rather than a tax as it was actually a fee for a service given by the
city which had previously been provided at no cost to its citizens.

Hence, not being a tax, the contention that the garbage fee under Ordinance No. SP-2235 violates
the rule on double taxation must necessarily fail.

b. Yes, SP-2235 violates the rule on equality.

For the purpose of garbage collection, there is, in fact, no substantial distinction between an
occupant of a lot, on one hand, and an occupant of a unit in a condominium, socialized housing
project or apartment, on the other hand. Most likely, garbage output produced by these types of
occupants is uniform and does not vary to a large degree; thus, a similar schedule of fee is both just
and equitable.

The rates being charged by the ordinance are unjust and inequitable: a resident of a 200 sq. m. unit
in a condominium or socialized housing project has to pay twice the amount than a resident of a lot
similar in size; unlike unit occupants, all occupants of a lot with an area of 200 sq. m. and less have
to pay a fixed rate of Php100.00; and the same amount of garbage fee is imposed regardless of
whether the resident is from a condominium or from a socialized housing project.

Indeed, the classifications under Ordinance No. S-2235 are not germane to its declared purpose of
“promoting shared responsibility with the residents to attack their common mindless attitude in over-
consuming the present resources and in generating waste.” Instead of simplistically categorizing the
payee into land or floor occupant of a lot or unit of a condominium, socialized housing project or
apartment, respondent City Council should have considered factors that could truly measure the
amount of wastes generated and the appropriate fee for its collection. Factors include, among
others, household age and size, accessibility to waste collection, population density of the barangay
or district, capacity to pay, and actual occupancy of the property.

Dispositive Portion:

WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and legality of Ordinance No.
SP-2095, S-2011, or the “Socialized Housing Tax of Quezon City,” is SUSTAINED for being consistent with
Section 43 of Republic Act No. 7279. On the other hand, Ordinance No. SP-2235, S-2013, which collects
an annual garbage fee on all domestic households in Quezon City, is hereby declared as
UNCONSTITUTIONAL AND ILLEGAL. Respondents are DIRECTED to REFUND with reasonable
dispatch the sums of money collected relative to its enforcement.
MMDA V. GARIN (456 SCRA 176)

Facts:

The issue arose from an incident involving the respondent Dante O. Garin, a lawyer, who was issued a
traffic violation receipt (TVR) by MMDA and his driver's license confiscated for parking illegally along
Gandara Street, Binondo, Manila, on August 1995.

Shortly before the expiration of the TVR's validity, the respondent addressed a letter to then MMDA
Chairman Prospero Oreta requesting the return of his driver's license, and expressing his preference for his
case to be filed in court.

Receiving no immediate reply, Garin filed the original complaint with application for preliminary injunction,
contending that, in the absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act No. 7924
grants the MMDA unbridled discretion to deprive erring motorists of their licenses, pre-empting a judicial
determination of the validity of the deprivation, thereby violating the due process clause of the Constitution.

The respondent further contended that the provision violates the constitutional prohibition against undue
delegation of legislative authority, allowing as it does the MMDA to fix and impose unspecified — and
therefore unlimited — fines and other penalties on erring motorists.

The trial court rendered the assailed decision in favor of herein respondent.

Issue:

WON MMDA, through Sec. 5(f) of Rep. Act No. 7924 could validly exercise police power.

HELD:

Police Power, having been lodged primarily in the National Legislature, cannot be exercised by any group
or body of individuals not possessing legislative power. The National Legislature, however, may delegate
this power to the president and administrative boards as well as the lawmaking bodies of municipal
corporations or local government units (LGUs). Once delegated, the agents can exercise only such
legislative powers as are conferred on them by the national lawmaking body.

Our Congress delegated police power to the LGUs in the Local Government Code of 1991. 15 A local
government is a "political subdivision of a nation or state which is constituted by law and has substantial
control of local affairs." 16 Local government units are the provinces, cities, municipalities and barangays,
which exercise police power through their respective legislative bodies.

Metropolitan or Metro Manila is a body composed of several local government units. With the passage of
Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a "special development and administrative
region" and the administration of "metro-wide" basic services affecting the region placed under "a
development authority" referred to as the MMDA. Thus: The MMDA is, as termed in the charter itself, a
"development authority." It is an agency created for the purpose of laying down policies and coordinating
with the various national government agencies, people's organizations, non-governmental organizations
and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan
area. All its functions are administrative in nature and these are actually summed up in the charter itself
* Section 5 of Rep. Act No. 7924 enumerates the "Functions and Powers of the Metro Manila Development
Authority." The contested clause in Sec. 5(f) states that the petitioner shall "install and administer a single
ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and
regulations, whether moving or non-moving in nature, and confiscate and suspend or revoke drivers'
licenses in the enforcement of such traffic laws and regulations, the provisions of Rep. Act No. 4136 and
P.D. No. 1605 to the contrary notwithstanding," and that "(f)or this purpose, the Authority shall enforce all
traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members
of the PNP, traffic enforcers of local government units, duly licensed security guards, or members of non-
governmental organizations to whom may be delegated certain authority, subject to such conditions and
requirements as the Authority may impose."
FRANCISCO, JR. v. FERNANDO (507 SCRA 173)

FACTS:
Petitioner Ernesto B. Francisco, Jr. (petitioner), as member of the Integrated Bar of the Philippines and
taxpayer, filed this original action for the issuance of the writs of Prohibition and Mandamus. Petitioner
prays for the Prohibition writ to enjoin respondents Bayani F. Fernando, Chairman of the Metropolitan
Manila Development Authority (MMDA) and the MMDA (respondents) from further implementing its “wet
flag scheme” (“Flag Scheme”).

Petitioner contends that the Flag Scheme: (1) has no legal basis because the MMDA’s governing body, the
Metro Manila Council, did not authorize it; (2) violates the Due Process Clause because it is a summary
punishment for jaywalking; (3) disregards the Constitutional protection against cruel, degrading, and
inhuman punishment; and (4) violates “pedestrian rights” as it exposes pedestrians to various potential
hazards.

ISSUE:

Whether or not the petition was valid.

HELD:

The Court dismissed the petition. A citizen can raise a constitutional question only when (1) he can show
that he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of
the government; (2) the injury is fairly traceable to the challenged action; and (3) a favorable action will
likely redress the injury.

On the other hand, a party suing as a taxpayer must specifically show that he has a sufficient interest in
preventing the illegal expenditure of money raised by taxation and that he will sustain a direct injury as a
result of the enforcement of the questioned statute. Petitioner meets none of the requirements under either
category.

Nor is there merit to petitioner’s claim that the Court should relax the standing requirement because of the
“transcendental importance” of the issues the petition raises. As an exception to the standing requirement,
the transcendental importance of the issues raised relates to the merits of the petition. Thus, the party
invoking it must show, among others, the presence of a clear disregard of a constitutional or statutory
prohibition. Petitioner has not shown such clear constitutional or statutory violation.

On the Flag Scheme’s alleged lack of legal basis, we note that all the cities and municipalities within the
MMDA’s jurisdiction, except Valenzuela City, have each enacted anti-jaywalking ordinances or traffic
management codes with provisions for pedestrian regulation. Such fact serves as sufficient basis for
respondents’ implementation of schemes, or ways and means, to enforce the anti-jaywalking ordinances
and similar regulations. After all, the MMDA is an administrative agency tasked with the implementation of
rules and regulations enacted by proper authorities. The absence of an anti-jaywalking ordinance in
Valenzuela City does not detract from this conclusion absent any proof that respondents implemented the
Flag Scheme in that city.
PIMENTEL v. AGUIRRE (G.R. No. 132988, July 19, 2000)

FACTS:
This is a petition for certiorari and prohibition seeking to annul Section 1 of Administrative Order No. 372,
issued by the President, insofar as it requires local government units to reduce their expenditures by 25%
of their authorized regular appropriations for non-personal services and to enjoin respondents from
implementing Section 4 of the Order, which withholds a portion of their internal revenue allotments.

ISSUE:
Whether or not the AO No. 372 violates the local fiscal autonomy.

HELD:
Section 1 of the AO does not violate local fiscal autonomy. Local fiscal autonomy does not rule out any
manner of national government intervention by way of supervision, in order to ensure that local programs,
fiscal and otherwise, are consistent with national goals. AO 372 is merely directory and has been issued by
the President consistent with his powers of supervision over local governments. A directory order cannot be
characterized as an exercise of the power of control. The AO is intended only to advise all government
agencies and instrumentalities to undertake cost-reduction measures that will help maintain economic
stability in the country. It does not contain any sanction in case of noncompliance.

The Local Government Code also allows the President to interfere in local fiscal matters, provided that
certain requisites are met: (1) an unmanaged public sector deficit of the national government; (2)
consultations with the presiding officers of the Senate and the House of Representatives and the presidents
of the various local leagues; (3) the corresponding recommendation of the secretaries of the Department of
Finance, Interior and Local Government, and Budget and Management; and (4) any adjustment in the
allotment shall in no case be less than 30% of the collection of national internal revenue taxes of the third
fiscal year preceding the current one.

Section 4 of AO 372 cannot be upheld. A basic feature of local fiscal autonomy is the automatic release of
the shares of LGUs in the national internal revenue. This is mandated by the Constitution and the Local
Government Code. Section 4 which orders the withholding of 10% of the LGU’s IRA clearly contravenes
the Constitution and the law.
GOV. LUIS RAYMUND VILLAFURTE v. HON. JESSE ROBREDO, DILG Secretary (744 SCRA 534)

Facts:
Villafuerte, then Governor of Camarines Sur, joined by the Provincial Government of Camarines Sur, filed
the instant petition for certiorari, seeking to nullify the three issuances of Robredo for being unconstitutional
and having been issued with grave abuse of discretion.

The circulars pertain to full disclosure of local budget and finances and other guidelines regarding budget.
Villafuerte argues that the circulars violate the principles of local and fiscal autonomy of the LGU.

Issue:
Whether or not the assailed memorandum circulars violate the principles of local and fiscal autonomy
enshired in the Constitution and the LGC? – NO

Held:
The Constitution has expressly adopted the policy of ensuring the autonomy of LGUs (Article X of
Constitution)

It is also pursuant to the mandate of the Constitution that enhancing local autonomy that the LGC was
enacted.

Local autonomy means a more responsive and accountable local government structure instituted through a
system of decentralization.

Autonomy is either decentralization of administration or decentralization of power. There is

decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make
local governments “more responsive and accountable,” and “ensure their fullest development as
self-reliant communities and make them more effective partners in the pursuit of national
development and social progress.” (Limbona v Mangelin)

To safeguard the state policy on local autonomy, the Constitution confines the power of the
President over LGUs to mere supervision. “The President exercises ‘general supervision’ over them,
but only to ‘ensure that local affairs are administered according to law.’ He has no control over their
acts in the sense that he can substitute their judgments with his own. (Section 4, Article X of
Constitution)

It is petitioners’ contention that Robredo went beyond the confined of his supervisory powers, as alter ego
of the President, when he issued MC No 2010-138. They argue that the mandatory nature of the circular,
with the threat of imposition of sanctions for non-compliance, evinces a clear desire to exercise control over
LGUs. However, the Court perceives otherwise.

A reading of MC No. 2010-138 shows that it is a mere reiteration of an existing provision in the LGC. It was
plainly intended to remind LGUs to faithfully observe the directive stated in Section 287 of the LGC to utilize
the 20% portion of the IRA for development projects. The assailed circular was issued in response to the
report of the COA that a substantial portion of the 20% development fund of some LGUs was not actually
utilized for development projects but was diverted to expenses more properly categorized as MOOE, in
violation of Section 287 of the LGC.

The issuance of MC No. 2010-138 was brought about by the report of the COA that the development fund
was not being utilized accordingly. To curb the alleged misuse of the development fund, the respondent
deemed it proper to remind LGUs of the nature and purpose of the provision for the IRA through MC No.
2010-138.

The enumeration in the circular was not meant to restrict the discretion of the LGUs in the utilization of their
funds. It was incorporated in the assailed circular in order to guide them in the proper disposition of the IRA
and avert further misuse of the fund by citing current practices which seemed to be incompatible with the
purpose of the fund. LGUs remain at liberty to map out their development plans based on their own
discretion and utilize their IRAs accordingly, with the only restriction that 20% thereof be expended for
development projects.
The local autonomy granted LGU does not completely severe them from the national government or turn
them into impenetrable states. Thus, notwithstanding the local fiscal autonomy being enjoyed by LGUs,
they are still under the supervision of the President and maybe held accountable for malfeasance or
violations of existing laws.

The assailed issuances of the respondent, MC Nos. 2010-83 and 2011-08, are but implementation of this
avowed policy of the State to make public officials accountable to the people. They are amalgamations of
existing laws, rules and regulation designed to give teeth to the constitutional mandate of transparency and
accountability.

The Constitution strongly summoned the State to adopt and implement a policy of full disclosure of all
transactions involving public interest and provide the people with the right to access public information.
Section 352 of the LGC and RA No 9184 are responses to this call for transparency and both laws
establish a system of transparency in procurement process in government agencies.
BOY SCOUT OF THE PHILIPPINES VS COMMISSION ON AUDIT (651 SCRA 146)

Facts:
COA issued a Resolution No. 99-011 on August 19, 1999, with the subject “Defining the Commission’s
Policy with respect to the audit of the Boy Scout of the Philippines.” The BSP which was created as a public
corporation, and that in BSP vs. NLRC, the Supreme Court ruled that the BSP, as constituted under its
charter, was a Government Owned and Controlled Corporation within the meaning of Art. IX (B) (2) (1) of
the Constitution, and that the BSP is regarded as a government instrumentality under the Administrative
Code. For the purposes of audit supervision, the BSP shall be classified among the government
corporations to be audited by employing the team audit approach. The BSP sought reconsideration of the
COA Resolution in a letter signed by then BSP National President Jejomar C. Binay, saying that it is not
subject to the COA’s jurisdiction.

Issues:
Whether or not the Boy Scout of the Philippines is a government owned and controlled corporation?
Whether or not it is under the jurisdiction of the COA?

Held:
After looking at the legislative history of its amended charter and carefully studying the applicable laws and
the arguments of both parties, The SC finds that the BSP is a public corporation and its funds are subject to
the COA’s audit jurisdiction.

The BSP is a public corporation or a government agency or instrumentality with juridical personality, which
does not fall within the constitutional prohibition in Article XII, Section 16, notwithstanding the amendments
to its charter. Not all corporations, which are not government owned or controlled, are ipso facto to be
considered private corporations as there exists another distinct class of corporations or chartered
institutions which are otherwise known as "public corporations." These corporations are treated by law as
agencies or instrumentalities of the government which are not subject to the tests of ownership or control
and economic viability but to different criteria relating to their public purposes/interests or constitutional
policies and objectives and their administrative relationship to the government or any of its Departments or
Offices.

Since the BSP, under its amended charter, continues to be a public corporation or a government
instrumentality, we come to the inevitable conclusion that it is subject to the exercise by the COA of its audit
jurisdiction in the manner consistent with the provisions of the BSP Charter.