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G.R. No. 91649 May 14, 1991 Basco vs.

PAGCOR Facts: On July 11, 1983, PAGCOR was created under PD 1869 to enable the Government to r egulate and centralize all games of chance authorized by existing franchises or permitted by law. Petitioners assailed the validity of the law creating PAGCOR o n constitutional grounds among others particularly citing that the PAGCOR s charter is against the constitutional provision on local autonomy, because it constitute s a waiver of the right of the City of Manila to impose taxes and legal fees fro m PAGCOR provided by the exemption clause of it's charter. Admin. Issue: 1. What is the nature of PAGCOR's charter? Does the City of Manila have the righ ts to impose tax on PAGCOR? Held: PAGCOR is a government owned or controlled corporation. All its shares of stocks are owned by the National Government. In addition to its corporate powers, it a lso exercises regulatory powers. PAGCOR has a dual role, first, to operate gambl ing, and secondly, to regulate gambling. The latter regulatory power is a govern mental function, which places PAGCOR as an agency or instrumentality of the Nati onal Government. Being such, PAGCOR is actually exempted from local taxes. Other wise, its operation might be burdened, impeded or subject to control by a mere L ocal Government. The National Government is always supreme over the Local.