THIRD DIVISION

[G.R. No. 149110. April 9, 2003.] NATIONAL POWER CORPORATION, petitioner, vs. CITY OF CABANATUAN, respondent. The Solicitor General for petitioner. Edgardo G. Villarin n! Trese D. Wenceslao for re"pon!ent. SYNOPSIS #etitioner i" $o%ern&ent o'ne! n! (ontrolle! (orpor tion (re te! )n!er *o&&on'e lt+ A(t No. 120, " &en!e!. ,or & n- -e r", petitioner "ol! ele(tri( po'er to t+e re"i!ent" of * . n t) n *it-. #)r") nt to 1992 or!in n(e, t+e re"pon!ent ""e""e! t+e petitioner fr n(+i"e t /. In ref)"in$ to p - t+e t / ""e""&ent, petitioner r$)e! t+ t t+e re"pon!ent + ! no )t+orit- to i&po"e t / on $o%ern&ent entitie" li0e it"elf n! t+ t it ' " t / e/e&pt entit- .- e/pre"" pro%i"ion" of l '. Hen(e, re"pon!ent file! (olle(tion ")it !e& n!in$ p -&ent of t+e ""e""e! t / !)e lle$in$ t+ t petitioner1" e/e&ption fro& lo( l t /e" + " .een repe le!. T+e tri l (o)rt !i"&i""e! t+e ( "e n! r)le! t+ t t+e t / e/e&ption pri%ile$e" $r nte! to petitioner "till ")."i"t". On ppe l, t+e *o)rt of Appe l" re%er"e! t+e tri l (o)rt1" or!er. #etitioner1" &otion for re(on"i!er tion ' " !enie! .- t+e ppell te (o)rt. Hen(e, t+i" petition for re%ie' file! .efore t+e S)pre&e *o)rt. T+e S)pre&e *o)rt !enie! t+i" petition n! ffir&e! t+e !e(i"ion of t+e *o)rt of Appe l". A((or!in$ to t+e *o)rt, one of t+e &o"t "i$nifi( nt pro%i"ion" of t+e 2o( l Go%ern&ent *o!e 32G*4 i" t+e re&o% l of t+e .l n0et e/(l)"ion of in"tr)&ent litie" n! $en(ie" of t+e n tion l $o%ern&ent fro& t+e (o%er $e of lo( l t / tion. Alt+o)$+ " $ener l r)le, 2o( l Go%ern&ent 5nit" 32G54 ( nnot i&po"e t /e", fee" or (+ r$e" of n0in! on t+e N tion l Go%ern&ent, it" $en(ie" n! in"tr)&ent litie", t+i" r)le no' !&it" n e/(eption, i.e., '+en "pe(ifi( pro%i"ion" of t+e 2G* )t+ori6e t+e 2G5 to i&po"e t /e", fee" or (+ r$e" on t+e fore&entione! entitie". In t+e ( "e t . r, Se(tion 171 in rel tion to Se(tion 138 of t+e 2G* (le rl- )t+ori6e! t+e re"pon!ent (it- $o%ern&ent to i&po"e on t+e petitioner t+e fr n(+i"e t / in 9)e"tion. SYLLABUS

1.TA:ATION; TA:<S AS TH< 2I,<=2OOD O, TH< GOV<RN><NT; *ONSTR5<D. ? T /e" re t+e life.loo! of t+e $o%ern&ent, for 'it+o)t t /e", t+e $o%ern&ent ( n neit+er e/i"t nor en!)re. A prin(ip l ttri.)te of "o%erei$nt-, t+e e/er(i"e of t /in$ po'er !eri%e" it" "o)r(e fro& t+e %er- e/i"ten(e of t+e "t te '+o"e "o(i l (ontr (t 'it+ it" (iti6en" o.li$e" it to pro&ote p).li( intere"t n! (o&&on $oo!. T+e t+eor- .e+in! t+e e/er(i"e of t+e po'er to t / e& n te" fro& ne(e""it-; 'it+o)t t /e", $o%ern&ent ( nnot f)lfill it" & n! te of pro&otin$ t+e $ener l 'elf re n! 'ell@.ein$ of t+e people. 2.ID.; #OA<R TO TA:; 2O*A2 GOV<RN><NT 5NITS; <NBOC DIR<*T A5THORITC TO 2<VC TA:<S, ,<<S AND OTH<R *HARG<S #5RS5ANT TO ARTI*2< :, S<*TION 7 O, TH< *ONSTIT5TION; RATIONA2<. ? In re(ent -e r", t+e in(re "in$ "o(i l (+ llen$e" of t+e ti&e" e/p n!e! t+e "(ope of "t te (ti%it-, n! t / tion + " .e(o&e tool to re li6e "o(i l D)"ti(e n! t+e e9)it .le !i"tri.)tion of 'e lt+, e(ono&i( pro$re"" n! t+e prote(tion of lo( l in!)"trie" " 'ell " p).li( 'elf re n! "i&il r o.De(ti%e". T / tion "")&e" e%en $re ter "i$nifi( n(e 'it+ t+e r tifi( tion of t+e 19E8 *on"tit)tion. T+en(efort+, t+e po'er to t / i" no lon$er %e"te! e/(l)"i%el- on *on$re""; lo( l le$i"l ti%e .o!ie" re no' $i%en !ire(t )t+orit- to le%- t /e", fee" n! ot+er (+ r$e" p)r") nt to Arti(le :, Se(tion 7 of t+e 19E8 *on"tit)tion, vizF GSe(tion 7. ? < (+ 2o( l Go%ern&ent )nit "+ ll + %e t+e po'er to (re te it" o'n "o)r(e" of re%en)e, to le%- t /e", fee" n! (+ r$e" ").De(t to ")(+ $)i!eline" n! li&it tion" " t+e *on$re"" & - pro%i!e, (on"i"tent 'it+ t+e . "i( poli(- of lo( l )tono&-. S)(+ t /e", fee" n! (+ r$e" "+ ll ((r)e e/(l)"i%el- to t+e 2o( l Go%ern&ent".G T+i" p r !i$& "+ift re")lt" fro& t+e re li6 tion t+ t $en)ine !e%elop&ent ( n .e (+ie%e! onl- ."tren$t+enin$ lo( l )tono&- n! pro&otin$ !e(entr li6 tion of $o%ern n(e. ,or lon$ ti&e, t+e (o)ntr-1" +i$+l- (entr li6e! $o%ern&ent "tr)(t)re + " .re! ()lt)re of !epen!en(e &on$ lo( l $o%ern&ent le !er" )pon t+e n tion l le !er"+ip. It + " l"o G! &pene! t+e "pirit of initi ti%e, inno% tion n! i& $in ti%e re"ilien(e in & tter" of lo( l !e%elop&ent on t+e p rt of lo( l $o%ern&ent le !er".G T+e onl- ' - to "+ tter t+i" ()lt)re of !epen!en(e i" to $i%e t+e 2G5" 'i!er role in t+e !eli%er- of . "i( "er%i(e", n! (onfer t+e& ")ffi(ient po'er" to $ener te t+eir o'n "o)r(e" for t+e p)rpo"e. To (+ie%e t+i" $o l, Se(tion 3 of Arti(le : of t+e 19E8 *on"tit)tion & n! te" *on$re"" to en (t lo( l $o%ern&ent (o!e t+ t 'ill, consistent with the basic policy of local autonomy, "et t+e $)i!eline" n! li&it tion" to t+i" $r nt of t /in$ po'er". 3.ID.; ID.; ID.; *ANNOT I>#OS< TA:<S, ,<<S OR *HARG<S O, ANC HIND ON TH< NATIONA2 GOV<RN><NT, ITS AG<N*I<S AND INSTR5><NTA2ITI<S AS A R52<; <:*<#TION. ? *on"i!ere! " t+e &o"t re%ol)tion r- pie(e of le$i"l tion on lo( l )tono&-, t+e 2G* effe(ti%el- !e l" 'it+ t+e fi"( l (on"tr int" f (e! .- 2G5". It 'i!en" t+e t / . "e of 2G5" to in(l)!e t /e" '+i(+ 'ere pro+i.ite! .- pre%io)" l '" ")(+ " t+e i&po"ition of t /e" on fore"t pro!)(t", fore"t (on(e""ion ire", &iner l pro!)(t", &inin$ oper tion", n! t+e li0e. T+e 2G* li0e'i"e pro%i!e" eno)$+ fle/i.ilitto i&po"e t / r te" in ((or! n(e 'it+ t+eir nee!" n! ( p .ilitie". It !oe" not pre"(ri.e

$r !) te! fi/e! r te" .)t &erel- "pe(ifie" t+e &ini&)& n! & /i&)& t / r te" n! le %e" t+e !eter&in tion of t+e (t) l r te" to t+e re"pe(ti%e sanggunian. One of t+e &o"t "i$nifi( nt pro%i"ion" of t+e 2G* i" t+e re&o% l of t+e .l n0et e/(l)"ion of in"tr)&ent litie" n! $en(ie" of t+e n tion l $o%ern&ent fro& t+e (o%er $e of lo( l t / tion. Alt+o)$+ " $ener l r)le, 2G5" ( nnot i&po"e t /e", fee" or (+ r$e" of n0in! on t+e N tion l Go%ern&ent, it" $en(ie" n! in"tr)&ent litie", t+i" r)le no' !&it" n e/(eption, i.e., '+en "pe(ifi( pro%i"ion" of t+e 2G* )t+ori6e t+e 2G5" to i&po"e t /e", fee" or (+ r$e" on t+e fore&entione! entitie", vizF GSe(tion 133. ommon !imitations on the Ta"ing #owers of the !ocal Government $nits % $nless otherwise provided herein, t+e e/er(i"e of t+e t /in$ po'er" of pro%in(e", (itie", &)ni(ip litie", n! barangays "+ ll not e/ten! to t+e le%- of t+e follo'in$F . . . 3o4 T /e", fee", or (+ r$e" of n- 0in! on t+e N tion l Go%ern&ent, it" $en(ie" n! in"tr)&ent litie", n! lo( l $o%ern&ent )nit".G 4.><R*ANTI2< 2AA; ,RAN*HIS<; D<,IN<D AND *ONSTR5<D. ? In it" $ener l "i$nifi( tion, fr n(+i"e i" pri%ile$e (onferre! .- $o%ern&ent )t+orit-, '+i(+ !oe" not .elon$ to (iti6en" of t+e (o)ntr- $ener ll- " & tter of (o&&on ri$+t. In it" "pe(ifi( "en"e, fr n(+i"e & - refer to $ener l or pri& r- fr n(+i"e, or to "pe(i l or "e(on! r- fr n(+i"e. T+e for&er rel te" to t+e ri$+t to e/i"t " (orpor tion, .- %irt)e of !)l- ppro%e! rti(le" of in(orpor tion, or (+ rter p)r") nt to "pe(i l l ' (re tin$ t+e (orpor tion. T+e ri$+t )n!er pri& r- or $ener l fr n(+i"e i" %e"te! in t+e in!i%i!) l" '+o (o&po"e t+e (orpor tion n! not in t+e (orpor tion it"elf. On t+e ot+er + n!, t+e l tter refer" to t+e ri$+t or pri%ile$e" (onferre! )pon n e/i"tin$ (orpor tion ")(+ " t+e ri$+t to )"e t+e "treet" of &)ni(ip lit- to l - pipe" of tr (0", ere(t pole" or "trin$ 'ire". T+e ri$+t" )n!er "e(on! r- or "pe(i l fr n(+i"e re %e"te! in t+e (orpor tion n! & or!in ril- .e (on%e-e! or &ort$ $e! )n!er $ener l po'er $r nte! to (orpor tion to !i"po"e of it" propert-, e/(ept ")(+ "pe(i l or "e(on! r- fr n(+i"e" " re (+ r$e! 'it+ p).li( )"e.
ISDH(T

7.TA:ATION; ,RAN*HIS< TA: I>#OS<D 5ND<R TH< 2O*A2 GOV<RN><NT *OD<; R<I5ISIT<S. ? In Se(tion 131 3&4 of t+e 2G*, *on$re"" )n&i"t 0 .l!efine! fr n(+i"e in t+e "en"e of "e(on! r- or "pe(i l fr n(+i"e. T+i" i" to %oi! n(onf)"ion '+en t+e 'or! fr n(+i"e i" )"e! in t+e (onte/t of t / tion. A" (o&&onl- )"e!, franchise ta" i" G t / on t+e pri%ile$e of tr n" (tin$ .)"ine"" in t+e "t te n! e/er(i"in$ (orpor te fr n(+i"e" $r nte! .- t+e "t te.G It i" not le%ie! on t+e (orpor tion "i&pl- for e/i"tin$ " (orpor tion, )pon it" propert- or it" in(o&e, .)t on it" e/er(i"e of t+e ri$+t" or pri%ile$e" $r nte! to it .- t+e $o%ern&ent. Hen(e, (orpor tion nee! not p - fr n(+i"e t / fro& t+e ti&e it (e "e! to !o .)"ine"" n! e/er(i"e it" fr n(+i"e. It i" 'it+in t+i" (onte/t t+ t t+e p+r "e Gta" on businesses en&oying a franchiseG in Se(tion 138 of t+e 2G* "+o)l! .e interprete! n! )n!er"too!. Veril-, to !eter&ine '+et+er t+e petitioner i" (o%ere! .- t+e fr n(+i"e t / in 9)e"tion, t+e follo'in$ re9)i"ite" "+o)l! (on()rF 314 t+ t petitioner + " Gfr n(+i"eG in t+e "en"e of "e(on! r- or "pe(i l fr n(+i"e; n! 324 t+ t it i" e/er(i"in$ it" ri$+t" or pri%ile$e" )n!er t+i" fr n(+i"e 'it+in t+e territor- of t+e

re"pon!ent (it- $o%ern&ent. To "tre"", fr n(+i"e t / i" i&po"e! . "e! not on t+e o'ner"+ip .)t on t+e e/er(i"e .- t+e (orpor tion of pri%ile$e to !o .)"ine"". T+e t / .le entit- i" t+e (orpor tion '+i(+ e/er(i"e" t+e fr n(+i"e, n! not t+e in!i%i!) l "to(0+ol!er". J.ID.; TA: <:<>#TION; *ONSTR5<D STRONG2C AGAINST TH< *2AI>ANT; A##2I*ATION IN *AS< AT =AR. ? A" r)le, t / e/e&ption" re (on"tr)e! "tron$l$ in"t t+e (l i& nt. </e&ption" &)"t .e "+o'n to e/i"t (le rl- n! ( te$ori( ll-, n! ")pporte! .- (le r le$ l pro%i"ion". In t+e ( "e t . r, t+e petitioner1" "ole ref)$e i" Se(tion 13 of Rep. A(t No. J397 e/e&ptin$ fro&, &on$ ot+er", G ll in(o&e t /e", fr n(+i"e t /e" n! re lt- t /e" to .e p i! to t+e N tion l Go%ern&ent, it" pro%in(e", (itie", &)ni(ip litie" n! ot+er $o%ern&ent $en(ie" n! in"tr)&ent litie".G Ho'e%er, Se(tion 193 of t+e 2G* 'it+!re', ").De(t to li&ite! e/(eption", t+e "'eepin$ t / pri%ile$e" pre%io)"l- enDo-e! .- pri% te n! p).li( (orpor tion". *ontr r- to t+e (ontention of petitioner, Se(tion 193 of t+e 2G* i" n e/pre"", l.eit $ener l, repe l of ll "t t)te" $r ntin$ t / e/e&ption" fro& lo( l t /e". It re !"F GSe(. 193. Withdrawal of Ta" E"emption #rivileges. % $nless otherwise provided in this ode' ta" e"emptions or incentives granted to' or presently en&oyed by all persons' whether natural or &uridical' including government(owned or controlled corporations, e/(ept lo( l ' ter !i"tri(t", (ooper ti%e" !)l- re$i"tere! )n!er R.A. No. J93E, non@"to(0 n! non@profit +o"pit l" n! e!)( tion l in"tit)tion", re +ere.- 'it+!r 'n )pon t+e effe(ti%it- of t+i" *o!e.G It i" . "i( pre(ept of "t t)tor- (on"tr)(tion t+ t t+e e/pre"" &ention of one per"on, t+in$, (t, or (on"e9)en(e e/(l)!e" ll ot+er" " e/pre""e! in t+e f &ili r & /i& e"pressio unius est e"clusio alterius. Not .ein$ lo( l ' ter !i"tri(t, (ooper ti%e re$i"tere! )n!er R.A. No. J93E, or non@"to(0 n! non@profit +o"pit l or e!)( tion l in"tit)tion, petitioner (le rl!oe" not .elon$ to t+e e/(eption. It i" t+erefore in()&.ent )pon t+e petitioner to point to "o&e pro%i"ion" of t+e 2G* t+ t e/pre""l- $r nt it e/e&ption fro& lo( l t /e".

8.#O2ITI*A2 2AA; GOV<RN><NT OAN<D AND *ONTRO22<D *OR#ORATION; *ONSTR5<D. ? Se(tion 2 of #re". De(ree No. 2029 (l ""ifie" $o%ern&ent@o'ne! or (ontrolle! (orpor tion" 3GO**"4 into t+o"e perfor&in$ $o%ern&ent l f)n(tion" n! t+o"e perfor&in$ propriet r- f)n(tion", vizF GA $o%ern&ent@ o'ne! or (ontrolle! (orpor tion i" "to(0 or non@"to(0 (orpor tion, whether performing governmental or proprietary functions' which is directly chartered by special law or if or$ ni6e! )n!er t+e $ener l (orpor tion l ' i" o'ne! or (ontrolle! .- t+e $o%ern&ent !ire(tl-, or in!ire(tl- t+ro)$+ p rent (orpor tion or ")."i!i r- (orpor tion, to t+e e/tent of t le "t & Dorit- of it" o)t"t n!in$ %otin$ ( pit l "to(0 . . . .G Go%ern&ent l f)n(tion" re t+o"e pert inin$ to t+e !&ini"tr tion of $o%ern&ent, n! " ")(+, re tre te! " ."ol)te o.li$ tion on t+e p rt of t+e "t te to perfor& '+ile propriet r- f)n(tion" re t+o"e t+ t re )n!ert 0en onl- .- ' - of !% n(in$ t+e $ener l intere"t of "o(iet-, n! re &erel- option l on t+e $o%ern&ent. In(l)!e! in t+e (l "" of

GO**" perfor&in$ propriet r- f)n(tion" re G.)"ine""@li0eG entitie" ")(+ " t+e N tion l Steel *orpor tion 3NS*4, t+e N tion l De%elop&ent *orpor tion 3ND*4, t+e So(i l Se()rit- S-"te& 3SSS4, t+e Go%ern&ent Ser%i(e In")r n(e S-"te& 3GSIS4, n! t+e N tion l A ter Se'er $e A)t+orit- 3NAAASA4, &on$ ot+er".

DECISION

PUNO, ) F
p

T+i" i" petition for re%ie' 1 of t+e De(i"ion 2 n! t+e Re"ol)tion 3 of t+e *o)rt of Appe l" ! te! > r(+ 12, 2001 n! B)l- 10, 2001, re"pe(ti%el-, fin!in$ petitioner N tion l #o'er *orpor tion 3N#*4 li .le to p - fr n(+i"e t / to re"pon!ent *it- of * . n t) n.
*<DS(A

#etitioner i" $o%ern&ent@o'ne! n! (ontrolle! (orpor tion (re te! )n!er *o&&on'e lt+ A(t No. 120, " &en!e!. 4 It i" t "0e! to )n!ert 0e t+e G!e%elop&ent of +-!roele(tri( $ener tion" of po'er n! t+e pro!)(tion of ele(tri(it- fro& n)(le r, $eot+er& l n! ot+er "o)r(e", " 'ell ", t+e tr n"&i""ion of ele(tri( po'er on n tion'i!e . "i".G 7 *on(o&it nt to it" & n! te! !)t-, petitioner + ", &on$ ot+er", t+e po'er to (on"tr)(t, oper te n! & int in po'er pl nt", )/ili r- pl nt", po'er "t tion" n! ")."t tion" for t+e p)rpo"e of !e%elopin$ +-!r )li( po'er n! ")ppl-in$ ")(+ po'er to t+e in+ .it nt". J ,or & n- -e r" no', petitioner "ell" ele(tri( po'er to t+e re"i!ent" of * . n t) n *it-, po"tin$ $ro"" in(o&e of #108,E14,1E8.9J in 1992. 8 #)r") nt to Se(tion 38 of Or!in n(e No. 1J7@92, E t+e re"pon!ent ""e""e! t+e petitioner fr n(+i"e t / &o)ntin$ to #E0E,J0J.41, repre"entin$ 87K of 1K of t+e l tter1" $ro"" re(eipt" for t+e pre(e!in$ -e r. 9 #etitioner, '+o"e ( pit l "to(0 ' " ")."(ri.e! n! p i! '+oll- .- t+e #+ilippine Go%ern&ent, 10 ref)"e! to p - t+e t / ""e""&ent. It r$)e! t+ t t+e re"pon!ent + " no )t+orit- to i&po"e t / on $o%ern&ent entitie". #etitioner l"o (onten!e! t+ t " non@ profit or$ ni6 tion, it i" e/e&pte! fro& t+e p -&ent of ll for&" of t /e", (+ r$e", !)tie" or fee" 11 in ((or! n(e 'it+ Se(. 13 of Rep. A(t No. J397, " &en!e!, vizF
Se(. 13.*on(profit haracter of the orporation+ E"emption from all Ta"es' Duties' ,ees' -mposts and .ther harges by Government and Governmental -nstrumentalities. ? T+e *orpor tion "+ ll .e non@profit n! "+ ll !e%ote ll it" ret)rn fro& it" ( pit l in%e"t&ent, " 'ell " e/(e"" re%en)e" fro& it" oper tion, for e/p n"ion. To en .le t+e *orpor tion to p - it" in!e.te!ne"" n! o.li$ tion"

n! in f)rt+er n(e n! effe(ti%e i&ple&ent tion of t+e poli(- en)n(i te! in Se(tion one of t+i" A(t, t+e *orpor tion i" +ere.- e/e&ptF 3 4,ro& t+e p -&ent of ll t /e", !)tie", fee", i&po"t", (+ r$e", (o"t" n! "er%i(e fee" in n- (o)rt or !&ini"tr ti%e pro(ee!in$" in '+i(+ it & - .e p rt-, re"tri(tion" n! !)tie" to t+e Rep).li( of t+e #+ilippine", it" pro%in(e", (itie", &)ni(ip litie" n! ot+er $o%ern&ent $en(ie" n! in"tr)&ent litie"; 3.4,ro& ll in(o&e t /e", fr n(+i"e t /e" n! re lt- t /e" to .e p i! to t+e N tion l Go%ern&ent, it" pro%in(e", (itie", &)ni(ip litie" n! ot+er $o%ern&ent $en(ie" n! in"tr)&ent litie"; 3(4,ro& ll i&port !)tie", (o&pen" tin$ t /e" n! !% n(e! " le" t /, n! '+ rf $e fee" on i&port of forei$n $oo!" re9)ire! for it" oper tion" n! proDe(t"; n! 3!4,ro& ll t /e", !)tie", fee", i&po"t", n! ll ot+er (+ r$e" i&po"e! .- t+e Rep).li( of t+e #+ilippine", it" pro%in(e", (itie", &)ni(ip litie" n! ot+er $o%ern&ent $en(ie" n! in"tr)&ent litie", on ll petrole)& pro!)(t" )"e! .t+e *orpor tion in t+e $ener tion, tr n"&i""ion, )tili6 tion, n! " le of ele(tri( po'er.G 12

T+e re"pon!ent file! (olle(tion ")it in t+e Re$ion l Tri l *o)rt of * . n t) n *it-, !e& n!in$ t+ t petitioner p - t+e ""e""e! t / !)e, pl)" ")r(+ r$e e9)i% lent to 27K of t+e &o)nt of t /, n! 2K &ont+l- intere"t. 13 Re"pon!ent lle$e! t+ t petitioner1" e/e&ption fro& lo( l t /e" + " .een repe le! .- Se(tion 193 of Rep. A(t No. 81J0, 14 '+i(+ re !" " follo'"F
GSe(. 193.Withdrawal of Ta" E"emption #rivileges. ? 5nle"" ot+er'i"e pro%i!e! in t+i" *o!e, t / e/e&ption" or in(enti%e" $r nte! to, or pre"entlenDo-e! .- ll per"on", '+et+er n t)r l or D)ri!i( l, in(l)!in$ $o%ern&ent o'ne! or (ontrolle! (orpor tion", e/(ept lo( l ' ter !i"tri(t", (ooper ti%e" !)lre$i"tere! )n!er R.A. No. J93E, non@"to(0 n! non@profit +o"pit l" n! e!)( tion l in"tit)tion", re +ere.- 'it+!r 'n )pon t+e effe(ti%it- of t+i" *o!e.G

On B n) r- 27, 199J, t+e tri l (o)rt i"")e! n Or!er 17 !i"&i""in$ t+e ( "e. It r)le! t+ t t+e t / e/e&ption pri%ile$e" $r nte! to petitioner ")."i"t !e"pite t+e p "" $e of Rep. A(t No. 81J0 for t+e follo'in$ re "on"F 314 Rep. A(t No. J397 i" p rti()l r l ' n! it & not .e repe le! .- Rep. A(t No. 81J0 '+i(+ i" $ener l l '; 324 Se(tion 193 of Rep. A(t No. 81J0 i" in t+e n t)re of n i&plie! repe l '+i(+ i" not f %ore!; n! 334 lo( l $o%ern&ent" + %e no po'er to t / in"tr)&ent litie" of t+e n tion l $o%ern&ent. #ertinent portion of t+e Or!er re !"F

GT+e 9)e"tion of '+et+er p rti()l r l ' + " .een repe le! or not .")."e9)ent l ' i" & tter of le$i"l ti%e intent. T+e l '& 0er" & - e/pre""lrepe l l ' .- in(orpor tin$ t+erein repe lin$ pro%i"ion" '+i(+ e/pre""l- n! "pe(ifi( ll- (ite3"4 t+e p rti()l r l ' or l '", n! portion" t+ereof, t+ t re inten!e! to .e repe le!. A !e(l r tion in "t t)te, )") ll- in it" repe lin$ (l )"e, t+ t p rti()l r n! "pe(ifi( l ', i!entifie! .- it" n)&.er or title i" repe le! i" n e/pre"" repe l; ll ot+er" re i&plie! repe l. Se(. 193 of R.A. No. 81J0 i" n i&plie! repe lin$ (l )"e .e( )"e it f il" to i!entif- t+e (t or (t" t+ t re inten!e! to .e repe le!. It i" 'ell@"ettle! r)le of "t t)tor- (on"tr)(tion t+ t repe l" of "t t)te" .- i&pli( tion re not f %ore!. T+e pre")&ption i" $ in"t in(on"i"ten(- n! rep)$n n(- for t+e le$i"l ti%e i" pre")&e! to 0no' t+e e/i"tin$ l '" on t+e ").De(t n! not to + %e en (te! in(on"i"tent or (onfli(tin$ "t t)te". It i" l"o 'ell@"ettle! r)le t+ t, $ener ll-, $ener l l ' !oe" not repe l "pe(i l l ' )nle"" it (le rl- ppe r" t+ t t+e le$i"l ti%e + " inten!e! .- t+e l tter $ener l (t to &o!if- or repe l t+e e rlier "pe(i l l '. T+)", !e"pite t+e p "" $e of R.A. No. 81J0 fro& '+i(+ t+e 9)e"tione! Or!in n(e No. 1J7@92 ' " . "e!, t+e t / e/e&ption pri%ile$e" of !efen! nt N#* re& in. Anot+er point $oin$ $ in"t pl intiff in t+i" ( "e i" t+e r)lin$ of t+e S)pre&e *o)rt in t+e ( "e of /asco vs. #hilippine 0musement and Gaming orporation, 198 S*RA 72, '+ere it ' " +el! t+ tF 12o( l $o%ern&ent" + %e no po'er to t / in"tr)&ent litie" of t+e N tion l Go%ern&ent. #AG*OR i" $o%ern&ent o'ne! or (ontrolle! (orpor tion 'it+ n ori$in l (+ rter, #D 1EJ9. All of it" "+ re" of "to(0" re o'ne! .- t+e N tion l Go%ern&ent. . . . =ein$ n in"tr)&ent lit- of t+e $o%ern&ent, #AG*OR "+o)l! .e n! (t) ll- i" e/e&pt fro& lo( l t /e". Ot+er'i"e, it" oper tion &i$+t .e .)r!ene!, i&pe!e! or ").De(te! to (ontrol .- &ere lo( l $o%ern&ent.1 2i0e #AG*OR, N#*, .ein$ $o%ern&ent o'ne! n! (ontrolle! (orpor tion 'it+ n ori$in l (+ rter n! it" "+ re" of "to(0" o'ne! .- t+e N tion l Go%ern&ent, i" .e-on! t+e t /in$ po'er of t+e 2o( l Go%ern&ent. *oroll r- to t+i", it "+o)l! .e note! +ere t+ t in t+e N#* *+ rter1" !e(l r tion of #oli(-, *on$re"" !e(l re! t+ tF 1. . . 324 t+e tot l ele(trifi( tion of t+e #+ilippine" t+ro)$+ t+e !e%elop&ent of po'er fro& ll "er%i(e" to &eet t+e nee!" of in!)"tri l !e%elop&ent n! !i"per" l n! nee!" of r)r l ele(trifi( tion re pri& r- o.De(ti%e" of t+e n tion" '+i(+ "+ ll .e p)r")e! coordinately and supported by all instrumentalities and agencies of the government, in(l)!in$ it" fin n(i l in"tit)tion".1 3e&p+ "i" ")pplie!4. To llo' pl intiff to ").De(t !efen! nt to it" t /@or!in n(e 'o)l! .e to i&pe!e t+e %o'e! $o l of t+i" $o%ern&ent in"tr)&ent lit-. 5nli0e t+e St te, (it- or &)ni(ip lit- + " no in+erent po'er of t / tion. It" t /in$ po'er i" li&ite! to t+ t '+i(+ i" pro%i!e! for in it" (+ rter or ot+er

"t t)te. An- $r nt of t /in$ po'er i" to .e (on"tr)e! "tri(tl-, 'it+ !o).t" re"ol%e! $ in"t it" e/i"ten(e. ,ro& t+e e/i"tin$ l ' n! t+e r)lin$" of t+e S)pre&e *o)rt it"elf, it i" %er(le r t+ t t+e pl intiff (o)l! not i&po"e t+e ").De(t t / on t+e !efen! nt.G 1J

On ppe l, t+e *o)rt of Appe l" re%er"e! t+e tri l (o)rt1" Or!er 18 on t+e $ro)n! t+ t Se(tion 193, in rel tion to Se(tion" 138 n! 171 of t+e 2G*, e/pre""l- 'it+!re' t+e e/e&ption" $r nte! to t+e petitioner. 1E It or!ere! t+e petitioner to p - t+e re"pon!ent (it- $o%ern&ent t+e follo'in$F 3 4 t+e ")& of #E0E,J0J.41 repre"entin$ t+e fr n(+i"e t / !)e . "e! on $ro"" re(eipt" for t+e -e r 1992, 3.4 t+e t / !)e e%er- -e r t+ere fter . "e! in t+e $ro"" re(eipt" e rne! .- N#*, 3(4 in ll ( "e", to p - ")r(+ r$e of 27K of t+e t / !)e n! )np i!, n! 3!4 t+e ")& of #10,000.00 " liti$ tion e/pen"e. 19 On April 4, 2001, t+e petitioner file! >otion for Re(on"i!er tion on t+e *o)rt of Appe l1" De(i"ion. T+i" ' " !enie! .- t+e ppell te (o)rt, vizF

GT+e *o)rt fin!" no &erit in N#*1" &otion for re(on"i!er tion. It" r$)&ent" reiter te! t+erein t+ t t+e t /in$ po'er of t+e pro%in(e )n!er Art. 138 3sic4 of t+e 2o( l Go%ern&ent *o!e refer" &erel- to pri% te per"on" or (orpor tion" in '+i(+ ( te$or- it 3N#*4 !oe" not .elon$, n! t+ t t+e 2G* 3RA 81J04 '+i(+ i" $ener l l ' & - not i&plie!l- repe l t+e N#* *+ rter '+i(+ i" "pe(i l l ' ? fin!" t+e n"'er in Se(tion 193 of t+e 2G* to t+e effe(t t+ t 1t / e/e&ption" or in(enti%e" $r nte! to, or pre"entl- enDo-e! .- ll per"on", '+et+er n t)r l or D)ri!i( l, in(l)!in$ $o%ern&ent@o'ne! or (ontrolle! (orpor tion" e/(ept lo( l ' ter !i"tri(t" . . . re +ere.- 'it+!r 'n.1 T+e repe l i" !ire(t n! )ne9)i%o( l, not i&plie!. IN VI<A AH<R<O,, t+e &otion for re(on"i!er tion i" +ere.- D<NI<D. SO ORD<R<D.G 20

In t+i" petition for re%ie', petitioner r i"e" t+e follo'in$ i"")e"F

GA.TH< *O5RT O, A##<A2S GRAV<2C <RR<D IN HO2DING THAT N#*, A #5=2I* NON@#RO,IT *OR#ORATION, IS 2IA=2< TO #AC A ,RAN*HIS< TA: AS IT ,AI2<D TO *ONSID<R THAT S<*TION 138 O, TH< 2O*A2 GOV<RN><NT *OD< IN R<2ATION TO S<*TION 131 A##2I<S ON2C TO #RIVAT< #<RSONS OR *OR#ORATIONS <NBOCING A ,RAN*HIS<. =.TH< *O5RT O, A##<A2S GRAV<2C <RR<D IN HO2DING THAT N#*1S <:<>#TION ,RO> A22 ,OR>S O, TA:<S HAS =<<N

R<#<A2<D =C TH< #ROVISION O, TH< 2O*A2 GOV<RN><NT *OD< AS TH< <NA*T><NT O, A 2AT<R 2<GIS2ATION, AHI*H IS A G<N<RA2 2AA, *ANNOT =< *ONSTR5<D TO HAV< R<#<A2<D A S#<*IA2 2AA. *.TH< *O5RT O, A##<A2S GRAV<2C <RR<D IN NOT *ONSID<RING THAT AN <:<R*IS< O, #O2I*< #OA<R THRO5GH TA: <:<>#TION SHO52D #R<VAI2 OV<R TH< 2O*A2 GOV<RN><NT *OD<.G 21

It i" .e-on! !i"p)te t+ t t+e re"pon!ent (it- $o%ern&ent + " t+e )t+orit- to i"")e Or!in n(e No. 1J7@92 n! i&po"e n nn) l t / on G.)"ine""e" enDo-in$ fr n(+i"e,G p)r") nt to Se(tion 171 in rel tion to Se(tion 138 of t+e 2G*, vizF
GSe(. 138.,ranchise Ta". ? *otwithstanding any e"emption granted by any law or other special law' the province may impose a ta" on businesses en&oying a franchise, t r te not e/(ee!in$ fift- per(ent 370K4 of one per(ent 31K4 of t+e $ro"" nn) l re(eipt" for t+e pre(e!in$ ( len! r -e r . "e! on t+e in(o&in$ re(eipt, or re li6e!, 'it+in it" territori l D)ri"!i(tion. In t+e ( "e of ne'l- "t rte! .)"ine"", t+e t / "+ ll not e/(ee! one@t'entiet+ 31L204 of one per(ent 31K4 of t+e ( pit l in%e"t&ent. In t+e ")((ee!in$ ( len! r -e r, re$ r!le"" of '+en t+e .)"ine"" "t rte! to oper te, t+e t / "+ ll .e . "e! on t+e $ro"" re(eipt" for t+e pre(e!in$ ( len! r -e r, or n- fr (tion t+ereof, " pro%i!e! +erein.G 3emphasis supplied4 /// /// /// Se(. 171.Scope of Ta"ing #owers. ? </(ept " ot+er'i"e pro%i!e! in t+i" *o!e, t+e (it-, & - le%- t+e t /e", fee", n! (+ r$e" '+i(+ t+e pro%in(e or &)ni(ip lit- & - i&po"eF #rovided' however' T+ t t+e t /e", fee" n! (+ r$e" le%ie! n! (olle(te! .- +i$+l- )r. ni6e! n! in!epen!ent (o&ponent (itie" "+ ll ((r)e to t+e& n! !i"tri.)te! in ((or! n(e 'it+ t+e pro%i"ion" of t+i" *o!e. T+e r te" of t /e" t+ t t+e (it- & - le%- & - e/(ee! t+e & /i&)& r te" llo'e! for t+e pro%in(e or &)ni(ip lit- .- not &ore t+ n fift- per(ent 370K4 e/(ept t+e r te" of profe""ion l n! &)"e&ent t /e".G

#etitioner, +o'e%er, ").&it" t+ t it i" not li .le to p - n nn) l fr n(+i"e t / to t+e re"pon!ent (it- $o%ern&ent. It (onten!" t+ t Se(tion" 138 n! 171 of t+e 2G* in rel tion to Se(tion 131, li&it t+e t /in$ po'er of t+e re"pon!ent (it- $o%ern&ent to pri% te entitie" t+ t re en$ $e! in tr !e or o(()p tion for profit. 22

Se(tion 131 3&4 of t+e 2G* !efine" 1franchise1 " G ri$+t or pri%ile$e, ffe(te! 'it+ p).li( intere"t '+i(+ i" (onferre! )pon private persons or corporations, )n!er ")(+ ter&" n! (on!ition" " t+e $o%ern&ent n! it" politi( l ").!i%i"ion" & - i&po"e in t+e intere"t of t+e p).li( 'elf re, "e()rit- n! " fet-.G ,ro& t+e p+r "eolo$- of t+i" pro%i"ion, t+e petitioner (l i&" t+ t t+e 'or! Gpri% teG &o!ifie" t+e ter&" Gper"on"G n! G(orpor tion".G Hen(e, '+en t+e 2G* )"e" t+e ter& Gfr n(+i"e,G petitioner ").&it" t+ t it "+o)l! refer "pe(ifi( ll- to fr n(+i"e" $r nte! to pri% te n t)r l per"on" n! to pri% te (orpor tion". 23 <r$o, it" (+ rter "+o)l! not .e (on"i!ere! Gfr n(+i"eG for t+e p)rpo"e of i&po"in$ t+e fr n(+i"e t / in 9)e"tion. On t+e ot+er + n!, Se(tion 131 3!4 of t+e 2G* !efine" 1business1 " Gtr !e or (o&&er(i l (ti%it- re$)l rl- en$ $e! in " &e n" of li%eli+oo! or 'it+ %ie' to profit.G #etitioner (l i&" t+ t it i" not en$ $e! in n (ti%it- for profit, in " &)(+ " it" (+ rter "pe(ifi( ll- pro%i!e" t+ t it i" Gnon@profit or$ ni6 tion.G In n- ( "e, petitioner r$)e" t+ t t+e (()&)l tion of profit i" &erel- in(i!ent l to it" oper tion; ll t+e"e profit" re re9)ire! .- l ' to .e (+ nnele! for e/p n"ion n! i&pro%e&ent of it" f (ilitie" n! "er%i(e". 24 #etitioner l"o lle$e" t+ t it i" n in"tr)&ent lit- of t+e N tion l Go%ern&ent, 25 n! " ")(+, & - not .e t /e! .- t+e re"pon!ent (it- $o%ern&ent. It (ite" t+e !o(trine in /asco vs. #hilippine 0musement and Gaming orporation 26 '+ere t+i" *o)rt +el! t+ t lo( l $o%ern&ent" + %e no po'er to t / in"tr)&ent litie" of t+e N tion l Go%ern&ent, vizF
G2o( l $o%ern&ent" + %e no po'er to t / in"tr)&ent litie" of t+e N tion l Go%ern&ent. #AG*OR + " !) l role, to oper te n! re$)l te $ &.lin$ ( "ino". T+e l tter role i" $o%ern&ent l, '+i(+ pl (e" it in t+e ( te$or- of n $en(- or in"tr)&ent lit- of t+e Go%ern&ent. =ein$ n in"tr)&ent lit- of t+e Go%ern&ent, #AG*OR "+o)l! .e n! (t) ll- i" e/e&pt fro& lo( l t /e". Ot+er'i"e, it" oper tion &i$+t .e .)r!ene!, i&pe!e! or ").De(te! to (ontrol .&ere lo( l $o%ern&ent. 1T+e "t te" + %e no po'er .- t / tion or ot+er'i"e, to ret r!, i&pe!e, .)r!en or in n- & nner (ontrol t+e oper tion of (on"tit)tion l l '" en (te! .- *on$re"" to ( rr- into e/e()tion t+e po'er" %e"te! in t+e fe!er l $o%ern&ent. 32 ulloch v. 2aryland, 4 A+e t 31J, 4 2 <!. 78941 T+i" !o(trine e& n te" fro& t+e 1")pre& (-1 of t+e N tion l Go%ern&ent o%er lo( l $o%ern&ent". 1B)"ti(e Hol&e", "pe 0in$ for t+e S)pre&e *o)rt, & !e referen(e to t+e entire ."en(e of po'er on t+e p rt of t+e St te" to to)(+, in t+ t ' 3t / tion4 t le "t, t+e in"tr)&ent litie" of t+e 5nite! St te" 3)ohnson v.

2aryland, 274 5S 714 n! it ( n .e $ree! t+ t no state or political subdivision can regulate a federal instrumentality in such a way as to prevent it from consummating its federal responsibilities' or even seriously burden it from accomplishment of them.1 3Antie ), 2odern onstitutional !aw' Vol. 2, p. 140, it li(" ")pplie!4 Ot+er'i"e, &ere (re t)re" of t+e St te ( n !efe t N tion l poli(ie" t+r) e/ter&in tion of '+ t lo( l )t+oritie" & - per(ei%e to .e )n!e"ir .le (ti%itie" or enterpri"e )"in$ t+e po'er to t / " 1 tool re$)l tion1 3$.S. v. Sanchez, 340 5S 424. T+e po'er to t / '+i(+ ' " ( lle! .- B)"ti(e > r"+ ll " t+e 1po'er to !e"tro-1 32c ulloch v. 2aryland, supra4 ( nnot .e llo'e! to !efe t n in"tr)&ent litor (re tion of t+e %er- entit- '+i(+ + " t+e in+erent po'er to 'iel! it.G 28

#etitioner (onten!" t+ t Se(tion 193 of Rep. A(t No. 81J0, 'it+!r 'in$ t+e t / pri%ile$e" of $o%ern&ent@o'ne! or (ontrolle! (orpor tion", i" in t+e n t)re of n i&plie! repe l. A "pe(i l l ', it" (+ rter ( nnot .e &en!e! or &o!ifie! i&plie!l- .- t+e lo( l $o%ern&ent (o!e '+i(+ i" $ener l l '. *on"e9)entl-, petitioner (l i&" t+ t it" e/e&ption fro& ll t /e", fee" or (+ r$e" )n!er it" (+ rter ")."i"t" !e"pite t+e p "" $e of t+e 2G*, vizF
GIt i" 'ell@"ettle! r)le of "t t)tor- (on"tr)(tion t+ t repe l" of "t t)te" .i&pli( tion re not f %ore! n! " &)(+ " po""i.le, effe(t &)"t .e $i%en to ll en (t&ent" of t+e le$i"l t)re. >oreo%er, it + " to .e (on(e!e! t+ t t+e (+ rter of t+e N#* (on"tit)te" "pe(i l l '. Rep).li( A(t No. 81J0, i" $ener l l '. It i" . "i( r)le in "t t)tor- (on"tr)(tion t+ t t+e en (t&ent of l ter le$i"l tion '+i(+ i" $ener l l ' ( nnot .e (on"tr)e! to + %e repe le! "pe(i l l '. A+ere t+ere i" (onfli(t .et'een $ener l l ' n! "pe(i l "t t)te, t+e "pe(i l "t t)te "+o)l! pre% il "in(e it e%in(e" t+e le$i"l ti%e intent &ore (le rl- t+ n t+e $ener l "t t)te. 28

,in ll-, petitioner ").&it" t+ t t+e (+ rter of t+e N#*, .ein$ % li! e/er(i"e of poli(e po'er, "+o)l! pre% il o%er t+e 2G*. It lle$e" t+ t t+e po'er of t+e lo( l $o%ern&ent to i&po"e fr n(+i"e t / i" ").or!in te to petitioner1" e/e&ption fro& t / tion; Gpoli(e po'er .ein$ t+e &o"t per% "i%e, t+e le "t li&it .le n! &o"t !e& n!in$ of ll po'er", in(l)!in$ t+e po'er of t / tion.G 29 T+e petition i" 'it+o)t &erit. T /e" re t+e life.loo! of t+e $o%ern&ent, 30 for 'it+o)t t /e", t+e $o%ern&ent ( n neit+er e/i"t nor en!)re. A prin(ip l ttri.)te of "o%erei$nt-, 31 t+e e/er(i"e of t /in$ po'er !eri%e" it" "o)r(e fro& t+e %er- e/i"ten(e of t+e "t te '+o"e "o(i l (ontr (t 'it+ it" (iti6en" o.li$e" it to pro&ote p).li( intere"t n! (o&&on $oo!. T+e t+eor- .e+in! t+e e/er(i"e of t+e po'er to t / e& n te" fro& ne(e""it-; 32 'it+o)t t /e", $o%ern&ent ( nnot f)lfill it" & n! te of pro&otin$ t+e $ener l 'elf re n! 'ell@.ein$ of t+e people.

In re(ent -e r", t+e in(re "in$ "o(i l (+ llen$e" of t+e ti&e" e/p n!e! t+e "(ope of "t te (ti%it-, n! t / tion + " .e(o&e tool to re li6e "o(i l D)"ti(e n! t+e e9)it .le !i"tri.)tion of 'e lt+, e(ono&i( pro$re"" n! t+e prote(tion of lo( l in!)"trie" " 'ell " p).li( 'elf re n! "i&il r o.De(ti%e". 33 T / tion "")&e" e%en $re ter "i$nifi( n(e 'it+ t+e r tifi( tion of t+e 19E8 *on"tit)tion. T+en(efort+, t+e po'er to t / i" no lon$er %e"te! e/(l)"i%el- on *on$re""; lo( l le$i"l ti%e .o!ie" re no' $i%en !ire(t )t+orit- to le%t /e", fee" n! ot+er (+ r$e" 34 p)r") nt to Arti(le :, Se(tion 7 of t+e 19E8 *on"tit)tion, vizF
GSe(tion 7.< (+ 2o( l Go%ern&ent )nit "+ ll + %e t+e po'er to (re te it" o'n "o)r(e" of re%en)e, to le%- t /e", fee" n! (+ r$e" ").De(t to ")(+ $)i!eline" n! li&it tion" " t+e *on$re"" & - pro%i!e, (on"i"tent 'it+ t+e . "i( poli(- of lo( l )tono&-. S)(+ t /e", fee" n! (+ r$e" "+ ll ((r)e e/(l)"i%el- to t+e 2o( l Go%ern&ent".G

T+i" p r !i$& "+ift re")lt" fro& t+e re li6 tion t+ t $en)ine !e%elop&ent ( n .e (+ie%e! onl- .- "tren$t+enin$ lo( l )tono&- n! pro&otin$ !e(entr li6 tion of $o%ern n(e. ,or lon$ ti&e, t+e (o)ntr-1" +i$+l- (entr li6e! $o%ern&ent "tr)(t)re + " .re! ()lt)re of !epen!en(e &on$ lo( l $o%ern&ent le !er" )pon t+e n tion l le !er"+ip. It + " l"o G! &pene! t+e "pirit of initi ti%e, inno% tion n! i& $in ti%e re"ilien(e in & tter" of lo( l !e%elop&ent on t+e p rt of lo( l $o%ern&ent le !er".G 37 T+e onl- ' - to "+ tter t+i" ()lt)re of !epen!en(e i" to $i%e t+e 2G5" 'i!er role in t+e !eli%er- of . "i( "er%i(e", n! (onfer t+e& ")ffi(ient po'er" to $ener te t+eir o'n "o)r(e" for t+e p)rpo"e. To (+ie%e t+i" $o l, Se(tion 3 of Arti(le : of t+e 19E8 *on"tit)tion & n! te" *on$re"" to en (t lo( l $o%ern&ent (o!e t+ t 'ill, consistent with the basic policy of local autonomy, "et t+e $)i!eline" n! li&it tion" to t+i" $r nt of t /in$ po'er", vizF
GSe(tion 3.T+e *on$re"" "+ ll en (t lo( l $o%ern&ent (o!e '+i(+ "+ ll pro%i!e for &ore re"pon"i%e n! ((o)nt .le lo( l $o%ern&ent "tr)(t)re in"tit)te! t+ro)$+ "-"te& of !e(entr li6 tion 'it+ effe(ti%e &e(+ ni"&" of re( ll, initi ti%e, n! referen!)&, llo( te &on$ t+e !ifferent lo( l $o%ern&ent )nit" t+eir po'er", re"pon"i.ilitie", n! re"o)r(e", n! pro%i!e for t+e 9) lifi( tion", ele(tion, ppoint&ent n! re&o% l, ter&, " l rie", po'er" n! f)n(tion" n! !)tie" of lo( l offi(i l", n! ll ot+er & tter" rel tin$ to t+e or$ ni6 tion n! oper tion of t+e lo( l )nit".G

To re( ll, prior to t+e en (t&ent of t+e Rep. A(t No. 81J0, 3J l"o 0no'n " t+e 2o( l Go%ern&ent *o!e of 1991 32G*4, % rio)" &e ")re" + %e .een en (te! to pro&ote lo( l )tono&-. T+e"e in(l)!e t+e = rrio *+ rter of 1979, 38 t+e 2o( l A)tono&- A(t of 1979, 3E t+e De(entr li6 tion A(t of 19J8 39 n! t+e 2o( l Go%ern&ent *o!e of 19E3. 40 De"pite t+e"e initi ti%e", +o'e%er, t+e "+ (0le" of !epen!en(e on t+e n tion l

$o%ern&ent re& ine!. 2o( l $o%ern&ent )nit" 'ere f (e! 'it+ t+e " &e pro.le&" t+ t + &per t+eir ( p .ilitie" to p rti(ip te effe(ti%el- in t+e n tion l !e%elop&ent effort", &on$ '+i(+ reF 3 4 in !e9) te t / . "e, 3.4 l (0 of fi"( l (ontrol o%er e/tern l "o)r(e" of in(o&e, 3(4 li&ite! )t+orit- to prioriti6e n! ppro%e !e%elop&ent proDe(t", 3!4 +e %!epen!en(e on e/tern l "o)r(e" of in(o&e, n! 3e4 li&ite! ")per%i"or- (ontrol o%er per"onnel of n tion l line $en(ie". 41 *on"i!ere! " t+e &o"t re%ol)tion r- pie(e of le$i"l tion on lo( l )tono&-, 42 t+e 2G* effe(ti%el- !e l" 'it+ t+e fi"( l (on"tr int" f (e! .- 2G5". It 'i!en" t+e t / . "e of 2G5" to in(l)!e t /e" '+i(+ 'ere pro+i.ite! .- pre%io)" l '" ")(+ " t+e i&po"ition of t /e" on fore"t pro!)(t", fore"t (on(e""ion ire", &iner l pro!)(t", &inin$ oper tion", n! t+e li0e. T+e 2G* li0e'i"e pro%i!e" eno)$+ fle/i.ilit- to i&po"e t / r te" in ((or! n(e 'it+ t+eir nee!" n! ( p .ilitie". It !oe" not pre"(ri.e $r !) te! fi/e! r te" .)t &erel"pe(ifie" t+e &ini&)& n! & /i&)& t / r te" n! le %e" t+e !eter&in tion of t+e (t) l r te" to t+e re"pe(ti%e sanggunian. 43 One of t+e &o"t "i$nifi( nt pro%i"ion" of t+e 2G* i" t+e re&o% l of t+e .l n0et e/(l)"ion of in"tr)&ent litie" n! $en(ie" of t+e n tion l $o%ern&ent fro& t+e (o%er $e of lo( l t / tion. Alt+o)$+ " $ener l r)le, 2G5" ( nnot i&po"e t /e", fee" or (+ r$e" of n0in! on t+e N tion l Go%ern&ent, it" $en(ie" n! in"tr)&ent litie", t+i" r)le no' !&it" n e/(eption, i.e., '+en "pe(ifi( pro%i"ion" of t+e 2G* )t+ori6e t+e 2G5" to i&po"e t /e", fee" or (+ r$e" on t+e fore&entione! entitie", vizF
GSe(tion 133. ommon !imitations on the Ta"ing #owers of the !ocal Government $nits. ? $nless otherwise provided herein, t+e e/er(i"e of t+e t /in$ po'er" of pro%in(e", (itie", &)ni(ip litie", n! barangays "+ ll not e/ten! to t+e le%- of t+e follo'in$F /// /// /// 3o4T /e", fee", or (+ r$e" of n- 0in! on t+e N tion l Go%ern&ent, it" $en(ie" n! in"tr)&ent litie", n! lo( l $o%ern&ent )nit".G 3emphasis supplied4

In %ie' of t+e fore@9)ote! pro%i"ion of t+e 2G*, t+e !o(trine in /asco vs. #hilippine 0musement and Gaming orporation 44 relie! )pon .- t+e petitioner to ")pport it" (l i& no lon$er pplie". To e&p+ "i6e, t+e /asco ( "e ' " !e(i!e! prior to t+e effe(ti%it- of t+e 2G*, '+en no l ' e&po'erin$ t+e lo( l $o%ern&ent )nit" to t / in"tr)&ent litie" of t+e N tion l Go%ern&ent ' " in effe(t. Ho'e%er, " t+i" *o)rt r)le! in t+e ( "e of 2actan ebu -nternational 0irport 0uthority 32 -004 vs. 2arcos, 45 not+in$ pre%ent" *on$re"" fro& !e(reein$ t+ t e%en in"tr)&ent litie" or $en(ie" of t+e $o%ern&ent perfor&in$ $o%ern&ent l f)n(tion" & - .e ").De(t to t /. 4J In en (tin$ t+e 2G*, *on$re"" e/er(i"e! it" prero$ ti%e to t / in"tr)&ent litie" n! $en(ie" of $o%ern&ent " it "ee" fit. T+)", fter re%ie'in$ t+e "pe(ifi( pro%i"ion" of t+e 2G*, t+i" *o)rt +el! t+ t

>*IAA, lt+o)$+ n in"tr)&ent lit- of t+e n tion l $o%ern&ent, ' " ").De(t to re l propert- t /, vizF
GT+)", re !in$ to$et+er Se(tion" 133, 232, n! 234 of t+e 2G*, 'e (on(l)!e t+ t " $ener l r)le, " l i! !o'n in Se(tion 133, t+e t /in$ po'er of lo( l $o%ern&ent" ( nnot e/ten! to t+e le%- of inter alia, 1t /e", fee" n! (+ r$e" of n- 0in! on t+e n tion l $o%ern&ent, it" $en(ie" n! in"tr)&ent litie", n! lo( l $o%ern&ent )nit"1; +o'e%er, p)r") nt to Se(tion 232, pro%in(e", (itie" n! &)ni(ip litie" in t+e >etropolit n > nil Are & - i&po"e t+e re l propertt / e/(ept on, inter alia, 1re l propert- o'ne! .- t+e Rep).li( of t+e #+ilippine" or n- of it" politi( l ").!i%i"ion" e/(ept '+en t+e .enefi(i l )"e t+ereof + " .een $r nte! for (on"i!er tion or ot+er'i"e, to t / .le per"on " pro%i!e! in t+e ite& 3 4 of t+e fir"t p r $r p+ of Se(tion 12.1G 48

In t+e ( "e t . r, Se(tion 171 in rel tion to Se(tion 138 of t+e 2G* (le rl- )t+ori6e" t+e re"pon!ent (it- $o%ern&ent to i&po"e on t+e petitioner t+e fr n(+i"e t / in 9)e"tion.
STI<H(

In it" $ener l "i$nifi( tion, fr n(+i"e i" pri%ile$e (onferre! .- $o%ern&ent )t+orit-, '+i(+ !oe" not .elon$ to (iti6en" of t+e (o)ntr- $ener ll- " & tter of (o&&on ri$+t. 48 In it" "pe(ifi( "en"e, fr n(+i"e & - refer to $ener l or pri& r- fr n(+i"e, or to "pe(i l or "e(on! r- fr n(+i"e. T+e for&er rel te" to t+e ri$+t to e/i"t " (orpor tion, .%irt)e of !)l- ppro%e! rti(le" of in(orpor tion, or (+ rter p)r") nt to "pe(i l l ' (re tin$ t+e (orpor tion. 49 T+e ri$+t )n!er pri& r- or $ener l fr n(+i"e i" %e"te! in t+e in!i%i!) l" '+o (o&po"e t+e (orpor tion n! not in t+e (orpor tion it"elf. 50 On t+e ot+er + n!, t+e l tter refer" to t+e ri$+t or pri%ile$e" (onferre! )pon n e/i"tin$ (orpor tion ")(+ " t+e ri$+t to )"e t+e "treet" of &)ni(ip lit- to l - pipe" of tr (0", ere(t pole" or "trin$ 'ire". 51 T+e ri$+t" )n!er "e(on! r- or "pe(i l fr n(+i"e re %e"te! in t+e (orpor tion n! & - or!in ril- .e (on%e-e! or &ort$ $e! )n!er $ener l po'er $r nte! to (orpor tion to !i"po"e of it" propert-, e/(ept ")(+ "pe(i l or "e(on! r- fr n(+i"e" " re (+ r$e! 'it+ p).li( )"e. 52 In Se(tion 131 3&4 of t+e 2G*, *on$re"" )n&i"t 0 .l- !efine! fr n(+i"e in t+e "en"e of "e(on! r- or "pe(i l fr n(+i"e. T+i" i" to %oi! n- (onf)"ion '+en t+e 'or! fr n(+i"e i" )"e! in t+e (onte/t of t / tion. A" (o&&onl- )"e!, franchise ta" i" G t / on t+e pri%ile$e of tr n" (tin$ .)"ine"" in t+e "t te n! e/er(i"in$ (orpor te fr n(+i"e" $r nte! .- t+e "t te.G 73 It i" not le%ie! on t+e (orpor tion "i&pl- for e/i"tin$ " (orpor tion, )pon it" propert- 74 or it" in(o&e, 77 .)t on it" e/er(i"e of t+e ri$+t" or pri%ile$e" $r nte! to it .- t+e $o%ern&ent. Hen(e, (orpor tion nee! not p - fr n(+i"e t / fro& t+e ti&e it (e "e! to !o .)"ine"" n! e/er(i"e it" fr n(+i"e. 7J It i" 'it+in t+i" (onte/t t+ t t+e p+r "e 1ta" on businesses en&oying a franchise1 in Se(tion 138 of t+e 2G* "+o)l! .e interprete! n! )n!er"too!. Veril-, to !eter&ine '+et+er t+e petitioner i" (o%ere! .- t+e fr n(+i"e t / in 9)e"tion, t+e follo'in$ re9)i"ite" "+o)l! (on()rF 314 t+ t petitioner + " Gfr n(+i"eG in t+e "en"e of "e(on! r- or "pe(i l fr n(+i"e; n! 324 t+ t it

i" e/er(i"in$ it" ri$+t" or pri%ile$e" )n!er t+i" fr n(+i"e 'it+in t+e territor- of t+e re"pon!ent (it- $o%ern&ent. #etitioner f)lfill" t+e fir"t re9)i"ite. *o&&on'e lt+ A(t No. 120, " &en!e! .- Rep. A(t No. 8397, (on"tit)te" petitioner1" pri& r- n! "e(on! r- fr n(+i"e". It "er%e" " t+e petitioner1" (+ rter, !efinin$ it" (o&po"ition, ( pit li6 tion, t+e ppoint&ent n! t+e "pe(ifi( !)tie" of it" (orpor te offi(er", n! it" (orpor te life "p n. 78 A" it" "e(on! rfr n(+i"e, *o&&on'e lt+ A(t No. 120, " &en!e!, %e"t" t+e petitioner t+e follo'in$ po'er" '+i(+ re not % il .le to or!in r- (orpor tion", vizF
G/// /// /// 3e4To (on!)(t in%e"ti$ tion" n! ")r%e-" for t+e !e%elop&ent of ' ter po'er in n- p rt of t+e #+ilippine"; 3f4To t 0e ' ter fro& n- p).li( "tre &, ri%er, (ree0, l 0e, "prin$ or ' terf ll in t+e #+ilippine", for t+e p)rpo"e" "pe(ifie! in t+i" A(t; to inter(ept n! !i%ert t+e flo' of ' ter" fro& l n!" of rip ri n o'ner" n! fro& per"on" o'nin$ or intere"te! in ' ter" '+i(+ re or & - .e ne(e"" r- for " i! p)rpo"e", )pon p -&ent of D)"t (o&pen" tion t+erefor; to lter, "tr i$+ten, o."tr)(t or in(re "e t+e flo' of ' ter in "tre &" or ' ter (+ nnel" inter"e(tin$ or (onne(tin$ t+ere'it+ or (onti$)o)" to it" 'or0" or n- p rt t+ereof. #ro%i!e!, T+ t D)"t (o&pen" tion "+ ll .e p i! to n- per"on or per"on" '+o"e propert- i", !ire(tl- or in!ire(tl-, !%er"elffe(te! or ! & $e! t+ere.-; 3$4To (on"tr)(t, oper te n! & int in po'er pl nt", )/ili r- pl nt", ! &", re"er%oir", pipe", & in", tr n"&i""ion line", po'er "t tion" n! ")."t tion", n! ot+er 'or0" for t+e p)rpo"e of !e%elopin$ +-!r )li( po'er fro& n- ri%er, (ree0, l 0e, "prin$ n! ' terf ll in t+e #+ilippine" n! ")ppl-in$ ")(+ po'er to t+e in+ .it nt" t+ereof, to (9)ire, (on"tr)(t, in"t ll, & int in, oper te, n! i&pro%e $ ", oil, or "te & en$ine", n!Lor ot+er pri&e &o%er", $ener tor" n! & (+iner- in pl nt" n!Lor )/ili r- pl nt" for t+e pro!)(tion of ele(tri( po'er; to e"t .li"+, !e%elop, oper te, & int in n! !&ini"ter po'er n! li$+tin$ "-"te&" for t+e tr n"&i""ion n! )tili6 tion of it" po'er $ener tion; to "ell ele(tri( po'er in .)l0 to 314 in!)"tri l enterpri"e", 324 (it-, &)ni(ip l or pro%in(i l "-"te&" n! ot+er $o%ern&ent in"tit)tion", 334 ele(tri( (ooper ti%e", 344 fr n(+i"e +ol!er", n! 374 re l e"t te ").!i%i"ion" . . .;

3+4To (9)ire, pro&ote, +ol!, tr n"fer, "ell, le "e, rent, &ort$ $e, en()&.er n! ot+er'i"e !i"po"e of propert- in(i!ent to, or ne(e"" r-, (on%enient or proper to ( rr- o)t t+e p)rpo"e" for '+i(+ t+e *orpor tion ' " (re te!F #ro%i!e!, T+ t in ( "e ri$+t of ' - i" ne(e"" r- for it" tr n"&i""ion

line", e "e&ent of ri$+t of ' - "+ ll onl- .e "o)$+tF #ro%i!e!, +o'e%er, T+ t in ( "e t+e propert- it"elf "+ ll .e (9)ire! .- p)r(+ "e, t+e (o"t t+ereof "+ ll .e t+e f ir & r0et % l)e t t+e ti&e of t+e t 0in$ of ")(+ propert-; 3i4To (on"tr)(t 'or0" (ro"", or ot+er'i"e, n- "tre &, ' ter(o)r"e, ( n l, !it(+, fl)&e, "treet, %en)e, +i$+' - or r il' - of pri% te n! p).li( o'ner"+ip, " t+e lo( tion of " i! 'or0" & - re9)ire . . .; 3D4To e/er(i"e t+e ri$+t of e&inent !o& in for t+e p)rpo"e of t+i" A(t in t+e & nner pro%i!e! .- l ' for in"tit)tin$ (on!e&n tion pro(ee!in$" .- t+e n tion l, pro%in(i l n! &)ni(ip l $o%ern&ent"; /// /// /// 3&4To (ooper te 'it+, n! to (oor!in te it" oper tion" 'it+ t+o"e of t+e N tion l <le(trifi( tion A!&ini"tr tion n! p).li( "er%i(e entitie"; 3n4To e/er(i"e (o&plete D)ri"!i(tion n! (ontrol o%er ' ter"+e!" ")rro)n!in$ t+e re"er%oir" of pl nt" n!Lor proDe(t" (on"tr)(te! or propo"e! to .e (on"tr)(te! .- t+e *orpor tion. 5pon !eter&in tion .- t+e *orpor tion of t+e re " re9)ire! for ' ter"+e!" for "pe(ifi( proDe(t, t+e =)re ) of ,ore"tr-, t+e Refore"t tion A!&ini"tr tion n! t+e =)re ) of 2 n!" "+ ll, )pon 'ritten !%i(e .- t+e *orpor tion, fort+'it+ ")rren!er D)ri"!i(tion to t+e *orpor tion of ll re " e&.r (e! 'it+in t+e ' ter"+e!", ").De(t to e/i"tin$ pri% te ri$+t", t+e nee!" of ' ter'or0" "-"te&", n! t+e re9)ire&ent" of !o&e"ti( ' ter ")ppl-; 3o4In t+e pro"e()tion n! & inten n(e of it" proDe(t", t+e *orpor tion "+ ll !opt &e ")re" to pre%ent en%iron&ent l poll)tion n! pro&ote t+e (on"er% tion, !e%elop&ent n! & /i&)& )tili6 tion of n t)r l re"o)r(e" . . .G 7E

Ait+ t+e"e po'er", petitioner e%ent) ll- + ! t+e &onopol- in t+e $ener tion n! !i"tri.)tion of ele(tri(it-. T+i" &onopol- ' " "tren$t+ene! 'it+ t+e i"") n(e of #re". De(ree No. 40, 59 n tion li6in$ t+e ele(tri( po'er in!)"tr-. Alt+o)$+ </e(. Or!er No. 217 60 t+ere fter llo'e! pri% te "e(tor p rti(ip tion in t+e $ener tion of ele(tri(it-, t+e tr n"&i""ion of ele(tri(it- re& in" t+e &onopol- of t+e petitioner. #etitioner l"o f)lfill" t+e "e(on! re9)i"ite. It i" oper tin$ 'it+in t+e re"pon!ent (it$o%ern&ent1" territori l D)ri"!i(tion p)r") nt to t+e po'er" $r nte! to it .*o&&on'e lt+ A(t No. 120, " &en!e!. ,ro& it" oper tion" in t+e *it- of * . n t) n, petitioner re li6e! $ro"" in(o&e of #108,E14,1E8.9J in 1992. ,)lfillin$ .ot+ re9)i"ite", petitioner i", n! o)$+t to .e, ").De(t of t+e fr n(+i"e t / in 9)e"tion.

#etitioner, +o'e%er, in"i"t" t+ t it i" e/(l)!e! fro& t+e (o%er $e of t+e fr n(+i"e t / "i&pl- .e( )"e it" "to(0" re '+oll- o'ne! .- t+e N tion l Go%ern&ent, n! it" (+ rter (+ r (teri6e! it " Gnon@profitG or$ ni6 tion. T+e"e (ontention" &)"t ne(e"" ril- f il. To "tre"", fr n(+i"e t / i" i&po"e! . "e! not on t+e o'ner"+ip .)t on t+e e/er(i"e .t+e (orpor tion of pri%ile$e to !o .)"ine"". T+e t / .le entit- i" t+e (orpor tion '+i(+ e/er(i"e" t+e fr n(+i"e, n! not t+e in!i%i!) l "to(0+ol!er". =- %irt)e of it" (+ rter, petitioner ' " (re te! " "ep r te n! !i"tin(t entit- fro& t+e N tion l Go%ern&ent. It ( n ")e n! .e ")e! )n!er it" o'n n &e, J1 n! ( n e/er(i"e ll t+e po'er" of (orpor tion )n!er t+e *orpor tion *o!e. J2 To .e ")re, t+e o'ner"+ip .- t+e N tion l Go%ern&ent of it" entire ( pit l "to(0 !oe" not ne(e"" ril- i&pl- t+ t petitioner i" not en$ $e! in .)"ine"". Se(tion 2 of #re". De(ree No. 2029 J3 (l ""ifie" $o%ern&ent@o'ne! or (ontrolle! (orpor tion" 3GO**"4 into t+o"e perfor&in$ $o%ern&ent l f)n(tion" n! t+o"e perfor&in$ propriet r- f)n(tion", vizF
GA $o%ern&ent@o'ne! or (ontrolle! (orpor tion i" "to(0 or non@"to(0 (orpor tion, whether performing governmental or proprietary functions, '+i(+ i" directly chartered by special law or if or$ ni6e! )n!er t+e $ener l (orpor tion l ' i" o'ne! or (ontrolle! .- t+e $o%ern&ent !ire(tl-, or in!ire(tlt+ro)$+ p rent (orpor tion or ")."i!i r- (orpor tion, to t+e e/tent of t le "t & Dorit- of it" o)t"t n!in$ %otin$ ( pit l "to(0 . . ..G 3emphases supplied4

Go%ern&ent l f)n(tion" re t+o"e pert inin$ to t+e !&ini"tr tion of $o%ern&ent, n! " ")(+, re tre te! " ."ol)te o.li$ tion on t+e p rt of t+e "t te to perfor& '+ile propriet r- f)n(tion" re t+o"e t+ t re )n!ert 0en onl- .- ' - of !% n(in$ t+e $ener l intere"t of "o(iet-, n! re &erel- option l on t+e $o%ern&ent. 64 In(l)!e! in t+e (l "" of GO**" perfor&in$ propriet r- f)n(tion" re G.)"ine""@li0eG entitie" ")(+ " t+e N tion l Steel *orpor tion 3NS*4, t+e N tion l De%elop&ent *orpor tion 3ND*4, t+e So(i l Se()rit- S-"te& 3SSS4, t+e Go%ern&ent Ser%i(e In")r n(e S-"te& 3GSIS4, n! t+e N tion l A ter Se'er $e A)t+orit- 3NAAASA4, 65 &on$ ot+er".
( H*SD

#etitioner ' " (re te! to G)n!ert 0e t+e !e%elop&ent of +-!roele(tri( $ener tion of po'er n! t+e pro!)(tion of ele(tri(it- fro& n)(le r, $eot+er& l n! ot+er "o)r(e", " 'ell " t+e tr n"&i""ion of ele(tri( po'er on n tion'i!e . "i".G 66 #)r") nt to t+i" & n! te, petitioner $ener te" po'er n! "ell" ele(tri(it- in .)l0. *ert inl-, t+e"e (ti%itie" !o not p rt 0e of t+e "o%erei$n f)n(tion" of t+e $o%ern&ent. T+e- re p)relpri% te n! (o&&er(i l )n!ert 0in$", l.eit i&.)e! 'it+ p).li( intere"t. T+e p).li( intere"t in%ol%e! in it" (ti%itie", +o'e%er, !oe" not !i"tr (t fro& t+e tr)e n t)re of t+e petitioner " (o&&er(i l enterpri"e, in t+e " &e le $)e 'it+ "i&il r p).li( )tilitie" li0e telep+one n! tele$r p+ (o&p nie", r ilro ! (o&p nie", ' ter ")ppl- n! irri$ tion (o&p nie", $ ", (o l or li$+t (o&p nie", po'er pl nt", i(e pl nt &on$ ot+er"; ll of

'+i(+ re !e(l re! .- t+i" *o)rt " &ini"tr nt or propriet r- f)n(tion" of $o%ern&ent i&e! t !% n(in$ t+e $ener l intere"t of "o(iet-. J8 A (lo"er re !in$ of it" (+ rter re%e l" t+ t e%en t+e le$i"l t)re tre t" t+e (+ r (ter of t+e petitioner1" enterpri"e " G.)"ine"",G lt+o)$+ it li&it" petitioner1" profit" to t'el%e per(ent 312K4, vizF JE
G3n4A+en e""enti l to t+e proper !&ini"tr tion of it" (orpor te ff ir" or ne(e"" r- for t+e proper tr n" (tion of it" business or to ( rr- o)t t+e p)rpo"e" for '+i(+ it ' " or$ ni6e!, to (ontr (t in!e.te!ne"" n! i"")e .on!" ").De(t to ppro% l of t+e #re"i!ent )pon re(o&&en! tion of t+e Se(ret r- of ,in n(e; 3o4To e/er(i"e ")(+ po'er" n! !o ")(+ t+in$" " & - .e re "on .l- ne(e"" rto ( rr- o)t t+e business and purposes for '+i(+ it ' " or$ ni6e!, or '+i(+, fro& ti&e to ti&e, & - .e !e(l re! .- t+e =o r! to .e ne(e"" r-, )"ef)l, in(i!ent l or )/ili r- to ((o&pli"+ t+e " i! p)rpo"e . . . .G3emphasis supplied4

It i" 'ort+- to note t+ t ll ot+er pri% te fr n(+i"e +ol!er" re(ei%in$ t le "t "i/t- per(ent 3J0K4 of it" ele(tri(it- re9)ire&ent fro& t+e petitioner re li0e'i"e i&po"e! t+e ( p of t'el%e per(ent 312K4 on profit". J9 T+e & in !ifferen(e i" t+ t t+e petitioner i" & n! te! to !e%ote G ll it" ret)rn" fro& it" ( pit l in%e"t&ent, " 'ell " e/(e"" re%en)e" fro& it" oper tion, for e/p n"ionG 80 '+ile ot+er fr n(+i"e +ol!er" + %e t+e option to !i"tri.)te t+eir profit" to it" "to(0+ol!er" .- !e(l rin$ !i%i!en!". Ae !o not "ee '+- t+i" f (t ( n .e "o)r(e of !ifferen(e in t / tre t&ent. In .ot+ in"t n(e", t+e t / .le entit- i" t+e (orpor tion, '+i(+ e/er(i"e" t+e fr n(+i"e, n! not t+e in!i%i!) l "to(0+ol!er". Ae l"o !o not fin! &erit in t+e petitioner1" (ontention t+ t it" t / e/e&ption" )n!er it" (+ rter ")."i"t !e"pite t+e p "" $e of t+e 2G*. A" r)le, t / e/e&ption" re (on"tr)e! "tron$l- $ in"t t+e (l i& nt. </e&ption" &)"t .e "+o'n to e/i"t (le rl- n! ( te$ori( ll-, n! ")pporte! .- (le r le$ l pro%i"ion". 81 In t+e ( "e t . r, t+e petitioner1" "ole ref)$e i" Se(tion 13 of Rep. A(t No. J397 e/e&ptin$ fro&, &on$ ot+er", G ll in(o&e t /e", fr n(+i"e t /e" n! re lt- t /e" to .e p i! to t+e N tion l Go%ern&ent, it" pro%in(e", (itie", &)ni(ip litie" n! ot+er $o%ern&ent $en(ie" n! in"tr)&ent litie".G Ho'e%er, Se(tion 193 of t+e 2G* 'it+!re', ").De(t to li&ite! e/(eption", t+e "'eepin$ t / pri%ile$e" pre%io)"l- enDo-e! .- pri% te n! p).li( (orpor tion". *ontr r- to t+e (ontention of petitioner, Se(tion 193 of t+e 2G* i" n e/pre"", l.eit $ener l, repe l of ll "t t)te" $r ntin$ t / e/e&ption" fro& lo( l t /e". 82 It re !"F
GSe(. 193.Withdrawal of Ta" E"emption #rivileges. ? $nless otherwise provided in this ode' ta" e"emptions or incentives granted to' or presently

en&oyed by all persons' whether natural or &uridical' including government( owned or controlled corporations, e/(ept lo( l ' ter !i"tri(t", (ooper ti%e" !)l- re$i"tere! )n!er R.A. No. J93E, non@"to(0 n! non@profit +o"pit l" n! e!)( tion l in"tit)tion", re +ere.- 'it+!r 'n )pon t+e effe(ti%it- of t+i" *o!e.G 3emphasis supplied4

It i" . "i( pre(ept of "t t)tor- (on"tr)(tion t+ t t+e e/pre"" &ention of one per"on, t+in$, (t, or (on"e9)en(e e/(l)!e" ll ot+er" " e/pre""e! in t+e f &ili r & /i& e"pressio unius est e"clusio alterius. 73 Not .ein$ lo( l ' ter !i"tri(t, (ooper ti%e re$i"tere! )n!er R.A. No. J93E, or non@"to(0 n! non@profit +o"pit l or e!)( tion l in"tit)tion, petitioner (le rl- !oe" not .elon$ to t+e e/(eption. It i" t+erefore in()&.ent )pon t+e petitioner to point to "o&e pro%i"ion" of t+e 2G* t+ t e/pre""l- $r nt it e/e&ption fro& lo( l t /e". =)t t+i" 'o)l! .e n e/er(i"e in f)tilit-. Se(tion 138 of t+e 2G* (le rl- "t te" t+ t t+e 2G5" ( n i&po"e fr n(+i"e t / 1notwithstanding any e"emption granted by any law or other special law.1 T+i" p rti()l r pro%i"ion of t+e 2G* !oe" not !&it n- e/(eption. In ity Government of San #ablo' !aguna v. 5eyes, 74 ><RA2*O1" e/e&ption fro& t+e p -&ent of fr n(+i"e t /e" ' " .ro)$+t " n i"")e .efore t+i" *o)rt. T+e " &e i"")e ' " in%ol%e! in t+e ")."e9)ent ( "e of 2anila Electric ompany v. #rovince of !aguna. 75 R)lin$ in f %or of t+e lo( l $o%ern&ent in .ot+ in"t n(e", 'e r)le! t+ t t+e fr n(+i"e t / in 9)e"tion i" i&po" .le !e"pite n- e/e&ption enDo-e! .- ><RA2*O )n!er "pe(i l l '", vizF

GIt i" o)r %ie' t+ t petitioner" (orre(tl- rel- on pro%i"ion" of Se(tion" 138 n! 193 of t+e 2G* to ")pport t+eir po"ition t+ t ><RA2*O1" t / e/e&ption + " .een 'it+!r 'n. T+e e/pli(it l n$) $e of Se(tion 138 '+i(+ )t+ori6e" t+e pro%in(e to i&po"e fr n(+i"e t / 1not'it+"t n!in$ n- e/e&ption $r nte! .n- l ' or ot+er "pe(i l l '1 i" ll@en(o&p ""in$ n! (le r. The franchise ta" is imposable despite any e"emption en&oyed under special laws. Section 678 buttresses the withdrawal of e"tant ta" e"emption privileges. ="t tin$ t+ t )nle"" ot+er'i"e pro%i!e! in t+i" *o!e, t / e/e&ption" or in(enti%e" $r nte! to or pre"entl- enDo-e! .- ll per"on", '+et+er n t)r l or D)ri!i( l, in(l)!in$ $o%ern&ent@o'ne! or (ontrolle! (orpor tion" e/(ept 314 lo( l ' ter !i"tri(t", 324 (ooper ti%e" !)l- re$i"tere! )n!er R.A. J93E, 334 non@"to(0 n! non@profit +o"pit l" n! e!)( tion l in"tit)tion", re 'it+!r 'n )pon t+e effe(ti%it- of t+i" (o!e, t+e o.%io)" i&port i" to li&it t+e e/e&ption" to t+e t+ree en)&er te! entitie". It i" . "i( pre(ept of "t t)tor- (on"tr)(tion t+ t t+e e/pre"" &ention of one per"on, t+in$, (t, or (on"e9)en(e e/(l)!e" ll ot+er" " e/pre""e! in t+e f &ili r & /i& e"pressio unius est e"clusio alterius. In t+e ."en(e of n- pro%i"ion of t+e *o!e to t+e (ontr r-, n! 'e fin! no ot+er

pro%i"ion in point, n- e/i"tin$ t / e/e&ption or in(enti%e enDo-e! .><RA2*O )n!er e/i"tin$ l ' ' " (le rl- inten!e! to .e 'it+!r 'n. 5eading together Sections 689 and 678 of the !G ' we conclude that under the !G the local government unit may now impose a local ta" at a rate not e"ceeding :;< of 6< of the gross annual receipts for the preceding calendar based on the incoming receipts realized within its territorial &urisdiction. The legislative purpose to withdraw ta" privileges en&oyed under e"isting law or charter is clearly manifested by the language used on 3sic4 Sections 689 and 678 categorically withdrawing such e"emption sub&ect only to the e"ceptions enumerated. Since it would be not only tedious and impractical to attempt to enumerate all the e"isting statutes providing for special ta" e"emptions or privileges' the !G provided for an e"press' albeit general' withdrawal of such e"emptions or privileges. *o more une=uivocal language could have been used.G 8J 3emphasis supplied4.

It i" 'ort+ &entionin$ t+ t Se(tion 192 of t+e 2G* e&po'er" t+e 2G5", t+ro)$+ or!in n(e" !)l- ppro%e!, to $r nt t / e/e&ption", initi ti%e" or relief". 88 =)t in en (tin$ Se(tion 38 of Or!in n(e No. 1J7@92 '+i(+ i&po"e" n nn) l fr n(+i"e t / Gnot'it+"t n!in$ n- e/e&ption $r nte! .- l ' or ot+er "pe(i l l ',G t+e re"pon!ent (it$o%ern&ent (le rl- !i! not inten! to e/e&pt t+e petitioner fro& t+e (o%er $e t+ereof. Do).tle"", t+e po'er to t / i" t+e &o"t effe(ti%e in"tr)&ent to r i"e nee!e! re%en)e" to fin n(e n! ")pport &-ri ! (ti%itie" of t+e lo( l $o%ern&ent )nit" for t+e !eli%er- of . "i( "er%i(e" e""enti l to t+e pro&otion of t+e $ener l 'elf re n! t+e en+ n(e&ent of pe (e, pro$re"", n! pro"perit- of t+e people. A" t+i" *o)rt o."er%e! in t+e 2actan ( "e, Gt+e ori$in l re "on" for t+e 'it+!r ' l of t / e/e&ption pri%ile$e" $r nte! to $o%ern&ent@o'ne! or (ontrolle! (orpor tion" n! ll ot+er )nit" of $o%ern&ent 'ere t+ t ")(+ pri%ile$e re")lte! in "erio)" t / . "e ero"ion n! !i"tortion" in t+e t / tre t&ent of "i&il rl- "it) te! enterpri"e".G 8E Ait+ t+e !!e! .)r!en of !e%ol)tion, it i" e%en &ore i&per ti%e for $o%ern&ent entitie" to "+ re in t+e re9)ire&ent" of !e%elop&ent, fi"( l or ot+er'i"e, .- p -in$ t /e" or ot+er (+ r$e" !)e fro& t+e&. IN VI<A AH<R<O,, t+e in"t nt petition i" D<NI<D n! t+e "" ile! De(i"ion n! Re"ol)tion of t+e *o)rt of Appe l" ! te! > r(+ 12, 2001 n! B)l- 10, 2001, re"pe(ti%el-, re +ere.- A,,IR><D. SO ORD<R<D. #anganiban' Sandoval(Gutierrez' orona n! arpio(2orales' )).' (on()r.