SOUTHERN LUZON DRUG CORPORATION

vs.
THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT, THE NATIONAL COUNCIL
FOR THE WELFARE OF DISABLED PERSONS, THE DEPARTMENT OF FINANCE, AND THE
BUREAU OF INTERNAL REVENUE

April 25, 2017

G.R. No. 199669

Facts:
The case at bar is a Petition for Review on Certiorari assailing the Decision of the Court
of Appeals which dismissed the petition for prohibition filed by Southern Luzon Drug
Corporation (petitioner) against the Department of Social Welfare and Development , the
National Council for the Welfare of Disabled Persons (now National Council on Disability
Affairs or NCDA), the Department of Finance and the Bureau of Internal Revenue (collectively,
the respondents), which sought to prohibit the implementation of Section 4(a) of Republic Act
(R.A.) No. 9257, otherwise known as the "Expanded Senior Citizens Act of 2003" and Section
32 of R.A. No. 9442, which amends the "Magna Carta for Disabled Persons," particularly the
granting of 20% discount on the purchase of medicines by senior citizens and persons with
disability (PWD), respectively, and treating them as tax deduction. which dismissed the petition
for prohibition filed by Southern Luzon Drug Corporation (petitioner) against the Department of
Social Welfare and Development , the National Council for the Welfare of Disabled Persons
(now National Council on Disability Affairs or NCDA), the Department of Finance and the
Bureau of: Internal Revenue (collectively, the respondents), which sought to prohibit the
implementation of Section 4(a) of Republic Act (R.A.) No. 9257, otherwise known as the
"Expanded Senior Citizens Act of 2003" and Section 32 of R.A. No. 9442, which amends the
"Magna Carta for Disabled Persons," particularly the granting of 20% discount on the purchase
of medicines by senior citizens and persons with disability (PWD),: respectively, and treating
them as tax deduction due to the reason that claiming it affects the profitability of their business.
The petitioner is a domestic corporation engaged in the business of drugstore operation in the
Philippines while the respondents are government' agencies, office and bureau tasked to
monitor compliance with R.A. Nos. 9257 and 9442, promulgate implementing rules and
regulations for their effective implementation, as well as prosecute and revoke licenses of erring
establishments.
Issues:
(1) Whether or not the Court of Appeals seriously erred on a question of substance when
it ruled that the 20% sales discount for senior citizens and PWDs is a valid exercise of police
power. On the contrary, it is an invalid exercise of the power of eminent domain because it fails
to provide just compensation to the petitioner and other similarly situated drugstores

Held:
(1) No, To begin with, the issue of just compensation finds no relevance in the instant
case as it had already been made clear in Carlos Superdrug that the power being
exercised by the State in the imposition of senior citizen discount was its police
power. Unlike in the exercise of the power of eminent domain, just compensation is
not required in wielding police power. This is precisely because there is no taking
involved, but only an imposition of burden. In the exercise of police power, "property
rights of private individuals are subjected to restraints and burdens in order to secure
the general comfort, health, and prosperity of the State." Even then, the State's claim
of police power cannot be arbitrary or unreasonable. After all, the overriding purpose
of the exercise of the power is to promote general welfare, public health and safety,
among others. The subjects of R.A. Nos. 9257 and 9442, i.e., senior citizens and
PWDs, are individuals whose well-being is a recognized public duty. As a public
duty, the responsibility for their care devolves upon the concerted efforts of the State,
the family and the community. In Article XIII, Section 1 of the Constitution, the State
is mandated to give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by equitably diffusing wealth and
political power for the common good.