UNIMASTERS CONGLOMERATION INCORPORATED , petitioner, vs.

TACLOBAN CITY
GOVERNMENT, PRIVATIZATION AND MANAGEMENT OFFICE, PHILIPPINE TOURISM
AUTHORITY,
AND THE PROVINCE OF LEYTE, respondents.

[G.R. No. 214195. March 23, 2022.]

Real Property owned by the government is exempted from real property taxes except when its beneficial use is
granted to a taxable person.

Facts:

Leyte Park Hotel, Inc. (LPHI) is a 61,322-square meter property that stands on Magsaysay Boulevard, Tacloban
City and covered by Transfer Certificate of Title No. T-1883. It is co-owned by Assets Privatization Trust (APT),
now Privatization and Management Office (PMO), the Province of Leyte.

Issue:

I. WON Leyte Park Hotel is subject to real property when its TCT is owned by the province of Leyte.

Ruling:

I. No. The hotel is not exempt from payment of real property taxes

The law contains a limitation to the exemption granted to the Republic or any of its political
subdivisions when the beneficial use of the real property it owns is granted to a taxable person

Certainly, the hotel, which is the subject matter of this case, is owned in common by the Province of
Leyte, which is a political subdivision, and by PMO and PTA, both government instrumentalities that
are exempt from payment of real property taxes. The subsequent execution of a Contract of Lease
between the co-owners of LPHI and UCI, a private entity, did not divest the former of their exemption
from realty taxes, only that the hotel lost the
exemption from being taxed and the burden to pay the taxes due thereon, passed on to UCI as the
beneficial user thereof.

The tax exemption, which the owners of LPHI carry, is withdrawn the moment the beneficial use or
possession over the real property was granted to petitioner, a taxable entity
NATIONAL FOOD AUTHORITY, Represented by ELVIRA C. OBAÑA, Regional Director of NFA-Region
III, petitioner, vs. CITY ASSESSOR AND CITY TREASURER, MALOLOS, BULACAN, respondents.

[C.T.A. AC NO. 241. March 16, 2022.]

Governmental Instrumentalities are exempt from payment of Real Property Tax.

Facts:

The National Food Authority is the registered owner of real properties constituting of land and buildings located at
Brgy. Tikay, City of Malolos. The NFA Legal Affairs Department received two (2) Notices of Realty Tax
Delinquency issued by respondents demanding payment for tax due over the real property.

The NFA argues that it is a Governmental Instrumentality because it performs

Issue:

I. WON the NFA is a GOCC or Governmental Instrumentality

II. WON the NFA is subject to Real Property Tax.

Ruling:

I. The NFA is a Governmental Instrumentality.

NFA is vested generally with governmental or public functions including, among others, the power to
issue seizure orders, deputize government agencies, promulgate rules and regulations, and register,
license and supervise such persons, activities and matters defined as falling within its jurisdiction.
Interestingly, the law does not require petitioner to be economically viable which would have classified
it into a GOCC. Section 9 of PD No.1770 provides that the national government shall make additional
equity investments into it out of the funds appropriated in the General Appropriations Act and other
appropriations laws as may be approved by the President in accordance with the fund requirements of
petitioner and funds availability in the Treasury. Sec. 5 (b) (i) of PD No. 4, as amended by PD No.
1485, further provides that the petitioner may, upon authorization by the Office of the President, incur
subsidies to be borne by the National Government in the implementation of the floor and ceiling prices

II. Yes. The NFA is a Governmental Instrumentality performing governmental functions and is exempted
from payment of real property tax.

Section 6, PD No. 4, as amended by PD No. 1485, exempts petitioner from payment of all taxes.
Section 6 thereof reads:

"Sec. 6. Administration — Powers, Organization,Management and Exemptions. — The Powers,

organization, management and exemptions of the Authority shall be as follows:

xxx xxx xxx

(d) Exemptions. — In furtherance to the effective implementation of the policy enunciated in this
decree, the Authority is hereby declared exempt:

i. From payment of all taxes, duties, fees, imposts, charges, costs and restrictions to the Republic of
the Philippines, its provinces, cities, municipalities, including the taxes, duties, fees, imposts and other
charges provided for under the Tariff and Customs Code of the Philippines, R.A. No. 1937, as
amended by Presidential Decree No. 34, dated October 27, 1972, and Presidential Decree No. 69,
dated November 24, 1972, and all filing, docket, and service fees, bonds and other charges or costs in
any court or administrative
proceedings in which the Authority may be a party.
BANGKO SENTRAL NG PILIPINAS, petitioner, vs. HON. FERNANDO M. FANDIÑO, in his capacity as
City Assessor, Pasay City, LOCAL BOARD OF TAX ASSESSMENT APPEALS
OF PASAY CITY, and CENTRAL BOARD OF ASSESSMENT APPEALS, respondents.

[C.T.A. EB CASE NO. 2201. March 4, 2022.]

(CBAA Case No. L-138-2017
LBTAA Case No. 013-6)

HON. FERNANDO M. FANDIÑO, in his capacity as City Assessor, Pasay City, petitioner, vs. BANGKO
SENTRAL NG PILIPINAS, respondent.

[C.T.A. EB CASE NO. 2205. March 4, 2022.]

(CBAA Case No. L-138-2017
LBTAA Case No. 013-6)

A Governmental Instrumentality is exempted from real property tax. However, if a portion of the real property is
leased to a taxable person then that portion is subject to real property tax.

Facts:

This is a consolidated petition.

City Assessor argues that the creation of the PICC was for corporate purposes, not cultural. Nothing in
PD No. 520 exempts the BSP from real property taxes. The City Assessor further states that many areas of the PICC
are under lease to various business and commercial enterprises, and that the PICC holds concerts for numerous
foreign and local artists, as well as graduation ceremonies and similar events. These events are clearly not for
cultural purposes but for commerce and profit.

Issue:

I. WON the PICC is subject to real property tax

Ruling:

I. No. the PICC

PICC properties which are owned by the BSP are exempt from real property tax, unless the beneficial
use thereof has been granted to a taxable person. In case the beneficial use of any portion of the PICC
properties has been granted to a taxable person, the personal liability for the real property tax thereon is
on such taxable person at the time of accrual of the real property tax, and not on BSP

In sum, PICC properties are exempt from real property taxes because such properties are owned by the
BSP, a government instrumentality with corporate functions. However, the portions of the PICC
properties, the beneficial use of which has been granted to taxable persons, by virtue of lease contracts
entered into by PICC, Inc. (on behalf of BSP), are taxable, and the corresponding real property tax
which has accrued thereon must be assessed in the name of, and collected from, the said taxable
persons or tenants.