EN BANC [G.R. No. 112099, February 21, 1995] ACHILLES C. BERCES, SR., PETITIONER, VS. HON. EXECUTIVE SECRETARY TEOFISTO T. GUINGONA, JR., CHIEF PRESIDENTIAL LEGAL COUNSEL ANTONIO CARPIO AND MAYOR NAOMI C. CORRAL OF TIWI, ALBAY, RESPONDENTS. DECISIONQUIASON, J.: This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court with prayer for mandatory preliminary injunction, assailing the Orders of the Office of the President as having been issued with grave abuse of discretion. Said Orders directed the stay of execution of the decision of the Sangguniang Panlalawigan suspending the Mayor of Tiwi, Albay from office: I Petitioner filed two administrative cases against respondent Naomi C. Corral, the incumbent Mayor of Tiwi, Albay with the Sangguniang Panlalawigan of Albay, to wit: (1) Administrative Case No. 02-92 for abuse of authority and/or oppression for non-payment of accrued leave benefits due the petitioner amounting to P36,779.02. (2) Administrative Case No. 05-92 for dishonesty and abuse of authority for installing a water pipeline which is being operated, maintained and paid for by the municipality to service respondent's private residence and medical clinic. On July 1, 1993, the Sangguniang Panlalawigan disposed the two Administrative cases in the following manner: "(1) Administrative Case No. 02-92 ACCORDINGLY, respondent Mayor Naomi C. Corral of Tiwi, Albay, is hereby ordered to pay Achilles Costo Berces, Sr. the sum of THIRTYSIX THOUSAND AND SEVEN HUNDRED SEVENTY-NINE PESOS and TWO CENTAVOS (P36,779.02) per Voucher No. 352, plus legal interest due thereon from the time it was approved in audit up to final payment, it being legally due the Complainant representing the money value of his leave credits accruing for services rendered in the municipality from 1988 to 1992 as a duly elected Municipal Councilor. IN ADDITION, respondent Mayor NAOMI C. CORRAL is hereby ordered SUSPENDED from office as Municipal Mayor of Tiwi, Albay, for a period of two (2) months, effective upon receipt hereof for her blatant abuse of authority coupled with oppression as a public example to deter others similarly inclined from using public office as a tool for personal vengeance, vindictiveness and oppression at the expense of the Taxpayer" (Rollo, p. 14). "(2) Administrative Case No. 05-92. WHEREFORE, premises considered, respondent Mayor NAOMI C. CORRAL of Tiwi, Albay, is hereby sentenced to suffer the penalty of SUSPENSION from office as Municipal Mayor thereof for a period of THREE (3) MONTHS beginning after her service of the first penalty of suspension ordered in Administrative Case No. 02-92. She is likewise ordered to reimburse the Municipality of Tiwi One-half of the amount the latter have paid for electric and water bills from July to December 1992, inclusive" (Rollo, p. 16). Consequently, respondent Mayor appealed to the Office of the President questioning the decision and at the same time prayed for the stay of execution thereof in accordance with Section 67(b) of the Local Government Code, which provides: "Administrative Appeals. - Decision in administrative cases may, within thirty (30) days from receipt thereof, be appealed to the following:

xxx xxx xxx (b) The Office of the President, in the case of decisions of the sangguniang panlalawigan and the sangguniang panglungsod of highly urbanized cities and independent component cities." Acting on the prayer to stay execution during the pendency of the appeal, the Office of the President issued an Order on July 28, 1993, the pertinent portions of which read as follows: xxxxxxxxx "The stay of execution is governed by Section 68 of R.A. No. 7160 and Section 6 of Administrative Order No. 18 dated 12 February 1987, quoted below: 'SEC. 68. Execution Pending Appeal. - An appeal shall not prevent a decision from becoming final or executory. The respondent shall be considered as having been placed under preventive suspension during the pendency of an appeal in the event he wins such appeal. In the event the appeal results in an exoneration, he shall be paid his salary and such other emoluments during the pendency of the appeal (R.A. No. 7160). 'SEC. 6. Except as otherwise provided by special laws, the execution of the decision/resolution/order appealed from is stayed upon the filing of the appeal within the period prescribed herein. However, in all cases, at any time during the pendency of the appeal, the Office of the President may direct or stay the execution of the decision/resolution/order appealed from upon such terms and conditions as it may deem just and reasonable (Adm. Order No. 18).' " xxxxxxxxx "After due consideration, and in the light of the Petition for Review filed before this Office, we find that a stay of execution pending appeal would be just and reasonable to prevent undue prejudice to public interest. "WHEREFORE, premises considered, this Office hereby orders the suspension/stay of execution of: a) the Decision of the Sangguniang Panlalawigan of Albay in Administrative Case No. 02-92 dated 1 July 1993 suspending Mayor Naomi C. Corral from office for a period of two (2) months, and b) the Resolution of the Sangguniang Panlalawigan of Albay in Administrative Case No. 05-92 dated 5 July 1993 suspending Mayor Naomi C. Corral from office for a period of three (3) months" (Rollo, pp. 55-56). Petitioner then filed a Motion for Reconsideration questioning the aforesaid Order of the Office of the President. On September 13, 1990, the Motion for Reconsideration was denied. Hence, this petition. II Petitioner claims that the governing law in the instant case is R.A. No. 7160, which contains a mandatory provision that an appeal "shall not prevent a decision from becoming final and executory." He argues that Administrative Order No. 18 dated February 12, 1987, (entitled "Prescribing the Rules and Regulations Governing Appeals to the Office of the President") authorizing the President to stay the execution of the appealed decision at any time during the pendency of the appeal, was repealed by R.A. No. 7160, which took effect on January 1, 1991 (Rollo, pp. 5-6). The petition is devoid of merit. Petitioner invokes the repealing clause of Section 530(f), R.A. No. 7160, which provides:

"All general and special laws, acts, city charters, decrees, executive orders, administrative regulations, part or parts thereof, which are inconsistent with any of the provisions of this Code, are hereby repealed or modified accordingly." The aforementioned clause is not an express repeal of Section 6 of Administrative Order No. 18 because it failed to identify or designate the laws or executive orders that are intended to be repealed (cf. I Sutherland, Statutory Construction 467 [1943]). If there is any repeal of Administrative Order No. 18 by R.A. No. 7160, it is through implication though such kind of repeal is not favored (The Philippine American Management Co., Inc. v. The Philippine American Management Employees Association, 49 SCRA 194 [1973]). There is even a presumption against implied repeal. An implied repeal predicates the intended repeal upon the condition that a substantial conflict must be found between the new and prior laws. In the absence of an express repeal, a subsequent law cannot be construed as repealing a prior law unless an irreconcilable inconsistency and repugnancy exists in the terms of the new and old laws (Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, 13 SCRA 377 [1965]). The two laws must be absolutely incompatible (Compania General de Tabacos v. Collector of Customs, 46 Phil. 8 [1924]). There must be such a repugnancy between the laws that they cannot be made to stand together (Crawford, Construction of Statutes 631 [1940]). We find that the provisions of Section 68 of R.A. No. 7160 and Section 6 of Administrative Order No. 18 are not irreconcilably inconsistent and repugnant and the two laws must in fact be read together. The first sentence of Section 68 merely provides that an "appeal shall not prevent a decision from becoming final or executory." As worded, there is room to construe said provision as giving discretion to the reviewing officials to stay the execution of the appealed decision. There is nothing to infer therefrom that the reviewing officials are deprived of the authority to order a stay of the appealed order. If the intention of Congress was to repeal Section 6 of Administrative Order No. 18, it could have used more direct language expressive of such intention. The execution of decisions pending appeal is procedural and in the absence of a clear legislative intent to remove from the reviewing officials the authority to order a stay of execution, such authority can be provided in the rules and regulations governing the appeals of elective officials in administrative cases. The term "shall" may be read either as mandatory or directory depending upon a consideration of the entire provision in which it is found, its object and the consequences that would follow from construing it one way or the other (cf. De Mesa v. Mencias, 18 SCRA 533 [1966]). In the case at bench, there is no basis to justify the construction of the word as mandatory. The Office of the President made a finding that the execution of the decision of the Sangguniang Panlalawigan suspending respondent Mayor from office might be prejudicial to the public interest. Thus, in order not to disrupt the rendition of service by the mayor to the public, a stay of the execution of the decision is in order. WHEREFORE, the petition is DISMISSED. SO ORDERED. Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, and Francisco, JJ., concur.

THIRD DIVISION [G.R. No. 127708, March 25, 1999] CITY GOVERNMENT OF SAN PABLO, LAGUNA, CITY TREASURER OF SAN PABLO, LAGUNA, AND THE SANGGUNIANG PANGLUNSOD OF SAN PABLO, LAGUNA, PETITIONERS, VS. HONORABLE BIENVENIDO V. REYES, IN HIS CAPACITY AS PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 29, SAN PABLO CITY AND THE MANILA ELECTRIC COMPANY, RESPONDENTS. DECISIONGONZAGA-REYES, J.: This is a petition under Rule 45 of the Rules of Court to review on a pure question of law the decision of the Regional Trial Court (RTC) of San Pablo City, Branch 29 in Civil Case No. SP-4459(96), entitled "Manila Electric Company vs. City of San Pablo, Laguna, City Treasurer of San Pablo Laguna, and the Sangguniang Panglunsod of San Pablo City, Laguna." The RTC declared the imposition of franchise tax under Section 2.09 Article D of Ordinance No. 56 otherwise known as the Revenue Code of the City of San Pablo as ineffective and void insofar as the respondent MERALCO is concerned for being violative of Act No. 3648, Republic Act No. 2340 and PD 551. The RTC also granted MERALCO'S claim for refund of franchise taxes paid under protest. The following antecedent facts are undisputed: Act No. 3648 granted the Escudero Electric Services Company, a legislative franchise to maintain and operate an electric light and power system in the City of San Pablo and nearby municipalities Section 10 of Act No. 3648 provides: "x x x In consideration of the franchise and rights hereby granted, the grantee shall pay unto the municipal treasury of each municipality in which it is supplying electric current to the public under this franchise, a tax equal to two percentum of the gross earnings from electric current sold or supplied under this franchise in each said municipality. Said tax shall be due and payable quarterly and shall be in lieu of any and all taxes of any kind, nature or description levied, established or collected by any authority whatsoever, municipal, provincial or insular, now or in the future, on its poles, wires, insulators, switches, transformers, and structures, installations, conductors, and accessories place in and over and under all public property, including public streets and highways, provincial roads, bridges and public squares, and on its franchise, rights, privileges, receipts, revenues and profits from which taxes the grantee is hereby expressly exempted." Escudero's franchise was transferred to the plaintiff (herein respondent) MERALCO under Republic Act No. 2340. Presidential Decree No. 551 was enacted on September 11, 1974. Section 1 thereof provides the following: "Section 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchise to generate, distribute and sell electric current for light, heat and power shall be two percent (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current. Such franchise tax shall be payable to the Commissioner of

Internal Revenue or his duly authorized representative on or before the twentieth day of the month following the end of each calendar quarter or month as may be provided in the respective franchise or pertinent municipal regulation and shall, any provision of the Local Tax Code or any other law to the contrary notwithstanding, be in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on earnings, receipts, income and privilege of generation, distribution and sale of electric current." Republic Act No. 7160, otherwise known as the "Local Government Code of 1991" (hereinafter referred to as the LGC) took effect on January 1, 1992. The said Code authorizes the province/city to impose a tax on business enjoying a franchise at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year realized within its jurisdiction. On October 5, 1992, the Sangguniang Panglunsod of San Pablo City enacted Ordinance No. 56, otherwise known as the Revenue Code of the City of San Pablo. The said Ordinance took effect on October 30, 1992:[1] Section 2.09 Article D of said Ordinance provides: "Sec. 2.09. Franchise Tax - There is hereby imposed a tax on business enjoying a franchise, at a rate of fifty percent (50%) of one percent (1%) of the gross annual receipts, which shall include both cash sales and sales on account realized during the preceding calendar year within the city." Pursuant to the above-quoted Section 2.09, the petitioner City Treasurer sent to private respondent a letter demanding payment of the aforesaid franchise tax. From 1994 to 1996, private respondent paid "under protest" a total amount of P1,857,711.67.[2] The private respondent subsequently filed this action before the Regional Trial Court to declare Ordinance No. 56 null and void insofar as it imposes the franchise tax upon private respondent MERALCO[3] and to claim for a refund of the taxes paid. The Court ruled in favor of MERALCO and upheld its argument that the LGC did not expressly or impliedly repeal the tax exemption/incentive enjoyed by it under its charter. The dispositive portion of the decision reads: "WHEREFORE, the imposition of a franchise tax under Sec. 2.09 Article D of Ordinance No. 56 otherwise known as the Revenue Code of the City of San Pablo, is declared ineffective and null and void insofar as the plaintiff MERALCO is concerned for being violative of Republic Act No. 2340, PD 551, and Republic Act No. 7160 and the defendants are ordered to refund to the plaintiff the amount of ONE MILLION EIGHT HUNDRED FIFTY SEVEN THOUSAND SEVEN HUNDRED ELEVEN & 67/100 (P1,857,711.67) and such other amounts as may have been paid by the plaintiff under said Revenue Ordinance No. 56 after the filing of the complaint.[4] SO ORDERED." Its motion for reconsideration having been denied by the trial court[5] the petitioners filed the instant petition with this Court raising pure questions of law based on the following grounds:

I.

RESPONDENT JUDGE GRAVELY ERRED IN HOLDING THAT ACT NO. 3648, REPUBLIC ACT NO. 2340 AND PRESIDENTIAL DECREE NO. 551 AS AMENDED, INSOFAR AS THEY GRANT TAX INCENTIVES, PRIVILEGES AND IMMUNITIES TO PRIVATE RESPONDENT, HAVE NOT BEEN REPEALED BY REPUBLIC ACT NO. 7160.

however, That the taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code. The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (50%) except the rates of professional and amusement taxes. Section 193 - Withdrawal of Tax Exemption Privileges. - Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code.

II.

RESPONDENT JUDGE GRAVELY ERRED IN RULING THAT SECTION 193 OF REPUBLIC ACT NO. 7160 HAS NOT WITHDRAWN THE TAX INCENTIVES, PRIVILEGES AND IMMUNITIES BEING ENJOYED BY THE PRIVATE RESPONDENT UNDER ACT NO. 3648, REPUBLIC ACT NO. 2340 AND PRESIDENTIAL DECREE NO. 551, AS AMENDED.

III.

RESPONDENT JUDGE GRAVELY ERRED IN HOLDING THAT THE FRANCHISE TAX IN QUESTION CONSTITUTES AN IMPAIRMENT OF THE CONTRACT BETWEEN THE GOVERNMENT AND THE PRIVATE RESPONDENT. Petitioners' position is the RA 7160 (LGC) expressly repealed Act No. 3648, Republic Act No. 2340 and Presidential Decree 551 and that pursuant to the provisions of Sections 137 and 193 of the LGC, the province or city now has the power to impose a franchise tax on a business enjoying a franchise. Petitioners rely on the ruling in the case of Mactan Cebu International Airport Authority vs. Marcos[6]

Section 534 (f) - Repealing Clause - All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this code are hereby repealed or modified accordingly. Section 534 (f), the repealing clause of the LGC, provides that all general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations or parts thereof which are inconsistent with any of the provisions of the Code are hereby repealed or modified accordingly.

where the Supreme Court held that the exemption

from real property tax granted to Mactan Cebu International Airport Authority under its charter has been withdrawn upon the effectivity of the LGC. In addition, the petitioners cite in their Memorandum dated December 8, 1997 an administrative interpretation made by the Bureau of Local Government Finance of the Department of Finance in its 3rd indorsement dated February 15, 1994 to the effect that the earlier ruling of the Department of Finance that holders of franchise which contain the phrase "in lieu of all taxes" proviso are exempt from the payment of any kind of tax is no longer applicable upon the effectivity of the LGC in view of the withdrawal of tax exemption privileges as provided in Sections 193 and 234 thereof.

This clause partakes of the nature of a general repealing clause.[7] It is certainly not an express repealing clause because it fails to designate the specific act or acts identified by number or title, that are intended to be repealed.[8] Was there an implied repeal by Republic Act No. 7160 of the MERALCO franchise insofar as the latter impose a 2% tax "in lieu of all taxes and assessments of whatever nature"? We rule affirmatively.

We resolve to reverse the court a quo. We are mindful of the established rule that repeals by implication The pivotal issue is whether the City of San Pablo may impose a local franchise tax pursuant to the LGC upon the Manila Electric Company which pays a tax equal to two percent of its gross receipts in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on savings or income. It is necessary to reproduce the pertinent provisions of the LGC. Section 137 - Franchise Tax - Notwithstanding any exemption granted by any law or other special law, the province may impose a tax on business enjoying a franchise, at a rate not exceeding fifty percent 50% of one percent 1% of the gross annual receipts for the preceding calendar year based on the incoming receipts, or realized, within its territorial jurisdiction. xxx" Section 151 - Scope of Taxing Powers - Except as otherwise provided in this Code, the city, may levy the taxes, fees, and charges which the province or municipality may impose: Provided, Section 193 buttresses the withdrawal of extant tax exemption It is our view that petitioners correctly rely on the provisions of Section 137 and 193 of the LGC to support their position that MERALCO's tax exemption has been withdrawn. The explicit language of Section 137 which authorizes the province to impose franchise tax "notwithstanding any exemption granted by any law or other special laws" is all-encompassing and clear. The franchise tax is imposable despite any exemption enjoyed under special laws. are not favored as laws are presumed to be passed with deliberation and full knowledge of all laws existing on the subject. A general law cannot be construed to have repealed a special law by mere implication unless the intent to repeal or alter is manifest[9] and it must be convincingly demonstrated that the two laws are so clearly repugnant and patently inconsistent that they cannot co-exist.[10]

privileges. By stating that unless otherwise provided in this Code, tax exemptions or incentives granted to or presently enjoyed by all persons whether natural or juridical, including governmentowned or controlled corporations except 1) local water districts, 2) cooperatives duly registered under R.A. 6938, (3) non-stock and non-profit hospitals and educational institutions, are withdrawn upon the effectivity of this code, the obvious import is to limit the exemptions to the three enumerated entities. It is a basic precept of statutory construction that the express mention of one person, thing, act, or consequence excludes all others as expressed in the familiar maxim expressio unius est exlcusio alterius.[11] In the absence of any provision of the Code to the contrary, and we find no other provision of the Code to the contrary, and we find no other provision in point, any existing tax exemption or incentive enjoyed by MERALCO under existing law was clearly intended to be withdrawn. Reading together Sections 137 and 193 of the LGC, we conclude that under the LGC the local government unit may now impose a local tax at a rate not exceeding 50% of 1% of the gross annual receipts for the preceding calendar year based on the incoming receipts realized within its territorial jurisdiction. The legislative purpose to withdraw tax privileges enjoyed under existing law or charter is clearly manifested by the language used in Section 137 and 193 categorically withdrawing such exemption subject only to the exceptions enumerated. Since it would be not only tedious and impractical to attempt to enumerate all the existing statutes providing for special tax exemptions or privileges, the LGC provided for an express, albeit general, withdrawal of such exemptions or privileges. No more unequivocal language could have been used. It is true that the phrase "in lieu of all taxes" found in special franchises has been held in several cases to exempt the franchise holder from payment of tax on its corporate franchise imposed by the Internal Revenue Code, as the charter is in the nature of a private contract and the exemption is part of the inducement for the acceptance of the franchise, and that the imposition of another franchise tax by the local authority would constitute an impairment of contract between the government and the corporation.[12]But these "magic words" contained in the phrase "shall be in lieu of all taxes."[13]Have to give way to the peremptory language of the LGC specifically providing for the withdrawal of such exemption privileges. Accordingly in Mactan Cebu International Airport Authority vs. Marcos,[14] this Court held that Section 193 of the LGC prescribes the general rule, viz., the tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons are withdrawn upon the effectivity of the LGC except with respect to those entities expressly enumerated. In the same vein We must hold that the express withdrawal upon effectivity of the LGC of all exemptions only as provided therein, can no longer be invoked by Meralco to disclaim liability for the local tax. Private respondents further argue that the "in lieu of" provision contained in PD 551, Act No. 3648 and RA 2340 does not partake of the nature of an exemption, but is a "commutative tax". This contention was raised but was not upheld in Cagayan Electric

Power and Light Co. Inc. vs. Commissioner of Internal Revenue[15] wherein the Supreme Court stated: "xxx Congress could impair petitioner's legislative franchise by making it liable for income tax from which heretofore it was exempted by virtue of the exemption provided for in section 3 of its franchise xxx xxx Republic Act No. 5431, in amending section 24 of the Tax Code by subjecting to income tax all corporate tax payers not expressly exempted therein and in section 27 of the Code, had the effect ofwithdrawing petitioner's exemption from income tax xxx" Private respondent's invocation of the non-impairment clause of the Constitution is accordingly unavailing. The LGC was enacted in pursuance of the constitutional policy to ensure autonomy to local governments[16] and to enable them to attain fullest development as self-reliant communities.[17] Thus in Mactan Cebu International Airport Authority vs. Marcos, supra, this Court pointed out, in upholding the withdrawal of the real estate tax exemption previously enjoyed by the Mactan Cebu International Airport Authority, as follows: "Note that as reproduced in Section 234(a) the phrase "and any government owned or controlled corporation so exempt by its charter" was excluded. The justification for this restricted exemption in Section 234(a) seems obvious: to limit further tax exemption privileges especially in light of the general provision on withdrawal of tax exemption privileges in Section 193 and the special provision on withdrawal of exemption from payment of real property taxes in the last paragraph of Section 234. These policy considerations are consistent with the State policy to ensure autonomy to local governments and the objective of the LGC that they enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in attainment of national goals. The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to governmentowned or controlled corporations and all other units of government were that such privilege resulted in serious tax base erosion and distortions in the tax treatment of similarly situated enterprises, and there was a need for these entities to share in the requirements of development, fiscal or otherwise, by paying the taxes and other charges due from them."[18] The Court therein concluded that: "nothing can prevent Congress from decreeing that even instrumentalities or agencies of the Government performing governmental functions may be subject to tax. Where it is done precisely to fulfill a constitutional mandate and national policy, no one can doubt its wisdom."[19] The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority conferred by Section 5, Article X of the Constitution.[20] Thus Article X, Section 5 of the Constitution reads:

"Section 5 - Each Local Government unit shall have the power to create its own sources of revenue and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the Local Governments." The important legal effect of Section 5 is that henceforth, in interpreting statutory provisions on municipal fiscal powers, doubts will have to be resolved in favor of municipal corporations.[21]

[5]

Order of January 10, 1996, p. 41, Rollo 261 SCRA 667, (1996). Ty vs. Trampe, 250 SCRA 500 at 512 (1995). Mecano vs. Commission on Audit, 216 SCRA 500 at 504

[6]

[7]

[8]

[1992]; Berces Sr., vs. Guingona, Jr., 241 SCRA 539 at 544 [1995].[9]

Laguna Lake Development Authority vs. Court of Appeals, 251

There is further basis for the conclusion that the non-impairment of contract clause cannot be invoked to uphold Meralco's exemption from the local tax. Escudero Electric Co. was originally given the legislative franchise under Act. 3648 to operate an electric light and power system in the City of San Pablo and nearby municipalities. The term of the franchise under Act No. 3648 is a period of fifty years from the Act's approval in 1929. The said law provided that the franchise is granted upon the condition that it shall be subject to amendment, or repeal by the Congress of the United States.[22]

SCRA 42 at 56 (1995).[10]

Villegas vs. Subido, 41 SCRA 190 at 197 (1971); Mecano vs.

Commission on Audit, Supra.[11]

Commissioner of Customs vs. Court of Tax Appeals, 224 SCRA

665 at pp. 669-670, (1993)[12]

Cotabato Light and Power Co. vs. City of Cotabato, 32 SCRA

Under the 1935,

[23]

the

231; Commissioner of Internal Revenue vs. Lingayen Gulf Electric Power Co. 164 SCRA 27 at 34 (1988), Province of Misamis Oriental vs. Cagayan Electric Power and Light Co., Inc., 181 SCRA 38 at 43 (1990).[13]

1973[24] and the 1987[25] Constitutions, no franchise or right shall be granted except under the condition that it shall be subject to amendment, alteration or repeal by the National Assembly when the public interest so requires. With or without the reservation clause, franchises are subject to alterations through a reasonable exercise of the police power; they are also subject to alteration by the power to tax, which like police power cannot be contracted away.[26] Finally, while the matter is not of controlling significance, the Court notes that whereas the original Escudero franchise exempted the franchise holder from all taxes levied or collected "now or in the future"[27]

Province of Misamis Oriental vs. Cagayan Electric Power and

Light Co. Inc. supra, at p. 42.[14]

Supra. 138 SCRA 629 at p. 631. Section 25, Art. II and 2, Art. X Constitution. 2(a) Local Government Code of 1991. Mactan Cebu International Airport Authority vs. Marcos, p.

[15]

[16]

this phrase is noticeably omitted in the[17]

counterpart provision of P.D. 551 that said omission is intended not to foreclose future taxes may reasonably be deduced by statutory construction. WHEREFORE, the instant petition is GRANTED. The decision of the Regional Trial Court of San Pablo City, appealed from is hereby reversed and set aside and the complaint of MERALCO is hereby DISMISSED. No pronouncement as to costs. SO ORDERED. Romero, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.

[18]

690.[19]

Ibid., p. 692. Isagani A. Cruz, Constitutional Law, (1991), at p. 84. Bernas, The Constitution of the Philippines, 1st ed. p. 381. Act No. 3648, 12. Article XIV, 8. Article XIV, 5. Article XII, 11. Bernas, Supra, p. 341. 10, Act No. 3648.

[20]

[21]

[22]

[23]

[24]

[25] [1]

Petitioner for review, p. 3[26]

[2]

Ibid., p. 4 and Respondent's Memorandum, p. 3.[27]

[3]

Petition for Review, p. 4 and Respondent's Memorandum, p. 4. Ibid E-Library Doc. ID: 1263538026564457718

[4]

THIRD DIVISION [G.R. No. 132378, January 18, 2000] ROGELIO JUAN, PEDRO DE JESUS, DELFIN CARREON AND ANTONIO GALGUERRA, PETITIONERS, VS. PEOPLE OF THE PHILIPPINES, RESPONDENT. DECISIONPANGANIBAN, J.: Unlawful and unauthorized use of government property by incumbent public officers constitutes fraud. Thus, the provision on preventive suspension in the Anti-Graft Law applies to such officers even if the alleged violations are primarily considered as election offenses. The Case Before us is a Petition for Review under Rule 45 assailing the October 14, 1997 Decision[1] and the January 26, 1998 Resolution of the Court of Appeals[2] (CA) in CA-GR SP No. 43903.[3] The assailed Decision dismissed the Petition for Certiorari filed by the petitioners. In that Petition, they questioned the April 3, 1997 Order[4] of the Regional Trial Court of Quezon City in Criminal Case Nos. Q-96-64564-6, directing their immediate suspension from office. On the other hand, the questioned CA Resolution denied their Motion for Reconsideration. The Facts The procedural and factual antecedents of this case are summarized in the challenged Decision as follows: "Petitioners Rogelio Juan, Barangay Chairman and Pedro de Jesus, Delfin Carreon, and Antonio Galguerra, Barangay Kagawads, of Barangay Talipapa, Novaliches, Quezon City, were separately accused in Criminal Cases Q-96-64564 to 66, for violation of Section 261-(o) of the Omnibus Election Code, before the Regional Trial Court, Branch 96, National Capital Judicial Region, Quezon City. Barangay Chairman Juan, and Bgy. Kagawad De Jesus were charged [with] willful and unlawful use of VHF radio transceiver, an equipment or apparatus owned by the barangay government of Talipapa, Novaliches, Quezon City, for election campaign or for partisan political activity. And Barangay Kagawads Carreon and Galguerra were charged with willful and unlawful use of a tricycle owned by the same barangay government in their political campaigns. "Rodolfo Cayubit and Ricardo Galguerra, representing themselves as "witnesses/private complainants," assisted by Atty. Leonides S. Bernabe, Jr., representing himself as "Private Prosecutor," filed a "Motion for Removal from Office," dated December 5, 1996, for the removal of said local elective officials, to which herein petitioners filed their comment, on the ground that movants have no legal standing in court, and neither was the public prosecutor notified of the motion to which he did not conform, and therefore, said motion should be expunged or stricken out from the records, or peremptorily denied. "In a Manifestation and Comment to the accused-petitioners comment, the COMELEC prosecutor stated that he "conforms" with the subject motion of private complainants, hence, respectfully submit[s] the same for the ruling of the court, followed by a Supplement to Motion for Removal from Office, dated February 28, 1997, to which petitioners also filed their

opposition. "On April 3, 1997, respondent court issued an Order, directing the "xxx immediate suspension from office of all the accused xxx for a period of sixty (60) days from service of this Order."[5] The CA Ruling In its Decision, the Court of Appeals upheld the trial courts discretion to order petitioners suspension from office. It ruled: "The preventive suspension of those officials is authorized under Section 13 of RA 3019, as amended, which is mandatory in character upon the filing of a valid information in court against them. Such suspension can be issued x x x in whatever stage of execution and mode of participation, is pending in court x x x (see also Gonzaga vs. Sandiganbayan, 201 SCRA 417, 422, 426). Said cases stressed though that the Constitution rejects preventive suspension for an indefinite duration as it constitutes a denial of due process and equal protection of the law. Nonetheless, preventive suspension is justifiable for as long as its continuance is for a reasonable length of time. This doctrine also finds expression in Luciano vs. Provincial Governor, 28 SCRA 570, upholding the power of courts to exercise the mandatory act of suspension of local elective official[s] under Section 13 of RA 3019."[6](underscoring found in the original) Hence, this Petition.[7] The Issues In their Memorandum, petitioners urge the Court to resolve the following questions: "1. Does Sec. 13 of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act), or Sec. 60 of R.A. 7160 (The Local Government Code of 1991) confer upon a Regional Trial Court, before which a criminal case for violation of Sec. 261 (o) of the Omnibus Election Code is pending, the power and authority to order the preventive suspension from office of the accused therein upon the filing of a valid Information against him? "2. In a criminal case for violation of Sec. 261 (o) of the Omnibus Election Code, where the INFORMATION does not allege damages sustained by any private party by reason thereof, has a person, representing himself to be a "witness/private complainant," or a lawyer, representing himself to be a "private prosecutor," the legal standing or personality to file a motion for removal from office of the accused in said criminal case? 2.1. Does a motion so filed, acquire legal standing before the Court by the subsequent adoption thereof by the COMELEC Prosecutor in said case? Msesm 2.2. Does a motion so filed, without compliance of the notice requirements prescribed for motions under Rule 15 of the Revised Rules of Court, deserve judicial cognizance by the court vis-avis Del Castillo v. Aguinaldo, 212 SCRA 169, 174, holding that such motion is "a useless piece of paper with no legal effect" that should not be accepted for filing and if filed, is not entitled to judicial cognizance?" 2.3. Is there substantial compliance [with] such notice requirements by the mere fact that [the] adverse party filed an opposition to said motion, precisely to question its noncompliance [with] notice requirements, prescribed by Rule 15, Revised Rules of Court?" 2.4. Notwithstanding the foregoing defects of said motion, is it proper for a Regional Trial Court to take cognizance thereof and act favorably thereon, without setting said motion for hearing?"

Citing RA 7691,[8] petitioners likewise assail the authority of the trial court to hear the cases against them. For the sake of clarity, the discussion of the case will revolve around three points:first, the jurisdiction of regional trial courts over violations of the Election Code;second, the propriety of petitioners suspension; and third, the alleged procedural lapses of the trial court. The Courts Ruling We find no merit in the Petition. First Issue: Jurisdiction over Election Cases Petitioners insist that the RTC did not have the jurisdiction to hear and decide the cases filed against them, because the penalty for the offenses charged did not exceed six years. Thus, they claim that the authority to hear the cases is vested by RA 7691 in the first-level courts. The argument does not persuade. It is evident from Section 32, BP 129, as amended by Section 2 of RA 7691, that the jurisdiction of first-level courts -- the metropolitan trial courts, municipal trial courts and municipal circuit trial courts -- does not cover those criminal cases which by specific provision of law are cognizable by regional trial courts. Section 32 provides: "Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases. Except in cases falling within the exclusive original jurisdiction of the Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: (1) Exclusive original jurisdiction over all violations of city or municipal ordinances, committed within their respective territorial jurisdiction; and (2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value or amount thereof;Provided, however, that in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof. Petitioners were charged with violating Section 261 (o) of the Omnibus Election Code. Under Section 268 of the said Code, regional trial courts have exclusive jurisdiction to try and decide any criminal action or proceeding for violation of the Code, "except those relating to the offense of failure to register or failure to vote." The said provision reads: "Sec. 268. Jurisdiction of courts. The regional trial court shall have the exclusive jurisdiction to try and decide any criminal action or proceeding for violation of this Code, except those relating to the offense of failure to register or failure to vote, which shall be under the jurisdiction of the metropolitan or municipal trial courts. From the decision of the courts, appeal will lie as in other criminal cases." Worth noting also is this Courts disquisition in COMELEC v. Noynay:[9] "We have explicitly ruled in Morales v. Court of Appeals, that by virtue of the exception provided for in the opening sentence of Section 32, the exclusive original jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts

does not cover criminal cases which by specific provisions of law fall within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan, regardless of the penalty prescribed therefor. Otherwise stated, even if those excepted cases are punishable by imprisonment not exceeding six (6) years, (i.e., prision correccional, arresto mayor, or arresto menor)jurisdiction thereon is retained by the Regional Trial Courts or the Sandiganbayan, as the case may be. "Among the examples cited in Morales as falling within the exception provided for in the opening sentence of Section 32 are cases under (1) Section 20 of BP Blg. 129; (2) Article 360 of the Revised Penal Code as amended; (3) the Decree on Intellectual Property; and (4) the Dangerous Drugs Act of 1972, as amended. "Undoubtedly, pursuant to Section 268 of the Omnibus Election Code, election offenses also fall within the exception. "As we stated in Morales, jurisdiction is conferred by the Constitution or Congress. Outside the cases enumerated in Section 5(2) of Article VIII of the Constitution, Congress has the plenary power to define, prescribe, and apportion the jurisdiction of various courts. Congress may thus provide by law that a certain class of cases should be exclusively heard and determined by one court. Such law would be a special law and must be construed as an exception to the general law on jurisdiction of courts, namely, the Judiciary Act of 1948, as amended, and the Judiciary Reorganization Act of 1980. R.A. 7691 can by no means be considered as a special law on jurisdiction; it is merely an amendatory law intended to amend specific sections of the Judiciary Reorganization Act of 1980. Hence, R.A. No. 7691 does not have the effect of repealing laws vesting upon Regional Trial Courts or the Sandiganbayan exclusive original jurisdiction to hear and decide the cases therein specified. That Congress never intended that RA 7691 should repeal such special provisions is indubitably evident from the fact that it did not touch at all the opening sentence of Section 32 of B.P. Blg. 129 providing for the exception." (Itals supplied) Clearly then, regional trial courts have jurisdiction to hear and decide cases for violation of the Omnibus Election Code, such as those filed against petitioners. Second Issue: Preventive Suspension Petitioners contend that their cases are not subject to Section 13 of RA 3019, the Anti-Graft and Corrupt Practices Act, which mandates the preventive suspension of indicted public officials. We disagree. Petitioners were accused of using barangay property for election campaign purposes and other partisan political activities during their incumbency as barangay officials, in violation of Section 261 (o) of the Omnibus Election Code, which reads as follows: "Section 261. Prohibited Acts. The following shall be guilty of an election offense: (o) Use of public funds, money deposited in trust, equipment, facilities owned or controlled by the government for an election campaign. - Any person who uses under any guise whatsoever, directly or indirectly, (1) public funds or money deposited with or held in trust by, public financing institutions or by government offices, banks, or agencies; (2) any printing press, radio, or television station or audio-visual equipment operated by the Government or by its divisions, sub-divisions, agencies or instrumentalities, including government-owned or controlled

corporations, or by the Armed Forces of the Philippines; or (3) any equipment, vehicle, facility, apparatus or paraphernalia owned by the government or by its political subdivisions, agencies, including government-owned or controlled corporations, or by the Armed Forces of the Philippines for any election campaign or for any partisan political activity." On the other hand, Section 13, R.A. 3019, as amended, provides: "SEC. 13. Suspension and loss of benefits. Any incumbent public officer against whom any criminal prosecution under a valid information under this Act or under Title 7, Book II of the Revised Penal Code or for any offense involving fraud upon government or public funds or property whether as a simple or as a complex offense and in whatever stage of execution and mode of participation, is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement, and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him. "In the event that such convicted officer, who may have already been separated from the service, has already received such benefits he shall be liable to restitute the same to the government." Interestingly, prior to its amendment by BP 195,[10] the said provision had applied to public officers who, under a valid information, were charged with violations of RA 3019 or with offenses covered by the Revised Penal Code provision on bribery.[11] The amendatory law expanded the scope of the provision; now, public officers may likewise be suspended from office if, under a valid information, they are charged with an offense falling under Title 7 of Book II of the Revised Penal Code, or with any other form of fraud involving government funds or property. True, the cases against petitioners involve violations of the Election Code; however, the charges are not unidimensional. Every law must be read together with the provisions of any other complementing law, unless both are otherwise irreconcilable. It must be emphasized that petitioners were incumbent public officers charged with the unauthorized and unlawful use of government property in their custody, in the pursuit of personal interests. The crime being imputed to them is akin to that committed by public officers as laid down in the Revised Penal Code. Certainly, petitioners acts constitute fraud against the government; thus, the present case is covered by Section 13 of RA 3019. The aforementioned proviso reinforces the principle that a public office is a public trust. Its purpose is to prevent the accused public officer from hampering his prosecution by intimidating or influencing witnesses, tampering with documentary evidence, or committing further acts of malfeasance while in office.[12] Preventive suspension is not a penalty;[13] petitioners, whose culpability remains to be proven, are still entitled to the constitutional presumption of innocence. Third Issue: Allegations of Procedural Prejudice Petitioners assail the trial courts Order of suspension on the ground that it was issued pursuant to the initial "Motion for Removal From Office,"[14] received by the trial court on December 6, 1996. The records show that this Motion neither complied with the notice requirements provided under the Rules of Court, nor

was it filed by one who was a party to their cases. The Court has held time and again that a motion that does not meet the notice requirements of Sections 4 and 5 of Rule 15 of the Rules of Court[15] is pro forma, and that the trial court has no authority to act on it. The requisites laid down in the aforementioned provisions are categorical and mandatory, and the failure of the movants to comply with them renders their Motions fatally defective.[16] The Rules mandate the service of a copy of a motion containing a notice of time and place of hearing, in order to afford the adverse party time to study and answer the arguments in the said motion before its resolution by the court. Considering the circumstances of the present Petition, however, we believe that the requirements of procedural due process were substantially complied with, and that such compliance justifies a liberal interpretation of the above-mentioned rules. In his "Manifestation on Comment of the Accused," the COMELEC prosecutor adopted the assailed Motion as well as the February 28, 1997 "Supplement to Motion for Removal from Office." This action should be considered to have thus cured the procedural defect pointed out by petitioners. More important, however, is the fact that the trial court heard petitioners and considered their arguments. In their six-page Memorandum[17] filed pursuant to the directive of the trial court, petitioners were able to ventilate their arguments against the Motion for Removal from Office. They contended that neither RA 3019 nor Section 60 of the Local Government Code justified their suspension from office. Indeed, the purpose of a notice of hearing was served;[18] the pleadings that were filed for and against them negated their allegations of procedural prejudice. Under Section 13 of RA 3019, the suspension of a public officer is mandatory after the determination of the validity of the information, as enunciated in Socrates v. Sandiganbayan[19] which we quote: "This Court has ruled that under Section 13 of the anti-graft law, the suspension of a public officer is mandatory after the validity of the information has been upheld in a pre-suspension hearing conducted for that purpose. This pre-suspension hearing is conducted to determine basically the validity of the information, from which the court can have a basis to either suspend the accused and proceed with the trial on the merits of the case, or withhold the suspension of the latter and dismiss the case, or correct any part of the proceeding which impairs its validity. That hearing may be treated in the same manner as a challenge to the validity of the information by way of a motion to quash." In the case at bar, while there was no pre-suspension hearing held to determine the validity of the Informations that had been filed against petitioners, we believe that the numerous pleadings filed for and against them have achieved the goal of this procedure. The right to due process is satisfied not just by an oral hearing but by the filing and the consideration by the court of the parties pleadings, memoranda and other position papers. WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED. Costs against petitioners. SO ORDERED. Melo, (Chairman), Vitug, Purisima and Gonzaga-Reyes,

JJ., concur.

hearing, unless the court for good reason sets the hearing on shorter notice. Section 5. Notice of hearing. The notice of hearing shall be addressed to all parties concerned, and shall specify the time and date of the hearing which must not be later than ten (10) days after the filing of the motion.[16]

[1]

Rollo, pp. 52-55.

[2]

Special Ninth Division composed of J. Artemon D. Luna, Division chairman andponente; and JJ. Bennie A. Adefuin de la Cruz and Demetrio G. Demetria, who both concurred.[3]

Entitled "Rogelio Juan, Pedro de Jesus, Delfin Carreon and Antonio Galguerra v. Hon. Lucas P. Bersamin, in his capacity as Presiding Judge, Regional Trial Court of Quezon City, Branch 96, and People of the Philippines."[4]

People v. Court of Appeals et al., GR No. 126005, January 21, 1999; Tan v. Court of Appeals and Bloomberry Export Manufacturing, Inc., 295 SCRA 755, September 22, 1998; Goldloop Properties, Inc., v. Court of Appeals, 212 SCRA 498, August 11, 1992.[17]

Rollo, pp. 82-87.

Penned by Judge Lucas P. Bersamin. Rollo, pp. 52-53. Rollo, p. 54.

[18]

[5]

See Vlasons Enterprises Corporation v. Court of Appeals, GR Nos. 121662-64, July 6, 1999.[19]

[6]

253 SCRA 773, February 20, 1996, per Regalado, J.

[7]

The case was deemed submitted for decision on June 9, 1999, upon receipt by this Court of respondents Memorandum, which was signed by Sol. Gen. Ricardo P. Galvez, Asst. Sol. Gen. Fernanda Lampas Peralta and Asst. Sol. Marilou B. Dayao. Petitioners Memorandum, submitted by Atty. Cenon C. Sorreta, was received by the Court on February 11, 1999.[8]

E-Library Doc. ID: 12584214931629076694

Petition, pp. 28-43; rollo, pp. 30-45. 292 SCRA 254, July 9, 1998, per Davide, J. (Now CJ)

[9]

[10]

"AN ACT AMENDING SECTION EIGHT, NINE, TEN, ELEVEN, AND THIRTEEN OF REPUBLIC ACT NUMBERED THIRTY HUNDRED AND NINETEEN, OTHERWISE KNOWN AS THE ANTI-GRAFT AND CORRUPT PRACTICES ACT."[11]

Before its amendment, Section 13 of R.A. 3019 read as follows: "Sec. 13.Suspension and loss of benefits. Any public officer against whom any criminal prosecution under a valid information under this Act or under the provisions of the Revised Penal Code on bribery is pending in court shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime, administrative proceedings have been filed against him."[12]

Pimentel v. Garchitorena, 208 SCRA 122, April 14, 1992.

[13]

Socrates v. Sandiganbayan, 253 SCRA 773, February 20, 1996; Bunye v. Escareal, 226 SCRA 332, September 10, 1993; Gonzaga v. Sandiganbayan, 201 SCRA 417, September 6, 1991.[14]

Rollo, pp. 64-65.

[15]

Section 4. Hearing of motion. Except for motions which the court may act upon without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the applicant. Every written motion required to be heard and the notice of hearing shall be served in such a manner as to ensure its receipt by the other party at least three (3) days before the date of

SECOND DIVISION [G.R. No. 154616, July 12, 2004] GOV. ANTONIO CALINGIN, PETITIONER, VS. COURT OF APPEALS, SPECIAL 17TH DIVISION, EXECUTIVE SECRETARY RENATO S. DE VILLA, DEPT. OF INTERIOR & LOCAL GOVERNMENT SECRETARY JOEY LINA,[*]UNDERSECRETARY EDUARDO R. SOLIMAN, JR., DEPARTMENT OF THE INTERIOR & LOCAL GOVERNMENT, REGIONAL OFFICE NO. 10, DIRECTOR RODOLFO Z. RAZUL, RESPONDENTS. RESOLUTIONQUISUMBING, J.: Before us is a petition for review seeking to annul the Resolution[1]

COMMISSION ON ELECTIONS. FINDING THAT THE DECISION OF THE OFFICE OF THE PRESIDENT IS FINAL AND EXECUTORY AS PROVIDED IN SECTION 67, CHAPTER 4, OF REPUBLIC ACT 7160, THE LOCAL GOVERNMENT CODE OF 1991.[7] In dispute is the validity of the DILG Memorandum implementing the suspension order issued by the Office of the President. We are asked to resolve in this connection two issues: (1) Was the decision of the Office of the President already final and executory? and (2) Was the exemption from the election ban in the movement of any public officer granted by COMELEC valid? Petitioner contends that decisions of the Office of the President on cases where it has original jurisdiction become final and executory only after the lapse of 15 days from the receipt thereof and that the filing of a Motion for Reconsideration shall suspend the running of the said period[8] in accordance with Section 15,[9] Chapter 3, Book VII of the Administrative Code of 1987. Petitioner further contends that Section 67,[10] Chapter 4 of the Local Government Code (Rep. Act 7160), which provides that decisions of the Office of the President shall be final and executory, applies only to decisions of the Office of the President on administrative cases appealed from the sangguniang[3]

dated May 11, 2001 of the Court of Appeals in CA-

G.R. SP No. 64583, which denied petitioner Governor Antonio Calingins petition for prohibition with prayer for temporary restraining order and/or the issuance of an order of status quo ante, as well as its Resolution[2] dated July 1, 2002, denying the motion for reconsideration. The antecedent facts, as summarized by the Court of Appeals and borne by the records, are as follows: The Office of the President issued a Resolution dated March 22,

panlalawigan, sangguniang panlungsod of highly-urbanized cities and independent component cities, andsangguniang bayan of municipalities within the Metro Manila Area. It does not cover decisions on cases where the Office of the President has original jurisdiction such as those involving a Provincial Governor.[11] In Lapid v. Court of Appeals,[12] we held that it is a principle of statutory construction that where there are two statutes that apply to a particular case, that which was specially intended for the said case must prevail. The case on hand involves a disciplinary action against an elective local official. Thus, the Local Government Code is the applicable law and must prevail over the Administrative Code which is of general application.[13] Further, the Local Government Code of 1991 was enacted much later than the Administrative Code of 1987. In statutory construction, all laws or parts thereof which are inconsistent with the later law are repealed or modified accordingly.[14] Besides, even though appeal to the Court of Appeals is granted under Sec. 1,[15] Rule 43 of the Revised Rules of Court, Sec. 12,[16] Rule 43 of the Revised Rules of Court in relation to Sec. 68[17] of the Local Government Code provides for the immediate execution pending appeal. Under the same case of Lapid v. Court of Appeals,[18] we enunciated that the decisions of the Office of the President under the Local Government Code are immediately executory even pending appeal because the pertinent laws under which the decisions were rendered mandated them to be so. In sum, the decisions of the Office of the President are final and executory. No motion for reconsideration is allowed by law but the parties may appeal the decision to the Court of Appeals. The appeal, however, does not stay the execution of the decision. Thus, the DILG Secretary may validly move for its immediate execution.

2001 in OP Case No. 00-1-9220 (DILG ADM. Case No. P-16-99) entitled Vice Governor Danilo P. Lagbas, et al. versus Governor Antonio P. Calingin (Misamis Oriental) suspending Gov. Calingin for 90 days. On April 30, 2001, Undersecretary Eduardo R. Soliman of the Department of the Interior and Local Government (DILG), by authority of Secretary Jose D. Lina, Jr., issued a Memorandum[4] implementing the said Resolution of the Office of the President. On May 3, 2001, Gov. Calingin filed before the Office of the President a Motion for Reconsideration.[5]

The DILG Memorandum bore the authority of the Commission on Elections (COMELEC) which granted an exemption to the election ban in the movement of any public officer in its Resolution No. 3992[6] promulgated on April 24, 2001. This was in pursuance to COMELEC Resolution No. 3401 which provides in part that Section 1. Prohibited Acts (a) During the election period from January 2, 2001 until July 13, 2001, no public official shall make or cause any transfer/detail whatsoever of any officer or employee in the civil service, including public school teachers, or suspend elective provincial, city, municipal or barangay official, except upon prior written approval of the Commission. On May 7, 2001, Gov. Calingin filed a petition for prohibition before the Court of Appeals to prevent the DILG from executing the assailed suspension order. However, on May 11, 2001, the Court of Appeals dismissed the said petition and by resolution issued on July 1, 2002, denied petitioners motion for reconsideration. Hence, this appeal by certiorari where petitioner asserts that the Court of Appeals erred in FINDING THAT THE EXECUTION OF THE SUSPENSION ORDER OF THE DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT DURING THE ELECTION PERIOD IS WITH AUTHORITY FROM THE

[8]

Id. at 17-18. SEC. 15. Finality of Order. The decision of the agency shall

As to the validity of the exemption granted by COMELEC in its Resolution No. 3992, petitioner claims that the exemption was invalid for being based on a mere draft resolution. According to him, a draft resolution does not operate as a final resolution of a case until the proper resolution is duly signed and promulgated. Petitioner maintains that a draft cannot produce any legal effect. A perusal of the records, however, reveals that the Resolution in O.P. Case No. 00-1-9220 was approved and signed on March 22, 2001 by Executive Secretary Renato de Villa by the authority of the President. Hence, the approval was before the promulgation of COMELEC Resolution No. 3992 on April 24, 2001. The record also shows that the request to implement the said suspension order was filed on March 22, 2001 by the Senior Deputy Executive Secretary of the Office of the President pursuant to the requirements stated in the Resolution. Moreover, COMELEC Resolution No. 3529[19] which may be applied by analogy and in relation to Sec. 2[20] of COMELEC Resolution No. 3401 merely requires the request to be in writing indicating the office and place from which the officer is removed, and the reason for said movement, and submitted together with the formal complaint executed under oath and containing the specific charges and the answer to said complaint. The request for the exemption was accompanied with the Affidavit of Complaint, Affidavit of Controversion, Reply and Draft Resolution. The pertinent documents required by the COMELEC to substantiate the request were submitted. There being a proper basis for its grant of exemption, COMELEC Resolution No. 3992 is valid. WHEREFORE, the instant petition for review on certiorari is DENIED. The assailed Court of Appeals resolutions dated May 11, 2002 and July 1, 2002 in CA-G.R. SP No. 64583 are hereby AFFIRMED. SO ORDERED. Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.[16] [15] [14] [13] [12] [11] [10] [9]

become final and executory fifteen (15) days after the receipt of a copy thereof by the party adversely affected unless within that period an administrative appeal or judicial review, if proper, has been perfected. One motion for reconsideration may be filed, which shall suspend the running of the said period. SEC. 67. Administrative Appeals. Decisions in administrative

cases may, within thirty (30) days from receipt thereof, be appealed to the following: (a) The sangguniang panlalawigan, in the case of decisions of thesangguniang panlungsod of component cities and the sangguniang bayan; and (b) The Office of the President, in the case of decisions of thesangguniang panlalawigan and the sangguniang panlungsod of highly urbanized cities and independent component cities. Decisions of the Office of the President shall be final and executory. Records, p. 16. G.R. No. 142261, 29 June 2000, 334 SCRA 738, 754. Corona v. Court of Appeals, G.R. No. 97356, 30 September

1992, 214 SCRA 378, 391-392; See also Zaldivia v. Reyes, Jr., G.R. No. 102342, 3 July 1992, 211 SCRA 277, 284. Ruben Agpalo, STATUTORY CONSTRUCTION, Third Edition, p.

321. SEC. 1. Scope. This Rule shall apply to appeals from

judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Office of the President, . . . . (Emphasis supplied) SEC. 12. Effect of appeal. The appeal shall not stay the

award, judgment, final order or resolution sought to be reviewed unless the Court of Appeals shall direct otherwise upon such[*]

Also referred to as DILG Sec. Jose D. Lina, Jr. Rollo, pp. 26-34. Id. at 36-37. Id. at 55-58. Id. at 38-39, 51-52. Id. at 60-64. Id. at 67-75. Id. at 9.

terms as it may deem just.[17]

[1]

SEC. 68. Execution Pending Appeal. An appeal shall not

prevent a decision from becoming final or executory. The[2]

respondent shall be considered as having been placed under preventive suspension during the pendency of an appeal in the event he wins such appeal. In the event the appeal results in an exoneration, he shall be paid his salary and such other emoluments during the pendency of the appeal.[18]

[3]

[4]

[5]

Supra, note 12 at 752. Premises considered, the Commission RESOLVED, as it hereby

[6]

[19]

RESOLVES, to approve the addendum to Sec. 2 of Resolution No.[7]

3401, promulgated on 15 December 2000 to read as follows:

SEC. 2. Any request for authority to suspend an elective city and barangay officer shall be submitted in writing to the commission, together with the formal complaint containing the specific charges, executed under oath and the answer to said complaint. ...[20]

SEC. 2. Requests for authority of the Commission. How to

file: (1) The requests shall indicate the office and place to which the officer or employee is proposed to be transferred/detailed or otherwise moved and the reason for said transfer/detail.

E-Library Doc. ID: 12162723492088011366

SECOND DIVISION [G.R. No. 127383, August 18, 2005] THE CITY OF DAVAO, CITY TREASURER AND THE CITY ASSESSOR OF DAVAO CITY, PETITIONERS, VS. THE REGIONAL TRIAL COURT, BRANCH XII, DAVAO CITY AND THE GOVERNMENT INSURANCE SYSTEM (GSIS), RESPONDENTS. DECISIONTINGA, J.: A Davao City Regional Trial Court (RTC) upheld the tax-exempt status of the Government Service Insurance System (GSIS) for the years 1992 to 1994 in contravention of the mandate under the Local Government Code of 1992,[1] the precedent set by this Court in Mactan-Cebu International Airport Authority v. Hon. Marcos,[2] and the public policy on local autonomy enshrined in the Constitution.[3] The matter was elevated to this Court directly from the trial court on a pure question of law.[4] The facts are uncontroverted. On 8 April 1994, the GSIS Davao City branch office received a Notice of Public Auction scheduling the public bidding of GSIS properties located in Matina and Ulas, Davao City for nonpayment of realty taxes for the years 1992 to 1994 totaling Two Hundred Ninety Five Thousand Seven Hundred Twenty One Pesos and Sixty One Centavos (P295,721.61).[5] The auction was subsequently reset by virtue of a deadline extension allowed by Davao City for the payment of delinquent real property taxes.[6] On 28 July 1994, the GSIS received Warrants of Levy and Notices of Levy on three parcels of land owned by the GSIS. Another Notice of Public Auction was received by the GSIS on 29 August 1994, setting the date of auction sale for 20 September 1994. On 13 September 1994, the GSIS filed a Petition for Certiorari, Prohibition, Mandamus And/Or Declaratory Relief with the RTC of Davao City. It also sought the issuance of a temporary restraining order. The case was raffled to Branch 12, presided by Judge Maximo Magno Libre. On 13 September 1994, the RTC issued a temporary restraining order for a period of twenty (20) days,[7] effectively enjoining the auction sale scheduled seven days later. Following exchange of arguments, the RTC issued anOrder dated 3 April 1995 issuing a writ of preliminary injunction effective for the duration of the suit.[8] At the pre-trial, it was agreed that the sole issue for resolution was purely a question of law, that is, whether Sections 234 and 534 of the Local Government Code, which have withdrawn real property tax exemptions of government owned and controlled corporations (GOCCs), have also withdrawn from the GSIS its right to be exempted from payment of the realty taxes sought to be levied by Davao City.[9] The parties submitted their respective memoranda. On 28 May 1996, the RTC rendered the Decision[10] now assailed before this Court. It concluded that notwithstanding the enactment of the Local Government Code, the GSIS retained its exemption from all taxes, including real estate taxes. The RTC cited Section 33 of Presidential Decree (P.D.) No. 1146, the Revised Government Service Insurance Act of 1977, as amended by P. D. No. 1981, which mandated such exemption. The RTC conceded that the tax exempting statute, P.D. No. 1146, was enacted prior to the Local Government Code. However, it noted that the earlier law had prescribed two conditions in order that the tax exemption provided therein could be withdrawn by future enactments, namely: (1) that Section 33 be expressly and categorically repealed by law; and (2) that a provision be enacted to substitute the declared policy of exemption from any and all taxes as an essential factor for the solvency of the GSIS fund.[11] The RTC concluded that both conditions had not been satisfied by the Local Government Code. The RTC likewise accorded weight to Legal Opinion No. 165 of the Secretary of Justice dated 16 December 1996 concluding that Section 33 was not repealed by the Local Government Code, and a memorandum emanating from the Office of the President dated 14 February 1995 expressing the same opinion.[12] The dispositive portion of the assailed Decision reads: Now then, in light of the foregoing observation, the court perceives, that the cause of action asseverated by petitioner in its petition has been well established by law and jurisprudence, and therefore the following relief should be granted:a) The tax exemption privilege of petitioner should be upheld and continued and that the warrants of levy and notices of levy issued by the respondent Treasurer is hereby voided and declared of no effect; Let a writ of prohibition be issued restraining the City Treasurer from proceeding with the auction sale of the subject properties, as well as the respondents Register of Deeds from annotating the warrants/notices of levy on the certificate of titles of petitioners real properties subject of this suit; and Compelling the City Assessor of Davao City to include the properties of petitioner in the list of properties exempt from payment of realty tax and if the warrants and levies issued by the City Treasurer had been annotated in the memorandum of encumbrance on the certificates of title of petitioner's properties, to cancel such annotation so that the certificates of titles of petitioners will be free from such liens and encumbrances.

b)

c)

SO ORDERED.[13] Petitioners' Motion for Reconsideration was denied by the RTC in an Order dated 30 October 1996, hence the present petition. Petitioners argue that the exemption granted in Section 33 of P.D. No. 1146, as amended, was effectively withdrawn upon the enactment of the Local Government Code, particularly Sections 193 and 294 thereof. These provisions made the GSIS, along with all other GOCCs, subject to realty taxes. Petitioners point out that under Section 534(f) of the Local Government Code, even special laws, such as PD No. 1146, which are inconsistent with the Local Government Code, are repealed or modified accordingly. On the other hand, GSIS contends, as the RTC held, that the requisites for repeal are laid down in Section 33 of P.D. No. 1146, as amended, namely that it be done expressly and categorically by law, and that a provision be enacted to substitute the declared policy of exemption from taxes as an essential factor for the solvency of the GSIS fund. It stresses that it had been exempt from taxation as far back as 1936, when its original charter was enacted through Commonwealth Act No. 186.[14] It asserts further that this Court had previously recognized the "extraordinary exemption" of GSIS in Testate Estate of Concordia T. Lim v. City of Manila,[15] and such exemption has similarly been affirmed by the Secretary of Justice and the Office of the President in the aforementioned issuances also cited by the RTC.[16] GSIS likewise notes that had it been the intention of the

legislature to repeal Section 33 of P.D. No. 1146 through the Local Government Code, said law would have included the appropriate retraction in its repealing clause found in Section 534(f). However, said section, according to the GSIS, partakes the nature of a general repealing provision which is accorded less weight in light of the rule that implied repeals are not favored. Consequently with its position that it remains exempt from realty taxation, the GSIS argues that the Notices of Assessment, Warrants and Notices of Levy, Notices of Public Auction Sale and the Annotations of the Notice of Levy are void ab initio. A review of the relevant statutory provisions is in order. Presidential Decree No. 1146 was enacted in 1977 by President Marcos in the exercise of his legislative powers. Section 33, as originally enacted, read: Sec. 33. Exemption from tax, Legal Process and Lien.- It is hereby declared to be the policy of the State that the actuarial solvency of the funds of the System shall be preserved and maintained at all times and that the contribution rates necessary to sustain the benefits under this Act shall be kept as low as possible in order not to burden the members of the system and/or their employees. . . . Accordingly, notwithstanding any laws to the contrary, the System, its assets, revenues including the accruals thereto, and benefits paid, shall be exempt from all taxes. These exemptions shall continue unless expressly and specifically revoked and any assessment against the System as of the approval of this Act are hereby considered paid. As it stood then, Section 33 merely provided a general rule exempting the GSIS from all taxes. However, Section 33 of P.D. No. 1146 was amended in 1985 by President Marcos, again in the exercise of his legislative powers, through P.D. No. 1981. It was through this latter decree that a second paragraph was added to Section 33 delineating the requisites for repeal of the tax exemption enjoyed by the GSIS by incorporating the following: ... Moreover, these exemptions shall not be affected by subsequent laws to the contrary, such as the provisions of Presidential Decree No. 1931 and other similar laws that have been or will be enacted, unless this section is expressly and categorically repealed by law and a provision is enacted to substitute the declared policy of exemption from any and all taxes as an essential factor for the solvency of the fund.[17] It bears noting though, and it is perhaps key to understanding the necessity of the addendum provided under P.D. No. 1981, that a presidential decree enacted a year earlier, P.D. No. 1931, effectively withdrew all tax exemption privileges granted to GOCCs.[18] In fact, P.D. No. 1931 was specifically named in the afore-quoted addendum as among those laws which, despite passage, would not affect the tax exempt status of GSIS. Section 1 of P.D. No. 1931 states: Sec. 1. The provisions of special or 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. There is no doubt that the GSIS which was established way back in 1937 is a GOCC, a fact that GSIS itself admits in its petition for certiorari before the RTC.[19] It thus clear that Section 1 of P.D. No. 1931 expressly withdrew those exemptions granted to the GSIS. Presidential Decree No. 1931 did allow the exemption to be restored in special cases through an application for restoration with the Secretary of Finance, but otherwise, the exemptions granted to the GSIS prior to the enactment of P.D. No. 1931 were withdrawn.

Notably, P.D. No. 1931 was also an exercise of legislative powers then accorded to President Marcos by virtue of Amendment No. 6 to the 1973 Constitution. Whether he was aware of the effect of P.D. No. 1931 on the GSIS's tax-exempt status or the ramifications of the decree thereon is unknown; but apparently, he immediately reconsidered the withdrawal of the exemptions on the GSIS. Thus, P.D. No. 1981 was enacted, expressly stating that the tax-exempt status of the GSIS under Section 33 of P.D. No. 1146 remained in place, notwithstanding the passage of P.D. No. 1931. However, P.D. No. 1981 did not stop there, serving merely as it should to restore the previous exemptions on the GSIS. It also attempted to proscribe future attempts to alter the tax-exempt status of the GSIS by imposing unorthodox conditions for its future repeal. Thus, as intimated earlier, a second paragraph was added to Section 33, containing the restrictions relied upon by the RTC and presently invoked by the GSIS before this Court. These laws have to be weighed against the Local Government Code of 1992, a landmark law which implemented the constitutional aspirations for a more extensive breadth of local autonomy. The Court, in Mactan, was asked to consider the effect of the Local Government Code on the taxability by local governments of GOCCs such as the Mactan Cebu International Airport Authority (MCIAA). Particularly, MCIAA invoked Section 133(o) of the Local Government Code as the basis for its claimed exemption, the provision reading: SECTION 133. Common Limitations on the Taxing Powers of Local Government Units.- Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: ....

(o)

Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units.

However, the Court, in ruling MCIAA non-exempt from realty taxes, considered that Section 133 qualified the exemption of the National Government, its agencies and instrumentalities from local taxation with the phrase "unless otherwise provided herein." The Court then considered the other relevant provisions of the Local Government Code, particularly the following: SECTION 193. Withdrawal of Tax Exemption Privileges. - Unless otherwise provided in this Code, tax exemption or incentives granted to, or enjoyed by all persons, whether natural or juridical, including government-owned and controlled corporations, except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code. SECTION 232. Power to Levy Real Property Tax. - A province or city or a municipality within the Metropolitan Manila area may levy an annualad valorem tax on real property such as land, building, machinery, and other improvements not hereafter specifically exempted. SECTION 234. Exemptions from Real Property Tax. -- The following are exempted from payment of the real property tax:(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person; Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit or religious

(b)

(c)

(d) (e)

cemeteries and all lands, buildings, and improvements actually, directly, and exclusively used for religious charitable or educational purposes; All machineries and equipment that are actually, directly and exclusively used by local water districts and governmentowned and controlled corporations engaged in the distribution of water and/or generation and transmission of electric power; All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and Machinery and equipment used for pollution control and environmental protection.

Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including all government-owned or controlled corporations are hereby withdrawn upon the effectivity of this Code. (Emphasis supplied.) Evidently, Section 133 was not intended to be so absolute a prohibition on the power of LGUs to tax the National Government, its agencies and instrumentalities, as evidenced by these cited provisions which "otherwise provided." But what was the extent of the limitation under Section 133? This is how the Court, in a discussion of far-reaching consequence, defined the parameters in Mactan: The foregoing sections of the LGC speak of: (a) the limitations on the taxing powers of local government units and the exceptions to such limitations; and (b) the rule on tax exemptions and the exceptions thereto. The use of exceptions or provisos in these sections, as shown by the following clauses: (1) "unless otherwise provided herein" in the opening paragraph of Section 133; (2) "Unless otherwise provided in this Code" in Section 193; (3) "not hereafter specifically exempted" in Section 232; and (4) "Except as provided herein" in the last paragraph of Section 234 initially hampers a ready understanding of the sections. Note, too, that the aforementioned clause in Section 133 seems to be inaccurately worded. Instead of the clause "unless otherwise provided herein," with the "herein" to mean, of course, the section, it should have used the clause "unless otherwise provided in this Code." The former results in absurdity since the section itself enumerates what are beyond the taxing powers of local government units and, where exceptions were intended, the exceptions are explicitly indicated in the next. For instance, in item (a) which excepts income taxes "when levied on banks and other financial institutions"; item (d) which excepts "wharfage on wharves constructed and maintained by the local government unit concerned"; and item (1) which excepts taxes, fees and charges for the registration and issuance of licenses or permits for the driving of "tricycles." It may also be observed that within the body itself of the section, there are exceptions which can be found only in other parts of the LGC, but the section interchangeably uses therein the clause, "except as otherwise provided herein" as in items (c) and (i), or the clause "except as provided in this Code" in item (j). These clauses would be obviously unnecessary or mere surplusages if the opening clause of the section were "Unless otherwise provided in this Code" instead of "Unless otherwise provided herein." In any event, even if the latter is used, since under Section 232 local government units have the power to levy real property tax, except those exempted therefrom under Section 234, then Section 232 must be deemed to qualify Section 133. Thus, reading together Sections 133, 232, and 234 of the LGC, we conclude that as a general rule, as laid down in Section 133, the taxing powers of local government units

cannot extend to the levy of, inter alia, "taxes, fees and charges of any kind on the National Government, its agencies and instrumentalities, and local government units"; however, pursuant to Section 232, provinces, cities, and municipalities in the Metropolitan Manila Area may impose the real property tax except on, inter alia, "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person," as provided in item (a) of the first paragraph of Section 234. As to tax exemptions or incentives granted to or presently enjoyed by natural or judicial persons, including governmentowned and controlled corporations, Section 193 of the LGC prescribes the general rule, viz., they are withdrawn upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under R.A. No. 6938, nonstock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC. The latter proviso could refer to Section 234 which enumerates the properties exempt from real property tax. But the last paragraph of Section 234 further qualifies the retention of the exemption insofar as real property taxes are concerned by limiting the retention only to those enumerated therein; all others not included in the enumeration lost the privilege upon the effectivity of the LGC. Moreover, even as to real property owned by the Republic of the Philippines or any of its political subdivisions covered by item (a) of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such property has been granted to a taxable person for consideration or otherwise. Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from payment of real property taxes granted to natural or juridical persons, including government-owned or controlled corporations, except as provided in the said section, and the petitioner is, undoubtedly, a government-owned corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its Charter, R.A. No. 6958, has been withdrawn. Any claim to the contrary can only be justified if the petitioner can seek refuge under any of the exceptions provided in Section 234, but not under Section 133, as it now asserts, since, as shown above, the said section is qualified by Sections 232 and 234.[20] (Emphasis supplied.) This Court, in Mactan, acknowledged that under Section 133, instrumentalities were generally exempt from all forms of local government taxation, unless otherwise provided in the Code. On the other hand, Section 232 "otherwise provides" insofar as it allowed local government units to levy an ad valorem real property tax, irrespective of who owned the property. At the same time, the imposition of real property taxes under Section 232 is in turn qualified by the phrase "not hereinafter specifically exempted." The exemptions from real property taxes are enumerated in Section 234, which specifically states that only real properties owned "by the Republic of the Philippines or any of its political subdivisions" are exempted from the payment of the tax. Clearly, instrumentalities or GOCCs do not fall within the exceptions under Section 234. Worth reckoning, however, is an essential difference between the situation of the MCIAA (and most other GOCCs, for that matter) and that of the GSIS. Unlike most other GOCCs, there is a statutory provision- Section 33 of P.D. No. 1146, as amendedwhich imposes conditions on the subsequent withdrawal of the GSIS's tax exemptions. The RTC justified the affirmance of the tax exemptions based on the non-compliance by the Local

Government Code with these conditionalities, and not by reason of a general proposition that GOCCs or instrumentalities remain exempt from local government taxation. Absent Section 33 of P.D. No. 1146, as amended, there would be no impediment in squarely applying the express provisions of Sections 193, 232 and 234 of the Local Government Code, as the Court did in Mactan and recently in Philippine Rural Electric Cooperatives Association, Inc. et al. v. Secretary of Interior And Local Government, et al. [21] and in ruling that the tax exemptions of GSIS were withdrawn by the Code. Thus, the crucial proposition is whether the GSIS tax exemptions can be deemed as withdrawn by the Local Government Code notwithstanding Section 33 of P.D. No. 1146 as amended. Concededly, it does not appear that at the very least, the second conditionality of Section 33 has been met. No provision has been enacted "to substitute the declared policy of exemption from any and all taxes as an essential factor for the solvency of the fund."[22] Yet the Court is averse to employing this framework, in the first place as utilized by the RTC, for we recognize a fundamental flaw in Section 33, particularly the amendatory second paragraph introduced by P.D. No. 1981. The second paragraph of Section 33 of P.D. No. 1146, as amended, effectively imposes restrictions on the competency of the Congress to enact future legislation on the taxability of the GSIS. This places an undue restraint on t