19Taxation powers and initiative and referendum Actually, initiative and referendum is no longer the power of the congress

but the power of the people. So war powers, para hindi ako ma bore. Section 21, Paragraph 1 and 2. Von Lao : Section 23 (1) The Congess, by a vote of two-thirds of both Houses in joint session assembled, voting separately, shall have the sole power to declare the existence of a state of war. (2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Okay, in paragraph 1 what is that power that may be exercised by the Congress? To declare a state of war. Declare a state of war, can you recall what is our national policy on war?

The Philippines renounces war as part of its national policy.

So what kind of war are we renouncing?

OFFENSIVE WAR.
Yes, we are renouncing offensive war to the point that if China will attack us, we will not do anything. Is that correct?

NO.
So what kind of war are we renouncing? Aggressive kind. Yes, we are renouncing offensive wars also. My point is, under section 23 paragraph 1, the Congress can declare a state of war. So, does that mean there can be war anytime? What does that mean? Because we are renouncing offensive wars, what kind of war can the Congress declare? Okay, when there is a need to defend. Now, it is the Congress which has the power or sole authority to declare a state of war. What happens now if there is an actual war, when were being attacked? Can the President do something? Yes? What is the authority of the President? Okay, to defend the country. What is now the purpose of declaring a state of war? Did you think about it? Kung may mag attack sa atin? Of course, the President has to defend the country. Through his commander-in-chief powers, he can call the military. What is now the purpose of this provision?

To unite the people.

So for one, the President cannot declare war, it should be with the authority of the Congress. Now, when the Congress declares a state of war, all measures may be addressed to that war. So in other words, the Congress can enact measures for the support of war. So thats the importance or relevance of this provision. What about Section 23, paragraph 2? Exercise of emergency power. When is emergency power granted? Okay, in times of war on a national emergency, the Congress may grant emergency powers. And what is the effect of that emergency power? What kind of powers may be granted to the President? Powers necessary to carry out a declared national policy. What does the mean in other words? Any power that may be necessary to carry out declared national policy. So, in other words the President may not only issue or promulgate rules and regulations which is an executive power but he can go the extent of exercising even legislative powers. So when the President is granted emergency powers, that may include the power to legislate. In other words, recall that there is that principle of non-delegability of legislative powers so this is one of those permissible delegation of legislative powers. So this is subject to several limitations. What are the limitations under section 23, paragraph 2? *Von answers* Okay so these are the commissions for the grant on the power. Another one,

limited period only. If there is no period provided? Okay, it will cease automatically upon the next adjournment of the Congress. Can the Congress withdraw it anytime? Yes. How? By means of a resolution. In other words, that that is pursuant to a law but the withdrawal is only pursuant to a resolution, it could only be via a resolution. It means, it is easier to withdraw than to grant because when we say a law, there must be an approval made by the President at its final stage; when it comes to resolution, there is no need for the approval of the President. And the emergency powers are subject to such restrictions as the Congress may provide. So it can be as broad or as narrow as the Congress may desire. Now, in the case of David vs Macapagal-Arroyo, the Supreme Court had the occasion to somehow distinguish the power to declare a state of emergency and the exercise of emergency powers. In this case of David vs. Macapagal-Arroyo, the President issued or declared a state of emergency. The first argument or the first issue assailed by the petitioners is that the President has no authority to declare a state of emergency. Pursuant to Section 23, paragraph 2, is it correct? Now, reading section 23 paragraph 2, it is not to be read as there is an intention that the Congress should first authorize the President before he can declare a state of national emergency. In other words, the President may validly declare the existence of a state of national emergency even in the absence of Congressional enactment because what does the President do when he declares a state of emergency? He is merely announcing the existence of a condition. Meaning, currently now we have this condition of emergency, theres a state of emergency. Nothing follows when there is no implied additional powers to the President just by virtue of that declaration. In other words, the next question would be if the President declares that we are experiencing a state of emergency, can the President now automatically exercise emergency powers? No. In the latter case, in the exercise of emergency powers there is a needed delegation by the legislative department. A law has to be enacted delegating this power or emergency power. So now, it now depends on the Congress whether or not the President may exercise emergency powers. Conclusion, declaration of state of emergency does not carry with it the power to exercise or the authority to exercise emergency powers. Lets go to power of taxation. The power of taxation belongs exclusively to the Congress. This is the sole exclusive powers of the Congress. Just like the power to legislate, the power of taxation is exclusively the power of Congress. So, the only rule is that in section 28 paragraph 1 The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation. Now, there is an exemption of this power of taxation. This can be delegated to the President pursuant to paragraph 2: The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the Government. So as an exemption to the power of taxation the Congress may delegate certain legislative power involving the imposition of tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts. So another exception to the principle of non-delegability of legislative power. The exception is provided by the Constitution itself. In other words, this power to impose tariff dues, export and import quotas, etc. is permissible delegation. Permissible because it is the Constitution itself which provides or which allows that delegation. So, this again involves legislation by the President to fix fees. In Southern vs Cement, the Supreme Court explains that this provision has basic postulates. Number 1, it is the Congress which authorizes the President to impose tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts. Thus, the authority cannot come from the finance department, national and economic development authority or the world trade organization no matter how insistent or persistent these bodies may be. Now in Southern vs Cement, this involves the Safeguard Measures Act enacted by Congress immediately after we enter the general agreement on tariff rates and after we got ourselves involved in the World Trade Organization Agreement. Now, SMA or the Sagefuard Measures Act provides for the structure and mechanics for the imposition of emergency measures including tariffs to prevent domestic industries and producers from increased imports which may inflict serious injury on debt (them). Remember with the GAT and the World Trade Organization Agreement, there is now a free flow of goods between countries, good and services. In fact, we can hire Chinese to be our laborers in the Philippines. Generally, pwede Mr. Lao. In the same way, they could import services from the Philippines for their factories. So, the Safety

Measures Act was enacted to provide for some safety nets to protect domestic goods or local goods and services. Now theres that clamor for the President to impose certain tariffs or duties on imported goods. The question is, who can authorize the President to impose these duties? It is only Congress. If there is an agreement in the World Trade Organization agreement for the Philippines to comply with, now that would be implemented or enacted by the Congress and not by the President. So, the Congress must authorize the President. Second basic postulate, vocalization (what? La ko kadungog ug tarong saba kayo si Algene. Authotization ata ni) granted to the President has been embodied in a law. So, there must be a law. Third is that, the authorization of the President can be exercised only within the specified limits set in the law and is further subject to limitations and restrictions which Congress may impose. So if the congress specifies that the tariff rates should not exceed a given amount, the President cannot impose tariff rates that would exceed such amount. If the Congress chooses not to impose duties on the importation of corn, the President cannot impose duties on corn. In other words, whatever authorization is granted to the President, this may be specified or limited by the Congress. So without section 28 paragraph 2 of article 6, the executive branch has no authority to impose tax involving the importation of foreign goods. Again, this is only a permissible delegation of legislative power. Lets go to paragraph 3: Charitable institutions, churches and personages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements, actually, directly, and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation. Ateneo de davao University is engaged in educational purposes. With all the improvements that we have here, can you say that the Jesuits are enjoying exception from taxation based on this provision? Yes or No? * Belinda: Only in property taxes* Yes, so this provision should be understood as an exception only as to the taxes on land and buildings and not only that, the land or buildings must be devoted exclusively, directly, actually for educational purposes, charitable purpose or religious purpose. So as explained by Chief Justice Davide, what is exempted is not the institution itself but only the land and buildings or the real property taxes that is the annual assessment by the local treasurer. Meron din kayo nian sa mga bahay ninyo. Annually, we are assessed and we pay our real property taxes. Now, only on the property taxes land and building. Now what is meant by the exclusive use of the property? This is an immediate and actual application which the charitable institutions, churches or educational institutions are organized. We have the case of Lung Center vs. Quezon City. Lung Center was established pursuant to a Presidential decree. It is a non stock and non profit organization. Now, it is a registered owner of a very vast parcel of land with an area of 121,463 sqm., 12 hectares more or less. That is a big property. The hospital is located only at the center, at the middle of the property. Now, the building is devoted for the care of patients but the ground or first floor is devoted for as commercial spaces. That spaces there are rented out to tenants for commercial purposes particularly doctors for their medical practice, they used them for their clinics and they charge their clients who will come to their clinic. Now, as with the left portion of that land, that lot is vacant and it is idle and serves no purpose. As to the right part or portion of that property, a large portion is rented out for another company for their commercial purposes. Now, the Quezon City government assessed Lunch Center of the Philippines real property tax in the amount of 4.5M. Okay, so na-shock ang Lung Center thats why they applied for an exemption based on this constitutional provision section 28, paragraph 3. According to the Lung Center of the Philippines, it is a charitable institution and it remains to be a charitable institution notwithstanding that it uses or rents out some parts of its property for commercial purposes because anyway the income would be used for their charitable purposes. So in that case, it should be exempt from real property taxation. Sp the Supreme Court said on the issue whether or not it is a charitable institution, the Supreme court does not argue with that. But what did we say about section 28 paragraph 3? The exemption is not on the institution itself but on the land or building on that property. So charitable institutions and the income is used for its charitable purposes. So as long as the income is used for charitable purposes, they remain an institution for charitable purposes. No part of the income goes to the private individual. But as to the tax exemption, the exception is not on the institution itself, the exception is only on land and buildings. So with the case of Lung Center, only those portion of the building and the portion of the land which are actually, and directly used for their charitable purposes would be exempted. The rest, land which is idle, land which has been rented to another corporation, the commercial spaces in the building would be assessed for taxation purposes. So that what is meant by directly, actually, and

exclusive use for charitable purposes. But that is the reason why these institutions are exempted from taxation? As discussed in Lung Center, the Supreme Court said it is based on the benefit for the public. And a consequent relief to some extent are the burden upon the State to care for and advanced the interest of its citizens. So, the constitution deems it proper to exempt them because it relieves them the burden of the State to take care of its citizens. Paragraph 4, No law granting any tax exemption shall be passed without the concurrence of a majority of all the Members of the Congress. So, the power to tax is exclusively within the power of the Congress. The power to exempt from taxation is also exclusively the power of the Congress. Not only that, the Constitution requires a conference of an absolute majority. So, we have the case of Chavez vs PCGG. PCGG is the Presidential Commission on Good Governance, its main function for its existence is to go after the ill-gotten wealth of the Marcoses. They came to a point that they came to enter into a compromise agreement with the Marcoses. So in exchange for the return of the most of the properties of the Marcoses, with the Marcos having the privilege to retain some and then they will be granted certain exemptions. One of the exemptions would be the criminal aspect. But thats not our concern. Another one would be the tax exemption. The PCGG in the compromise agreement, committed to give or to grant the Marcoses exemption on all forms of taxes over their properties that are to be retained by them. The question now is Is that commitment valid? Of course its not based on paragraph 4. Only the Congress may grant tax exemption. So that is unconstitutional based on paragraph 4. That commitment is also unconstitutional based on equal protection of laws. So you bare exempted on all forms of property taxation then they are treated differently from those who are similarly stated. It is also violative of the Constitutional rule that taxation should be uniform and equitable. INITIATIVE & REFERENDUM Section 32: The Congress shall, as early as possible, provide for a system of initiative and referendum, and the exceptions therefrom, whereby the people can directly propose and enact laws or approve or reject any act or law or part thereof passed by the Congress or local legislative body after the registration of a petition therefor signed by at least ten per centum of the total number of registered voters, of which every legislative district must be represented by at least three per centum of the registered voters thereof. Okay, based on what you read can we now exercise the power of initiative and referendum invoking only section 32?*Mimay answers* As a general rule of construction, the Constitution is supposed to be self-executory otherwise, whats the purpose of having a constitution when we give the Congress the discretion whether or not to legislate a law implementing the provisions of the Constitution. In other words if the Congress does not enact any law, useless ang ating Constitution. So the general rule is that the provisions in the provision are supposed to be self-executing as unless otherwise provided. Yung unless otherwise provided, if makakita kayo na pursuant to a law, thats the time the Congress is mandated to enact something to implement that provision. So, section 32 is not self executing, the Congress needs to enact a law. The Congress shall, as early as possible, provide for a system of initiative and referendum. Under section 1 of Article 6, legislative power is vested in the Congress except to the extent reserved to the people through the system of initiative and referendum. So if the Congress does not enact a law providing for that system of initiative and referendum, we cannot exercise the power of initiative and referendum. How much do we want that power? We would want it badly. Why? Because we can legislate by virtue of that power, we can enact laws, we can amend laws, we can reject laws submitted to the people for approval or rejection. So that is why this provision is important to us. So question now is, is there such a law? Fortunately yes. (Kani si Cute-amora sigeg tubag-tubag ba. Sige pud katawa). They enacted it as early as in 1989. They enacted R.A 7035. Not only limitation or requirement by the Constitution, whatever the system will be, the petition should be signed by 10% of the total registered voters of which every legislative district must be represented by at least 3% of the registered voters thereof. So the people can now directly propose or enact laws or approve or reject any act or law or part thereof passed by Congress or local legislative body. Why include local legislative body? Because they have, in the local set-up, they have the power and the power to legislate is vested in them. Now, what are the appropriate subjects of local initiative and referendum?

In Garcia vs Comelec, the municipal council of Morong, Bataan passed a resolution of the inclusion of the municipality as part of the Subic Special Economic Zone under Republic Act 7227. The petitioners here, the constituents of the municipality did not like the resolution or opposed that resolution and they filed this petition to annul the resolution. Now, the Comelec denied the petition citing that what they intend to be annulled is a resolution and not an ordinance. What is a resolution, by the way? A resolution generally is merely an expression of an intention. Its different from an ordinance because an ordinance takes the form of a law for rights to be established. When it comes to a resolution, it is merely an expression of a will, expressions of intentions of the body. Ordinance is the local law. So the Supreme Court said, a resolution to be a proper subject for local initiative. Read that in section 32, the people can directly propose and enact laws or approve or reject any act or law or part thereof. Any act so, act according to the Supreme Court is defined by Black as an expression of will or purpose, it may denote something done as a legislature including not merely physical acts but also decrees, edicts, laws, judgments, resolves, awards and determinations. A resolution therefore is an act. Therefore, it is a proper subject for local initiative. Is there a distinction between initiative and a referendum? And if there is, is the distinction material? In the case of SBMA vs Comelec, in continuation of that dilemma of the petitioners in Garcia vs Comelec, when they opposed the resolution and not only that, they propose certain amendments to the provision. They proposed new terms and conditions for the inclusion in the Special Economic Zone so they petitioned for a holding of an initiative. The Comelec, competent as it is, prepared no for the holding of an initiative but for the holding of a referendum. Kung mali ang pinrepare ng Comelec, will it stay allowed for the holding of an initiative or masasayang lang ba ang effort ng petitioners? So the SC had the occasion to distinguish initiative from referendum? What is initiative? It is the power of the people to propose amendments in the Constitution or to propose and enact legislation through an election called for the purpose. So it is the power of the people to propose bills and laws independent of the legislative body. There is also that term as indirect initiative the exercise of initiative by the people through a proposition sent not for the approval or rejection of the people, diba nag propose tayo sa people then you submit it for approval or rejection in an initiative. Initiative is also an election form. Now, indirect initiative we make the proposal as people, we give it to our Congressman, now that will be deliberated in the Congress and will be enacted by the Congress. So the proposal came from the people but the ultimate enactment of it (law) is done by the Congress. So thats indirect initiative. Referendum, on the other hand, is the power of the electorate to approve or reject legislation through an election called for the purpose. It may be of two class: (1) Referendum on statutes which refers to a petition to approve or reject an act or law, or part thereof, passed by Congress; and (2) Referendum on local law which refers to a petition to approve or reject a law, resolution or ordinance enacted by regional assemblies and local legislative bodies. So lets distinguish, initiative is resorted to by the people directly either because the lawmaking body fails to enact a law or bill which the people does not desire. Referendum, on the other hand, here the lawmaking body submits to the people or to the voters for approval or rejection any ordinance or resolution which is duly authorized or approved by the lawmaking body. So thats one distinction. Initiative comes from the people; referendum, it is the lawmaking body which submits it to the people. Initiative is entirely the work of the electorate while referendum is begot by the lawmaking body and is consented to by the lawmaking body. Initiative is the process of lawmaking by the people themselves without the participation or even against the wishes or desires of their elected representatives while referendum consists merely of the electorate approving or rejecting what has been drawn out or enacted by the legislative body. So based on this distinction, the processes involved in an initiative is more complex than in a referendum. In a referendum, what is expected is only.. what is submitted to the people is only the question, yes or no because its only for approval or rejection of a legislation enacted by the Congress. So the voters would just simply write yes or no in the ballot whereas in initiative, it starts with the proposing of the law itself so there is a need therefore for the Comelec to supervise an initiative more closely, extending not only to the counting of votes but also see to it that the matter or acts of the people is in the proper form so it may easily be understood and voted upon by the electorate. So we can deduce that if there is initiative compares to a referendum dba? Its initiative actually but eventually pareho pa roin to accept or reject a proposal. As with Santiago vs comelec, that is more appropriate when we discuss amendments and revisions of the constitution,. So in gist no, that law we were talking about, law on a system on does not cover initiative on the amendments of the Constitution (enactment of a local law)