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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 138810 September 29, 2004
BATANGAS CATV, NC., petitioner,
vs.
T!E COURT O" APPEA#S, T!E BATANGAS CT$ SANGGUNANG PAN#UNGSO%
&'( BATANGAS CT$ MA$OR, respondents.
D E C I S I N
SAN%OVA#)GUTERRE*, J.:
In the late !"#$s, %ohn &alson, an appliance dealer in Penns'lvania, suffered a decline
in the sale of television (tv) sets because of poor reception of si*nals in his co++unit'.
,roubled, he built an antenna on top of a nearb' +ountain. -sin* coa.ial cable lines, he
distributed the tv si*nals fro+ the antenna to the ho+es of his custo+ers. &alson/s
innovative idea i+proved his sales and at the sa+e ti+e *ave birth to a ne0
teleco++unication s'ste+ 11 the Co++unit' Antenna ,elevision (CA,2) or Cable
,elevision.
!

,his technolo*ical brea3throu*h found its 0a' in our shores and, li3e in its countr' of
ori*in, it spa0ned le*al controversies, especiall' in the field of re*ulation. ,he case at
bar is 4ust another occasion to clarif' a shad' area. 5ere, 0e are tas3ed to resolve the
in6uir' 11 +a' a local *overn+ent unit (78-) re*ulate the subscriber rates char*ed b'
CA,2 operators 0ithin its territorial 4urisdiction9
,his is a petition for revie0 on certiorari filed b' Batan*as CA,2, Inc. (petitioner herein)
a*ainst the Sangguniang Panlungsod and the Ma'or of Batan*as Cit' (respondents
herein) assailin* the Court of Appeals +1, Decision
:
dated ;ebruar' !:, !""" and +2,
Resolution
<
dated Ma' :=, !""", in CA18.R. C2 No. >:<=!.
#
,he Appellate Court
reversed and set aside the %ud*+ent
>
dated ctober :", !""> of the Re*ional ,rial
Court (R,C), Branch ?, Batan*as Cit' in Civil Case No. #:>#,
=
holdin* that neither of
the respondents has the po0er to fi. the subscriber rates of CA,2 operators, such
bein* outside the scope of the 78-/s po0er.
,he antecedent facts are as follo0s@
n %ul' :A, !"A=, respondent Sangguniang Panlungsod enacted Resolution No. :!$
?
*rantin* petitioner a perm-t to construct, install, and operate a CA,2 s'ste+ in
Batan*as Cit'. Section A of the Resolution provides that petitioner is authoriBed to
char*e its subscribers the +a.i+u+ rates specified therein, Cprovided, ho0ever, that
an' increase of rates shall be sub4ect to the approval of the Sangguniang Panlungsod.C
A
So+eti+e in Nove+ber !""<, petitioner increased its subscriber rates fro+ PAA.$$ to
P!A$.$$ per +onth. As a result, respondent Ma'or 0rote petitioner a letter
"
threatenin*
to cancel its per+it unless it secures the approval of respondent San**unian*
Panlun*sod, pursuant to Resolution No. :!$.
Petitioner then filed 0ith the R,C, Branch ?, Batan*as Cit', a petition for in4unction
doc3eted as Civil Case No. #:>#. It alle*ed that respondent Sangguniang Panlungsod
has no authorit' to re*ulate the subscriber rates char*ed b' CA,2 operators because
under E.ecutive rder No. :$>, the National ,eleco++unications Co++ission (N,C)
has the sole authorit' to re*ulate the CA,2 operation in the Philippines.
n ctober :", !"">, the trial court decided in favor of petitioner, thus@
C.!ERE"ORE, as pra'ed for, the (e/e'(&'t0, their representatives, a*ents, deputies
or other persons actin* on their behalf or under their instructions, &re 1ereb2 e'3o-'e(
/rom 4&'4e5-'6 p5&-'t-//70 perm-t to oper&te & C&b5e A'te''& Te5e8-0-o' +CATV,
020tem -' t1e C-t2 o/ B&t&'6&0 or -t0 e'8-ro'0 or -' &'2 m&''er, /rom -'ter/er-'6
9-t1 t1e &:t1or-t2 &'( po9er o/ t1e N&t-o'&5 Te5e4omm:'-4&t-o'0 Comm-00-o' to
6r&'t /r&'41-0e0 to oper&te CATV 020tem0 to ;:&5-/-e( &pp5-4&'t0, &'( t1e r-61t o/
p5&-'t-// -' /-<-'6 -t0 0er8-4e r&te0 91-41 'ee(0 'o pr-or &ppro8&5 o/ t1e
Sangguniang Panlungsod o/ B&t&'6&0 C-t2.
,he counterclai+ of the plaintiff is hereb' dis+issed. No pronounce+ent as to costs.
T S SO OR%ERE%.C
!$
,he trial court held that the enact+ent of Resolution No. :!$ b' respondent violates the
State/s dere*ulation polic' as set forth b' then N,C Co++issioner %ose 7uis A. AlcuaB
in his Me+orandu+ dated Au*ust :>, !"A". Also, it pointed out that the sole a*enc' of
the *overn+ent 0hich can re*ulate CA,2 operation is the N,C, and that the 78-s
cannot e.ercise re*ulator' po0er over it 0ithout appropriate le*islation.
-nsatisfied, respondents elevated the case to the Court of Appeals, doc3eted as CA1
8.R. C2 No. >:<=!.
n ;ebruar' !:, !""", the Appellate Court reversed and set aside the trial court/s
Decision, ratiocinatin* as follo0s@
CA5t1o:61 t1e Cert-/-4&te o/ A:t1or-t2 to oper&te & C&b5e A'te''& Te5e8-0-o'
+CATV, S20tem -0 6r&'te( b2 t1e N&t-o'&5 Te5e4omm:'-4&t-o'0 Comm-00-o'
p:r0:&'t to E<e4:t-8e Or(er No. 20=, t1-0 (oe0 'ot pre45:(e t1e S&'66:'-&'6
P&'5:'60o( /rom re6:5&t-'6 t1e oper&t-o' o/ t1e CATV -' t1e-r 5o4&5-t2 :'(er t1e
po9er0 8e0te( :po' -t b2 B&t&0 P&mb&'0& B-5&'6 33>, ot1er9-0e ?'o9' &0 t1e
#o4&5 Go8er'me't Co(e o/ 1983. Se4t-o' 1>> +'o9 Se4t-o' 4=> p&r&6r&p1 3 +--, o/
Rep:b5-4 A4t >1@0, pro8-(e0A
DSe4t-o' 1>>. Po9er0 &'( %:t-e0 E ,he San**unian* Panlun*sod shall@
a) Enact such ordinances as +a' be necessar' to carr' into effect and dischar*e the
responsibilities conferred upon it b' la0, and such as shall be necessar' and proper to
provide for health and safet', co+fort and convenience, +aintain peace and order,
i+prove the +orals, and pro+ote the prosperit' and *eneral 0elfare of the co++unit'
and the inhabitants thereof, and the protection of propert' thereinF
. . .
d) Re*ulate, fi. the license fee for, and ta. an' business or profession bein* carried on
and e.ercised 0ithin the territorial 4urisdiction of the cit', e.cept travel a*encies, tourist
*uides, tourist transports, hotels, resorts, de lu.e restaurants, and tourist inns of
international standards 0hich shall re+ain under the licensin* and re*ulator' po0er of
the Ministr' of ,ouris+ 0hich shall e.ercise such authorit' 0ithout infrin*e+ent on the
ta.in* and re*ulator' po0ers of the cit' *overn+entF/
-nder cover of the 8eneral &elfare Clause as provided in this section, 7ocal
8overn+ent -nits can perfor+ 4ust about an' po0er that 0ill benefit their
constituencies. ,hus, local *overn+ent units can e.ercise po0ers that are@
+1, e.pressl' *rantedF +2, necessaril' i+plied fro+ the po0er that is e.pressl' *rantedF
+3, necessar', appropriate or incidental for its efficient and effective *overnanceF and
+4, essential to the pro+otion of the *eneral 0elfare of their inhabitants. (Pi+entel, ,he
7ocal 8overn+ent Code of !""!, p. #=)
Ver-52, t1e re6:5&t-o' o/ b:0-'e00e0 -' t1e 5o4&5-t2 -0 e<pre0052 pro8-(e( -' t1e
#o4&5 Go8er'me't Co(e. T1e /-<-'6 o/ 0er8-4e r&te0 -0 5&9/:5 :'(er t1e Ge'er&5
.e5/&re C5&:0e.
Resolution No. :!$ *rantin* appellee a per+it to construct, install and operate a
co++unit' antenna television (CA,2) s'ste+ in Batan*as Cit' as 6uoted earlier in this
decision, authoriBed the *rantee to i+pose char*es 0hich cannot be increased e.cept
upon approval of the San**unian* Ba'an. It further provided that in case of violation b'
the *rantee of the ter+s and conditionsGre6uire+ents specificall' provided therein, the
Cit' shall have the ri*ht to 0ithdra0 the franchise.
Appellee increased the service rates fro+ EI85,H EI85, PESS (PAA.$$) to NE
5-NDRED EI85,H PESS (P!A$.$$) (Records, p. :>) 0ithout the approval of
appellant. S:41 &4t bre&41e( Re0o5:t-o' No. 210 91-41 6-8e0 &ppe55&'t t1e r-61t to
9-t1(r&9 t1e perm-t 6r&'te( to &ppe55ee.C
!!

Petitioner filed a +otion for reconsideration but 0as denied.
!:
5ence, the instant petition for revie0 on certiorari anchored on the follo0in*
assi*n+ents of error@
C
T!E COURT O" APPEA#S ERRE% N !O#%NG T!AT T!E GENERA# .E#"ARE
C#AUSE o/ t1e #OCA# GOVERNMENT CO%E AUT!OR*ES RESPON%ENT
SANGGUNANG PAN#UNGSO% TO EBERCSE T!E REGU#ATOR$ "UNCTON
SO#E#$ #O%GE% .T! T!E NATONA# TE#ECOMMUNCATONS COMMSSON
UN%ER EBECUTVE OR%ER NO. 20=, NC#U%NG T!E AUT!ORT$ TO "B
AN%COR APPROVE T!E SERVCE RATES O" CATV OPERATORSD AN%

T!E COURT O" APPEA#S ERRE% N REVERSNG T!E %ECSON APPEA#E%


"ROM AN% %SMSSNG PETTONER7S COMP#ANT.C
!<

Petitioner contends that 0hile Republic Act No. ?!=$, the 7ocal 8overn+ent Code of
!""!, e.tends to the 78-s the *eneral po0er to perfor+ an' act that 0ill benefit their
constituents, nonetheless, it does not authoriBe the+ to re*ulate the CA,2 operation.
Pursuant to E.. No. :$>, onl' the N,C has the authorit' to re*ulate the CA,2
operation, includin* the fi.in* of subscriber rates.
Respondents counter that the Appellate Court did not co++it an' reversible error in
renderin* the assailed Decision. First, Resolution No. :!$ 0as enacted pursuant to
Section !??(c) and (d) of Batas Pambansa Bilang <<?, the 7ocal 8overn+ent Code of
!"A<, 0hich authoriBes 78-s to re*ulate businesses. ,he ter+ CbusinessesC
necessaril' includes the CA,2 industr'. And second, Resolution No. :!$ is in the nature
of a contract bet0een petitioner and respondents, it bein* a *rant to the for+er of a
franchise to operate a CA,2 s'ste+. ,o hold that E.. No. :$> a+ended its ter+s
0ould violate the constitutional prohibition a*ainst i+pair+ent of contracts.
!#

,he petition is i+pressed 0ith +erit.
Earlier, 0e posed the 6uestion 11 +a' a local *overn+ent unit (78-) re*ulate the
subscriber rates char*ed b' CA,2 operators 0ithin its territorial 4urisdiction9 A revie0 of
pertinent la0s and 4urisprudence 'ields a ne*ative ans0er.
President ;erdinand E. Marcos 0as the first one to place the CA,2 industr' under the
re*ulator' po0er of the national *overn+ent.
!>
n %une !!, !"?A, he issued
Pre0-(e't-&5 %e4ree +P.%., No. 1=12
!=
establishin* a +onopol' of the industr' b'
*rantin* Sining Makulay, Inc., an e.clusive franchise to operate CA,2 s'ste+ in an'
place 0ithin the Philippines. Accordin*l', it ter+inated all franchises, per+its or
certificates for the operation of CA,2 s'ste+ previousl' *ranted b' local *overn+ents
or b' an' instru+entalit' or a*enc' of the national *overn+ent.
!?
7i3e0ise, it prescribed
the subscriber rates to be char*ed b' Sining Makulay, Inc. to its custo+ers.
!A
n %ul' :!, !"?", President Marcos issued 7etter of Instruction (7I) No. A"# vestin*
upon the Chair+an of the Board of Co++unications direct supervision over the
operations of Sinin* Ma3ula', Inc. ,hree da's after, he issued E.. No. >#=
!"
inte*ratin*
the Board of Co++unications
:$
and the ,eleco++unications Control Bureau
:!
to for+ a
sin*le entit' to be 3no0n as the CNational ,eleco++unications Co++ission.C ,0o of its
assi*ned functions are@
Ca. Issue Certificate of Public Convenience for the operation of co++unications utilities
and services, radio co++unications s'ste+s, 0ire or 0ireless telephone or tele*raph
s'ste+s, radio and television broadcastin* s'ste+ and other si+ilar public utilitiesF
b. Establish, prescribe and re*ulate areas of operation of particular operators of public
service co++unicationsF and deter+ine and prescribe char*es or rates pertinent to the
operation of such public utilit' facilities and services e.cept in cases 0here char*es or
rates are established b' international bodies or associations of 0hich the Philippines is
a participatin* +e+ber or b' bodies reco*niBed b' the Philippine 8overn+ent as the
proper arbiter of such char*es or ratesFC
Althou*h Sining Makulay Inc./s e.clusive franchise had a life ter+ of :> 'ears, it 0as cut
short b' the advent of the !"A= Revolution. -pon President CoraBon C. A6uino/s
assu+ption of po0er, she issued E.O. No. 20=
::
openin* the CA,2 industr' to all
citiBens of the Philippines. t m&'(&te( t1e NTC to 6r&'t Cert-/-4&te0 o/ A:t1or-t2 to
CATV oper&tor0 &'( to -00:e t1e 'e4e00&r2 -mp5eme't-'6 r:5e0 &'( re6:5&t-o'0.
n Septe+ber ", !""?, President ;idel 2. Ra+os issued E.O. No. 43@
:<
prescribin*
polic' *uidelines to *overn CA,2 operation in the Philippines. Cast in +ore definitive
ter+s, it restated the N,C/s re*ulator' po0ers over CA,2 operations, thus@
CSECTON 2. ,he re6:5&t-o' &'( 0:per8-0-o' of the cable television industr' in the
Philippines shall re+ain vested 0o5e52 0ith the N&t-o'&5 Te5e4omm:'-4&t-o'0
Comm-00-o' +NTC,.
SECTON 3. nl' persons, associations, partnerships, corporations or cooperatives,
*ranted a Provisional Authorit' or Certificate of Authorit' b' the Co++ission +a' install,
operate and +aintain a cable television s'ste+ or render cable television service 0ithin
a service area.C
Clearl', it has been +ore than t0o decades no0 since our national *overn+ent, throu*h
the N,C, assu+ed re*ulator' po0er over the CA,2 industr'. Chan*es in the political
arena did not alter the trend. Instead, subse6uent presidential issuances further
reinforced the N,C/s po0er. Si*nificantl', President Marcos and President A6uino, in
the e.ercise of their le*islative po0er, issued P.D. No. !>!:, E.. No. >#= and E.. No.
:$>. 5ence, the' have the force and effect of statutes or la0s passed b' Con*ress.
:#
,hat the re*ulator' po0er sta's 0ith the N,C is also clear fro+ President Ra+os/ E..
No. #<= +andatin* that the re*ulation and supervision of the CA,2 industr' shall
re+ain vested Csolel'C in the N,C. Blac3/s 7a0 Dictionar' defines CsoleC as C0ithout
another or others.C
:>
T1e 5o6-4&5 4o'45:0-o', t1ere/ore, -0 t1&t -' 5-61t o/ t1e &bo8e
5&90 &'( E.O. No. 43@, t1e NTC e<er4-0e0 re6:5&tor2 po9er o8er CATV oper&tor0
to t1e e<45:0-o' o/ ot1er bo(-e0.
But, lest 0e be +isunderstood, nothin* herein should be interpreted as to strip 78-s of
their *eneral po0er to prescribe re*ulations under the *eneral 0elfare clause of the
7ocal 8overn+ent Code. It +ust be e+phasiBed that 0hen E.. No. #<= decrees that
the Cre*ulator' po0erC shall be vested Csolel'C in the N,C, it pertains to the Cre*ulator'
po0erC over those +atters 0hich are peculiarl' 0ithin the N,C/s co+petence, such as,
the@ (!) deter+ination of rates, (:) issuance of Ccertificates of authorit', (<)
establish+ent of areas of operation, (#) e.a+ination and assess+ent of the le*al,
technical and financial 6ualifications of applicant operators, (>) *rantin* of per+its for
the use of fre6uencies, (=) re*ulation of o0nership and operation, +?) ad4udication of
issues arisin* fro+ its functions, and (A) other si+ilar +atters.
:=
&ithin these areas, the
N,C rei*ns supre+e as it possesses the e.clusive po0er to re*ulate 11 a po0er
co+prisin* varied acts, such as Cto fi., establish, or controlF to ad4ust b' rule, +ethod or
established +odeF to direct b' rule or restrictionF or to sub4ect to *overnin* principles or
la0s.C
:?

Coincidentall', respondents 4ustif' their e.ercise of re*ulator' po0er over petitioner/s
CA,2 operation under the *eneral 0elfare clause of the 7ocal 8overn+ent Code of
!"A<. ,he Court of Appeals sustained their stance.
,here is no dispute that respondent San**unian* Panlun*sod, li3e other local
le*islative bodies, has been e+po0ered to enact ordinances and approve resolutions
under the *eneral 0elfare clause of B.P. Bl*. <<?, the 7ocal 8overn+ent Code of !"A<.
,hat it continues to posses such po0er is clear under the ne0 la0, R.A. No. ?!=$ (the
7ocal 8overn+ent Code of !""!). Section != thereof provides@
CSEC,IN !=. General Welfare. E Ever' local *overn+ent unit shall e.ercise the
po0ers e.pressl' *ranted, those necessaril' i+plied therefro+, as 0ell as po0ers
necessar', appropriate, or incidental for its efficient and effective *overnance, and those
0hich are essential to the pro+otion of the *eneral 0elfare. &ithin their respective
territorial 4urisdictions, local *overn+ent units shall ensure and support, a+on* others,
the preservation and enrich+ent of culture, pro+ote health and safet', enhance the
ri*ht of the people to a balanced ecolo*', encoura*e and support the develop+ent of
appropriate and self1reliant, scientific and technolo*ical capabilities, i+prove public
+orals, enhance econo+ic prosperit' and social 4ustice, pro+ote full e+plo'+ent
a+on* their residents, +aintain peace and order, and preserve the co+fort and
convenience of their inhabitants.C
In addition, Section #>A of the sa+e Code specificall' +andates@
CSEC,IN #>A. Po0ers, Duties, ;unctions and Co+pensation. I (a) ,he San**unian*
Panlun*sod, as the le*islative bod' of the cit', shall enact ordinances, approve
resolutions and appropriate funds for the *eneral 0elfare of the cit' and its inhabitants
pursuant to Section != of this Code and in the proper e.ercise of the corporate po0ers
of the cit' as provided for under Section :: of this Code, . . .@C
T1e 6e'er&5 9e5/&re 45&:0e -0 t1e (e5e6&t-o' -' 0t&t:tor2 /orm o/ t1e po5-4e po9er
o/ t1e St&te to #GU0.
:A
,hrou*h this, 78-s +a' prescribe re*ulations to protect the
lives, health, and propert' of their constituents and +aintain peace and order 0ithin
their respective territorial 4urisdictions. Accordin*l', 0e have upheld enact+ents
providin*, for instance, the re*ulation of *a+blin*,
:"
the occupation of ri* drivers,
<$
the
installation and operation of pinball +achines,
<!
the +aintenance and operation of
coc3pits,
<:
the e.hu+ation and transfer of corpses fro+ public burial *rounds,
<<
and the
operation of hotels, +otels, and lod*in* houses
<#
as valid e.ercises b' local le*islatures
of the police po0er under the *eneral 0elfare clause.
7i3e an' other enterprise, CA,2 operation +a'be re*ulated b' 78-s under the *eneral
0elfare clause. ,his is pri+aril' because the CA,2 s'ste+ co++its the indiscretion of
crossin* public properties. (It uses public properties in order to reach subscribers.) ,he
ph'sical realities of constructin* CA,2 s'ste+ E the use of public streets, ri*hts of
0a's, the foundin* of structures, and the parcelin* of lar*e re*ions E allo0 an 78- a
certain de*ree of re*ulation over CA,2 operators.
<>
,his is the sa+e re*ulation that it
e.ercises over all private enterprises 0ithin its territor'.
But, 0hile 0e reco*niBe the 78-s/ po0er under the *eneral 0elfare clause, 0e cannot
sustain Resolution No. :!$. &e are convinced that respondents stra'ed fro+ the 0ell
reco*niBed li+its of its po0er. ,he fla0s in Resolution No. :!$ are@ +1, it violates the
+andate of e.istin* la0s and +2, it violates the State/s dere*ulation polic' over the
CA,2 industr'.
I.
Resolution No. :!$ is an enact+ent of an 78- actin* onl' as a*ent of the national
le*islature. Necessaril', its act +ust reflect and confor+ to the 0ill of its principal. ,o test
its validit', 0e +ust appl' the particular re6uisites of a valid ordinance as laid do0n b'
the accepted principles *overnin* +unicipal corporations.
<=
Spea3in* for the Court in the leadin* case of -nited States vs. Abendan,
<?
%ustice
Moreland said@ CAn ordinance enacted b' virtue of the *eneral 0elfare clause is valid,
unless it contravenes the funda+ental la0 of the Philippine Islands, or an Act of the
Philippine 7e*islature, or unless it is a*ainst public polic', or is unreasonable,
oppressive, partial, discri+inatin*, or in dero*ation of co++on ri*ht.C In De la CruB vs.
ParaB,
<A
0e laid the *eneral rule Cthat ordinances passed b' virtue of the i+plied po0er
found in the *eneral 0elfare clause +ust be reasonable, consonant 0ith the *eneral
po0ers and purposes of the corporation, and not inconsistent 0ith the la0s or polic' of
the State.C
,he apparent defect in Resolution No. :!$ is that it contravenes E.. No. :$> and E..
No. #<= insofar as it per+its respondent San**unian* Panlun*sod to usurp a po0er
e.clusivel' vested in the N,C, i.e., the po0er to fi. the subscriber rates char*ed b'
CA,2 operators. As earlier discussed, the fi.in* of subscriber rates is definitel' one of
the +atters 0ithin the N,C/s e.clusive do+ain.
In this re*ard, it is appropriate to stress that 0here the state le*islature has +ade
provision for the re*ulation of conduct, it has +anifested its intention that the sub4ect
+atter shall be full' covered b' the statute, and that a +unicipalit', under its *eneral
po0ers, cannot re*ulate the sa+e conduct.
<"
In Keller vs. State,
#$
it 0as held that@
C&here there is no e.press po0er in the charter of a +unicipalit' authoriBin* it to adopt
ordinances re*ulatin* certain +atters 0hich are specificall' covered b' a *eneral
statute, a +unicipal ordinance, insofar as it atte+pts to re*ulate the sub4ect 0hich is
co+pletel' covered b' a *eneral statute of the le*islature, +a' be rendered invalid. . .
. &here the sub4ect is of state0ide concern, and the le*islature has appropriated the
field and declared the rule, its declaration is bindin* throu*hout the State.C A reason
advanced for this vie0 is that such ordinances are in e.cess of the po0ers *ranted to
the +unicipal corporation.
#!
Since E.. No. :$>, a *eneral la0, +andates that the re*ulation of CA,2 operations
shall be e.ercised b' the N,C, an 78- cannot enact an ordinance or approve a
resolution in violation of the said la0.
It is a funda+ental principle that +unicipal ordinances are inferior in status and
subordinate to the la0s of the state. An ordinance in conflict 0ith a state la0 of *eneral
character and state0ide application is universall' held to be invalid.
#:
,he principle is
fre6uentl' e.pressed in the declaration that +unicipal authorities, under a *eneral *rant
of po0er, cannot adopt ordinances 0hich infrin*e the spirit of a state la0 or repu*nant to
the *eneral polic' of the state.
#<
In ever' po0er to pass ordinances *iven to a
+unicipalit', there is an i+plied restriction that the ordinances shall be consistent 0ith
the *eneral la0.
##
In the lan*ua*e of %ustice Isa*ani CruB (ret.), this Court, in Magtaas
vs. Pryce Pro!erties "or!., Inc.,
#>
ruled that@
C,he rationale of the re6uire+ent that the ordinances should not contravene a statute is
obvious. Municipal *overn+ents are onl' a*ents of the national *overn+ent. 7ocal
councils e.ercise onl' dele*ated le*islative po0ers conferred on the+ b' Con*ress as
the national la0+a3in* bod'. ,he dele*ate cannot be superior to the principal or
e.ercise po0ers hi*her than those of the latter. It is a heres' to su**est that the local
*overn+ent units can undo the acts of Con*ress, fro+ 0hich the' have derived their
po0er in the first place, and ne*ate b' +ere ordinance the +andate of the statute.
DMunicipal corporations o0e their ori*in to, and derive their po0ers and ri*hts 0holl'
fro+ the le*islature. It breathes into the+ the breath of life, 0ithout 0hich the' cannot
e.ist. As it creates, so it +a' destro'. As it +a' destro', it +a' abrid*e and control.
-nless there is so+e constitutional li+itation on the ri*ht, the le*islature +i*ht, b' a
sin*le act, and if 0e can suppose it capable of so *reat a foll' and so *reat a 0ron*,
s0eep fro+ e.istence all of the +unicipal corporations in the State, and the corporation
could not prevent it. &e 3no0 of no li+itation on the ri*ht so far as to the corporation
the+selves are concerned. ,he' are, so to phrase it, the +ere tenants at 0ill of the
le*islature./
,his basic relationship bet0een the national le*islature and the local *overn+ent units
has not been enfeebled b' the ne0 provisions in the Constitution stren*thenin* the
polic' of local autono+'. &ithout +eanin* to detract fro+ that polic', 0e here confir+
that Con*ress retains control of the local *overn+ent units althou*h in si*nificantl'
reduced de*ree no0 than under our previous Constitutions. ,he po0er to create still
includes the po0er to destro'. ,he po0er to *rant still includes the po0er to 0ithhold or
recall. ,rue, there are certain notable innovations in the Constitution, li3e the direct
confer+ent on the local *overn+ent units of the po0er to ta., 0hich cannot no0 be
0ithdra0n b' +ere statute. B2 &'( 5&r6e, 1o9e8er, t1e '&t-o'&5 5e6-05&t:re -0 0t-55
t1e pr-'4-p&5 o/ t1e 5o4&5 6o8er'me't :'-t0, 91-41 4&''ot (e/2 -t0 9-55 or mo(-/2 or
8-o5&te -t.C
Respondents have an in*enious retort a*ainst the above dis6uisition. ,heir theor' is
that the re*ulator' po0er of the 78-s is *ranted b' R.A. No. ?!=$ (the 7ocal
8overn+ent Code of !""!), a handi0or3 of the national la0+a3in* authorit'. ,he'
contend that R.A. No. ?!=$ repealed E.. No. :$> (issued b' President A6uino).
Respondents/ ar*u+ent espouses a bad precedent. ,o sa' that 78-s e.ercise the
sa+e re*ulator' po0er over +atters 0hich are peculiarl' 0ithin the N,C/s co+petence
is to pro+ote a scenario of 78-s and the N,C loc3ed in constant clash over the
appropriate re*ulator' +easure on the sa+e sub4ect +atter. #GU0 m:0t re4o6'-Ee
t1&t te41'-4&5 m&tter0 4o'4er'-'6 CATV oper&t-o' &re 9-t1-' t1e e<45:0-8e
re6:5&tor2 po9er o/ t1e NTC.
At an' rate, 0e find no basis to conclude that R.A. No. ?!=$ repealed E.. No. :$>,
either e.pressl' or i+pliedl'. It is note0orth' that R.A. No. ?!=$ repealin* clause, 0hich
painsta3in*l' +entions the specific la0s or the parts thereof 0hich are repealed, does
not include E.. No. :$>, thus@
CSECTON =34. #e!ealing "lause. I (a) Batas Pa+bansa Bl*. <<?, other0ise 3no0n
as the 7ocal 8overn+ent Code.C E.ecutive rder No. !!: (!"A?), and E.ecutive rder
No. <!" (!"AA) are hereb' repealed.
+b, Presidential Decree Nos. =A#, !!"!, !>$A and such other decrees, orders,
instructions, +e+oranda and issuances related to or concernin* the baran*a' are
hereb' repealed.
+4, ,he provisions of Sections :, <, and # of Republic Act No. !"<" re*ardin* hospital
fundF Section <, a (<) and b (:) of Republic Act. No. >##? re*ardin* the Special
Education ;undF Presidential Decree No. !## as a+ended b' Presidential Decree Nos.
>>" and !?#!F Presidential Decree No. :<! as a+endedF Presidential Decree No. #<=
as a+ended b' Presidential Decree No. >>AF and Presidential Decree Nos. <A!, #<=,
#=#, #??, >:=, =<:, ?>:, and !!<= are hereb' repealed and rendered of no force and
effect.
+(, Presidential Decree No. !>"# is hereb' repealed insofar as it *overns locall'1funded
pro4ects.
+e, ,he follo0in* provisions are hereb' repealed or a+ended insofar as the' are
inconsistent 0ith the provisions of this Code@ Sections :, !=, and :" of Presidential
Decree No. ?$#F Section !: of Presidential Decree No. A?, as a+endedF Sections >:,
><, ==, =?, =A, =", ?$, ?!, ?:, ?<, and ?# of Presidential Decree No. #=<, as a+endedF
and Section != of Presidential Decree No. "?:, as a+ended, and
+/, All *eneral and special la0s, acts, cit' charters, decrees, e.ecutive orders,
procla+ations and ad+inistrative re*ulations, or part or parts thereof 0hich are
inconsistent 0ith an' of the provisions of this Code are hereb' repealed or +odified
accordin*l'.C
Neither is there an indication that E.. No. :$> 0as i+pliedl' repealed b' R.A. No.
?!=$. It is a settled rule that i+plied repeals are not li*htl' presu+ed in the absence of a
clear and un+ista3able sho0in* of such intentions. In Mecano vs. Co++ission on
Audit,
#=
0e ruled@
CRepeal b' i+plication proceeds on the pre+ise that 0here a statute of later date clearl'
reveals an intention on the part of the le*islature to abro*ate a prior act on the sub4ect,
that intention +ust be *iven effect. 5ence, before there can be a repeal, there +ust be
a clear sho0in* on the part of the la0+a3er that the intent in enactin* the ne0 la0 0as
to abro*ate the old one. ,he intention to repeal +ust be clear and +anifestF other0ise,
at least, as a *eneral rule, the later act is to be construed as a continuation of, and not a
substitute for, the first act and 0ill continue so far as the t0o acts are the sa+e fro+ the
ti+e of the first enact+ent.C
As previousl' stated, E.. No. #<= (issued b' President Ra+os) vests upon the N,C
the po0er to re*ulate the CA,2 operation in this countr'. So also Me+orandu+ Circular
No. A1"1">, the I+ple+entin* Rules and Re*ulations of R.A. No. ?":> (the CPublic
,eleco++unications Polic' Act of the PhilippinesC). ,his sho0s that the N,C/s
re*ulator' po0er over CA,2 operation is continuousl' reco*niBed.
It is a canon of le*al her+eneutics that instead of pittin* one statute a*ainst another in
an inevitabl' destructive confrontation, courts +ust e.ert ever' effort to reconcile the+,
re+e+berin* that both la0s deserve a beco+in* respect as the handi0or3 of
coordinate branches of the *overn+ent.
#?
n the assu+ption of a conflict bet0een E..
No. :$> and R.A. No. ?!=$, the proper action is not to uphold one and annul the other
but to *ive effect to both b' har+oniBin* the+ if possible. ,his recourse finds application
here. ,hus, 0e hold that the N,C, under E.. No. :$>, has e.clusive 4urisdiction over
+atters affectin* CA,2 operation, includin* specificall' the fi.in* of subscriber rates,
but nothin* herein precludes 78-s fro+ e.ercisin* its *eneral po0er, under R.A. No.
?!=$, to prescribe re*ulations to pro+ote the health, +orals, peace, education, *ood
order or safet' and *eneral 0elfare of their constituents. In effect, both la0s beco+e
e6uall' effective and +utuall' co+ple+entar'.
,he *rant of re*ulator' po0er to the N,C is easil' understandable. CA,2 s'ste+ is not
a +ere local concern. ,he co+ple.ities that characteriBe this ne0 technolo*' de+and
that it be re*ulated b' a specialiBed a*enc'. ,his is particularl' true in the area of rate1
fi.in*. Rate fi.in* involves a series of technical operations.
#A
Conse6uentl', on the
hands of the re*ulator' bod' lies the a+ple discretion in the choice of such rational
processes as +i*ht be appropriate to the solution of its hi*hl' co+plicated and technical
proble+s. Considerin* that the CA,2 industr' is so technical a field, 0e believe that the
N,C, a specialiBed a*enc', is in a better position than the 78-, to re*ulate it. Notabl',
in -nited States vs. South0estern Cable Co.,
#"
the -S Supre+e Court affir+ed the
;ederal Co++unications Co++ission/s (;CC/s) 4urisdiction over CA,2 operation. ,he
Court held that the ;CC/s authorit' over cable s'ste+s assures the preservation of the
local broadcast service and an e6uitable distribution of broadcast services a+on* the
various re*ions of the countr'.
II.
Resolution No. :!$ violated the State/s dere*ulation polic'.
Dere*ulation is the reduction of *overn+ent re*ulation of business to per+it freer
+ar3ets and co+petition.
>$
ftenti+es, the State, throu*h its re*ulator' a*encies,
carries out a polic' of dere*ulation to attain certain ob4ectives or to address certain
proble+s. In the field of teleco++unications, it is reco*niBed that +an' areas in the
Philippines are still CunservedC or Cunderserved.C ,hus, to encoura*e private sectors to
venture in this field and be partners of the *overn+ent in sti+ulatin* the *ro0th and
develop+ent of teleco++unications, the State pro+oted the polic' of dere*ulation.
In the -nited States, the countr' 0here CA,2 ori*inated, the Con*ress observed, 0hen
it adopted the ,eleco++unications Act of !""=, that there 0as a need to provide a pro1
co+petitive, dere*ulator' national polic' fra+e0or3 desi*ned to accelerate rapidl'
private sector deplo'+ent of advanced teleco++unications and infor+ation
technolo*ies and services to all A+ericans b' openin* all teleco++unications +ar3ets
to co+petition. ,he ;CC has adopted re*ulations to i+ple+ent the re6uire+ents of the
!""= Act and the intent of the Con*ress.
ur countr' follo0s the sa+e polic'. ,he fifth &hereas Clause of E.. No. #<= states@
C&5EREAS, professionalis+ and self1re*ulation a+on* e.istin* operators, throu*h a
nationall' reco*niBed cable television operator/s association, have enhanced the *ro0th
of the cable television industr' and +ust therefore be +aintained alon* 0ith +ini+al
reasonable *overn+ent re*ulationsFC
,his polic' reaffir+s the N,C/s +andate set forth in the Me+orandu+ dated Au*ust :>,
!"A" of Co++issioner %ose 7uis A. AlcuaB, to 0it@
CIn line 0ith the purpose and ob4ective of MC #1$A1AA, Cable ,elevision S'ste+ or
Co++unit' Antenna ,elevision (CA,2) is +ade part of the broadcast +edia to pro+ote
the orderl' *ro0th of the Cable ,elevision Industr' it bein* in its developin* sta*e. Bein*
part of the Broadcast Media, the service rates of CA,2 are li3e0ise considered
dere*ulated in accordance 0ith MC $=1:1A! dated :> ;ebruar' !"A!, the i+ple+entin*
*uidelines for the authoriBation and operation of Radio and ,elevision Broadcastin*
stationsGs'ste+s.
;urther, the Co++ission 0ill issue Provisional Authorit' to e.istin* CA,2 operators to
authoriBe their operations for a period of ninet' ("$) da's until such ti+e that the
Co++ission can issue the re*ular Certificate of Authorit'.C
&hen the State declared a polic' of dere*ulation, the 78-s are bound to follo0. ,o rule
other0ise is to render the State/s polic' ineffective. Bein* +ere creatures of the State,
78-s cannot defeat national policies throu*h enact+ents of contrar' +easures. 2eril',
in the case at bar, petitioner +a' increase its subscriber rates 0ithout respondents/
approval.
At this 4uncture, it bears e+phasiBin* that +unicipal corporations are bodies politic and
corporate, created not onl' as local units of local self1*overn+ent, but as *overn+ental
a*encies of the state.
>!
,he le*islature, b' establishin* a +unicipal corporation, does
not divest the State of an' of its soverei*nt'F absolve itself fro+ its ri*ht and dut' to
ad+inister the public affairs of the entire stateF or divest itself of an' po0er over the
inhabitants of the district 0hich it possesses before the charter 0as *ranted.
>:
Respondents li3e0ise ar*ue that E.. No. :$> violates the constitutional prohibition
a*ainst i+pair+ent of contracts, Resolution No. :!$ of Batan*as Cit' Sangguniang
Panlungsod bein* a *rant of franchise to petitioner.
&e are not convinced.
,here is no la0 specificall' authoriBin* the 78-s to *rant franchises to operate CA,2
s'ste+. &hatever authorit' the 78-s had before, the sa+e had been 0ithdra0n 0hen
President Marcos issued P.D. No. !>!: Cter+inatin* all franchises, per+its or
certificates for the operation of CA,2 s'ste+ previousl' *ranted b' local *overn+ents.C
,oda', pursuant to Section < of E.. No. #<=, Conl' persons, associations, partnerships,
corporations or cooperatives *ranted a Provisional Authorit' or Certificate of Authorit'
b' the N,C +a' install, operate and +aintain a cable television s'ste+ or render cable
television service 0ithin a service area.C It is clear that in the absence of constitutional
or le*islative authoriBation, +unicipalities have no po0er to *rant franchises.
><
Conse6uentl', the protection of the constitutional provision as to i+pair+ent of the
obli*ation of a contract does not e.tend to privile*es, franchises and *rants *iven b' a
+unicipalit' in e.cess of its po0ers, or ultra vires.
>#

ne last 0ord. ,he devolution of po0ers to the 78-s, pursuant to the Constitutional
+andate of ensurin* their autono+', has bred 4urisdictional tension bet0een said 78-s
and the State. 78-s +ust be re+inded that the' +erel' for+ part of the 0hole. ,hus,
0hen the Drafters of the !"A? Constitution enunciated the polic' of ensurin* the
autono+' of local *overn+ents,
>>
it 0as never their intention to create an im!erium in
im!erio and install an intra1soverei*n political subdivision independent of a sin*le
soverei*n state.
.!ERE"ORE, the petition is GRANTE%. ,he assailed Decision of the Court of Appeals
dated ;ebruar' !:, !""" as 0ell as its Resolution dated Ma' :=, !""" in CA18.R. C2
No. >:#=!, are hereb' REVERSE%. ,he R,C Decision in Civil Case No. #:># is
A""RME%.
No pronounce+ent as to costs.
SO OR%ERE%.
$avide, %r., Puno, Panganiban, &uisumbing, 'nares(Santiago, "ar!io, )ustria(
Martine*, "orona, "ar!io Morales, "alleo, Sr., )*cuna, +inga, and ",ico(-a*ario
.
, %%.,
concur.
"oot'ote0
J
n leave.
!
Mar' Alice Ma'er, %ohn &alson@ An ral 5istor', Au*ust !"A? (-SA).
:
Rollo at >!1>=. Per Associate %ustice Buenaventura . 8uerrero (retired) and
concurred in b' Associate %ustices Portia AliKo15or+achuelos and ,eodoro P. Re*ino
(retired).
<
Rollo at >A.
#
Entitled CBatangas ")+/, Inc. versus +,e Batangas "ity Sangguniang Panlungsod
and Batangas "ity Mayor.C
>
Rollo at A=1"$.
=
Entitled CBatangas ")+/, Inc. vs. +,e Batangas "ity Sangguniang Panlungsod and
t,e Batangas "ity Mayor.
?
Rollo at ?$1?<.
A
Id. at ?:.
"
Id. at A#, dated April :=, !""#.
!$
Rollo at A"1"$.
!!
Id. at >=.
!:
Id. at >A.
!<
Id. at !".
!#
Section !$. Article III of the !"A? Constitution provides that@ CNo la0 i+pairin* the
obli*ation of contracts shall be passed.C
!>
,he fourth &hereas Clause of P.D. !>!: reads@
C&5EREAS, because of technolo*ical advances in e6uip+ent and facilities, CA,2
s'ste+s have ac6uired a +ore si*nificant role in the socio1political life of the nation,
re6uirin* the e.ercise of re*ulator' po0er b' the national *overn+ent.C
!=
CDecree Creatin* an E.clusive ;ranchise to Construct, perate and Maintain a
Co++unit' Antenna ,elevision S'ste+ in the Philippines in favor of Sinin* Ma3ula',
Incorporated.C
!?
Section !$ of P.D. No. !>!:.
!A
Section = of P.D. No. !>!:.
!"
CCreatin* a Ministr' of Public &or3s and a Ministr' of ,ransportation and
Co++unications.C
:$
Created under Article III, Chapter I, Part L of the Inte*rated Reor*aniBation Plan, as
a+ended.
:!
Created under Article IL, id.
::
Dated %une <$, !"A?.
:<
CPrescribin* Polic' 8uidelines to 8overn the perations of Cable ,elevision in the
Philippines.C
:#
Miners )ssociation of t,e P,ili!!ines vs. Factoran, 8.R. No. "A<<:, %anuar' !=,
!"">, :#$ SCRA !$$.
:>
Si.th Edition at !<"!.
:=
See National ,eleco++unications Co++ission Practices M Procedures Manual, April
:?,!"":F P0$+ vs. -ational +elecommunication "ommission, 8.R. No. "#<?#, ;ebruar'
:!, !"">, :#! SCRA #A=.
:?
Blac3/s 7a0 Dictionar', Si.th Edition at !:A=.
:A
1S vs. Salaveria, <" Phil. !$: (!"!A).
:"
Id.
<$
Peo!le vs. Felisarta, 8.R. No. !><#=, %une :", !"=:, > SCRA <A".
<!
Miranda vs. "ity of Manila, 8.R. Nos. 71!?:>: M 71!?:?=, Ma' <!, !"=!, : SCRA
=!<.
<:
",ief of t,e P,ili!!ine "onstabulary vs. Sabungan Bagong Silang, Inc., 8.R. No. 71
::=$", ;ebruar' :A, !"==, != SCRA <<=F ",ief of P.". vs. %udge of "FI of #i*al, 8.R.
Nos. 71::<$A M 71::<#<1#, March <!, !"==, != SCRA =$?.
<<
/iray vs. "ity of "aloocan, 8.R. No. 71:<!!A, %ul' :=, !"=?, :$ SCRA ?"!.
<#
2rmita(Malate 3otel and Motel 4!erators )ssociation, Inc. vs. "ity Mayor of ManilaN
8.R. No. 71:#="<, %ul' <!, !"=?, :$ SCRA A#".
<>
See -e5 'ork State "ommission on "able +elevision vs. Federal "ommunication
"ommission.
<=
Accordin* to Elliot, a +unicipal ordinance, to be valid@ !) m:0t 'ot 4o'tr&8e'e t1e
Co'0t-t:t-o' or &'2 0t&t:teF :) +ust not be unfair or oppressiveF <) +ust not be partial
or discri+inator'F #) +ust not prohibit but +a' re*ulate tradeF >) +ust not be
unreasonableF and =) +ust be *eneral and consistent 0ith public polic'. ,he Solicitor
8eneral vs. ,he Metropolitan Manila Authorit', 8.R. No. !$:?A:, Dece+ber !!, !""!,
:$# SCRA A<?.
,hou*h desi*nated as resolution, Resolution No. :!$ is actuall' an ordinance as it
concerns a sub4ect that is inherentl' le*islative in character, <? A+. %ur. p. ==?. Dillon
co++ents, thus@ CA resolution concernin* a sub4ect 0hich is inherentl' le*islative in its
character and for 0hich an ordinance is re6uired, 0ill, if adopted 0ith all the for+alities
re6uired in the case of an ordinance, be re*arded as an ordinance and *iven effect
accordin*l'. ,he substance, and not the for+, of the corporate act is 0hat *overns.
Dillon, Municipal Corporations, >th ed., 2ol. II, pp. >"#1A"?.
<?
:# Phil !=> (!"!<).
<A
8.R. No. 71#!$><, ;ebruar' :?, !"?=, =" SCRA >>=.
<"
>= S+ %ur :d O <?> citin* Birming,am vs. )llen, :>! Ala !"A, <= So :d :"?F 26 !arte
$aniels, !A< Cal =<=, !": P##:, :! A7R !!?:F +,ro5er vs. )tlanta, !:# 8a !, >: SE
?=.
#$
#= AriB !$=, #? P:d ##:.
#!
>= S+ %ur :d O <?> citin* Savanna, vs. 3ussey, :! 8a A$F "orvallis vs. "arlile, !$ r
!<"F %udy vs. 0as,ley, >$ & 2a =:A, #! SE !"?.
#:
>= A+ %ur :d O <?# citin* West ",icago Street #."o. vs. Illinois, :$! -S >$=, >$ 7 Ed
A#>, := S Ct >!AF 26 !arte Byrd, A# Ala !?,# So <"?F Mclaug,lin vs. #et,erford, :$? Ar3
!$"#, !A# S&:d #=!.
#<
>= A+ %ur :d O <?# citin* Sims vs. )labama Water "o., :$> Ala <?A, A? So =AA, :A
A7R #=!F )bbot vs. 0os )ngeles, >< Cal :d =?#, < Cal Rptr !>A, <#" P:d "?#, A: A7R
:d <A>F P,illi!s vs. $enver, !" Colo !?", <# P "$:F Miami Beac, vs. +e6as "o., !#! ;la
=!=, !"# So <=A, !:A A7R <>$.
##
%o,nson vs. P,iladel!,ia, "# Miss <#, #? So >:=, see also Kraus vs. "leveland, !<>
hio St #<, !< hio ps <:<, !" NE:d !>".
#>
8.R. No. !!!$"?, %ul' :$, !""#, :<# SCRA :>>.
#=
8.R. No. !$<"A:, Dece+ber !!, !"":, :!= SCRA >$$.
#?
Ma*ta4as vs. Pr'ce Properties, Corp. Inc., supra.
#A
Republic vs. Medina, 71<:$=A, ctober #, !"?!, #! SCRA =#<.
#"
<": -.S. !>? (!"=A).
>$
Blac3/s 7a0 Dictionar', Si.th Ed. at ##<.
>!
"arolina(/irginia "oastal 3ig,5ay vs. "oastal +urn!ike )ut,ority, :<? NC >:, ?#
SE:d <!$F 4t,ello vs. 3arder, #= &ash :d ?#?, :A# P:d !$"".
>:
0aramie "ounty vs. )lbany "ounty, ": -S <$?, :< 7ed >>:F Peo!le e6 rel. #aymond
"ommunity 3ig, Sc,ool $ist. vs. Bartlett, <$# Ill :A<, !<= NE =>#.
><
<= A+ %ur :d O !!.
>#
<= A+ %ur :d O ? citin* Grand +runk W.#. "o. vs. Sout, Bend, ::? -S >##, >? 7 ed
=<<, << S Ct. <$<F Murray vs. Pocatello, ::= -S <!A, >? 7ed :<", << S Ct !$?F 3ome
+el. 7 +el. "o. vs. 0os )ngeles, :!! -S :=>, >< 7 ed !?=, :" S Ct >$F Birming,am 7
P.M. Street #. "o. vs. Birming,am Street #. "o. ?" Ala #=>F Westminster Water "o. vs.
Westminster, "A Md >>!, >= A ""$8 2li*abet, "ity vs. Bank, !>$ NC #$?, =# SE !A"F
State e6 rel. Webster vs. Su!erior, Ct.=? &ash <?, !:$ P A=!.
>>
Section :>, Article II of the !"A? Constitution.