DOJ Opinion No. 108, s. 1995

DOJ OPINION NO. 108 , s. 1995 October 12, 1995 Chairman Philip Ella Juico Philippine Sports Commission Rizal Memorial Sports Complex Pablo Ocampo Sr., Street Malate, Manila Sir : This has reference to your request for opinion on the proposal of the Philippine Sports Commission (PSC) to purchase some sports equipment and supplies on a duty-free basis from Duty Free Philippines (DFP). You state that the purchase of sports equipment and supplies from DFP is contemplated to cut down on costs and stretch the budget of your office since you perceive that DFP, which has regular contacts with major sports equipment supplier and deep merchandising capability and large purchase volumes, can secure better prices on PSC's sports equipment needs. You inquire whether this is legally possible in the light of Section 19 of R.A. No. 6847 ("Philippine Sports Commission Act") which grants tax exemption privileges to PSC and Section 24 of the same Act which empowers PSC to call on the assistance of any government entity. prcd It appears that you have previous information from DFP that E.O. No. 46 ("Granting the [Department] of Tourism, Through the Philippine Tourism Authority [PTA], Authority to Establish and Operate a Duty and Tax Free Merchandising System in the Philippine") and R.A. No. 6768 ("An Act Instituting a Balikbayan Program") "may be interpreted to limit DFP sales to international travelers, on retail basis". The basic issue to be resolved is whether or not the PSC can purchase sports equipment and supplies from DFP on the basis of Sections 19 and 24 of R.A. No. 6847 despite the restrictive provisions of E.O. No. 46 and R.A. No. 6768. The pertinent provisions of the cited laws read: R. A. No. 6847 "SEC. 19. Tax Exemptions of the Commission . The Commission shall be exempted from the payment of customs duties, taxes and tariffs on the importation of sportswear, equipment, supplies, instruments and materials. including those donated to the Commission, which are of international sports standard not available from local manufacturers and only in such numbers as may be required in the development of various sports and/or training of the national pool of athletes. The importation of sportswear, equipment, supplies, instruments and materials donated to the Philippine Olympic Committee and, through the Commission, to the various national sports in the country shall also be exempt from the payment of customs duties, taxes and tariffs." "SEC. 24. Assistance by the Government Entities . The Commission may call upon any government entity for assistance in the performance of its functions and duties. All heads of departments, agencies, corporations and offices of the government are hereby enjoined to render full assistance and cooperation to the Commission to ensure the attainment of its objectives and the success of the national sports development program." E.O. No. 46 "Section 1. The [Department] of Tourism through the Philippine Tourism Authority (PTA) is hereby authorized to establish a duty and tax free merchandising system in the Philippines to augment the service facilities for tourists and to generate foreign exchange and revenue for the government . Under this system, the Philippine Tourism Authority shall have the exclusive authority to operate stores and shops that would sell, among others, tax and duty free merchandise, goods and articles, in international airports and sea ports throughout the country in accordance with the rules and regulations issued by the [Department] of Tourism. In the event that the operation of the stores is to be contracted to private parties, the award thereof shall be done through the usual public bidding." (Emphasis supplied) "Sec. 2. The [Department] of Tourism shall promulgate the rules and regulations to implement this Order, which shall, among others, provide for the norms and guidelines to ensure that the aforesaid merchandising system is at par with international standards insofar as prices and services are concerned. The stores and shops are effective showcases of Philippine culture, craftsmanship and industry and that the system is an efficient and effective vehicle for the generation of foreign exchange and revenue for the government. It is understood that the merchandise in the shops and stores shall be sold only to departing passengers for their consumption abroad: Provided, however, that subject to such limitations, rules and regulations as may be prescribed by the [Department] of Finance, the shops herein authorized may sell merchandise to passengers coming into the Philippines from abroad ." (Emphasis supplied) R.A. No. 6768 "SECTION 1. Balikbayan Program . A Balikbayan Program is hereby instituted under the administration of the Department of Tourism to attract and encourage overseas Filipinos to come and visit their motherland. This is in recognition of their contribution to the economy of the country through the foreign exchange inflow that they generate." "SEC. 3. Benefits and Privileges of the Balikbayan . The balikbayan and his family shall be entitled to the following: (a) Tax-free maximum purchase in the amount of One Thousand United States dollars (US$1,000.00) or its equivalent in other acceptable foreign currencies at Philippine duty-free shops subject to the limitations contained in Section 4 hereof; xxx xxx xxx" Examination of the abovequoted provisions shows that Section 19 of R.A. No. 6847 grants PSC exemption from payment of customs taxes, duties and tariffs when it imports sportswear, equipment, supplies, instruments and materials. However, there is nothing therein which grants it authority to make its purchases on a duty-free basis from the DFP. While Section 24 of the same Act grants PSC permissive authority to call upon any government agency for assistance to ensure the attainment of its objectives, it is believed that the assistance therein contemplated pertain only to that which the government agency concerned is authorized to provide or render in the performance of its functions pursuant to existing law. It is noted that under Section 1 of E.O. No. 46, the Department of Tourism is authorized, through the PTA, to establish a duty and tax free merchandising system and operate stores and shops (now operated by DFP ) that would sell, among others, tax and duty free merchandise, goods and articles, in international airports and sea ports throughout the country. Section 2 of said E.O. No. 46, however, specifically mandates that "the merchandise in the shops and stores shall be sold only to departing passengers for consumption abroad" and to "passengers coming into the Philippines from abroad", subject to the limitations and rules and regulations as may be prescribed by the Department of Finance. There is nothing in the said provision which authorizes the DFP to sell to persons other than those expressly named thereunder. The rule is that a meaning that does not appear nor is intended to be reflected in the language of the statute cannot be placed therein (Manikad vs. Tanodbayan, 127 SCRA 724); and when a statute is expressly limited to certain matters, it may not be extended to other matters (Hongkong & Shanghai Bank vs. Peters, 16 Phil. 284). Indeed, had there been an intention on the part of the legislature to extend the scope of E.O. No. 46 to the PSC, it could have easily done so by granting PSC under R.A. No. 6847 an express authority to purchase merchandise from the DFP as it did in connection with the aforementioned Balikbayan Law granting a balikbayan and his family the privilege to purchase goods and merchandise from the DFP. Based thereon, it is our view that PSC cannot legally purchase its sports equipment and supplies and other sports requirement from the DFP. This does not mean, however, that PSC may not ask the DFP's assistance to enable it to purchase its sporting goods and other sports requirements from the same sources and under the same terms that DFP procures its goods and merchandise. Please be guided accordingly. Very truly yours, (SGD.) TEOFISTO T. GUINGONA, JR. Secretary