ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES

MARANAN AND LORENZO SANCHEZ v. PHILIPPINE AMUSEMENTS

AND GAMING CORPORATION (PAGCOR)
G.R. No. 61649 May 14, 1991
En Banc; Paras, J.:

Facts

The PAGCOR was created by virtue of P.D. 1067-A dated January 1, 1977 and was
granted a franchise under P.D. 1067-B also dated January 1, 1977 "to establish, operate and
maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines."
The operation was considered a success for it proved to be a potential source of revenue to fund
infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for
PAGCOR to fully attain this objective.

Subsequently, on 11 July, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing franchise or
permitted by law. The petitioners argue that the decree is said to have a "gambling objective" and
therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3
(2) of Article XIV, of the present Constitution.

Issues

1. Whether or not it waived the Manila City government’s right to impose taxes and license
fees.
2. Whether or not it has intruded into the local government’s right to impose local taxes and
license fees.
3. Whether or not it violates the equal protection clause of the constitution.
4. Whether or not it violates the avowed trend of Cory government away from monopolistic
and crony economy, and toward free enterprise and privatization.

Held

1. No. The LGU-Manila, being a mere Municipal corporation has no inherent right to
impose taxes. Further, the Charter or statute must plainly show an intent to confer that
 power or the municipality cannot assume it. It should be further stressed that municipal
corporations are mere creatures of Congress. Congress, therefore, has the power of
control over Local governments. 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.
2. No. The LGU-Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru the
grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested
exclusively on the National Government. Necessarily, the power to demand or collect
license fees which is a consequence of the issuance of "licenses or permits" is no longer
vested in the City of Manila.
3. No. 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. Further, it 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.
4. No. Suffice it to state that this is not a ground for this Court to nullify P.D. 1869. The
judiciary does not settle policy issues. The Court can only declare what the law is and not
what the law should be. It should be noted that, as the provision is worded, monopolies
are not necessarily prohibited by the Constitution. The state must still decide whether
public interest demands that monopolies be regulated or prohibited. Again, this is a
matter of policy for the Legislature to decide.
Kilosbayan, et. al. v. Manuel Morato, et. al
G.R. No. 118910 November 16, 1995
En Banc; Mendoza, J.:

Facts

The herein petition was filed seeking to declare Equipment Lease Agreement (ELA)
invalid for the fact that it is substantially the same as the Contract of Lease nullified in the first
case and was already settled, which is the case of Kilosbayan v. Guingona, invalidating the
Contract of Lease between the Philippine Charity Sweepstake Office and the Philippine Gaming
Management Corporation.

They insist that the decision in the first case has already settled (1) whether petitioner
Kilosbayan, Inc. has a standing to sue and (2) whether under its charter (R.A. No. 1169, as
amended) the Philippine Charity Sweepstakes Office can enter into any form of association or
collaboration with any party in operating an on-line lottery. Consequently, petitioners contend,
these questions can no longer be reopened.

Issue

Whether or not the agreement entered into between PCSO and PGMC is valid.

Held

No. It is contended that equipment leases are attractive and commonly used in place of
contracts of purchase and sale because of "multifarious credit and tax constraints" and therefore
could not have been left out from the requirement of public bidding. Obviously, these credit and
tax constraints can have no attraction to the government when considering the advantages of sale
over lease of equipment. The fact that lease contracts are in common use is not a reason for
implying that the rule on public bidding applies not only to government purchases but also to
lease contracts. For the fact also is that the government leases equipment, such as copying
machines, personal computers and the like, without going through public bidding.
Tondo Medical Center Employees Association v. Court of Appeals
G.R. No. 167324 July 17, 2007
Chico-Nazario, J.:

Facts

In 1999, the DOH launched the Health Sector Reform Agenda, which was developed by
the HSRA Technical Working Group after a series of workshops and analyses with inputs from
several consultants, program managers and technical staff possessing the adequate expertise and
experience in the health sector. Petitioners questioned the first reform agenda involving the fiscal
autonomy of government hospitals, particularly the collection of socialized user fees and the
corporate restructuring of government hospitals.

Subsequently, then President Joseph Ejercito Estrada issued Executive Order No. 102,
entitled "Redirecting the Functions and Operations of the Department of Health," which provided
for the changes in the roles, functions, and organizational processes of the DOH. Under the
assailed executive order, the DOH refocused its mandate from being the sole provider of health
services to being a provider of specific health services and technical assistance, as a result of the
devolution of basic services to local government units. Petitioners contended that the said law,
which effects the reorganization of the DOH, should be enacted by Congress in the exercise of
its legislative function. They argued that Executive Order No. 102 is void, having been issued in
excess of the President’s authority.

Issue

Whether or not the HSRA and E.O No. 102 are unconstitutional.

Held

No. The petitioners’ allegations are too general and unsubstantiated by the records for the
Court to pass upon. Any serious legal errors in laying down the compensation of the DOH
employees concerned can only invalidate the pertinent provisions of Department Circular
No.312, Series of 2000. The validity of Executive Order No. 102 would, nevertheless, remain
unaffected. The validity of a statute or ordinance is to be determined from its general purpose
and its efficiency to accomplish the end desired, not from its effects in a particular case. This
case likewise stressed that the rule on constitutional questions which are of transcendental
importance cannot be invoked where a party’s substantive claim is without merit. After a careful
scrutiny of the petitioners’ substantive claims, this Court finds that the petitioners miserably
failed to show any merit to their claims.