Abakada Guro vs Ermita Abakada Guro v. ErmitaG.R. No. 168056, July 5, 2005J.

Puno En Banc Facts: Motions for Reconsideration filed by petitioners, ABAKADA Guro party List Officer and et al.,insist that the bicameral conference committee should not even have acted on the no pass-on provisions since there is no disagreement between House Bill Nos. 3705 and 3555 on the onehand, and Senate Bill No. 1950 on the other, with regard to the no pass-on provision for the saleof service for power generation because both the Senate and the House were in agreement thatthe VAT burden for the sale of such service shall not be passed on to the endconsumer. As tothe no pass-on provision for sale of petroleum products, petitioners argue that the fact that the presence of such a no pass-on provision in the House version and the absence thereof in theSenate Bill means there is no conflict because a House provision cannot be in conflict withsomething that does not exist.Escudero, et. al., also contend that Republic Act No. 9337 grossly violates the constitutionalimperative on exclusive origination of revenue bills under Section 24 of Article VI of theConstitution when the Senate introduced amendments not connected with VAT.Petitioners Escudero, et al., also reiterate that R.A. No. 9337s stand- by authority to theExecutive to increase the VAT rate, especially on account of the recommendatory power grantedto the Secretary of Finance, constitutes undue delegation of legislative power. They submit thatthe recommendatory power given to the Secretary of Finance in regard to the occurrence of either of two events using the Gross Domestic Product (GDP) as a benchmark necessarily andinherently required extended analysis and evaluation, as well as policy making.Petitioners also reiterate their argument that the input tax is a property or a property right.Petitioners also contend that even if the right to credit the input VAT is merely a statutory privilege, it has already evolved into a vested right that the State cannot remove. Issue: Whether or not the R.A. No. 9337 or the Vat Reform Act is constitutional? Held: The Court is not persuaded. Article VI, Section 24 of the Constitution provides that Allappropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of localapplication, and private bills shall originate exclusively in the House of Representatives, but theSenate may propose or concur with amendments. The Court reiterates that in making his recommendation to the President on the existence of either of the two conditions, the Secretary of Finance is not acting as the alter ego of thePresident or even her subordinate. He is acting as the agent of the legislative department, todetermine and declare the event upon which its expressed will is to take effect. The Secretary of Finance becomes the means or tool by which legislative policy is determined and implemented,considering that he possesses all the facilities to gather data and information and has a much

broader perspective to properly evaluate them. His function is to gather and collate statisticaldata and other pertinent information and verify if any of the two conditions laid out by Congressis present.In the same breath, the Court reiterates its finding that it is not a property or a property right, anda VATregistered persons entitlement to the creditable input tax is a mere statutory privilege. Asthe Court stated in its Decision, the right to credit the input tax is a mere creation of law. Moreimportantly, the assailed provisions of R.A. No. 9337 already involve legislative policy andwisdom. So long as there is a public end for which R.A. No. 9337 was passed, the means throughwhich such end shall be accomplished is for the legislature to choose so long as it is withinconstitutional bounds.The Motions for Reconsideration are hereby DENIED WITH FINALITY. The temporaryrestraining order issued by the Court is LIFTED. MAYOR MAGTAJAS & CITY OF CAGAYAN v. PRYCE PROPERTIES & PAGCOR Facts: PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation, Inc., renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season. . Civic organizations angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth. Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the city. The contention of the petitioners is that it is violative of the Sangguniang Panlungsod of Cagayan de Oro City Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. On the other hand, the respondents invoke P.D. 1869 which created PAGCOR to help centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines. The Court of Appeals ruled in favor of the respondents. Hence, the petition for review. Issue: Whether or not the Ordinance No. 3353 and Ordinance No. 3375-93 are valid Held:No Ratio: Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows: ***Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. There is a requirement that the ordinances should not contravene a

statute. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute. Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Therefore, the petition is DENIED and the challenged decision of the Court of Appeals is AFFIRMED