LEAGUE OF CITIES OF THE PHILIPPINES (LCP) v.

COMMISSION ON ELECTIONS
FACTS:
During the 11th Congress - Congress enacted into law 33 bills converting 33 municipalities into
cities. However, Congress did not act on bills converting 24 other municipalities into cities.During
the 12th Congress, Congress enacted into law RA 9009 which took effect on 30 June 2001. RA
9009 amended Section 450 of the Local Government Code by increasing the annual income
requirement for conversion of a municipality into a city from P20 million to P100 million.
After the effectivity of RA 9009, the House of Representatives of the 12th Congress, adopted
Joint Resolution No. 29,which sought to exempt from the P100 million income requirement in RA
9009 the 24 municipalities whose cityhood bills were not approved in the
11th Congress. However, the 12th Congress ended without the Senate approving Joint
Resolution No. 29.
During the 13th Congress, the House of Representatives re-adopted Joint Resolution No. 29 as
Joint Resolution No. 1 and forwarded it to the Senate for approval. However, the Senate again
failed to approve the Joint Resolution. Following the advice of Senator Aquilino Pimentel, 16
municipalities filed, through their respective sponsors, individual cityhood bills.The 16 cityhood
bills contained a common provision exempting all the 16 municipalities from the P100 million
income requirement in RA 9009.
On 22 December 2006, the House of Representatives approved the cityhood bills. The Senate
also approved the cityhood bills in February 2007, except that of Naga, Cebu which was passed
on 7 June 2007. The cityhood bills lapsed into law on various dates from March to July 2007
without the Presidents signature.
The Cityhood Laws direct the COMELEC to hold plebiscites to determine whether the voters in
each respondent municipality approve of the conversion of their municipality into a city.
Petitioners filed the present petitions to declare the Cityhood Laws unconstitutional for violation
of Section 10, Article X of the Constitution, as well as for violation of the equal protection
clause.Petitioners also lament that the wholesale conversion of municipalities into cities will
reduce the share of existing cities in the Internal Revenue Allotment because more cities will
share the same amount of internal revenue set aside for all cities under Section 285 of the Local
Government Code.
Issues:
1. Whether the Cityhood Laws violate Section 10, Article X of the Constitution; and
2. Whether the Cityhood Laws violate the equal protection clause and the right of the local
governments to a just share in the national taxes.
RULING:
November 18, 2008 - UNCONSTITUTIONAL
The Cityhood Laws violate Sections 6 and 10, Article X of the Constitution, and are thus
unconstitutional.
First, applying the P100 million income requirement in RA 9009 to the present case is a
prospective, not a retroactive application, because RA 9009 took effect in 2001 while the
cityhood bills became law more than five years later.
Second, the Constitution requires that Congress shall prescribe all the criteria for the creation of
a city in the Local Government Code and not in any other law, including the Cityhood Laws.
Third, the Cityhood Laws violate Section 6, Article X of the Constitution because they prevent a
fair and just distribution of the national taxes to local government units.
Fourth, the criteria prescribed in Section 450 of the Local Government Code, as amended by RA
9009, for converting a municipality into a city are clear, plain and unambiguous, needing no
resort to any statutory construction.
Fifth, the intent of members of the 11th Congress to exempt certain municipalities from the
coverage of RA 9009 remained an intent and was never written into Section 450 of the Local
Government Code.
Sixth, the deliberations of the 11th or 12th Congress on unapproved bills or resolutions are not
extrinsic aids in interpreting a law passed in the 13th Congress.
Seventh, even if the exemption in the Cityhood Laws were written in Section 450 of the Local
Government Code, the exemption would still be unconstitutional for violation of the equal
protection clause.
March 31, 2009 - UNCONSTITUTIONAL
No. The SC denied the first Motion for Reconsideration. 7-5 vote.
April 28, 2009 - UNCONSTITUTIONAL
No. The SC En Banc, by a split vote (6-6), denied a second motion for reconsideration.
December 21, 2009 - CONSTITUTIONAL
Yes. The SC (voting 6-4) reversed its November 18, 2008 decision and declared as
constitutional the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities into cities. It
said that based on Congress deliberations and clear legislative intent was that the then pending
cityhood bills would be outside the pale of the minimum income requirement of PhP100 million
that Senate Bill No. 2159 proposes; and RA 9009 would not have any retroactive effect insofar
as the cityhood bills are concerned. The conversion of a municipality into a city will only affect its
status as a political unit, but not its property as such, it added. The Court held that the favorable
treatment accorded the sixteen municipalities by the cityhood laws rests on substantial
distinction.
The Court stressed that respondent LGUs were qualified cityhood applicants before the
enactment of RA 9009. To impose on them the much higher income requirement after what they
have gone through would appear to be indeed unfair. Thus, the imperatives of fairness dictate
that they should be given a legal remedy by which they should be allowed to prove that they have
all the necessary qualifications for city status using the criteria set forth under the LGC of 1991
prior to its amendment by RA 9009. (GR No. 176951, League of Cities of the Philippines v.
COMELEC; GR No. 177499, League of Cities of the Philippines v. COMELEC; GR No. 178056,
League of Cities of the Philippines v. COMELEC, December 21, 2009) NOTE: The November
18, 2008 ruling already became final and executory and was recorded in the SCs Book of
Entries of Judgments on May 21, 2009.)
August 24, 2010 (NOVEMBER 18, 2008 DECISION REINSTATED) - UNCONSTITUTIONAL
No. The SC (voting 7-6) granted the motions for reconsideration of the League of Cities of the
Philippines (LCP), et al. and reinstated its November 18, 2008 decision declaring
unconstitutional the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities into
cities. Undeniably, the 6-6 vote did not overrule the prior majorityen banc Decision of 18
November 2008, as well as the prior majority en bancResolution of 31 March 2009 denying
reconsideration. The tie-vote on the second motion for reconsideration is not the same as a
tie-vote on the main decision where there is no prior decision, the Court said. In the latest
resolution, the Court reiterated its November 18, 2008 ruling that the Cityhood Laws violate sec.
10, Art. X of the Constitution which expressly provides that no cityshall be createdexcept in
accordance with the criteria established in the local government code. It stressed that while all
the criteria for the creation of cities must be embodied exclusively in the Local Government
Code, the assailed Cityhood Laws provided an exemption from the increased income
requirement for the creation of cities under sec. 450 of the LGC. The unconstitutionality of the
Cityhood Laws lies in the fact that Congress provided an exemption contrary to the express
language of the Constitution.Congress exceeded and abused its law-making power, rendering
the challenged Cityhood Laws void for being violative of the Constitution, the Court held.
The Court further held that limiting the exemption only to the 16 municipalities violates the
requirement that the classification must apply to all similarly situated. Municipalities with the
same income as the 16 respondent municipalities cannot convert into cities, while the 16
respondent municipalities can. Clearly, as worded the exemption provision found in the Cityhood
Laws, even if it were written in Section 450 of the Local Government Code, would still be
unconstitutional for violation of the equal protection clause. (GR No. 176951,League of Cities of
the Philippines v. Comelec; GR No. 177499, League of Cities of the Philippines v. Comelec; GR
No. 178056, League of Cities of the Philippines v. Comelec, August 24, 2010)
February 15, 2011 - CONSTITUTIONAL
Yes, the laws are constitutional. The February 15, 2011 resolution is the fourth ruling since the
High Court first resolved the Cityhood case in 2008.
April 12, 2011 (FINAL RULING) - CONSTITUTIONAL

1. The Cityhood Laws does not violate Section 10, Article X of the Constitution. he Court
stressed that Congress clearly intended that the local government units covered by the Cityhood
Laws be exempted from the coverage of RA 9009, which imposes a higher income requirement
of PhP100 million for the creation of cities.

The Court reiterated that while RA 9009 was being deliberated upon, the Congress was well
aware of the pendency of conversion bills of several municipalities, including those covered by
the Cityhood Laws. It pointed out that RA 9009 took effect on June 30, 2001, when the 12th
Congress was incipient. By reason of the clear legislative intent to exempt the municipalities
covered by the conversion bills pending during the 11th Congress, the House of Representatives
adopted Joint Resolution No. 29 entitled Joint Resolution to Exempt Certain Municipalities
Embodied in Bills Filed in Congress before June 30, 2001 from the coverage of Republic Act No.
9009. However, the Senate failed to act on the said Joint Resolution. Even so, the House
readopted Joint Resolution No. 29 as Joint Resolution No. 1 during the 12th Congress, and
forwarded the same for approval to the Senate, which again failed to prove it. Eventually, the
conversion bills of respondents were individually filed in the Lower House and
fellesters.blogspot.com were all unanimously and favorably voted upon. When forwarded to the
Senate, the bills were also unanimously approved. The acts of both Chambers of Congress show
that the exemption clauses ultimately incorporated in the Cityhood Laws are but the express
articulations of the clear legislative intent to exempt the respondents, without exception, from the
coverage of RA No. 9009. Thereby, RA 9009, and, by necessity, the LCG, were amended, not by
repeal but by way of the express exemptions being embodied in the exemption clauses.
The Court held that the imposition of the income requirement of P100 million from local sources
under RA 9009 was arbitrary. While the Constitution mandates that the creation of local
government units must comply with the criteria laid down in the LGC, it cannot be justified to insist
that the Constitution must have to yield to every amendment to the LGC despite such amendment
imminently producing effects contrary to the original thrusts of the LGC to promote autonomy,
decentralization, countryside development, and the concomitant national growth.

2. The petitioners contention that the Cityhood Laws violated their right to a just share in the
national taxes is not acceptable.

In this regard, it suffices to state that the share of local government units is a matter of
percentage under Section 285 of the LGC, not a specific amount. Specifically, the share of the
cities is 23%, determined on the basis of population (50%), land area (25%), and equal sharing
(25%). This share is also dependent on the number of existing cities, such that when the number
of cities increases, then more will divide and share the allocation for cities. However, we have to
note that the allocation by the National Government is not a constant, and can either increase or
decrease. With every newly converted city becoming entitled to share the allocation for cities, the
percentage of internal revenue allotment (IRA) entitlement of each city will decrease, although
the actual amount received may be more than that received in the preceding year. That is a
necessary consequence of Section 285 and Section 286 of the LGC.

As elaborated here and in the assailed February 15, 2011 Resolution, the Cityhood Laws were
not violative of the Constitution and the LGC. The respondents are thus also entitled to their just
share in the IRA allocation for cities. They have demonstrated their viability as component cities
of their respective provinces and are developing continuously, albeit slowly, because they had
previously to share the IRA with about 1,500 municipalities. With their conversion into
component cities, they will have to share with only around 120 cities.

Local government units do not subsist only on locally generated income, but also depend on the
IRA to support their development. They can spur their own developments and thereby realize
their great potential of encouraging trade and commerce in the far-flung regions of the country.
Yet their potential will effectively be stunted if those already earning more will still receive a
bigger share from the national coffers, and if commercial activity will be more or less
concentrated only in and near Metro Manila.

11. THE PROVINCE OF NORTH COTABATO, et al . v . THE GOVERNMENT OF THE

REPUBLIC OF THE PHILIPPINES, et al .
FACTS:
President Gloria Macapagal-Arroyo, in line with the governments policy of pursuing peace
negotiations with the Moro Islamic Liberation Front (MILF), asked Prime Minister Mahathir
Mohammad to convince the MILF to continue negotiating with the government. MILF, thereafter,
convened its Central Committee and decided to meet with the Government of the Republic of the
Philippines (GRP). Formal peace talks were held in Libya which resulted to the crafting of the
GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) which consists of three (3)
aspects: a.) security aspect; b.) rehabilitation aspect; and c.) ancestral domain aspect. Various
negotiations were held which led to the finalization of the Memorandum of Agreement on the
Ancestral Domain (MOA-AD). The said memorandum was set to be signed last August 5, 2008.
In its body, it grants the authority and jurisdiction over the Ancestral Domain and Ancestral
Lands of the Bangsamoro to the Bangsamoro Juridical Entity (BJE). The latter, in addition, has
the freedom to enter into any economic cooperation and trade relation with foreign countries.
The sharing between the Central Government and the BJE of total production pertaining to
natural resources is to be 75:25 in favor of the BJE. The MOA-AD further provides for the extent
of the territory of the Bangsamoro. It describes it as the land mass as well as the maritime,
terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space
above it, embracing the Mindanao-Sulu-Palawan geographic region. With regard to governance,
on the other hand, a shared responsibility and authority between the Central Government and
BJE was provided. The relationship was described as associative. With the formulation of the
MOA-AD, petitioner saver that the negotiation and finalization of the MOA-AD violates
constitutional and statutory provisions on public consultation, as mandated by Executive Order
No. 3, and right to information. They further contend that it violates the Constitution and laws.
Hence, the filing of the petition.
ISSUES:
1. Whether or not the MOA-AD violates constitutional and statutory provisions on
public consultation and right to information.
2. Whether or not the MOA-AD violates the Constitution and the laws.
HELD:
1. The MOA-AD subject of the present cases is of public concern, involving as it does the
sovereignty and territorial integrity of the State, which directly affects the lives of the public at
large. Intended as a splendid symmetry to the right to information under the Bill of Rights is the
policy of public disclosure under Section 28, Article II of the Constitution which provides that
subject to reasonable conditions prescribed by law, the State adopts and implements a policy of
full public disclosure of all its transactions involving public interest. Moreover, the policy of full
public disclosure enunciated in above-quoted Section 28 complements the right of access to
information on matters of public concern found in the Bill of Rights. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty
of officialdom to give information even if nobody demands. The policy of public disclosure
establishes a concrete ethical principle for the conduct of public affairs in a genuinely open
democracy, with the peoples right to know as the centerpiece. It is a mandate of the State to be
accountable by following such policy. These provisions are vital to the exercise of the freedom of
expression and essential to hold public officials at all times accountable to the
people. Indubitably, the effectivity of the policy of public disclosure need not await the passing of
a statute. As Congress cannot revoke this principle, it is merely directed to provide for
reasonable safeguards. The complete and effective exerciseof the right to information
necessitates that its complementary provision on public disclosure derive the same
self-executory nature. Since both provisions go hand-in-hand, it is absurd to say that the broader
right to information on matters of public concern is already enforceable while the correlative duty
of the State to disclose its transactions involving public interest is not enforceable until there is an
enabling law. Respondents cannot thus point to the absence of an implementing legislation as an
excuse in not effecting such policy. An essential element of these freedoms is to keep open a
continuing dialogue or process of communication between the government and the people. It is
in the interest of the State that the channels for free political discussion be maintained to the end
that the government may perceive and be responsive to the peoples will. Envisioned to be
corollary to the twin rights to information and disclosure is the design for feedback
mechanisms. The imperative of a publicconsultation, as a species of the right to information, is
evident in the marching orders to respondents. The mechanics for the duty to disclose
information and to conduct publicconsultation regarding the peace agenda and process is
manifestly provided by E.O. No. 3. The preambulatory clause of E.O. No. 3 declares that there is
a need to further enhance the contribution of civil society to the comprehensive peace process
by institutionalizing the peoples participation. One of the three underlying principles of the
comprehensive peace process is that it should be community-based, reflecting the sentiments,
values and principles important to all Filipinos and shall be defined not by the government
alone, nor by the different contending groups only, but by all Filipinos as one community.
Included as a component of the comprehensive peace process isconsensus-building and
empowerment for peace, which includes continuing consultations on both national and local
levels to build consensus for a peace agenda and process, and the mobilization and facilitation
of peoples participation in the peace process.Clearly, E.O. No. 3 contemplates not just the
conduct of a plebiscite to effectuate continuing consultations, contrary to respondents position
that plebiscite is more than sufficient consultation.Further, E.O. No. 3 enumerates the functions
and responsibilities of the PAPP, one of which is to conduct regular dialogues with the National
Peace Forum (NPF) and other peace partners to seek relevant information, comments,
recommendations as well as to render appropriate and timely reports on the progress of the
comprehensive peace process. E.O. No. 3 mandates the establishment of the NPF to be the
principal forum for the Presidential Adviser on Peace Progress (PAPP) to consult with and seek
advi[c]e from the peace advocates, peace partners and concerned sectors of society on both
national and local levels, on the implementation of the comprehensive peace process, as well as
for government[-]civil society dialogue and consensus-building on peace agenda and
initiatives. In fine, E.O. No. 3 establishes petitioners right to be consulted on the peace agenda,
as a corollary to the constitutional right to information and disclosure. In general, the objections
against the MOA-AD center on the extent of the powers conceded therein to the BJE. Petitioners
assert that the powers granted to the BJE exceed those granted to any local government under
present laws, and even go beyond those of the present ARMM. Before assessing some of the
specific powers that would have been vested in the BJE, however, it would be useful to turn first
to a general idea that serves as a unifying link to the different provisions of the MOA-AD, namely,
the international law concept of association. Significantly, the MOA-AD explicitly alludes to this
concept, indicating that the Parties actually framed its provisions with it in mind. Association is
referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4 on
GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD most clearly
uses it to describe the envisioned relationship between the BJE and the Central Government.
2. The relationship between the Central Government and the Bangsamoro juridical entity
shall be associative characterized by shared authority and responsibility with a structure of
governance based on executive, legislative, judicial and administrative institutions with defined
powers and functions in the comprehensive compact. A period of transition shall be established
in a comprehensive peace compact specifying the relationship between the Central Government
and the BJE. The nature of the associative relationship may have been intended to be defined
more precisely in the still to be forged Comprehensive Compact. Nonetheless, given that there is
a concept of association in international law, and the MOA-AD by its inclusion of international
law instruments in its TOR placed itself in an international legal context, that concept of
association may be brought to bear in understanding the use of the term associative in the
MOA-AD. The MOA-AD contains many provisions which are consistent with the international
legal concept of association, specifically the following: the BJEs capacity to enter into economic
and trade relations with foreign countries, the commitment of the Central Government to ensure
the BJEs participation in meetings and events in the ASEAN and the specialized UN agencies,
and the continuing responsibility of the Central Government over external defense. Moreover,
the BJEs right to participate in Philippine official missions bearing on negotiation of border
agreements, environmental protection, and sharing of revenues pertaining to the bodies of water
adjacent to or between the islands forming part of the ancestral domain, resembles the right of
the governments of FSM and the Marshall Islands to be consulted by the U.S. government on
any foreign affairs matter affecting them. These provisions of the MOA indicate, among other
things, that the Parties aimed to vest in the BJE the status of an associated state or, at any rate,
a status closely approximating it. The concept of association is not recognized under the present
Constitution. No province, city, or municipality, not even the ARMM, is recognized under our laws
as having an associative relationship with the national government. Indeed, the concept
implies powers that go beyond anything ever granted by the Constitution to any local or regional
government. It also implies the recognition of the associated entity as a state. The Constitution,
however, does not contemplate any state in this jurisdiction other than the Philippine State, much
less does it provide for a transitory status that aims to prepare any part of Philippine territory for
independence.

Even the mere concept animating many of the MOA-ADs provisions, therefore, already
requires for its validity the amendment of constitutional provisions, specifically the following
provisions of Article X:

SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the
provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as hereinafter provided.
SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing
common and distinctive historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.

It is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all
but name as it meets the criteria of a state laid down in the Montevideo Convention, namely, a
permanent population, a defined territory, a government, and a capacity to enter into relations
with other states.

The defining concept underlying the relationship between the national government and the
BJE being itself contrary to the present Constitution, it is not surprising that many of the specific
provisions of the M OA-AD on the formation and powers of the BJE are in conflict with the
Constitution and the laws. Article X, Section 18 of the Constitution provides that [t]he creation
of the autonomous region shall be effective when approved by a majority of the votes cast by the
constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and
geographic areas voting favorably in such plebiscite shall be included in the autonomous region.
The BJE is more of a state than an autonomous region. But even assuming that it is covered by
the term autonomous region in the constitutional provision just quoted, the MOA-AD would still
be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte
which voted for inclusion in the ARMM during the 2001 plebiscite Baloi, Munai, Nunungan,
Pantar, Tagoloan and Tangkal are automatically part of the BJE without need of another
plebiscite, in contrast to the areas under Categories A and B mentioned earlier in the overview.
That the present components of the ARMM and the above-mentioned municipalities voted for
inclusion therein in 2001, however, does not render another plebiscite unnecessary under the
Constitution, precisely because what these areas voted for then was their inclusion in the ARMM,
not the BJE.

` Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in
the MOA-AD is to be effected. That constitutional provision states: The State recognizes and
promotes the rights of indigenous cultural communities within the framework of national unity and
development. An associative arrangement does not uphold national unity. While there may be a
semblance of unity because of the associative ties between the BJE and the national
government, the act of placing a portion of Philippine territory in a status which, in international
practice, has generally been a preparation for independence, is certainly not conducive to
national unity.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its
specific provisions but the very concept underlying them, namely, the associative relationship
envisioned between the GRP and the BJE, are unconstitutional, for the concept presupposes
that the associated entity is a state and implies that the same is on its way to independence.
While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the
present legal framework will not be effective until that framework is amended, the same does not
cure its defect. The inclusion of provisions in the MOA-AD establishing an associative
relationship between the BJE and the Central Government is, itself, a violation of the
Memorandum of Instructions from the President dated March 1, 2001, addressed to the
government peace panel. Moreover, as the clause is worded, it virtually guarantees that the
necessary amendments to the Constitution and the laws will eventually be put in place. Neither
the GRP Peace Panel nor the President herself is authorized to make such a guarantee.
Upholding such an act would amount to authorizing a usurpation of the constituent powers
vested only in Congress, a Constitutional Convention, or the people themselves through the
process of initiative, for the only way that the Executive can ensure the outcome of the
amendment process is through an undue influence or interference with that process.
12. Humberto Basco vs Philippine Amusements and Gaming Corporation 197 SCRA 52
FACTS:
In 1977, the Philippine Amusements and Gaming Corporation (PAGCOR) was
created by Presidential Decree 1067-A. PD 1067-B meanwhile granted PAGCOR the power to
establish, operate and maintain gambling casinos on land or water within the territorial
jurisdiction of the Philippines. PAGCORs operation was a success hence in 1978, PD 1399
was passed which expanded PAGCORs power. In 1983, PAGCORs charter was updated
through PD 1869. PAGCORs charter provides that PAGCOR shall regulate and centralize all
games of chance authorized by existing franchise or permitted by law. Section 1 of PD 1869
provides:
Section 1. Declaration of Policy. It is hereby declared to be the policy of the State to
centralize and integrate all games of chance not heretofore authorized by existing franchises or
permitted by law.
Atty. Humberto Basco and several other lawyers assailed the validity of the law creating
PAGCOR. They claim that PD 1869 is unconstitutional because a) it violates the equal protection
clause and b) it violates the local autonomy clause of the constitution.
Basco et al argued that PD 1869 violates the equal protection clause because it legalizes
PAGCOR-conducted gambling, while most other forms of gambling are outlawed, together with
prostitution, drug trafficking and other vices.
Anent the issue of local autonomy, Basco et al contend that P.D. 1869 forced cities like Manila to
waive its right to impose taxes and legal fees as far as PAGCOR is concerned; that Section 13
par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any tax of
any kind or form, income or otherwise, as well as fees, charges or levies of whatever nature,
whether National or Local is violative of the local autonomy principle.
ISSUES:
1. Whether or not PD 1869 violates the equal protection clause.
2. Whether or not PD 1869 violates the local autonomy clause.
RULING:
1. No. Just how PD 1869 in legalizing gambling conducted by PAGCOR is violative of the equal
protection is not clearly explained in Bascos petition. The mere fact that some gambling
activities like cockfighting (PD 449) horse racing (RA 306 as amended by RA 983), sweepstakes,
lotteries and races (RA 1169 as amended by BP 42) are legalized under certain conditions, while
others are prohibited, does not render the applicable laws, PD. 1869 for one, unconstitutional.
Bascos posture ignores the well-accepted meaning of the clause equal protection of the laws.
The clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary. A law does
not have to operate in equal force on all persons or things to be conformable to Article III, Sec 1
of the Constitution. The equal protection clause does not prohibit the Legislature from
establishing classes of individuals or objects upon which different rules shall operate. The
Constitution does not require situations which are different in fact or opinion to be treated in law
as though they were the same.
2. No. Section 5, Article 10 of the 1987 Constitution provides:
Each local government unit shall have the power to create its own source of revenue and to levy
taxes, fees, and other charges subject to such guidelines and limitation as the congress may
provide, consistent with the basic policy on local autonomy. Such taxes, fees and charges shall
accrue exclusively to the local government.
A close reading of the above provision does not violate local autonomy (particularly on taxing
powers) as it was clearly stated that the taxing power of LGUs are subject to such guidelines and
limitation as Congress may provide.
Further, the City of Manila, being a mere Municipal corporation has no inherent right to impose
taxes. The Charter of the City of Manila is subject to control by Congress. It should be stressed
that municipal corporations are mere creatures of Congress which has the power to create and
abolish municipal corporations due to its general legislative powers. Congress, therefore, has
the power of control over Local governments. And if Congress can grant the City of Manila the
power to tax certain matters, it can also provide for exemptions or even take back the power.
Further still, local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an original charter,
PD 1869. All of its shares of stocks are owned by the National Government. Otherwise, its
operation might be burdened, impeded or subjected to control by a mere Local government.