PRINCIPLE OF AUTO LIMITATION

Reagan vs CIR

It was held that the provision in the military bases agreement giving the US criminal jurisdiction over
crimes committed even by Filipinos inside the bases is not a derogation of Philippine sovereignty. The
Philippines has the power to limit the exercise of its sovereignty. When it allows a foreign state to use
part of its territory and waives jurisdiction over crimes committed therein, it does not give up part of its
sovereignty but only limits the exercise of its sovereignty.

ISSUE: Is the sale considered done in a foreign soil not subject to Philippine income tax?
Answer: No. The Philippines is independent and sovereign, its authority may be exercised over its entire
domain. There is no portion thereof that is beyond its power. There is nothing in the Military Bases
Agreement that lends support to Reagan’s assertion. The Base has not become foreign soil or territory.
This country’s jurisdictional rights therein, certainly not excluding the power to tax, have been
preserved. The Philippines merely consents that the US exercise jurisdiction in certain cases – this is just
a matter of comity, courtesy and expediency. It is likewise noted that he indeed is employed by the
USAF and his income is derived from US source but the income derived from the sale is not of US source
hence taxable.

People vs Loreta Gozo

Issue: Is the Municipal Ordinance enforceable within the US Naval Base?

Answer: : Yes. The Philippine Government has not abdicated its sovereignty over the bases as part of
the Philippine territory or divested itself completely of jurisdiction over offenses committed therein.
Under the terms of the treaty, the United States Government has prior or preferential but not exclusive
jurisdiction of such offenses, in other words, the Philippines still exercises sovereignty within that
locality. i Hence, in the exercise of its sovereignty, the State through the City of Olongapo does have
administrative jurisdiction over the lot located within the US Naval Base.