Taxation Case

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC.
,
HOTEL DEL MAR, INC. and GO CHIU, Petitioners-Appellees, v. THE HONORABLE
CITY MAYOR OF MANILA, Respondent-Appellant. VICTOR ALABANZA, Intervenor-
Appellee.
J. M. Aruego, A. Tenchavez and L. U. Go for Petitioners-Appellees.
Panganiban, Abad & Associates for Respondent-Appellant.
SYLLABUS
1. CONSTITUTIONAL LAW; ABSENCE OF INJURY TO RIGHTS BY OPERATION OF

STATUTE OR ORDINANCE. — Unless a person is injuriously affected in any of his
constitutional rights by the operation of statute or ordinance he has no standing, except perhaps
as to the liberty to contract, which is part and parcel of their right to property.
2. ID.; FREEDOM OF CONTRACT, NOT A BAR TO POLICE POWER MEASURES. — In

this jurisdiction, the liberty to contract, has never stood in the way of the enactment of police
power measures when called for by circumstances. The same is true in the United States, where
such concept has definitely fallen from its previously high estate under the impact of the Nebbia
(291 US 502), West Coast Hotel Co. (300 US 379), and Olsen (313 US 1305) decisions.
3. ID.; DEPRIVATION OF PROPERTY ALLOWED PROVIDED DUE PROCESS IS

OBSERVED. — One could, consistently with the fundamental law, be deprived of his property,
as long as due process is observed.
4. ID.; CHALLENGED ORDINANCE DOES NOT DENY EQUAL PROTECTION CLAUSE.

— Since the challenged ordinance applies to all the motels in Manila, an assertion that there is
denial of equal protection would be extremely far-fetched.
5. ID.; LAISSEZ FAIRE CONCEPT AS BAR TO ENACTMENT OF REGULATORY

MEASURES, MAY NOT BE INVOKED. — The invocation of the laissez faire concept as bar
against the enactment of regulatory measures, which undoubtedly would result in the diminution
of income and the loss of business, does not occasion any misgiving as to the conformity of the
decision arrived at by the Court with controlling constitutional law principles. The policy of
laissez faire has to some extent given way to the assumption by the government of the right of
intervention even in contractual relations affected with public interest. The state in order to
promote the general welfare may interfere with personal liberty, with property, and with business
and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the state. The mere fact that some
individuals in the community may be deprived of their present business or a particular mode of
earning a living cannot prevent the exercise of police power. Persons licensed to pursue
occupations which may in the public need and interest be affected by the exercise of the police
power embark in those occupations subject to the disadvantages which may result from the legal
exercise of that power.
DECISION
FERNANDO, J.:
A Motion for the reconsideration of our decision of July 31, 1967 was filed by
petitioners, followed by a Motion for new trial. As the Motion for reconsideration is
clearly without merit, there is no occasion for this sought-for new trial. Consequently,
both motions are denied.
(1) No merit in the Motion for reconsideration. —
In the decision of this Court of July 31, 1967, sought to be reconsidered, its basis was
categorically set forth in the following language:jgc:chanrobles.com.ph
"As noted at the outset, the judgment must be reversed. A decent regard for
constitutional doctrines of a fundamental character ought to have admonished the lower
court against such a sweeping condemnation of the challenged ordinance. Its decision
cannot be allowed to stand, consistently with what has hitherto been the accepted
standards of constitutional adjudication, in both procedural and substantive aspects.
"Primarily what calls for a reversal of such a decision is the absence of any evidence to
offset the presumption of validity that attaches to a challenged statute or ordinance. As
was expressed categorically by Justice Malcolm: ‘The presumption is all in favor of
validity . . . . The action of the elected representatives of the people cannot be lightly
set aside. The councilors must, in the very nature of things, be familiar with the
necessities of their particular municipality and with all the facts and circumstances
which surround the subject and necessitates action. The local legislative body, by
enacting the ordinance, has in effect given notice that the regulations are essential to
the well being of the people . . . . The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise
of police regulations.’
"It admits of no doubt therefore that there being a presumption of validity, the
necessity for evidence to rebut it is unavoidable, unless the statute or ordinance is void
on its face, which is not the case here. The principle has been nowhere better
expressed than in the leading case of O’Gorman & Young v. Hartford Fire Insurance Co.,
where the American Supreme Court through Justice Brandeis tersely and succinctly
summed up the matter thus: ‘The statute here questioned deals with a subject clearly
within the scope of the police power. We are asked to declare it void on the ground that
the specific method of regulation prescribed is unreasonable and hence deprives the
plaintiff of due process of law. As underlying questions of fact may condition the
constitutionality of legislation of this character, the presumption of constitutionality
must prevail in the absence of some factual foundation of record for overthrowing the
statute.’ No such factual foundation being laid in the present case, the lower court
deciding the matter on the pleadings and the stipulation of facts, the presumption of
validity must prevail and the judgment against the ordinance set aside." cralaw virtua1aw library
The O’Gorman principle 1 fails to meet the approval of counsel of petitioners. They
would restrain unduly and unjustifiably its operation. In the language of the motion for
reconsideration: "The U.S. Supreme Court was not laying down as a general rule in
constitutional cases that there must be a factual foundation of record to offset the
presumption of constitutionality of any and every law." cralaw virtua1aw library
To paraphrase Justice Brandeis, this interpretation is without support in authority or

reason and rests upon a misconception. It is to betray an almost total lack of
awareness of the import and significance of the O’Gorman doctrine in American
constitutional law. Authorities on the subject of proven competence and knowledge
flatly reject such a view. Dodd, 2 Dowling, 3 Freund, Sutherland, De Wolfe Howe, and
Brown, 4 and Kauper 5 in their standard casebooks quote the same excerpt from
O’Gorman v. Hartford Fire Ins. Co. appearing in the opinion of this Court. Dodd
entertained no doubt: "The accepted view is that stated by Mr. Justice Brandeis in the
O’Gorman case." 6
Frankfurter and Landis were equally explicit in their appreciation of what the O’Gorman
dictum means. "As doctrine, there is nothing new in the avowal of a need for
concreteness in passing judgment upon the legislative judgment. But perhaps last term
marks a more sedulous attention to its observance. Certainly the procedure followed by
the Court in O’Gorman & Young v. Hartford Fire Ins. Co., if regularly observed, will
affect not a little the fate of legislation. If insisted upon, it will compel the bar to argue
questions of legislative validity in the perspective of the circumstances which gave rise
to a particular statute." 7
The late Professor Hamilton of the Yale Law School, one of the most distinguished
constitutionalist, would have been appalled by the unorthodoxy of the view of counsel
of petitioners. For him, the O’Gorman opinion was a manifestation of the jurist’s art at
its best: jgc:chanrobles.com.ph
"If the jurists have the feelings of other men, Monday, the fifth of January, nineteen
hundred and thirty-one, must have been a day of consequence in the life of Mr. Justice
Brandeis. On that day he handed down the judgment of the United States Supreme
Court in the O’Gorman case. The cause was a simple suit in contract: the result
depended upon the validity of a New Jersey statute regulating the commissions to be
paid by insurance companies to their agents for securing business. The more general
question was the tolerance to be accorded to legislative price-fixing under the
Fourteenth Amendment. And, as the fortunes of litigation broke, the issue came to be
the intellectual procedure by which the constitutionality of the acts which make up the
public control of business are to be determined. Upon that day the views of Brandeis
became ‘the opinion of the court,’ and a new chapter in judicial history began to be
written.
"x x x
"In form ‘the opinion of the court’ is a very simple and unpretentous document. It
begins with a statement of the issue and a history of the case, continues with a brief
summary of the reasons for the statute and a statement that ‘the business of insurance
is so affected with a public interest that the state may regulate the rates,’ and
concludes with a declaration of the test for validity. As ‘underlying questions of fact may
condition the constitutionality of legislation of this character,’ it follows that `the
presumption of constitutionality must prevail in the absence of some factual foundation
of record for overthrowing the statute.’ It did not appear ‘upon the face of the statute,
or from any facts of which the court must take judicial notice, that in New Jersey ‘evils
did not exist,’ for which the statute was ‘an appropriate remedy.’ Accordingly the court
was compelled to declare the statute valid; in fact it was left with no alternative.
"Yet the simple lines of a short opinion present a superb example of the jurist’s
art . . . ." 8
This is not to discount the possibility of a situation where the nullity of a statute,
executive order, or ordinance may not be readily apparent but the threat to
constitutional rights, especially those involving the freedom of the mind, present and
ominous. That in such an event there should not be a rigid insistence on the
requirement that evidence be presented does not argue against the force of the above
excerpts on the weight to be accorded the O’Gorman doctrine in this case.
The prop here failing, is there anything else in the Motion for reconsideration that calls
for a modification of the decision of this Court? The answer must be in the negative. It
ought not to have escaped petitioners that the opinion of the Court after noting the lack
of factual foundation to offset the presumption of constitutionality went on to discuss
the due process aspect to make clear that on its face, the Ordinance cannot be
considered void.
"Nor may petitioners assert with plausibility that on its face the ordinance is fatally
defective as being repugnant to the due process clause of the Constitution. The mantle
of protection associated with the due process guaranty does not cover petitioners. This
particular manifestation of a police power measure being specifically aimed to
safeguard public morals is immune from such imputation of nullity resting purely on
conjecture and unsupported by anything of substance. To hold otherwise would be to
unduly restrict and narrow the scope of police power which has been properly
characterized as the most essential, insistent and the least limitable of powers,
extending as it does ‘to all the great public needs.’ It would be, to paraphrase another
leading decision, to destroy the very purpose of the state if it could be deprived or
allowed itself to be deprived of its competence to promote public health, public morals,
public safety and the general welfare. Negatively put, police power is `that inherent
and plenary power in the State which enables it to prohibit all that is hurtful to the
comfort, safety, and welfare of society.’
"There is no question but that the challenged ordinance was precisely enacted to
minimize certain practices hurtful to public morals. The explanatory note of the then
Councilor Herminio Astorga included as annex to the stipulation of facts speaks of the
alarming increase in the rate of prostitution, adultery and fornication in Manila,
traceable in great part to the existence of motels, which ‘provide a necessary
atmosphere for clandestine entry, presence and exit’ and thus become the `ideal haven
for prostitutes and thrill-seekers.’ The challenged ordinance then ‘proposes to check the
clandestine harboring of transients and guests of these establishments by requiring
these transients and guests to fill up a registration form, prepared for the purpose, in a
lobby open to public view at all times, and by introducing several other amendatory
provisions calculated to shatter the privacy that characterizes the registration of
transients and guests.’ Moreover, the increase in the license fees was intended to
discourage `establishments of the kind from operating for purpose other than legal’ and
at the same time, to increase `the income of the city government.’ It would appear
therefore that the stipulation of facts, far from sustaining any attack against the validity
of the ordinance, argues eloquently for it."cralaw virtua1aw library
There is nothing in the Motion for reconsideration that in any wise affects adversely or
impairs the force of the above conclusion. The task of proving that the challenged
Ordinance is void on its face is one attended with difficulty. Nonetheless, with the
persistence worthy of a better cause, petitioners would cite as fatal infirmity the alleged
invasion of the rights against unreasonable search and seizure, to liberty, and to
property.
As the unchallenged rule, to paraphrase Laurel, is that unless a person is injuriously

affected in any of his constitutional rights by the operation of statute or ordinance, 9 he
has no standing, the invocation of petitioners as motel operators of their alleged right
to being free from unreasonable search and seizure need not be taken seriously. Nor
does their claim of the alleged infringement of their liberty deserve any further thought,
its implausibility being self- evident, except perhaps as to the liberty to contract, which
is part and parcel of their right to property. Unfortunately for them, in this jurisdiction
the liberty to contract, except in the Pomar 10 case as noted in the decision, has never
stood in the way of the enactment of police power measures when called for by
circumstances such as undoubtedly exist in this case. The same is true in the United
States, where such a concept has definitely fallen from its previously high state under
the impact of the Nebbia, 11 West Coast Hotel Co. 12 and Olsen decisions. 13
That leaves only the alleged grievance that there was an unconstitutional invasion of
property rights. It goes without saying that petitioners themselves cannot ignore that
one could, consistently with the fundamental law, be deprived of his property as long as
due process is observed. The decision makes clear that such indeed was the case as far
as this Ordinance was concerned. To that aspect, a considerable portion of the opinion
was devoted, citing a number of applicable decisions of this Court, all tending to
demonstrate that there was no due process infraction. The Motion for reconsideration is
conspicuously barren of any attempt to show that under our previous decisions referred
to, the challenged Ordinance could be successfully assailed. It would follow then that
this reiteration of an argument, previously shown to be far from persuasive, is
deserving of a similar fate.
That is all there is to the Motion for reconsideration. That and what Justice Cardozo
aptly referred to as reference to "grotesque or fanciful situations," which if they would
arise could then be appropriately dealt with. As the famed jurist aptly noted: "That they
are conceivable though improbable ought not to govern our construction." 14 That is
not the way then to impugn the validity of an ordinance. Neither could it be rightfully
looked upon as laying a foundation for setting aside a decision. The Motion for
reconsideration, to repeat, is palpably lacking in merit.
1. No occasion for new trial. —
Subsequently, a supplemental Motion for new trial dated September 25, 1967, was filed
the same day. As earlier pointed out, with the Motion for reconsideration having been
shown to be devoid of merit, the supplemental Motion for new trial should likewise be
denied. In the main, what was so unsuccessfully put forth by counsel for petitioners
was adhered to. Additional counsel would bring in new points, namely, the alleged
denial of equal protection and the repugnancy to "the laissez faire principle underlying
our economic system, as it would substantially reduce return on the investment."
Neither suffices to justify any modification of the decision, much less its
reconsideration. A new trial would therefore be a exercise in futility.
The alleged denial of equal protection was predicated on the greater advantages that
the motels in the suburbs of Manila would enjoy as against those within the city limits.
On its face, such argument is clearly unfounded. If the legislative power of the
Municipal Board of the City of Manila were not limited to its boundaries, if it could apply
to the suburban area, then perhaps plausibility could be imparted to such a claim.
Since, as is undeniable, the challenged Ordinance applies to all the motels in Manila, an
assertion that there is denial of equal protection would, to put it at its mildest, be
extremely far-fetched.
Nor does the invocation of the laissez faire concept as bar against the enactment of
regulatory measures, which undoubtedly would result in the diminution of income and
the loss of business, occasion any misgiving as to the conformity of the decision arrived
at by this Court with controlling constitutional law principles. Did not petitioners take
note of the view announced by Justice Laurel quoted in the decision to the effect that
the policy "of laissez faire has to some extent given way to the assumption by the
government of the right of intervention even in contractual relations affected with
public interest." The decision likewise cited this jurist, speaking for the Court in
Calalang v. Williams: 15 "Public welfare, then, lies at the bottom of the enactment of
said law, and the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons and
property may be subjected to all kinds of restraints and burdens, in order to secure the
general comfort, health, and prosperity of the state . . . . To this fundamental aim of
our Government the rights of the individual are subordinated." That was in 1940. Then
in 1955, came Co Kiam v. City of Manila, 16 where Justice Reyes, A., for a unanimous
Court categorically declared: "And surely, the mere fact that some individuals in the
community may be deprived of their present business or a particular mode of earning a
living can not prevent the exercise of the police power. As was said in a case, persons
licensed to pursue occupations which may in the public need and interest be affected by
the exercise of the police power embark in those occupations subject to the
disadvantages which may result from the legal exercise of that power. (City of New
Orleans v. Stafford, 27 L. Ann. 417)." cralaw virtua1aw library
Nor does the reference by new counsel to American state court decisions call for a
different conclusion. The United States Supreme Court in the leading case of West
Virginia State Board of Education v. Barnette, 17 decided in 1943, was equally explicit,
saying "the laissez-faire concept or principle of non-interference has withered at least
as to economic affairs, and social advancements are increasingly sought through closer
integration of society and through expanded and strengthened governmental controls."
Two names of great repute, Freund and Learned Hand, were cited by petitioners.
Neither, if properly understood, could help their cause at all. According to Freund: "In
short, when freedom of the mind is imperiled by law, it is freedom that commands a
momentum of respect, when property is imperiled, it is the lawmakers’ judgment that
commands respect. This dual standard may not precisely reverse the presumption of
constitutionality in civil liberties cases, but obviously it does set up a hierarchy of values
within the due process clause." 18 The illustrious Learned Hand writing on Chief Justice
Stone’s concept of the judicial function had occasion to note the "discredited attitude"
of what he referred to "as the old apostles of the institution of property . . . ." 19
What then is left? Clearly nothing to call for the reconsideration of our decision of July
31, 1967. Nor is there the least justification for a new trial and reception of evidence.
Wherefore, the Motion for reconsideration of petitioners of September 16, 1967 and
supplemental Motion for new trial of September 25, 1967, are denied.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
Castro and Angeles, JJ., concur.
Endnotes:
G.R. No. 88291 June 8, 1993
ERNESTO M. MACEDA, Petitioner, vs. HON. CATALINO MACARAIG, JR., in his

capacity as Executive Secretary, Office of the President, HON. VICENTE JAYME,
ETC., ET AL., Respondents.
Angara, Abello, Concepcion & Cruz for respondent Pilipinas Shell Petroleum
Corporation.chanrobles virtual law library
Siguion Reyna, Montecillo & Ongsiako for Caltex.
NOCON, J.:
Just like lightning which does strike the same place twice in some instances, this matter
of indirect tax exemption of the private respondent National Power Corporation (NPC) is
brought to this Court a second time. Unfazed by the Decision We promulgated on May
31, 1991 1petitioner Ernesto Maceda asks this Court to reconsider said Decision. Lest
We be criticized for denying due process to the petitioner. We have decided to take a
second look at the issues. In the process, a hearing was held on July 9, 1992 where all
parties presented their respective arguments. Etched in this Court's mind are the
paradoxical claims by both petitioner and private respondents that their respective
positions are for the benefit of the Filipino people.
A Chronological review of the relevant NPC laws, specially with respect to its tax
exemption provisions, at the risk of being repetitious is, therefore, in order. chanroblesvirtualawlibrary chanrobles virtual law library
On November 3, 1936, Commonwealth Act No. 120 was enacted creating the National
Power Corporation, a public corporation, mainly to develop hydraulic power from all
water sources in the Philippines. 2The sum of P250,000.00 was appropriated out of the
funds in the Philippine Treasury for the purpose of organizing the NPC and conducting
its preliminary work. 3The main source of funds for the NPC was the flotation of bonds in
the capital markets 4and these bonds
. . . issued under the authority of this Act shall be exempt from the payment of all taxes
by the Commonwealth of the Philippines, or by any authority, branch, division or
political subdivision thereof and subject to the provisions of the Act of Congress,
approved March 24, 1934, otherwise known as the Tydings McDuffle Law, which facts
shall be stated upon the face of said bonds. . . . . 5 chanrobles virtual law library
On June 24, 1938, C.A. No. 344 was enacted increasing to P550,000.00 the funds
needed for the initial operations of the NPC and reiterating the provision of the flotation
of bonds as soon as the first construction of any hydraulic power project was to be
decided by the NPC Board. 6The provision on tax exemption in relation to the issuance
of the NPC bonds was neither amended nor deleted. chanroblesvirtualawlibrary chanrobles virtual law library
On September 30, 1939, C.A. No. 495 was enacted removing the provision on the
payment of the bond's principal and interest in "gold coins" but adding that payment
could be made in United States dollars. 7The provision on tax exemption in relation to
the issuance of the NPC bonds was neither amended nor deleted. chanroblesvirtualawlibrary chanrobles virtual law library
On June 4, 1949, Republic Act No. 357 was enacted authorizing the President of the
Philippines to guarantee, absolutely and unconditionally, as primary obligor, the
payment of any and all NPC loans. 8He was also authorized to contract on behalf of the
NPC with the International Bank for Reconstruction and Development (IBRD) for NPC
loans for the accomplishment of NPC's corporate objectives 9and for the reconstruction
and development of the economy of the country. 10It was expressly stated that:
Any such loan or loans shall be exempt from taxes, duties, fees, imposts, charges,
contributions and restrictions of the Republic of the Philippines, its provinces, cities and
municipalities. 11 chanrobles virtual law library
On the same date, R.A. No. 358 was enacted expressly authorizing the NPC, for the
first time, to incur other types of indebtedness, aside from indebtedness incurred by
flotation of bonds. 12As to the pertinent tax exemption provision, the law stated as
follows:
To facilitate payment of its indebtedness, the National Power Corporation shall be

exempt from all taxes, duties, fees, imposts, charges, and restrictions of the Republic of
the Philippines, its provinces, cities and municipalities. 13 chanrobles virtual law library
On July 10, 1952, R.A. No. 813 was enacted amending R.A. No. 357 in that, aside from
the IBRD, the President of the Philippines was authorized to negotiate, contract and
guarantee loans with the Export-Import Bank of of Washigton, D.C., U.S.A., or any
other international financial institution. 14The tax provision for repayment of these
loans, as stated in R.A. No. 357, was not amended. chanroblesvirtualawlibrary chanrobles virtual law library
On June 2, 1954, R.A. No. 987 was enacted specifically to withdraw NPC's tax
exemption for real estate taxes. As enacted, the law states as follows:
To facilitate payment of its indebtedness, the National Power Corporation shall be

exempt from all taxes, except real property tax, and from all duties, fees, imposts,
charges, and restrictions of the Republic of the Philippines, its provinces, cities, and
municipalities. 15
chanrobles virtual law library
On September 8, 1955, R.A. No. 1397 was enacted directing that the NPC projects to
be funded by the increased indebtedness 16should bear the National Economic Council's
stamp of approval. The tax exemption provision related to the payment of this total
indebtedness was not amended nor deleted. chanroblesvirtualawlibrary chanrobles virtual law library
On June 13, 1958, R.A. No. 2055 was enacted increasing the total amount of foreign
loans NPC was authorized to incur to US$100,000,000.00 from the US$50,000,000.00
ceiling in R.A. No. 357. 17The tax provision related to the repayment of these loans was
not amended nor deleted. chanroblesvirtualawlibrary chanrobles virtual law library
On June 13, 1958, R.A. No. 2058 was enacting fixing the corporate life of NPC to
December 31, 2000. 18All laws or provisions of laws and executive orders contrary to
said R.A. No. 2058 were expressly repealed. 19 chanrobles virtual law library
On June 18, 1960, R.A. No 2641 was enacted converting the NPC from a public
corporation into a stock corporation with an authorized capital stock of
P100,000,000.00 divided into 1,000.000 shares having a par value of P100.00 each,
with said capital stock wholly subscribed to by the Government. 20No tax exemption
was incorporated in said Act. chanroblesvirtualawlibrary chanrobles virtual law library
On June 17, 1961, R.A. No. 3043 was enacted increasing the above-mentioned
authorized capital stock to P250,000,000.00 with the increase to be wholly subscribed
by the Government. 21No tax provision was incorporated in said Act. chanroblesvirtualawlibrary chanrobles virtual law library
On June 17, 1967, R.A. No 4897 was enacted. NPC's capital stock was increased again
to P300,000,000.00, the increase to be wholly subscribed by the Government. No tax
provision was incorporated in said Act. 22 chanrobles virtual law library
On September 10, 1971, R.A. No. 6395 was enacted revising the charter of the NPC,
C.A. No. 120, as amended. Declared as primary objectives of the nation were:
Declaration of Policy. - Congress hereby declares that (1) the comprehensive

development, utilization and conservation of Philippine water resources for all beneficial
uses, including power generation, and (2) the total electrification of the Philippines
through the development of power from all sources to meet the needs of industrial
development and dispersal and the needs of rural electrification are primary objectives
of the nation which shall be pursued coordinately and supported by all instrumentalities
and agencies of the government, including the financial institutions. 23 chanrobles virtual law library
Section 4 of C.A. No. 120, was renumbered as Section 8, and divided into sections 8 (a)
(Authority to incur Domestic Indebtedness) and Section 8 (b) (Authority to Incur
Foreign Loans). chanroblesvirtualawlibrary chanrobles virtual law library
As to the issuance of bonds by the NPC, Paragraph No. 3 of Section 8(a), states as
follows:
The bonds issued under the authority of this subsection shall be exempt from the
payment of all taxes by the Republic of the Philippines, or by any authority, branch,
division or political subdivision thereof which facts shall be stated upon the face of said
bonds. . . . 24
As to the foreign loans the NPC was authorized to contract, Paragraph No. 5, Section
8(b), states as follows:
The loans, credits and indebtedness contracted under this subsection and the payment
of the principal, interest and other charges thereon, as well as the importation of
machinery, equipment, materials and supplies by the Corporation, paid from the
proceeds of any loan, credit or indebtedeness incurred under this Act, shall also be
exempt from all taxes, fees, imposts, other charges and restrictions, including import
restrictions, by the Republic of the Philippines, or any of its agencies and political
subdivisions. 25
A new section was added to the charter, now known as Section 13, R.A. No. 6395,
which declares the non-profit character and tax exemptions of NPC as follows:
The Corporation shall be non-profit and shall devote all its returns from its capital
investment, as well as excess revenues from its operation, for expansion. 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 is
hereby declared exempt: chanrobles virtual law library
(a) From the payment of all taxes, duties, fees, imposts, charges costs and service fees
in any court or administrative proceedings in which it may be a party, restrictions and
duties to the Republic of the Philippines, its provinces, cities, and municipalities and
other government agencies and instrumentalities; chanrobles virtual law library
(b) From all income taxes, franchise taxes and realty taxes to be paid to the National
Government, its provinces, cities, municipalities and other government agencies and
instrumentalities; chanrobles virtual law library
(c) From all import duties, compensating taxes and advanced sales tax, and wharfage
fees on import of foreign goods required for its operations and projects; and chanrobles virtual law library
(d) From all taxes, duties, fees, imposts and all other charges its provinces, cities,
municipalities and other government agencies and instrumentalities, on all petroleum
products used by the Corporation in the generation, transmission, utilization, and sale
of electric power. 26
On November 7, 1972, Presidential Decree No. 40 was issued declaring that the
electrification of the entire country was one of the primary concerns of the country. And
in connection with this, it was specifically stated that: chanrobles virtual law library
The setting up of transmission line grids and the construction of associated generation
facilities in Luzon, Mindanao and major islands of the country, including the Visayas,
shall be the responsibility of the National Power Corporation (NPC) as the authorized
implementing agency of the State. 27
xxx xxx xxx chanrobles virtual law library
It is the ultimate objective of the State for the NPC to own and operate as a single
integrated system all generating facilities supplying electric power to the entire area
embraced by any grid set up by the NPC. 28 chanrobles virtual law library
On January 22, 1974, P.D. No. 380 was issued giving extra powers to the NPC to
enable it to fulfill its role under aforesaid P.D. No. 40. Its authorized capital stock was
raised to P2,000,000,000.00, 29its total domestic indebtedness was pegged at a
maximum of P3,000,000,000.00 at any one time, 30and the NPC was authorized to
borrow a total of US$1,000,000,000.00 31in foreign loans. chanroblesvirtualawlibrary chanrobles virtual law library
The relevant tax exemption provision for these foreign loans states as follows:
machinery, equipment, materials, supplies and services, by the Corporation, paid from
the proceeds of any loan, credit or indebtedness incurred under this Act, shall also
be exempt from all direct and indirect taxes, fees, imposts, other charges and
restrictions, including import restrictions previously and presently imposed, and to be
imposed by the Republic of the Philippines, or any of its agencies and political
subdivisions. 32(Emphasis supplied)
Section 13(a) and 13(d) of R.A. No 6395 were amended to read as follows:
(a) From the payment of all taxes, duties, fees, imposts, charges and restrictions to the
Republic of the Philippines, its provinces, cities, municipalities and other government
agencies and instrumentalities including the taxes, duties, fees, imposts and other
charges provided for under the Tariff and Customs Code of the Philippines, Republic Act
Numbered Nineteen Hundred Thirty-Seven, as amended, and as further amended by
Presidential Decree No. 34 dated October 27, 1972, and Presidential Decree No. 69,
dated November 24, 1972, and costs and service fees in any court or administrative
proceedings in which it may be a party;
(d) From all taxes, duties, fees, imposts, and all other charges imposed directly or
indirectly by the Republic of the Philippines, its provinces, cities, municipalities and
other government agencies and instrumentalities, on all petroleum products used by
the Corporation in the generation, transmission, utilization and sale of electric
power. 33(Emphasis supplied)
On February 26, 1970, P.D. No. 395 was issued removing certain restrictions in the
NPC's sale of electricity to its different customers. 34No tax exemption provision was
amended, deleted or added. chanroblesvirtualawlibrary chanrobles virtual law library
On July 31, 1975, P.D. No. 758 was issued directing that P200,000,000.00 would be
appropriated annually to cover the unpaid subscription of the Government in the NPC
authorized capital stock, which amount would be taken from taxes accruing to the
General Funds of the Government, proceeds from loans, issuance of bonds, treasury
bills or notes to be issued by the Secretary of Finance for this particular purpose. 35 chanrobles virtual law library
On May 27, 1976 P.D. No. 938 was issued
(I)n view of the accelerated expansion programs for generation and transmission
facilities which includes nuclear power generation, the present capitalization of National
Power Corporation (NPC) and the ceilings for domestic and foreign borrowings are
deemed insufficient; 36

(I)n the application of the tax exemption provisions of the Revised Charter, the non-
profit character of NPC has not been fully utilized because of restrictive interpretation of
the taxing agencies of the government on said provisions; 37
(I)n order to effect the accelerated expansion program and attain the declared
objective of total electrification of the country, further amendments of certain sections
of Republic Act No. 6395, as amended by Presidential Decrees Nos. 380, 395 and 758,
have become imperative; 38 chanrobles virtual law library
Thus NPC's capital stock was raised to P8,000,000,000.00, 39the total domestic
indebtedness ceiling was increased to P12,000,000,000.00, 40the total foreign loan
ceiling was raised to US$4,000,000,000.00 41and Section 13 of R.A. No. 6395, was
amended to read as follows:
investment as well as excess revenues from its operation, for expansion. To enable the
Corporation to pay to 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. 42
II
On the other hand, the pertinent tax laws involved in this controversy are P.D. Nos.
882, 1177, 1931 and Executive Order No. 93 (S'86). chanroblesvirtualawlibrary chanrobles virtual law library
On January 30, 1976, P.D. No. 882 was issued withdrawing the tax exemption of NPC
with regard to imports as follows:
WHEREAS, importations by certain government agencies, including government-owned

or controlled corporation, are exempt from the payment of customs duties and
compensating tax; and chanrobles virtual law library
WHEREAS, in order to reduce foreign exchange spending and to protect domestic

industries, it is necessary to restrict and regulate such tax-free importations. chanroblesvirtualawlibrary chanrobles virtual law library
NOW THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of

the powers vested in me by the Constitution, and do hereby decree and order the
following:chanrobles virtual law library
Sec. 1. All importations of any government agency, including government-owned or

controlled corporations which are exempt from the payment of customs duties and
internal revenue taxes, shall be subject to the prior approval of an Inter-Agency
Committee which shall insure compliance with the following conditions: chanrobles virtual law library
(a) That no such article of local manufacture are available in sufficient quantity and
comparable quality at reasonable prices; chanrobles virtual law library
(b) That the articles to be imported are directly and actually needed and will be used
exclusively by the grantee of the exemption for its operations and projects or in the
conduct of its functions; and chanrobles virtual law library
(c) The shipping documents covering the importation are in the name of the grantee to
whom the goods shall be delivered directly by customs authorities.
Sec. 3. The Committee shall have the power to regulate and control the tax-free
importation of government agencies in accordance with the conditions set forth in
Section 1 hereof and the regulations to be promulgated to implement the provisions of
this Decree. Provided, however, That any government agency or government-owned or
controlled corporation, or any local manufacturer or business firm adversely affected by
any decision or ruling of the Inter-Agency Committee may file an appeal with the Office
of the President within ten days from the date of notice thereof. . . . .
Sec. 6. . . . . Section 13 of Republic Act No. 6395; . . .. and all similar provisions of all
general and special laws and decrees are hereby amended accordingly.
xxx xxx xxx
On July 30, 1977, P.D. 1177 was issued as it was
. . . declared the policy of the State to formulate and implement a National Budget that
is an instrument of national development, reflective of national objectives, strategies
and plans. The budget shall be supportive of and consistent with the socio-economic
development plan and shall be oriented towards the achievement of explicit objectives
and expected results, to ensure that funds are utilized and operations are conducted
effectively, economically and efficiently. The national budget shall be formulated within
a context of a regionalized government structure and of the totality of revenues and
other receipts, expenditures and borrowings of all levels of government-owned or
controlled corporations. The budget shall likewise be prepared within the context of the
national long-term plan and of a long-term budget program. 43 chanrobles virtual law library
In line with such policy, the law decreed that chanrobles virtual law library
All units of government, including government-owned or controlled corporations, shall

pay income taxes, customs duties and other taxes and fees are imposed under
revenues laws: provided, that organizations otherwise exempted by law from the
payment of such taxes/duties may ask for a subsidy from the General Fund in the exact
amount of taxes/duties due: provided, further, that a procedure shall be established by
the Secretary of Finance and the Commissioner of the Budget, whereby such subsidies
shall automatically be considered as both revenue and expenditure of the General
Fund. 44chanrobles virtual law library
The law also declared that -
[A]ll laws, decrees, executive orders, rules and regulations or parts thereof which are
inconsistent with the provisions of the Decree are hereby repealed and/or modified
accordingly. 45 chanrobles virtual law library
On July 11, 1984, most likely due to the economic morass the Government found itself
in after the Aquino assassination, P.D. No. 1931 was issued to reiterate that:
WHEREAS, Presidential Decree No. 1177 has already expressly repealed the grant of
tax privileges to any government-owned or controlled corporation and all other units of
government; 46 chanrobles virtual law library
and since there was a
. . . need for government-owned or controlled corporations and all other units of

government enjoying tax privileges to share in the requirements of development, fiscal
or otherwise, by paying the duties, taxes and other charges due from them. 47 chanrobles virtual law library
it was decreed that:
Sec. 1. The provisions of special on general law to the contrary notwithstanding, all
exemptions from the payment of duties, taxes, fees, imposts and other charges
heretofore granted in favor of government-owned or controlled corporations including
their subsidiaries, are hereby withdrawn. chanroblesvirtualawlibrary chanrobles virtual law library
Sec. 2. The President of the Philippines and/or the Minister of Finance, upon the
recommendation of the Fiscal Incentives Review Board created under Presidential
Decree No. 776, is hereby empowered to restore, partially or totally, the exemptions
withdrawn by Section 1 above, any applicable tax and duty, taking into account, among
others, any or all of the following: chanrobles virtual law library
1) The effect on the relative price levels; chanrobles virtual law library
2) The relative contribution of the corporation to the revenue generation effort; chanrobles virtual law library
3) The nature of the activity in which the corporation is engaged in; or chanrobles virtual law library
4) In general the greater national interest to be served.
Sec. 5. The provisions of Presidential Decree No. 1177 as well as all other laws,
decrees, executive orders, administrative orders, rules, regulations or parts thereof
which are inconsistent with this Decree are hereby repealed, amended or modified
accordingly.
On December 17, 1986, E.O. No. 93 (S'86) was issued with a view to correct
presidential restoration or grant of tax exemption to other government and private
entities without benefit of review by the Fiscal Incentives Review Board, to wit:
WHEREAS, Presidential Decree Nos. 1931 and 1955 issued on June 11, 1984 and
October 14, 1984, respectively, withdrew the tax and duty exemption privileges,
including the preferential tax treatment, of government and private entities with certain
exceptions, in order that the requirements of national economic development, in terms
of fiscals and other resources, may be met more adequately;
WHEREAS, in addition to those tax and duty exemption privileges were restored by the
Fiscal Incentives Review Board (FIRB), a number of affected entities, government and
private, had their tax and duty exemption privileges restored or granted by Presidential
action without benefit or review by the Fiscal Incentives Review Board (FIRB);
xxx xxx xxx
Since it was decided that:
[A]ssistance to government and private entities may be better provided where

necessary by explicit subsidy and budgetary support rather than tax and duty
exemption privileges if only to improve the fiscal monitoring aspects of government
operations.
It was thus ordered that:
Sec. 1. The Provisions of any general or special law to the contrary notwithstanding, all
tax and duty incentives granted to government and private entities are hereby
withdrawn, except: chanrobles virtual law library
a) those covered by the non-impairment clause of the Constitution; chanrobles virtual law library
b) those conferred by effective internation agreement to which the Government of the

Republic of the Philippines is a signatory; chanrobles virtual law library
c) those enjoyed by enterprises registered with:
(i) the Board of Investment pursuant to Presidential Decree No. 1789, as amended; chanrobles virtual law library
(ii) the Export Processing Zone Authority, pursuant to Presidential Decree No. 66 as
amended; chanrobles virtual law library
(iii) the Philippine Veterans Investment Development Corporation Industrial Authority

pursuant to Presidential Decree No. 538, was amended.
d) those enjoyed by the copper mining industry pursuant to the provisions of Letter of
Instructions No. 1416; chanrobles virtual law library
e) those conferred under the four basic codes namely:
(i) the Tariff and Customs Code, as amended; chanrobles virtual law library
(ii) the National Internal Revenue Code, as amended; chanrobles virtual law library
(iii) the Local Tax Code, as amended; chanrobles virtual law library
(iv) the Real Property Tax Code, as amended; chanrobles virtual law library
f) those approved by the President upon the recommendation of the Fiscal Incentives
Review Board.
Sec. 2. The Fiscal Incentives Review Board created under Presidential Decree No. 776,
as amended, is hereby authorized to: chanrobles virtual law library
a) restore tax and/or duty exemptions withdrawn hereunder in whole or in part; chanrobles virtual law library
b) revise the scope and coverage of tax and/or duty exemption that may be restored;
library
chanrobles virtual law
c) impose conditions for the restoration of tax and/or duty exemption; chanrobles virtual law library
d) prescribe the date of period of effectivity of the restoration of tax and/or duty
exemption; chanrobles virtual law library
e) formulate and submit to the President for approval, a complete system for the grant
of subsidies to deserving beneficiaries, in lieu of or in combination with the restoration
of tax and duty exemptions or preferential treatment in taxation, indicating the source
of funding therefor, eligible beneficiaries and the terms and conditions for the grant
thereof taking into consideration the international commitment of the Philippines and
the necessary precautions such that the grant of subsidies does not become the basis
for countervailing action. chanroblesvirtualawlibrary chanrobles virtual law library
Sec. 3. In the discharge of its authority hereunder, the Fiscal Incentives Review Board
shall take into account any or all of the following considerations: chanrobles virtual law library
a) the effect on relative price levels; chanrobles virtual law library
b) relative contribution of the beneficiary to the revenue generation effort; chanrobles virtual law library
c) nature of the activity the beneficiary is engaged; and chanrobles virtual law library
d) in general, the greater national interest to be served.
Sec. 5. All laws, orders, issuances, rules and regulations or parts thereof inconsistent
with this Executive Order are hereby repealed or modified accordingly.
E.O. No. 93 (S'86) was decreed to be effective 48upon the promulgation of the rules and
regulations, to be issued by the Ministry of Finance. 49Said rules and regulations were
promulgated and published in the Official Gazette
on February 23, 1987. These became effective on the 15th day after promulgation 50in
the Official Gasetter, 51which 15th day was March 10, 1987.
III
Now to some definitions. We refer to the very simplistic approach that all would-be
lawyers, learn in their TAXATION I course, which fro convenient reference, is as
follows: chanrobles virtual law library
Classifications or kinds of Taxes:
According to Persons who pay or who bear the burden: chanrobles virtual law library
a. Direct Tax - the where the person supposed to pay the tax really pays
it. WITHOUT transferring the burden to someone else. chanroblesvirtualawlibrary chanrobles virtual law library
Examples: Individual income tax, corporate income tax, transfer taxes (estate tax,
donor's tax), residence tax, immigration tax chanrobles virtual law library
b. Indirect Tax - that where the tax is imposed upon goods BEFORE reaching the
consumer who ultimately pays for it, not as a tax, but as a part of the purchase
price.
chanroblesvirtualawlibrary chanrobles virtual law library
Examples: the internal revenue indirect taxes (specific tax, percentage taxes, (VAT)
and the tariff and customs indirect taxes (import duties, special import tax and other
dues) 52
IV
To simply matter, the issues raised by petitioner in his motion for reconsideration can
be reduced to the following: chanrobles virtual law library
(1) What kind of tax exemption privileges did NPC have? chanrobles virtual law library
(2) For what periods in time were these privileges being enjoyed? chanrobles virtual law library
(3) If there are taxes to be paid, who shall pay for these taxes?
Petitioner contends that P.D. No. 938 repealed the indirect tax exemption of NPC as the
phrase "all forms of taxes etc.," in its section 10, amending Section 13, R.A. No. 6395,
as amended by P.D. No. 380, does not expressly include "indirect taxes." chanrobles virtual law library
His point is not well-taken. chanroblesvirtualawlibrary chanrobles virtual law library

A chronological review of the NPC laws will 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. chanroblesvirtualawlibrary chanrobles virtual law library
NPC's tax exemptions at first applied to the bonds it was authorized to float to finance
its operations upon its creation by virtue of C.A. No. 120. chanroblesvirtualawlibrary chanrobles virtual law library
When the NPC was authorized to contract with the IBRD for foreign financing, any loans
obtained were to be completely tax exempt. chanroblesvirtualawlibrary chanrobles virtual law library
After the NPC was authorized to borrow from other sources of funds - aside issuance of
bonds - it was again specifically exempted from all types of taxes "to facilitate payment
of its indebtedness." Even when the ceilings for domestic and foreign borrowings were
periodically increased, the tax exemption privileges of the NPC were maintained. chanroblesvirtualawlibrary chanrobles virtual law library
NPC's tax exemption from real estate taxes was, however, specifically withdrawn by
Rep. Act No. 987, as above stated. The exemption was, however, restored by R.A. No.
6395.chanroblesvirtualawlibrary chanrobles virtual law library
Section 13, R.A. No. 6395, was very comprehensive in its enumeration of the tax
exemptions allowed NPC. Its section 13(d) is the starting point of this bone of
contention among the parties. For easy reference, it is reproduced as follows:
[T]he Corporation is hereby declared exempt:
(d) From all taxes, duties, fees, imposts and all other charges imposed by the Republic
of the Philippines, its provinces, cities, municipalities and other government agencies
and instrumentalities, on all petroleum products used by the Corporation in the
generation, transmission, utilization, and sale of electric power.
P.D. No. 380 added phrase "directly or indirectly" to said Section 13(d), which now
reads as follows:
(d) From all taxes, duties, fees, imposts, and all other charges imposed directly or
indirectly by the Republic of the Philippines, its provinces, cities, municipalities and
other government agencies and instrumentalities, on all petroleum products used by
the Corporation in the generation, transmission, utilization and sale of electric power.
(Emphasis supplied)
Then came P.D. No. 938 which amended Sec. 13(a), (b), (c) and (d) into one very
simple paragraph as follows:
investment as well as excess revenues from its operation, for expansion. 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.
(Emphasis supplied)
Petitioner reminds Us that:
[I]t must be borne in mind that Presidential Decree Nos. 380

and 938 were issued by one man, acting as such the Executive and Legislative. 53
[S]ince both presidential decrees were made by the same person, it would have been
very easy for him to retain the same or similar language used in P.D. No. 380 P.D. No.
938 if his intention were to preserve the indirect tax exemption of NPC. 54 chanrobles virtual law library
Actually, P.D. No. 938 attests to the ingenuousness of then President Marcos no matter
what his fault were. It should be noted that section 13, R.A. No. 6395, provided for tax
exemptions for the following items:
13(a) : court or administrative proceedings; chanrobles virtual law library
13(b) : income, franchise, realty taxes; chanrobles virtual law library
13(c) : import of foreign goods required for its operations and projects; chanrobles virtual law library
13(d) : petroleum products used in generation of electric power.
P.D. No. 938 lumped up 13(b), 13(c), and 13(d) into the phrase "ALL FORMS OF
TAXES, ETC.,", included 13(a) under the "as well as" clause and added PNOC
subsidiaries as qualified for tax exemptions. chanroblesvirtualawlibrary chanrobles virtual law library
This is the only conclusion one can arrive at if he has read all the NPC laws in the order
of enactment or issuance as narrated above in part I hereof. President Marcos must
have considered all the NPC statutes from C.A. No. 120 up to its latest amendments,
P.D. No. 380, P.D. No. 395 and P.D. No. 759, AND came up 55with a very simple
Section 13, R.A. No. 6395, as amended by P.D. No. 938. chanroblesvirtualawlibrary chanrobles virtual law library
One common theme in all these laws is that the NPC must be enable to pay its
indebtedness 56which, 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.chanroblesvirtualawlibrary chanrobles virtual law library
By virtue of P.D. No. 938 NPC's capital stock was raised to P8 Billion. It must be
remembered that to pay the government share in its capital stock P.D. No. 758 was
issued mandating that P200 Million would be appropriated annually to cover the said
unpaid subscription of the Government in NPC's authorized capital stock. And
significantly one of the sources of this annual appropriation of P200 million is TAX
MONEY accruing to the General Fund of the Government. It does not stand to reason
then that former President Marcos would order P200 Million to be taken partially or
totally from tax money to be used to pay the Government subscription in the NPC, on
one hand, and then order the NPC to pay all its indirect taxes, on the other. chanroblesvirtualawlibrary chanrobles virtual law library
The above conclusion that then President Marcos lumped up Sections 13 (b), 13 (c) and
(d) into the phrase "All FORMS OF" is supported by the fact that he did not do the same
for the tax exemption provision for the foreign loans to be incurred. chanroblesvirtualawlibrary chanrobles virtual law library
The tax exemption on foreign loans found in Section 8(b), R.A. No. 6395, reads as
follows:
machinery, equipment, materials and supplies by the Corporation, paid from the
proceeds of any loan, credit or indebtedness incurred under this Act, shall also be
exempt from all taxes, fees, imposts, other charges and restrictions, including import
restrictions, by the Republic of the Philippines, or any of its agencies and political
subdivisions. 57
The same was amended by P.D. No. 380 as follows:
The loans, credits and indebtedness contracted this subsection and the payment of the
principal, interest and other charges thereon, as well as the importation of machinery,
equipment, materials, supplies and services, by the Corporation, paid from the
proceeds of any loan, credit or indebtedness incurred under this Act, shall also be
exempt from all direct and indirect taxes, fees, imposts, other charges and restrictions,
including import restrictions previously and presently imposed, and to be imposed by
the Republic of the Philippines, or any of its agencies and political
subdivisions. 58(Emphasis supplied)
P.D. No. 938 did not amend the same 59and so the tax exemption provision in Section 8
(b), R.A. No. 6395, as amended by P.D. No. 380, still stands. Since the subject matter
of this particular Section 8 (b) had to do only with loans and machinery imported, paid
for from the proceeds of these foreign loans, THERE WAS NO OTHER SUBJECT MATTER
TO LUMP IT UP WITH, and so, the tax exemption stood as is - with the express mention
of "direct
and indirect" tax exemptions. And this "direct and indirect" tax exemption privilege
extended to "taxes, fees, imposts, other charges . . . to be imposed" in the future -
surely, an indication that the lawmakers wanted the NPC to be exempt from ALL FORMS
of taxes - direct and indirect. chanroblesvirtualawlibrary chanrobles virtual law library
It is crystal clear, therefore, that NPC had been granted tax exemption privileges for
both direct and indirect taxes under P.D. No. 938.
VI
Five (5) years on into the now discredited New Society, the Government decided to
rationalize government receipts and expenditures by formulating and implementing a
National Budget. 60The NPC, being a government owned and controlled corporation had
to be shed off its tax exemption status privileges under P.D. No. 1177. It was, however,
allowed to ask for a subsidy from the General Fund in the exact amount of taxes/duties
due.chanroblesvirtualawlibrary chanrobles virtual law library
Actually, much earlier, P.D. No. 882 had already repealed NPC's tax-free importation
privileges. It allowed, however, NPC to appeal said repeal with the Office of the
President and to avail of tax-free importation privileges under its Section 1, subject to
the prior approval of an Inter-Agency Committed created by virtue of said P.D. No. 882.
It is presumed that the NPC, being the special creation of the State, was allowed to
continue its tax-free importations. chanroblesvirtualawlibrary chanrobles virtual law library
This Court notes that petitioner brought to the attention of this Court, the matter of the
abolition of NPC's tax exemption privileges by P.D. No. 1177 61only in his Common
Reply/Comment to private Respondents' "Opposition" and "Comment" to Motion for
Reconsideration, four (4) months AFTER the motion for Reconsideration had been filed.
During oral arguments heard on July 9, 1992, he proceeded to discuss this tax
exemption withdrawal as explained by then Secretary of Justice Vicente Abad Santos in
opinion No. 133 (S '77). 62A careful perusal of petitioner's senate Blue Ribbon
Committee Report No. 474, the basis of the petition at bar, fails to yield any mention of
said P.D. No. 1177's effect on NPC's tax exemption privileges. 63Applying by
analogy Pulido vs. Pablo, 64the court declares that the matter of P.D. No. 1177
abolishing NPC's tax exemption privileges was not seasonably invoked 65by the
petitioner. chanroblesvirtualawlibrary chanrobles virtual law library
Be that as it may, the Court still has to discuss the effect of P.D. No. 1177 on the NPC
tax exemption privileges as this statute has been reiterated twice in P.D. No. 1931. The
express repeal of tax privileges of any government-owned or controlled corporation
(GOCC). NPC included, was reiterated in the fourth whereas clause of P.D. No. 1931's
preamble. The subsidy provided for in Section 23, P.D. No. 1177, being inconsistent
with Section 2, P.D. No. 1931, was deemed repealed as the Fiscal Incentives Revenue
Board was tasked with recommending the partial or total restoration of tax exemptions
withdrawn by Section 1, P.D. No. 1931. chanroblesvirtualawlibrary chanrobles virtual law library
The records before Us do not indicate whether or not NPC asked for the subsidy
contemplated in Section 23, P.D. No. 1177. Considering, however, that under Section
16 of P.D. No. 1177, NPC had to submit to the Office of the President its request for the
P200 million mandated by P.D. No. 758 to be appropriated annually by the Government
to cover its unpaid subscription to the NPC authorized capital stock and that under
Section 22, of the same P.D. No. NPC had to likewise submit to the Office of the
President its internal operating budget for review due to capital inputs of the
government (P.D. No. 758) and to the national government's guarantee of the domestic
and foreign indebtedness of the NPC, it is clear that NPC was covered by P.D. No.
1177. chanroblesvirtualawlibrary chanrobles virtual law library
There is reason to believe that NPC availed of subsidy granted to exempt GOCC's that
suddenly found themselves having to pay taxes. It will be noted that Section 23, P.D.
No. 1177, mandated that the Secretary of Finance and the Commissioner of the Budget
had to establish the necessary procedure to accomplish the tax payment/tax subsidy
scheme of the Government. In effect, NPC, did not put any cash to pay any tax as it got
from the General Fund the amounts necessary to pay different revenue collectors for
the taxes it had to pay. chanroblesvirtualawlibrary chanrobles virtual law library
In his memorandum filed July 16, 1992, petitioner submits:
[T]hat with the enactment of P.D. No. 1177 on July 30, 1977, the NPC lost all its duty
and tax exemptions, whether direct or indirect. And so there was nothing to be
withdrawn or to be restored under P.D. No. 1931, issued on June 11, 1984. This is
evident from sections 1 and 2 of said P.D. No. 1931, which reads:
"Section 1. The provisions of special or general law to the contrary notwithstanding, all
exemptions from the payment of duties, taxes, fees, imports and other charges
heretofore granted in favor of government-owned or controlled corporations including
their subsidiaries are hereby withdrawn." chanrobles virtual law library
Sec. 2. The President of the Philippines and/or the Minister of Finance, upon the
recommendation of the Fiscal Incentives Review Board created under P.D. No. 776, is
hereby empowered to restore partially or totally, the exemptions withdrawn by section
1 above. . . .
Hence, P.D. No. 1931 did not have any effect or did it change NPC's status. Since it had
already lost all its tax exemptions privilege with the issuance of P.D. No. 1177 seven
(7) years earlier or on July 30, 1977, there were no tax exemptions to be withdrawn by
section 1 which could later be restored by the Minister of Finance upon the
recommendation of the FIRB under Section 2 of P.D. No. 1931. Consequently, FIRB
resolutions No. 10-85, and 1-86, were all illegally and validly issued since FIRB acted
beyond their statutory authority by creating and not merely restoring the tax exempt
status of NPC. The same is true for FIRB Res. No. 17-87 which restored NPC's tax
exemption under E.O. No. 93 which likewise abolished all duties and tax exemptions
but allowed the President upon recommendation of the FIRB to restore those abolished.
The Court disagrees. chanroblesvirtualawlibrary chanrobles virtual law library
Applying by analogy the weight of authority that:
When a revised and consolidated act re-enacts in the same or substantially the same
terms the provisions of the act or acts so revised and consolidated, the revision and
consolidation shall be taken to be a continuation of the former act or acts, although the
former act or acts may be expressly repealed by the revised and consolidated act; and
all rights
66
and liabilities under the former act or acts are preserved and may be enforced. chanrobles virtual law library
the Court rules that when P.D. No. 1931 basically reenacted in its Section 1 the first
half of Section 23, P.D. No. 1177, on withdrawal of tax exemption privileges of all
GOCC's said Section 1, P.D. No. 1931 was deemed to be a continuation of the first half
of Section 23, P.D. No. 1177, although the second half of Section 23, P.D. No. 177, on
the subsidy scheme for former tax exempt GOCCs had been expressly repealed by
Section 2 with its institution of the FIRB recommendation of partial/total restoration of
tax exemption privileges. chanroblesvirtualawlibrary chanrobles virtual law library
The NPC tax privileges withdrawn by Section 1. P.D. No. 1931, were, therefore, the
same NPC tax exemption privileges withdrawn by Section 23, P.D. No. 1177. NPC could
no longer obtain a subsidy for the taxes it had to pay. It could, however, under P.D. No.
1931, ask for a total restoration of its tax exemption privileges, which, it did, and the
same were granted under FIRB Resolutions Nos. 10-85 67and 1-86 68as approved by the
Minister of Finance. chanroblesvirtualawlibrary chanrobles virtual law library
Consequently, contrary to petitioner's submission, FIRB Resolutions Nos. 10-85 and 1-

86 were both legally and validly issued by the FIRB pursuant to P.D. No. 1931. FIRB did
not created NPC's tax exemption status but merely restored it. 69 chanrobles virtual law library
Some quarters have expressed the view that P.D. No. 1931 was illegally issued under
the now rather infamous Amendment No. 6 70as there was no showing that President
Marcos' encroachment on legislative prerogatives was justified under the then
prevailing condition that he could legislate "only if the Batasang Pambansa 'failed or
was unable to act inadequately on any matter that in his judgment required immediate
action' to meet the 'exigency'. 71 chanrobles virtual law library
Actually under said Amendment No. 6, then President Marcos could issue decrees not
only when the Interim Batasang Pambansa failed or was unable to act adequately on
any matter for any reason that in his (Marcos') judgment required immediate action,
but also when there existed a grave emergency or a threat or thereof. It must be
remembered that said Presidential Decree was issued only around nine (9) months after
the Philippines unilaterally declared a moratorium on its foreign debt payments 72as a
result of the economic crisis triggered by loss of confidence in the government brought
about by the Aquino assassination. The Philippines was then trying to reschedule its
debt payments. 73One of the big borrowers was the NPC 74which had a US$ 2.1 billion
white elephant of a Bataan Nuclear Power Plant on its back. 75From all indications, it
must have been this grave emergency of a debt rescheduling which compelled Marcos
to issue P.D. No. 1931, under his Amendment 6 power. 76 chanrobles virtual law library
The rule, therefore, that under the 1973 Constitution "no law granting a tax exemption
shall be passed without the concurrence of a majority of all the members of the
Batasang Pambansa" 77does not apply as said P.D. No. 1931 was not passed by the
Interim Batasang Pambansa but by then President Marcos under His Amendment No. 6
power.chanroblesvirtualawlibrary chanrobles virtual law library
P.D. No. 1931 was, therefore, validly issued by then President Marcos under his
Amendment No. 6 authority. chanroblesvirtualawlibrary chanrobles virtual law library
Under E.O No. 93 (S'86) NPC's tax exemption privileges were again clipped by, this
time, President Aquino. Its section 2 allowed the NPC to apply for the restoration of its
tax exemption privileges. The same was granted under FIRB Resolution No. 17-
87 78dated June 24, 1987 which restored NPC's tax exemption privileges effective,
starting March 10, 1987, the date of effectivity of E.O. No. 93 (S'86). chanroblesvirtualawlibrary chanrobles virtual law library
FIRB Resolution No. 17-87 was approved by the President on October 5, 1987. 79There
is no indication, however, from the records of the case whether or not similar approvals
were given by then President Marcos for FIRB Resolutions Nos. 10-85 and 1- 86. This
has led some quarters to believe that a "travesty of justice" might have occurred when
the Minister of Finance approved his own recommendation as Chairman of the Fiscal
Incentives Review Board as what happened in Zambales Chromate vs. Court of
Appeals 80when the Secretary of Agriculture and Natural Resources approved a decision
earlier rendered by him when he was the Director of Mines, 81and in Anzaldo vs.
Clave 82where Presidential Executive Assistant Clave affirmed, on appeal to
Malacañang, his own decision as Chairman of the Civil Service Commission. 83 chanrobles virtual law library
Upon deeper analysis, the question arises as to whether one can talk about "due
process" being violated when FIRB Resolutions Nos. 10-85 and 1-86 were approved by
the Minister of Finance when the same were recommended by him in his capacity as
Chairman of the Fiscal Incentives Review Board. 84 chanrobles virtual law library
In Zambales Chromite and Anzaldo, two (2) different parties were involved: mining
groups and scientist-doctors, respectively. Thus, there was a need for procedural due
process to be followed. chanroblesvirtualawlibrary chanrobles virtual law library
In the case of the tax exemption restoration of NPC, there is no other comparable entity
- not even a single public or private corporation - whose rights would be violated if
NPC's tax exemption privileges were to be restored. While there might have been a
MERALCO before Martial Law, it is of public knowledge that the MERALCO generating
plants were sold to the NPC in line with the State policy that NPC was to be the State
implementing arm for the electrification of the entire country. Besides, MERALCO was
limited to Manila and its environs. And as of 1984, there was no more MERALCO - as a
producer of electricity - which could have objected to the restoration of NPC's tax
exemption privileges. chanroblesvirtualawlibrary chanrobles virtual law library
It should be noted that NPC was not asking to be granted tax exemption privileges for
the first time. It was just asking that its tax exemption privileges be restored. It is for
these reasons that, at least in NPC's case, the recommendation and approval of NPC's
tax exemption privileges under FIRB Resolution Nos. 10-85 and 1-86, done by the
same person acting in his dual capacities as Chairman of the Fiscal Incentives Review
Board and Minister of Finance, respectively, do not violate procedural due process. chanroblesvirtualawlibrary chanrobles virtual law library
While as above-mentioned, FIRB Resolution No. 17-87 was approved by President

Aquino on October 5, 1987, the view has been expressed that President Aquino, at least
with regard to E.O. 93 (S'86), had no authority to sub-delegate to the FIRB, which was
allegedly not a delegate of the legislature, the power delegated to her thereunder. chanroblesvirtualawlibrary chanrobles virtual law library
A misconception must be cleared up. chanroblesvirtualawlibrary chanrobles virtual law library
When E.O No. 93 (S'86) was issued, President Aquino was exercising both Executive
and Legislative powers. Thus, there was no power delegated to her, rather it was she
who was delegating her power. She delegated it to the FIRB, which, for purposes of E.O
No. 93 (S'86), is a delegate of the legislature. Clearly, she was not sub-delegating her
power. chanroblesvirtualawlibrary chanrobles virtual law library
And E.O. No. 93 (S'86), as a delegating law, was complete in itself - it set forth the
policy to be carried out 85and it fixed the standard to which the delegate had to conform
in the performance of his functions, 86both qualities having been enunciated by this
Court in Pelaez vs. Auditor General. 87 chanrobles virtual law library
Thus, after all has been said, it is clear that the NPC had its tax exemption privileges
restored from June 11, 1984 up to the present.
VII
The next question that projects itself is - who pays the tax? chanrobles virtual law library
The answer to the question could be gleamed from the manner by which the
Commissaries of the Armed Forces of the Philippines sell their goods. chanroblesvirtualawlibrary chanrobles virtual law library
By virtue of P.D. No. 83, 88veterans, members of the Armed of the Philippines, and their
defendants but groceries and other goods free of all taxes and duties if bought from
any AFP Commissaries. chanroblesvirtualawlibrary chanrobles virtual law library
In practice, the AFP Commissary suppliers probably treat the unchargeable specific, ad
valorem and other taxes on the goods earmarked for AFP Commissaries as an added
cost of operation and distribute it over the total units of goods sold as it would any
other cost. Thus, even the ordinary supermarket buyer probably pays for the
specific, ad valorem and other taxes which theses suppliers do not charge the AFP
Commissaries. 89 chanrobles virtual law library
IN MUCH THE SAME MANNER, it is clear that private respondents-oil companies have to
absorb the taxes they add to the bunker fuel oil they sell to NPC. chanroblesvirtualawlibrary chanrobles virtual law library
It should be stated at this juncture that, as early as May 14, 1954, the Secretary of
Justice renders an opinion, 90wherein he stated and We quote:
Republic Act No. 358 exempts the National Power Corporation from "all taxes, duties,
fees, imposts, charges, and restrictions of the Republic of the Philippines and its
provinces, cities, and municipalities." This exemption is broad enough to include all
taxes, whether direct or indirect, which the National Power Corporation may be required
to pay, such as the specific tax on petroleum products. That it is indirect or is of no
amount [should be of no moment], for it is the corporation that ultimately pays it. The
view which refuses to accord the exemption because the tax is first paid by the seller
disregards realities and gives more importance to form than to substance. Equity and
law always exalt substance over from.
Tax exemptions are undoubtedly to be construed strictly but not so grudgingly as

knowledge that many impositions taxpayers have to pay are in the nature of indirect
taxes. To limit the exemption granted the National Power Corporation to direct taxes
notwithstanding the general and broad language of the statue will be to thwrat the
legislative intention in giving exemption from all forms of taxes and impositions without
distinguishing between those that are direct and those that are not. (Emphasis
supplied)
In view of all the foregoing, the Court rules and declares that the oil companies which
supply bunker fuel oil to NPC have to pay the taxes imposed upon said bunker fuel oil
sold to NPC. By the very nature of indirect taxation, the economic burden of such
taxation is expected to be passed on through the channels of commerce to the user or
consumer of the goods sold. Because, however, the NPC has been exempted from both
direct and indirect taxation, the NPC must beheld exempted from absorbing the
economic burden of indirect taxation. This means, on the one hand, that the oil
companies which wish to sell to NPC absorb all or part of the economic burden of the
taxes previously paid to BIR, which could they shift to NPC if NPC did not enjoy
exemption from indirect taxes. This means also, on the other hand, that the NPC may
refuse to pay the part of the "normal" purchase price of bunker fuel oil which
represents all or part of the taxes previously paid by the oil companies to BIR. If NPC
nonetheless purchases such oil from the oil companies - because to do so may be more
convenient and ultimately less costly for NPC than NPC itself importing and hauling and
storing the oil from overseas - NPC is entitled to be reimbursed by the BIR for that part
of the buying price of NPC which verifiably represents the tax already paid by the oil
company-vendor to the BIR. chanroblesvirtualawlibrary chanrobles virtual law library
It should be noted at this point in time that the whole issue of who WILL pay these
indirect taxes HAS BEEN RENDERED moot and academic by E.O. No. 195 issued on
June 16, 1987 by virtue of which the ad valorem tax rate on bunker fuel oil was
reduced to ZERO (0%) PER CENTUM. Said E.O. no. 195 reads as follows:
EXECUTIVE ORDER NO. 195 chanrobles virtual law library
AMENDING PARAGRAPH (b) OF SECTION 128 OF THE NATIONAL INTERNAL REVENUE

CODE, AS AMENDED BY REVISING THE EXCISE TAX RATES OF CERTAIN PETROLEUM
PRODUCTS.
Sec. 1. Paragraph (b) of Section 128 of the National Internal Revenue Code, as
amended, is hereby amended to read as follows: chanrobles virtual law library
Par. (b) - For products subject to ad valorem tax only: chanrobles virtual law library
PRODUCT AD VALOREM TAX RATE chanrobles virtual law library
1. . . . chanroblesvirtualawlibrary chanrobles virtual law library

4. Fuel oil, commercially known as bunker oil and on similar fuel oils having more or
less the same generating power 0%
Sec. 3. This Executive Order shall take effect immediately. chanroblesvirtualawlibrary chanrobles virtual law library
Done in the city of Manila, this 17th day of June, in the year of Our Lord, nineteen
hundred and eighty-seven. (Emphasis supplied)
The oil companies can now deliver bunker fuel oil to NPC without having to worry about
who is going to bear the economic burden of the ad valorem taxes. What this Court will
now dispose of are petitioner's complaints that some indirect tax money has been
illegally refunded by the Bureau of Internal Revenue to the NPC and that more claims
for refunds by the NPC are being processed for payment by the BIR. chanroblesvirtualawlibrary chanrobles virtual law library
A case in point is the Tax Credit Memo issued by the Bureau of Internal Revenue in
favor of the NPC last July 7, 1986 for P58.020.110.79 which were for "erroneously paid
specific and ad valorem taxes during the period from October 31, 1984 to April 27,
1985. 91Petitioner asks Us to declare this Tax Credit Memo illegal as the PNC did not
have indirect tax exemptions with the enactment of P.D. No. 938. As We have already
ruled otherwise, the only questions left are whether NPC Is entitled to a tax refund for
the tax component of the price of the bunker fuel oil purchased from Caltex (Phils.) Inc.
and whether the Bureau of Internal Revenue properly refunded the amount to NPC.
library
chanroblesvirtualawlibrary chanrobles virtual law
After P.D. No. 1931 was issued on June 11, 1984 withdrawing the
tax exemptions of all GOCCs - NPC included, it was only on May 8, 1985 when the BIR
issues its letter authority to the NPC authorizing it to withdraw tax-free bunker fuel oil
from the oil companies pursuant to FIRB Resolution No. 10-85. 92Since the tax
exemption restoration was retroactive to June 11, 1984 there was a need. therefore, to
recover said amount as Caltex (PhiIs.) Inc. had already paid the BIR the specific and ad
valorem taxes on the bunker oil it sold NPC during the period above indicated and had
billed NPC correspondingly. 93It should be noted that the NPC, in its letter-claim dated
September 11, 1985 to the Commissioner of the Bureau of Internal Revenue DID NOT
CATEGORICALLY AND UNEQUIVOCALLY STATE that itself paid the P58.020,110.79 as
part of the bunker fuel oil price it purchased from Caltex (Phils) Inc. 94 chanrobles virtual law library
The law governing recovery of erroneously or illegally, collected taxes is section 230 of
the National Internal Revenue Code of 1977, as amended which reads as follows:
Sec. 230. Recover of tax erroneously or illegally collected. - No suit or proceeding shall
be maintained in any court for the recovery of any national internal revenue tax
hereafter alleged to have been erroneously or illegally assessed or collected, or of any
penalty claimed to have been collected without authority, or of any sum alleged to have
been excessive or in any Manner wrongfully collected. until a claim for refund or credit
has been duly filed with the Commissioner; but such suit or proceeding may be
maintained, whether or not such tax, penalty, or sum has been paid under protest or
duress. chanroblesvirtualawlibrary chanrobles virtual law library
In any case, no such suit or proceeding shall be begun after the expiration of two years
from the date of payment of the tax or penalty regardless of any supervening cause
that may arise after payment; Provided, however, That the Commissioner may, even
without a written claim therefor, refund or credit any tax, where on the face of the
return upon which payment was made, such payment appears clearly, to have been
erroneously paid.
xxx xxx xxx
Inasmuch as NPC filled its claim for P58.020,110.79 on September 11, 1985, 95the
Commissioner correctly issued the Tax Credit Memo in view of NPC's indirect tax
exemption. chanroblesvirtualawlibrary chanrobles virtual law library
Petitioner, however, asks Us to restrain the Commissioner from acting favorably on

NPC's claim for P410.580,000.00 which represents specific and ad valorem taxes paid
by the oil companies to the BIR from June 11, 1984 to the early part of 1986. 96 chanrobles virtual law library
A careful examination of petitioner's pleadings and annexes attached thereto does not
reveal when the alleged claim for a P410,580,000.00 tax refund was filed. It is only
stated In paragraph No. 2 of the Deed of Assignment 97executed by and between NPC
and Caltex (Phils.) Inc., as follows:
That the ASSIGNOR(NPC) has a pending tax credit claim with the Bureau of Internal
Revenue amounting to P442,887,716.16. P58.020,110.79 of which is due to Assignor's
oil purchases from the Assignee (Caltex [Phils.] Inc.)
Actually, as the Court sees it, this is a clear case of a "Mexican standoff." We cannot
restrain the BIR from refunding said amount because of Our ruling that NPC has both
direct and indirect tax exemption privileges. Neither can We order the BIR to refund
said amount to NPC as there is no pending petition for review on certiorari of a suit for
its collection before Us. At any rate, at this point in time, NPC can no longer file any suit
to collect said amount EVEN IF lt has previously filed a claim with the BIR because it is
time-barred under Section 230 of the National Internal Revenue Code of 1977. as
amended, which states:
In any case, no such suit or proceeding shall be begun after the expiration of two years
from the date of payment of the tax or penalty REGARDLESS of any supervening cause
that may arise after payment. . . . (Emphasis supplied)
The date of the Deed of Assignment is June 6. 1986. Even if We were to assume that
payment by NPC for the amount of P410,580,000.00 had been made on said date. it is
clear that more than two (2) years had already elapsed from said date. At the same
time, We should note that there is no legal obstacle to the BIR granting, even without a
suit by NPC, the tax credit or refund claimed by NPC, assuming that NPC's claim had
been made seasonably, and assuming the amounts covered had actually been paid
previously by the oil companies to the BIR. chanroblesvirtualawlibrary chanrobles virtual law library
WHEREFORE, in view of all the foregoing, the Motion for Reconsideration of petitioner is
hereby DENIED for lack of merit and the decision of this Court promulgated on May 31,
1991 is hereby AFFIRMED. chanroblesvirtualawlibrary chanrobles virtual law library
SO ORDERED.
Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo and Melo, JJ., concur. chanroblesvirtualawlibrary chanrobles virtual law library
Padilla and Quiason, JJ. took no part.

Taxation Case

Uploaded by

Copyright:

Available Formats

Taxation Case

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Taxation Case

Uploaded by

Copyright:

Available Formats

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC.

J. M. Aruego, A. Tenchavez and L. U. Go for Petitioners-Appellees.

Panganiban, Abad & Associates for Respondent-Appellant.

1. CONSTITUTIONAL LAW; ABSENCE OF INJURY TO RIGHTS BY OPERATION OF

2. ID.; FREEDOM OF CONTRACT, NOT A BAR TO POLICE POWER MEASURES. — In

3. ID.; DEPRIVATION OF PROPERTY ALLOWED PROVIDED DUE PROCESS IS

4. ID.; CHALLENGED ORDINANCE DOES NOT DENY EQUAL PROTECTION CLAUSE.

5. ID.; LAISSEZ FAIRE CONCEPT AS BAR TO ENACTMENT OF REGULATORY

(1) No merit in the Motion for reconsideration. —

To paraphrase Justice Brandeis, this interpretation is without support in authority or

As the unchallenged rule, to paraphrase Laurel, is that unless a person is injuriously

1. No occasion for new trial. —

ERNESTO M. MACEDA, Petitioner, vs. HON. CATALINO MACARAIG, JR., in his

Siguion Reyna, Montecillo & Ongsiako for Caltex.

To facilitate payment of its indebtedness, the National Power Corporation shall be

To facilitate payment of its indebtedness, the National Power Corporation shall be

Declaration of Policy. - Congress hereby declares that (1) the comprehensive

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx chanrobles virtual law library

On May 27, 1976 P.D. No. 938 was issued

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx chanrobles virtual law library

WHEREAS, importations by certain government agencies, including government-owned

WHEREAS, in order to reduce foreign exchange spending and to protect domestic

NOW THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of

Sec. 1. All importations of any government agency, including government-owned or

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx

On July 30, 1977, P.D. 1177 was issued as it was

All units of government, including government-owned or controlled corporations, shall

The law also declared that -

and since there was a

. . . need for government-owned or controlled corporations and all other units of

it was decreed that:

4) In general the greater national interest to be served.

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx

Since it was decided that:

[A]ssistance to government and private entities may be better provided where

It was thus ordered that:

b) those conferred by effective internation agreement to which the Government of the

c) those enjoyed by enterprises registered with:

(iii) the Philippine Veterans Investment Development Corporation Industrial Authority

a) the effect on relative price levels; chanrobles virtual law library

d) in general, the greater national interest to be served.

xxx xxx xxx chanrobles virtual law library

Classifications or kinds of Taxes:

His point is not well-taken. chanroblesvirtualawlibrary chanrobles virtual law library

[T]he Corporation is hereby declared exempt:

xxx xxx xxx chanrobles virtual law library

xxx xxx xxx chanrobles virtual law library

Petitioner reminds Us that:

[I]t must be borne in mind that Presidential Decree Nos. 380

xxx xxx xxx chanrobles virtual law library

13(a) : court or administrative proceedings; chanrobles virtual law library

13(b) : income, franchise, realty taxes; chanrobles virtual law library

13(d) : petroleum products used in generation of electric power.

The same was amended by P.D. No. 380 as follows: