Bureau of Local Government Finance Opinion

October 6, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Ruben Lim President Guinobatan Market Vendors Association, Inc. Guinobatan, Albay S i r : This refers to Resolution No. 6, S. 1996 of the Guinobatan market Vendors Association, Inc. (GMVAI) requesting assistance for the repeal of Ordinance No. 8, S. 1996 entitled "PUBLIC MARKET ORDINANCE OF THE MUNICIPALITY OF GUINOBATAN." Said association alleged that Ordinance No. 8 requires the payment of a privilege fee for the stall to be occupied. Thus, it was claimed that since it is a public market, any mandate must be an ordinance approved by the public and not just by the municipal authorities. Under a 2nd Indorsement dated May 26, 1997, copy enclosed, the Provincial Treasurer of Albay informed that subject Tax Ordinance was passed by the Municipal Government of Guinobatan and finally approved by the Sangguniang Panlalawigan. It was informed further that a public hearing was conducted for the purpose wherein members of the association and other concerned citizens took a very active part in the deliberation of the construction of the new market through a GSIS Loan, and the expected increase of rentals to be imposed by the municipality, including the fidelity deposit. It was likewise informed that out of 331 market vendors around 220 have already transferred to the new building and are paying the rentals religiously including the fidelity deposit. Finally, it was informed that around 26 of the members, including the writer are still in the relocation site for the reason that the choice portions where they are to be located are still under construction. Considering the above information, it may be presumed that during the said public hearing, an agreement or consensus between the market vendors and the officials of the local government concerned has been reached. Be that as it may, it is advised that a dialogue between your association and that of said officials be sought in order that further differences not taken up may possibly be threshed out and amicably settled. In addition, this Bureau has consistently cited the case of Esteban et . al . , vs . City of Cabanatuan , GR L-13662, May 30, 1960, 108 Phil. 374 on cases similarly situated as the instant case, wherein the Supreme Court ruled that "When a municipal corporation fixes the fees for the use of its properties such as public markets, it does not assert governmental authority, or wield the police power or the power of taxation. It exercises merely a proprietary function, and, like any private owner, it is, in the absence of any constitutional or statutory limitation, free to charge such sums as it may deem best, regardless of the reasonableness of the amount fixed, for the prospective lessees are free to enter into the corresponding contract of lease, if they are agreeable to its terms or otherwise, not to enter into such contract. SCDaET Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director