Legality of Pasay City Resolution No. 576 s. 1993 re Refusal of Issuance of Business Permits to PETCO

January 14, 1994 DILG LEGAL OPINION NO. 026-94 OFFICE OF THE SECRETARY Councilor Florencio C. Mateo Sangguniang Panlungsod Pasay City S i r : This refers to your November 29, 1993 letter, which we referred to, but was declined to be answered by, the Pasay City Legal Officer, relative to your request for legal opinion on the legality of Resolution No. 576 s. 1993, of that legislative body, "directing the Chief of the License Division to refuse issuance of business permits to Philippine Exhibition and Trade Corporation (PETCO) for non-payment of taxes and imposts" to that city. It appears from a perusal of your communication that the sanggunian thereat was, prompted to pass the aforesaid Resolution due to the alleged repeated failure of PETCO, represented to be a private organization, to pay the amusement taxes and business permits due the Pasay City Government, thereby denying the latter a "substantial amount in the form of taxes and imposts which should have been utilized for maintenance and development of (that) city". However, the City Mayor, in his November 24, 1993 letter to the Vice-Mayor/Presiding Officer, viewed that the subject of the aforesaid Resolution, i.e., directing the License Division Chief on how to perform the functions of his office, is essentially executive; hence, is an ultra vires act of the sangguniang panlungsod, thereby declaring the same as null and void. Believing the propriety thereof. To promote local autonomy, the 1987 Constitution empowers every local government unit to create its own sources of revenue and to levy taxes, subject to such limitations as may be provided for by law. Within this framework, local governments are enjoined to, as much as practicable, evolve a progressive system of taxation. On the city level, these responsibilities are to be shared by the mayor and the members of the sangguniang panlungsod who jointly exercise authority over the financial affairs, transactions and operations of the city government. At this juncture, it would be worthy to state and compare the pertinent powers and duties of the City Mayor with that of the Sangguniang Panlungsod, as provided for under the Local Government Code of 1991 (RA 7160), viz: Section 455 . "(b) For efficient, effective and economical governance the purpose of which is the general welfare of the city and its inhabitants . . ., the city mayor shall: (1) Exercise general supervision and control over all programs, projects, services, and activities of the city government, and in this connection, shall: (i) Determine the guidelines of city policies and be responsible to the sangguniang panlungsod for the program of government; (x) Ensure that all executive officials and employees of the city faithfully discharge their duties and functions as provided by law . . .; (3) Initiate and maximize the generation of resources and revenues, and apply the same to the implementation of development plans, program objectives, and priorities . . . and relative thereto, shall: (iii) Ensure that all taxes and other revenues of the city are collected . . ., in accordance with law or ordinance; (iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions upon which said licenses or permits had been issued, pursuant to law or ordinance; (viii) Institute or cause to be instituted administrative or judicial proceedings for violation of ordinances in the collection of taxes, fees or charges, and for the recovery of funds and property . . ." Section 458 . "The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions . . . for the general welfare of the city and its inhabitants . . ., and shall: (1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and . . . shall: (vii) Subject to the provisions of this Code and pertinent laws, determine the powers and duties of officials and employees of the city; (2) Generate and maximize the use of resources and revenues for the development plans, program objectives and priorities of the city . . . and shall: (ii) Subject to the provisions of Book II of this Code and applicable laws and upon the majority vote of all the members of the sangguniang panlungsod, enact ordinances levying taxes, fees and charges, prescribing the rates thereof for general and specific purposes . . .; (vi) Prescribe reasonable limits and restraints on the use of property within the jurisdiction of the city; (3) . . . (E)nact ordinances . . . authorizing the issuance of permits or licenses, upon such conditions . . . and pursuant to this, legislative authority, shall: (i) Fix and impose reasonable fees and charges for all services rendered by the city government to private persons or entities; (ii) Regulate or fix license fees for any business . . . within the city and the conditions under which the license for said business . . . may be revoked and enact ordinances levying taxes thereon: (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: (vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performance, circuses . . . and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community." All the aforequoted provisions would point out that there indeed is a delineation of powers between the local chief executive and the local legislative body. In relation to this seeming controversy, while it may be true that it is incumbent upon the city mayor to ensure that all city officials and employees faithfully discharge their respective duties and functions and to correspondingly take the necessary action against them for dereliction or violation thereof, equally conceded is the fact that the sangguniang panlungsod is likewise mandated to see to it that city ordinances or resolutions have been complied with. Verily, if the sanggunian should find that any city official or employee has been remiss in the performance of his duties and responsibilities we see no cogent reason as to why it should be precluded from calling the attention of the concerned official or employee, more so that in the instant case, the issue involved is the alleged repeated non-payment of taxes by PETCO which, presumably, is part of the pre-conditions for the issuance of the license/permit. Parenthetically, while the power of a municipal corporation to license includes the power to regulate, and the power to regulate necessarily implies the power to permit conditionally the doing of a thing, the power to regulate ordinarily does not include the power to prohibit or suppress. Prohibition is not the equivalent of regulation; and ordinances of prohibition, direct or indirect, enacted under the power of regulation only are generally unwarranted (62 C.J.S. 324). Relatively, a permit is not a contract or property, but is merely the grant of a privilege which may be charged or revoked, and the holder thereof is not exempted thereby from the operation of subsequent ordinances legally enacted by the LGU in the exercise of its police power (62 C.J.S. 330). Circuses, carnivals, and other forms of public amusement are similarly subject to the regulatory powers of LGUs to preserve public health, comfort, morals, or safety of the people. Within limitations imposed by the state, LGUs may regulate places of public amusement, and the power to regulate embraces the power to prohibit altogether amusements considered hurtful to the community (Orendain, Local Government Code Annotated, 1983 ed., page 324). In the light of the foregoing premises, we so hold the considered view that while the sangguniang panlungsod could not be precluded from inviting the attention of any of the city officials and/or employees to perform their duties and responsibilities according to law or city ordinances/resolutions, it could not, however, categorically direct them on what not to do as the same has to be coursed through the total chief executive who exercises primary jurisdiction over them. LLphil Hoping that you will be guided accordingly. Very truly yours, RAFAEL M. ALUNAN III Secretary Department of Interior and Local Government cc: Mayor Pablo C. Cuneta Pasay City The Presiding Officer and the Honorable Members Sangguniang Panlungsod Pasay City The City Legal Officer Pasay City