25. Engracio Francia vs.
Intermediate Appellate Court - 162 SCRA 753
FACTS: Engracio Francia was the owner of a 328 square meter land in Pasay City. In October 1977, a
portion of his land (125 square meter) was expropriated by the government for P4,116.00. The
expropriation was made to give way to the expansion of a nearby road.
It also appears that Francia failed to pay his real estate taxes since 1963 amounting to P2,400.00. So in
December 1977, the remaining 203 square meters of his land was sold at a public auction (after due notice
was given him). The highest bidder was a certain Ho Fernandez who paid the purchase price of P2,400.00
(which was lesser than the price of the portion of his land that was expropriated).
Later, Francia filed a complaint to annul the auction sale on the ground that the selling price was grossly
inadequate. He further argued that his land should have never been auctioned because the P2,400.00 he
owed the government in taxes should have been set-off by the debt the government owed him (legal
compensation). He alleged that he was not paid by the government for the expropriated portion of his land
because though he knew that the payment therefor was deposited in the Philippine National Bank, he never
withdrew it.
ISSUE: Whether or not the tax owed by Francia should be set-off by the “debt” owed him by the
government.
HELD: No. As a rule, set-off of taxes is not allowed. There is no legal basis for the contention. By legal
compensation, obligations of persons, who in their own right are reciprocally debtors and creditors of each
other, are extinguished (Art. 1278, Civil Code). This is not applicable in taxes. There can be no off-setting of
taxes against the claims that the taxpayer may have against the government. A person cannot refuse to
pay a tax on the ground that the government owes him an amount equal to or greater than the tax being
collected. The collection of a tax cannot await the results of a lawsuit against the government.
The Supreme Court emphasized: A claim for taxes is not such a debt, demand, contract or judgment as is
allowed to be set-off under the statutes of set-off, which are construed uniformly, in the light of public policy,
to exclude the remedy in an action or any indebtedness of the state or municipality to one who is liable to
the state or municipality for taxes. Neither are they a proper subject of recoupment since they do not arise
out of the contract or transaction sued on.
Further, the government already Francia. All he has to do was to withdraw the money. Had he done that,
he could have paid his tax obligations even before the auction sale or could have exercised his right to
redeem – which he did not do.
Anent the issue that the selling price of P2,400.00 was grossly inadequate, the same is not tenable. The
Supreme Court said: “alleged gross inadequacy of price is not material when the law gives the owner the
right to redeem as when a sale is made at public auction, upon the theory that the lesser the price, the
easier it is for the owner to effect redemption.” If mere inadequacy of price is held to be a valid objection to
a sale for taxes, the collection of taxes in this manner would be greatly embarrassed, if not rendered
altogether impracticable. “Where land is sold for taxes, the inadequacy of the price given is not a valid
objection to the sale.” This rule arises from necessity, for, if a fair price for the land were essential to the
sale, it would be useless to offer the property. Indeed, it is notorious that the prices habitually paid by
purchasers at tax sales are grossly out of proportion to the value of the land.
26. Hilado vs. Collector of Internal Revenue
GR L-9408, October 31,1956
Facts: Emilio Hilado filed his income tax return for 1951 with the treasurer of Bacolod City, claiming a
deductible item of P12,837.65 from his gross income pursuant to General Circular V-123 issued by the
Collector of Internal Revenue. The Secretary of Finance, through the Collector, issued General Circular V-
139 which revoked and declared void Circular V-123; and laid down the rule[s] that losses of property which
occurred in World War II from fires, storms, shipwreck or other casualty, or from robbery, theft, or
embezzlement are deductible in the year of actual loss or destruction of said property. The deductions were
disallowed.
Issue: Whether Internal Revenue Laws were enforced during the war and whether Hilado can claim
compensation for destruction of his property during the war.
Held: Philippines Internal Revenue Laws are not political in nature and as such were continued in force
during the period of enemy occupation and in effect were actually enforced by the occupation government.
Such tax laws are deemed to be laws of the occupied territory and not of the occupying enemy. As of the
end of 1945, there was no law which Hilado could claim for the destruction of his properties during the
battle for the liberation of the Philippines. Under the Philippine Rehabilitation Act of 1948, the payment of
claims by the War Damage Commission depended upon its discretions non-payment of which does not
give rise to any enforceable right. Assuming that the loss (deductible item) represents a portion of the 75%
of his war damage claim, the amount would be at most a proper deduction of his 1950 gross income (not
on his 1951 gross income) as the last installment and notice of discontinuation of payment by the War
Damage
27. ESSO STANDARD EASTERN, INC. vs. ACTING COMMISSIONER OF CUSTOMS
18 SCRA 488
GR No. L-21841, October 28, 1966
"Exemptions from taxation are construed in strictissimi juris against the taxpayer and liberally in favor of the
taxing authority."
FACTS: Petitioner, engaged in the industry of processing gasoline, oils etc., claims for the refund of special
import taxes paid pursuant to the provision of RA 1394 which imposed a special import tax "on all goods,
articles or products imported or brought into the Philippines." Exempt from this tax, by express mandate of
Section 6 of the same law are "machinery, equipment, accessories, and spare parts, for the use of
industries, miners, mining enterprises, planters and farmers". Petitioner argued that the importation it made
of gas pumps used by their gasoline station operators should fall under such exemptions, being directly
used in its industry. The Collector of Customs of Manila rejected the claim, and so as the Court on Tax
Appeals. The CTA noted that the pumps imported were not used in the processing of gasoline and other oil
products but by the gasoline stations, owned by the petitioner, for pumping out, from underground barrels,
gasoline sold on retail to customers.
ISSUE: Is the contention of the petitioner tenable? Does the subject imports fall into the exemptions?
HELD: No. The contention runs smack against the familiar rules that exemption from taxation is not
favored, and that exemptions in tax statutes are never presumed. Which are but statements in adherence
to the ancient rule that exemptions from taxation are construed in strictissimi juris against the taxpayer and
liberally in favor of the taxing authority. Tested by this precept, we cannot indulge in expansive construction
and write into the law an exemption not therein set forth. Rather, we go by the reasonable assumption that
where the State has granted in express terms certain exemptions, those are the exemptions to be
considered, and no more. Since the law states that, to be tax-exempt, equipment and spare parts should be
"for the use of industries", the coverage herein should not be enlarged to include equipment and spare
parts for use in dispensing gasoline at retail.
28. PLANTERS PRODUCTS VS FERTIPHIL
G.R. No. 166006
PLANTERS PRODUCTS, INC
Petitioner,
FERTIPHIL CORPORATION,
Respondent.
Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws.
They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural
chemicals.
On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465
which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic
sale of all grades of fertilizers in the Philippines. The LOI provides:
The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital
contribution component of not less than P10 per bag. This capital contribution shall be collected until
adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all
domestic sales of fertilizers in the Philippines.
Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the
Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and
Trust Company, the depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January
24, 1986.
After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of
democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI
refused to accede to the demand.
Unreasonable, oppressive, invalid and an unlawful imposition that amounted to a denial of due process of
law. Fertiphil alleged that the LOI solely favored PPI, a privately owned corporation, which used the
proceeds to maintain its monopoly of the fertilizer industry.
In its Answer, FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid
exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It
also averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the
levy fell on the ultimate consumer, not the seller.
Issues:
LOI 1465, BEING A LAW IMPLEMENTED FOR THE PURPOSE OF ASSURING THE FERTILIZER
SUPPLY AND DISTRIBUTION IN THE COUNTRY, AND FOR BENEFITING A FOUNDATION CREATED
BY LAW TO HOLD IN TRUST FOR MILLIONS OF FARMERS THEIR STOCK OWNERSHIP IN PPI
CONSTITUTES A VALID LEGISLATION PURSUANT TO THE EXERCISE OF TAXATION AND POLICE
POWER FOR PUBLIC PURPOSES.
The levy was imposed to pay the corporate debt of PPI. Fertiphil also argues that, even if the LOI is
enacted under the police power, it is still unconstitutional because it did not promote the general welfare of
the people or public interest.
Police power and the power of taxation are inherent powers of the State. These powers are distinct and
have different tests for validity. Police power is the power of the State to enact legislation that may interfere
with personal liberty or property in order to promote the general welfare, while the power of taxation is the
power to levy taxes to be used for public purpose. The main purpose of police power is the regulation of a
behavior or conduct, while taxation is revenue generation. The “lawful subjects” and “lawful means” tests
are used to determine the validity of a law enacted under the police power. The power of taxation, on the
other hand, is circumscribed by inherent and constitutional limitations.
While it is true that the power of taxation can be used as an implement of police power, the primary
purpose of the levy is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one
of the real and substantial purposes, then the exaction is properly called a tax.
THE AMOUNT COLLECTED UNDER THE CAPITAL RECOVERY COMPONENT WAS REMITTED TO
THE GOVERNMENT, AND BECAME GOVERNMENT FUNDS PURSUANT TO AN EFFECTIVE AND
VALIDLY ENACTED LAW WHICH IMPOSED DUTIES AND CONFERRED RIGHTS BY VIRTUE OF THE
PRINCIPLE OF “OPERATIVEFACT” PRIOR TO ANY DECLARATION OF UNCONSTITUTIONALITY OF
LOI 1465.
The general rule is that an unconstitutional law is void. It produces no rights, imposes no duties and affords
no protection. It has no legal effect. It is, in legal contemplation, inoperative as if it has not been passed.
Being void, Fertiphil is not required to pay the levy. All levies paid should be refunded in accordance with
the general civil code principle against unjust enrichment. The general rule is supported by Article 7 of the
Civil Code, which provides:
ART. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be
excused by disuse or custom or practice to the contrary.
When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the
latter shall govern.
Notes:
An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a public
purpose. They cannot be used for purely private purposes or for the exclusive benefit of private persons.
The reason for this is simple. The power to tax exists for the general welfare; hence, implicit in its power is
the limitation that it should be used only for a public purpose. It would be a robbery for the State to tax its
citizens and use the funds generated for a private purpose. As an old United States case bluntly put it: “To
lay with one hand, the power of the government on the property of the citizen, and with the other to bestow
it upon favored individuals to aid private enterprises and build up private fortunes, is nonetheless a robbery
because it is done under the forms of law and is called taxation.”
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and
fair play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior
to a determination of unconstitutionality is an operative fact and may have consequences which cannot
always be ignored. The past cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those
who have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of
unconstitutionality would put the accused in double jeopardy or would put in limbo the acts done by a
municipality in reliance upon a law creating it.
29. BAGATSING vs. RAMIREZ
74 SCRA 306
GR No. L-41631, December 17, 1976
"The entrusting of the tax collection to private entities does not destroy the public purpose of a tax
ordinance."
FACTS: Aside from the issue on publication, private respondent bewails that the market stall fees imposed
in the disputed City Ordinance No. 7522, which regulates public markets and prescribes fees for rentals of
stalls, are diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection of
said fees had been let by the City of Manila to the said corporation in a "Management and Operating
Contract."
ISSUE: Does the delegation of the collection of taxes to a private entity invalidates a tax ordinance and
defeats its public purpose?
HELD: No. The assumption is of course saddled on erroneous premise. The fees collected do not go direct
to the private coffers of the corporation. Ordinance No. 7522 was not made for the corporation but for the
purpose of raising revenues for the city. That is the object it serves. The entrusting of the collection of the
fees does not destroy the public purpose of the ordinance. So long as the purpose is public, it does not
matter whether the agency through which the money is dispensed is public or private. The right to tax
depends upon the ultimate use, purpose and object for which the fund is raised. It is not dependent on the
nature or character of the person or corporation whose intermediate agency is to be used in applying it. The
people may be taxed for a public purpose, although it be under the direction of an individual or private
corporation.
30. GOMEZ v. PALOMAR
GR No. L-23645, October 29, 1968
25 SCRA 827
FACTS: Petitioner Benjamin Gomez mailed a letter at the post office in San Fernando, Pampanga. It did
not bear the special anti-TB stamp required by the RA 1635. It was returned to the petitioner. Petitioner
now assails the constitutionality of the statute claiming that RA 1635 otherwise known as the Anti-TB
Stamp law is violative of the equal protection clause because it constitutes mail users into a class for the
purpose of the tax while leaving untaxed the rest of the population and that even among postal patrons the
statute discriminatorily grants exemptions. The law in question requires an additional 5 centavo stamp for
every mail being posted, and no mail shall be delivered unless bearing the said stamp.
ISSUE: Is the Anti-TB Stamp Law unconstitutional, for being allegedly violative of the equal protection
clause?
HELD: No. It is settled that the legislature has the inherent power to select the subjects of taxation and to
grant exemptions. This power has aptly been described as "of wide range and flexibility." Indeed, it is said
that in the field of taxation, more than in other areas, the legislature possesses the greatest freedom in
classification. The reason for this is that traditionally, classification has been a device for fitting tax
programs to local needs and usages in order to achieve an equitable distribution of the tax burden.
The classification of mail users is based on the ability to pay, the enjoyment of a privilege and on
administrative convenience. Tax exemptions have never been thought of as raising revenues under the
equal protection clause.
Issue no.2.
The petitioner further argues that the tax in question is invalid, first, because it is not levied for a public
purpose as no special benefits accrue to mail users as taxpayers, and second, because it violates the rule
of uniformity in taxation.
Ruling
The eradication of a dreaded disease is a public purpose, but if by public purpose the petitioner means
benefit to a taxpayer as a return for what he pays, then it is sufficient answer to say that the only benefit to
which the taxpayer is constitutionally entitled is that derived from his enjoyment of the privileges of living in
an organized society, established and safeguarded by the devotion of taxes to public purposes. Any other
view would preclude the levying of taxes except as they are used to compensate for the burden on those
who pay them and would involve the abandonment of the most fundamental principle of government — that
it exists primarily to provide for the common good.
Nor is the rule of uniformity and equality of taxation infringed by the imposition of a flat rate rather than a
graduated tax. A tax need not be measured by the weight of the mail or the extent of the service rendered.
We have said that considerations of administrative convenience and cost afford an adequate ground for
classification. The same considerations may induce the legislature to impose a flat tax which in effect is a
charge for the transaction, operating equally on all persons within the class regardless of the amount
involved.
According to the trial court, the money raised from the sales of the anti-TB stamps is spent for the benefit of
the Philippine Tuberculosis Society, a private organization, without appropriation by law. But as the Solicitor
General points out, the Society is not really the beneficiary but only the agency through which the State
acts in carrying out what is essentially a public function. The money is treated as a special fund and as
such need not be appropriated by law
Issue no 3.
Finally, the claim is made that the statute is so broadly drawn that to execute it the respondents had to
issue administrative orders far beyond their powers. Indeed, this is one of the grounds on which the lower
court invalidated Republic Act 1631, as amended, namely, that it constitutes an undue delegation of
legislative power.
Ruling
Administrative Order 3, as amended by Administrative Orders 7 and 10, provides that for certain classes of
mail matters (such as mail permits, metered mails, business reply cards, etc.), the five-centavo charge may
be paid in cash instead of the purchase of the anti-TB stamp..
It is true that the law does not expressly authorize the collection of five centavos except through the sale of
anti-TB stamps, but such authority may be implied in so far as it may be necessary to prevent a failure of
the undertaking. The authority given to the Postmaster General to raise funds through the mails must be
liberally construed, consistent with the principle that where the end is required the appropriate means are
given.
The anti-TB stamp is a distinctive stamp which shows on its face not only the amount of the additional
charge but also that of the regular postage. In the case of business reply cards, for instance, it is obvious
that to require mailers to affix the anti-TB stamp on their cards would be to make them pay much more
because the cards likewise bear the amount of the regular postage.
It is likewise true that the statute does not provide for the disposition of mails which do not bear the anti-TB
stamp, but a declaration therein that "no mail matter shall be accepted in the mails unless it bears such
semi-postal stamp" is a declaration that such mail matter is nonmailable within the meaning of section 1952
of the Administrative Code. Administrative Order 7 of the Postmaster General is but a restatement of the
law for the guidance of postal officials and employees. As for Administrative Order 9, we have already said
that in listing the offices and entities of the Government exempt from the payment of the stamp, the
respondent Postmaster General merely observed an established principle, namely, that the Government is
exempt from taxation.
31. PASCUAL vs. SECRETARY OF PUBLIC WORKS
110 PHIL 331
GR No. L-10405, December 29, 1960
"A law appropriating the public revenue is invalid if the public advantage or benefit, derived from such
expenditure, is merely incidental in the promotion of a particular enterprise."
FACTS: Governor Wenceslao Pascual of Rizal instituted this action for declaratory relief, with injunction,
upon the ground that RA No. 920, which apropriates funds for public works particularly for the construction
and improvement of Pasig feeder road terminals. Some of the feeder roads, however, as alleged and as
contained in the tracings attached to the petition, were nothing but projected and planned subdivision
roads, not yet constructed within the Antonio Subdivision, belonging to private respondent Zulueta, situated
at Pasig, Rizal; and which projected feeder roads do not connect any government property or any important
premises to the main highway. The respondents' contention is that there is public purpose because people
living in the subdivision will directly be benefitted from the construction of the roads, and the government
also gains from the donation of the land supposed to be occupied by the streets, made by its owner to the
government.
ISSUE: Should incidental gains by the public be considered "public purpose" for the purpose of justifying an
expenditure of the government?
HELD: No. It is a general rule that the legislature is without power to appropriate public revenue for
anything but a public purpose. It is the essential character of the direct object of the expenditure which must
determine its validity as justifying a tax, and not the magnitude of the interest to be affected nor the degree
to which the general advantage of the community, and thus the public welfare, may be ultimately benefited
by their promotion. Incidental to the public or to the state, which results from the promotion of private
interest and the prosperity of private enterprises or business, does not justify their aid by the use public
money.
The test of the constitutionality of a statute requiring the use of public funds is whether the statute is
designed to promote the public interest, as opposed to the furtherance of the advantage of individuals,
although each advantage to individuals might incidentally serve the public.
32. LUTZ v. ARANETA
GR No. L-7859, December 22, 1955
98 PHIL 148
FACTS: Plaintiff Walter Lutz, in his capacity as judicial administrator of the intestate estate of Antionio
Ledesma, sought to recover from the CIR the sum of P14,666.40 paid by the estate as taxes, under section
3 of the CA 567 or the Sugar Adjustment Act thereby assailing its constitutionality, for it provided for an
increase of the existing tax on the manufacture of sugar, alleging that such enactment is not being levied
for a public purpose but solely and exclusively for the aid and support of the sugar industry thus making it
void and unconstitutional. The sugar industry situation at the time of the enactment was in an imminent
threat of loss and needed to be stabilized by imposition of emergency measures.
ISSUE: Is CA 567 constitutional, despite its being allegedly violative of the equal protection clause, the
purpose of which is not for the benefit of the general public but for the rehabilitation only of the sugar
industry?
HELD: Yes. The protection and promotion of the sugar industry is a matter of public concern, it follows that
the Legislature may determine within reasonable bounds what is necessary for its protection and expedient
for its promotion.
Here, the legislative discretion must be allowed to fully play, subject only to the test of reasonableness;
and it is not contended that the means provided in the law bear no relation to the objective pursued or are
oppressive in character. If objective and methods are alike constitutionally valid, no reason is seen why the
state may not levy taxes to raise funds for their prosecution and attainment. Analysis of the Act, will show
that the tax is levied with a regulatory purpose, to provide means for the rehabilitation and stabilization of
the threatened sugar industry. In other words, Taxation may be made the implement of the state's
police power.
33. FERRER V. CITY MAYOR BAUTISTA
FACTS: Quezon City Council enacted Ordinance No. SP-2095, S-2011,or the Socialized Housing Tax of
Quezon City, Section 3 of which provides:
SECTION 3.IMPOSITION. A special assessment equivalent to one-half percent (0.5%) on the assessed
value of land in excess of One Hundred Thousand Pesos (Php100,000.00) shall be collected by the City
Treasurer which shall accrue to the Socialized Housing Programs of the Quezon City Government.
“Effective for five (5) years, the Socialized Housing Tax (SHT) shall be utilized by the Quezon City
Government for the following projects: (a) land purchase/land banking; (b) improvement of current/existing
socialized housing facilities; (c) land development; (d) construction of core houses, sanitary cores, medium-
rise buildings and other similar structures; and (e) financing of public-private partnership agreement of the
Quezon City Government and National Housing Authority (NHA) with the private sector. “
On the other hand, Ordinance No. SP-2235, S-20135 was enacted on December 16, 2013 and took effect
ten days after when it was approved by respondent City Mayor.6 The proceeds collected from the garbage
fees on residential properties shall be deposited solely and exclusively in an earmarked special account
under the general fund to be utilized for garbage collections.7 Section 1 of the Ordinance set forth the
schedule and manner for the collection of garbage fees:
The collection of the garbage fee shall accrue on the first day of January and shall be paid simultaneously
with the payment of the real property tax, but not later than the first quarter installment. 8 In case a
household owner refuses to pay, a penalty of 25% of the garbage fee due, plus an interest of 2% per month
or a fraction thereof, shall be charged.ChanRoblesVi
PetitionerFerrer claims that the annual property tax is an ad valorem tax, a percentage of the assessed
value of the property, which is subject to revision every three (3) years in order to reflect an increase in the
market value of the property. The SHT and the garbage fee are actually increases in the property tax which
are not based on the assessed value of the property or its reassessment every three years; hence, in
violation of Sections 232 and 233 of the LGC.rtualawlibrary
ISSUE: Whether or not the tax ordinances are valid
HELD: Ordinance No. SP-2095, S-2011, the Socialized Housing Tax is valid.
Ordinance No. SP-2235, S-2013, which collects an annual garbage fee on all domestic households in
Quezon City, is hereby declared as UNCONSTITUTIONAL AND ILLEGAL
RATIO:
1. The 1987 Constitution explicitly espouses the view that the use of property bears a social function
and that all economic agents shall contribute to the common good.Property has not only an individual
function, insofar as it has to provide for the needs of the owner, but also a social function insofar as it has to
provide for the needs of the other members of society. The principle is this:
Police power proceeds from the principle that every holder of property, however absolute and unqualified
may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal
enjoyment of others having an equal right to the enjoyment of their property, no r injurious to the right of the
community.
Property rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of
the government in the exercise of police power. In this jurisdiction, it is well-entrenched that taxation may
be made the implement of the state’s police power.
The SHT charged by the Quezon City Government is a tax which is within its power to impose. Cities are
allowed to exercise such other powers and discharge such other functions and responsibilities as are
necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities
which include, among others, programs and projects for low-cost housing and other mass dwellings. The
collections made accrue to its socialized housing programs and projects.
The tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with a regulatory
purpose. The levy is primarily in the exercise of the police power for the general welfare of the entire city. It
is greatly imbued with public interest. Removing slum areas in Quezon City is not only beneficial to the
underprivileged and homeless constituents but advantageous to the real property owners as well. The
situation will improve the value of the their property investments, fully enjoying the same in view of an
orderly, secure, and safe community, and will enhance the quality of life of the poor, making them law-
abiding constituents and better consumers of business products.
2. In the subject ordinance imposing garbage collection fee, the rates of the imposable fee depend on
land or floor area and whether the payee is an occupant of a lot, condominium, social housing project or
apartment. For easy reference, the relevant provision is again quoted below:
The rates being charged by the ordinance are unjust and inequitable: a resident of a 200 sq. m. unit in a
condominium or socialized housing project has to pay twice the amount than a resident of a lot similar in
size; unlike unit occupants, all occupants of a lot with an area of 200 sq. m. and less have to pay a fixed
rate of Php100.00; and the same amount of garbage fee is imposed regardless of whether the resident is
from a condominium or from a socialized housing project.
Indeed, the classifications under Ordinance No. S-2235 are not germane to its declared purpose of
"promoting shared responsibility with the residents to attack their common mindless attitude in over-
consuming the present resources and in generating waste." Instead of simplistically categorizing the payee
into land or floor occupant of a lot or unit of a condominium, socialized housing project or apartment,
respondent City Council should have considered factors that could truly measure the amount of wastes
generated and the appropriate fee for its collection. Factors include, among others, household age and
size, accessibility to waste collection, population density of the barangay or district, capacity to pay, and
actual occupancy of the property. R.A. No. 9003 may also be looked into for guidance. Under said law, WM
service fees may be computed based on minimum factors such as types of solid waste to include special
waste, amount/volume of waste, distance of the transfer station to the waste management facility, capacity
or type of LGU constituency, cost of construction, cost of management, and type of technology. With
respect to utility rates set by municipalities, a municipality has the right to classify consumers under
reasonable classifications based upon factors such as the cost of service, the purpose for which the service
or the product is received, the quantity or the amount received, the different character of the service
furnished, the time of its use or any other matter which presents a substantial difference as a ground of
distinction.
