Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 91649 May 14, 1991 ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO SANCHEZ,petitioners, vs. PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent. H.B. Basco & Associates for petitioners. Valmonte Law Offices collaborating counsel for petitioners. Aguirre, Laborte and Capule for respondent PAGCO .

PARAS, J.:p A TV ad proudly announces !The ne" PA#C$R % respondin& throu&h responsible &a'in&.! But the petitioners thin( other"ise, that is "hy, they filed the instant petition see(in& to annul the Philippine A'use'ent and #a'in& Corporation )PA#C$R* Charter % P+ ,-./, because it is alle&edly contrary to 'orals, public policy and order, and because % A. 0t constitutes a "aiver of a ri&ht pre1udicial to a third person "ith a ri&ht reco&ni2ed by la". 0t "aived the Manila City &overn'ent3s ri&ht to i'pose ta4es and license fees, "hich is reco&ni2ed by la"5 B. 6or the sa'e reason stated in the i''ediately precedin& para&raph, the la" has intruded into the local &overn'ent3s ri&ht to i'pose local ta4es and license fees. This, in contravention of the constitutionally enshrined principle of local autono'y5 C. 0t violates the e7ual protection clause of the constitution in that it le&ali2es PA#C$R % conducted &a'blin&, "hile 'ost other for's of &a'blin& are outla"ed, to&ether "ith prostitution, dru& traffic(in& and other vices5

+. 0t violates the avo"ed trend of the Cory &overn'ent a"ay fro' 'onopolistic and crony econo'y, and to"ard free enterprise and privati2ation. )p. 8, A'ended Petition5 p. 9, ollo* 0n their :econd A'ended Petition, petitioners also clai' that P+ ,-./ is contrary to the declared national policy of the !ne" restored de'ocracy! and the people3s "ill as e4pressed in the ,/-9 Constitution. The decree is said to have a !&a'blin& ob1ective! and therefore is contrary to :ections ,,, ,8 and ,; of Article 00, :ec. , of Article V000 and :ection ; )8* of Article <0V, of the present Constitution )p. ;, :econd A'ended Petition5 p. 8,, ollo*. The procedural issue is "hether petitioners, as ta4payers and practicin& la"yers )petitioner Basco bein& also the Chair'an of the Co''ittee on =a"s of the City Council of Manila*, can 7uestion and see( the annul'ent of P+ ,-./ on the alle&ed &rounds 'entioned above. The Philippine A'use'ents and #a'in& Corporation )PA#C$R* "as created by virtue of P.+. ,>.9?A dated @anuary ,, ,/99 and "as &ranted a franchise under P.+. ,>.9?B also dated @anuary ,, ,/99 !to establish, operate and 'aintain &a'blin& casinos on land or "ater "ithin the territorial 1urisdiction of the Philippines.! 0ts operation "as ori&inally conducted in the "ell (no"n floatin& casino !Philippine Tourist.! The operation "as considered a success for it proved to be a potential source of revenue to fund infrastructure and socio?econo'ic pro1ects, thus, P.+. ,;// "as passed on @une 8, ,/9- for PA#C$R to fully attain this ob1ective. :ubse7uently, on @uly ,,, ,/-;, PA#C$R "as created under P.+. ,-./ to enable the #overn'ent to re&ulate and centrali2e all &a'es of chance authori2ed by e4istin& franchise or per'itted by la", under the follo"in& declared policy % :ec. ,. !eclaration of Polic". % 0t is hereby declared to be the policy of the :tate to centrali2e and inte&rate all &a'es of chance not heretofore authori2ed by e4istin& franchises or per'itted by la" in order to attain the follo"in& ob1ectives )a* To centrali2e and inte&rate the ri&ht and authority to operate and conduct &a'es of chance into one corporate entity to be controlled, ad'inistered and supervised by the #overn'ent. )b* To establish and operate clubs and casinos, for a'use'ent and recreation, includin& sports &a'in& pools, )bas(etball, football, lotteries, etc.* and such other for's of a'use'ent and recreation includin& &a'es of chance, "hich 'ay be allo"ed by la" "ithin the territorial 1urisdiction of the Philippines and "hich "ill ),* &enerate sources of additional revenue to fund infrastructure and socio?civic pro1ects, such as flood control pro&ra's, beautification, se"era&e and se"a&e pro1ects, Tulun&an n& Bayan Centers, Nutritional Pro&ra's, Population Control and such other essential public services5 )8* create recreation and inte&rated facilities "hich "ill e4pand and i'prove the country3s e4istin& tourist attractions5 and );* 'ini'i2e, if not totally eradicate, all the evils, 'alpractices and corruptions that are nor'ally prevalent on the conduct and operation of &a'blin& clubs and casinos "ithout direct &overn'ent involve'ent. ):ection ,, P.+. ,-./*

To attain these ob1ectives PA#C$R is &iven territorial 1urisdiction all over the Philippines. Ander its Charter3s repealin& clause, all la"s, decrees, e4ecutive orders, rules and re&ulations, inconsistent there"ith, are accordin&ly repealed, a'ended or 'odified. 0t is reported that PA#C$R is the third lar&est source of &overn'ent revenue, ne4t to the Bureau of 0nternal Revenue and the Bureau of Custo's. 0n ,/-/ alone, PA#C$R earned P;.B; Billion, and directly re'itted to the National #overn'ent a total of P8.C Billion in for' of franchise ta4, &overn'ent3s inco'e share, the President3s :ocial 6und and Dost Cities3 share. 0n addition, PA#C$R sponsored other socio?cultural and charitable pro1ects on its o"n or in cooperation "ith various &overn'ental a&encies, and other private associations and or&ani2ations. 0n its ; ,E8 years of operation under the present ad'inistration, PA#C$R re'itted to the &overn'ent a total of P..8 Billion. As of +ece'ber ;,, ,/-/, PA#C$R "as e'ployin& B,B/B e'ployees in its nine )/* casinos nation"ide, directly supportin& the livelihood of 6our Thousand 6our Dundred Ninety?6our )B,B/B* fa'ilies. But the petitioners, are 7uestionin& the validity of P.+. No. ,-./. They alle&e that the sa'e is !null and void! for bein& !contrary to 'orals, public policy and public order,! 'onopolistic and tends to"ard !crony econo'y!, and is violative of the e7ual protection clause and local autono'y as "ell as for runnin& counter to the state policies enunciated in :ections ,, )Personal +i&nity and Du'an Ri&hts*, ,8 )6a'ily* and ,; )Role of Fouth* of Article 00, :ection , ):ocial @ustice* of Article <000 and :ection 8 )Educational Values* of Article <0V of the ,/-9 Constitution. This challen&e to P.+. No. ,-./ deserves a searchin& and thorou&h scrutiny and the 'ost deliberate consideration by the Court, involvin& as it does the e4ercise of "hat has been described as !the hi&hest and 'ost delicate function "hich belon&s to the 1udicial depart'ent of the &overn'ent.! ):tate v. Manuel, 8> N.C. ,BB5 =o2ano v. Martine2, ,B. :CRA ;8;*. As Ge enter upon the tas( of passin& on the validity of an act of a co?e7ual and coordinate branch of the &overn'ent Ge need not be re'inded of the ti'e?honored principle, deeply in&rained in our 1urisprudence, that a statute is presu'ed to be valid. Every presu'ption 'ust be indul&ed in favor of its constitutionality. This is not to say that Ge approach $ur tas( "ith diffidence or ti'idity. Ghere it is clear that the le&islature or the e4ecutive for that 'atter, has over?stepped the li'its of its authority under the constitution, Ge should not hesitate to "ield the a4e and let it fall heavily, as fall it 'ust, on the offendin& statute )=o2ano v. Martine2, supra*. 0n Victoriano #. $li%alde ope &or'ers( )nion, et al, C/ :CRA CB, the Court thru Mr. @ustice Haldivar underscored the % . . . thorou&hly established principle "hich 'ust be follo"ed in all cases "here 7uestions of constitutionality as obtain in the instant cases are involved. All presu'ptions are indul&ed in favor of constitutionality5 one "ho attac(s a statute alle&in& unconstitutionality 'ust prove its invalidity beyond a reasonable doubt5 that a la" 'ay "or( hardship does not render it unconstitutional5 that if any reasonable basis 'ay be conceived "hich supports the statute, it "ill be upheld and the challen&er 'ust ne&ate all possible basis5 that the courts are not concerned "ith the "isdo', 1ustice, policy or

e4pediency of a statute and that a liberal interpretation of the constitution in favor of the constitutionality of le&islation should be adopted. )+anner v. Dass, ,/B N.G. *nd C;B, C;/5 :purbec( v. :tatton, ,>. N.G. *nd ..>, ..;5 C/ :CRA ..5 see also e.&. :alas v. @arencio, B. :CRA 9;B, 9;/ I,/9>J5 Peralta v. Co''ission on Elections, -8 :CRA ;>, CC I,/9-J5 and Deirs of $rdona v. Reyes, ,8C :CRA 88>, 8B,?8B8 I,/-;J cited in Citi2ens Alliance for Consu'er Protection v. Ener&y Re&ulatory Board, ,.8 :CRA C8,, CB>* $f course, there is first, the procedural issue. The respondents are 7uestionin& the le&al personality of petitioners to file the instant petition. Considerin& ho"ever the i'portance to the public of the case at bar, and in (eepin& "ith the Court3s duty, under the ,/-9 Constitution, to deter'ine "hether or not the other branches of &overn'ent have (ept the'selves "ithin the li'its of the Constitution and the la"s and that they have not abused the discretion &iven to the', the Court has brushed aside technicalities of procedure and has ta(en co&ni2ance of this petition. )Kapatiran n& '&a Na&lilin&(od sa Pa'ahalaan n& Pilipinas 0nc. v. Tan, ,.; :CRA ;9,* Gith particular re&ard to the re7uire'ent of proper party as applied in the cases before us, Ge hold that the sa'e is satisfied by the petitioners and intervenors because each of the' has sustained or is in dan&er of sustainin& an i''ediate in1ury as a result of the acts or 'easures co'plained of. And even if, strictly spea(in& they are not covered by the definition, it is still "ithin the "ide discretion of the Court to "aive the re7uire'ent and so re'ove the i'pedi'ent to its addressin& and resolvin& the serious constitutional 7uestions raised. 0n the first E'er&ency Po"ers Cases, ordinary citi2ens and ta4payers "ere allo"ed to 7uestion the constitutionality of several e4ecutive orders issued by President Luirino althou&h they "ere involvin& only an indirect and &eneral interest shared in co''on "ith the public. The Court dis'issed the ob1ection that they "ere not proper parties and ruled that !the transcendental i'portance to the public of these cases de'ands that they be settled pro'ptly and definitely, brushin& aside, if "e 'ust technicalities of procedure.! Ge have since then applied the e4ception in 'any other cases. )Association of :'all =ando"ners in the Philippines, 0nc. v. :ec. of A&rarian Refor', ,9C :CRA ;B;*. Davin& disposed of the procedural issue, Ge "ill no" discuss the substantive issues raised. #a'blin& in all its for's, unless allo"ed by la", is &enerally prohibited. But the prohibition of &a'blin& does not 'ean that the #overn'ent cannot re&ulate it in the e4ercise of its police po"er. The concept of police po"er is "ell?established in this 1urisdiction. 0t has been defined as the !state authority to enact le&islation that 'ay interfere "ith personal liberty or property in order to pro'ote the &eneral "elfare.! )Edu v. Ericta, ;C :CRA B-,, B-9* As defined, it consists of ),* an i'position or restraint upon liberty or property, )8* in order to foster the co''on &ood. 0t is not capable of an e4act

definition but has been, purposely, veiled in &eneral ter's to underscore its all? co'prehensive e'brace. )Philippine Association of :ervice E4porters, 0nc. v. +rilon, ,.; :CRA ;-.*. 0ts scope, ever?e4pandin& to 'eet the e4i&encies of the ti'es, even to anticipate the future "here it could be done, provides enou&h roo' for an efficient and fle4ible response to conditions and circu'stances thus assu'in& the &reatest benefits. )Edu v. Ericta, supra* 0t finds no specific Constitutional &rant for the plain reason that it does not o"e its ori&in to the charter. Alon& "ith the ta4in& po"er and e'inent do'ain, it is inborn in the very fact of statehood and soverei&nty. 0t is a funda'ental attribute of &overn'ent that has enabled it to perfor' the 'ost vital functions of &overnance. Marshall, to "ho' the e4pression has been credited, refers to it succinctly as the plenary po"er of the state !to &overn its citi2ens!. )Tribe, A'erican Constitutional =a", ;8;, ,/9-*. The police po"er of the :tate is a po"er co?e4tensive "ith self? protection and is 'ost aptly ter'ed the !la" of over"hel'in& necessity.! )Rubi v. Provincial Board of Mindoro, ;/ Phil. ..>, 9>-* 0t is !the 'ost essential, insistent, and illi'itable of po"ers.! ):'ith Bell M Co. v. National, B> Phil. ,;.* 0t is a dyna'ic force that enables the state to 'eet the a&encies of the "inds of chan&e. Ghat "as the reason behind the enact'ent of P.+. ,-./N P.+. ,-./ "as enacted pursuant to the policy of the &overn'ent to !re&ulate and centrali2e thru an appropriate institution all &a'es of chance authori2ed by e4istin& franchise or per'itted by la"! ),st "hereas clause, P+ ,-./*. As "as subse7uently proved, re&ulatin& and centrali2in& &a'blin& operations in one corporate entity % the PA#C$R, "as beneficial not 1ust to the #overn'ent but to society in &eneral. 0t is a reliable source of 'uch needed revenue for the cash strapped #overn'ent. 0t provided funds for social i'pact pro1ects and sub1ected &a'blin& to !close scrutiny, re&ulation, supervision and control of the #overn'ent! )Bth Ghereas Clause, P+ ,-./*. Gith the creation of PA#C$R and the direct intervention of the #overn'ent, the evil practices and corruptions that &o "ith &a'blin& "ill be 'ini'i2ed if not totally eradicated. Public "elfare, then, lies at the botto' of the enact'ent of P+ ,-/.. Petitioners contend that P.+. ,-./ constitutes a "aiver of the ri&ht of the City of Manila to i'pose ta4es and le&al fees5 that the e4e'ption clause in P.+. ,-./ is violative of the principle of local autono'y. They 'ust be referrin& to :ection ,; par. )8* of P.+. ,-./ "hich e4e'pts PA#C$R, as the franchise holder fro' payin& any !ta4 of any (ind or for', inco'e or other"ise, as "ell as fees, char&es or levies of "hatever nature, "hether National or =ocal.! )8* +ncome and ot,er ta-es. % a* 6ranchise Dolder No ta4 of any (ind or for', inco'e or other"ise as "ell as fees, char&es or levies of "hatever nature, "hether National or =ocal, shall be assessed and collected under this franchise fro' the Corporation5 nor shall any for' or ta4 or char&e attach in any "ay to the earnin&s of the Corporation, e4cept a franchise ta4 of five )CO* percent of the &ross revenues or earnin&s derived by the Corporation fro' its operations under this franchise. :uch ta4 shall be due and payable 7uarterly to the National #overn'ent and shall be in lieu of all (inds of ta4es, levies, fees or

assess'ents of any (ind, nature or description, levied, established or collected by any 'unicipal, provincial or national &overn'ent authority ):ection ,; I8J*. Their contention stated hereinabove is "ithout 'erit for the follo"in& reasons )a* The City of Manila, bein& a 'ere Municipal corporation has no inherent ri&ht to i'pose ta4es )0card v. City of Ba&uio, -; Phil. -9>5 City of 0loilo v. Villanueva, ,>C Phil. ;;95 :antos v. Municipality of Caloocan, 9 :CRA .B;*. Thus, !the Charter or statute 'ust plainly sho" an intent to confer that po"er or the 'unicipality cannot assu'e it! )Medina v. City of Ba&uio, ,8 :CRA .8*. 0ts !po"er to ta4! therefore 'ust al"ays yield to a le&islative act "hich is superior havin& been passed upon by the state itself "hich has the !inherent po"er to ta4! )Bernas, the Revised I,/9;J Philippine Constitution, Vol. ,, ,/-; ed. p. BBC*. )b* The Charter of the City of Manila is sub1ect to control by Con&ress. 0t should be stressed that !'unicipal corporations are 'ere creatures of Con&ress! )Anson v. =acson, #.R. No. 9/>/, @anuary ,-, ,/C9* "hich has the po"er to !create and abolish 'unicipal corporations! due to its !&eneral le&islative po"ers! )Asuncion v. Friantes, 8- Phil. .95 Merdanillo v. $randia, C :CRA CB,*. Con&ress, therefore, has the po"er of control over =ocal &overn'ents )Debron v. Reyes, #.R. No. /,8B, @uly 8, ,/C>*. And if Con&ress can &rant the City of Manila the po"er to ta4 certain 'atters, it can also provide for e4e'ptions or even ta(e bac( the po"er. )c* The City of Manila3s po"er to i'pose license fees on &a'blin&, has lon& been revo(ed. As early as ,/9C, the po"er of local &overn'ents to re&ulate &a'blin& thru the &rant of !franchise, licenses or per'its! "as "ithdra"n by P.+. No. 99, and "as vested e4clusively on the National #overn'ent, thus :ec. ,. Any provision of la" to the contrary not"ithstandin&, the authority of chartered cities and other local &overn'ents to issue license, per'it or other for' of franchise to operate, 'aintain and establish horse and do& race trac(s, 1ai?alai and other for's of &a'blin& is hereby revo(ed. :ec. 8. Dereafter, all per'its or franchises to operate, 'aintain and establish, horse and do& race trac(s, 1ai?alai and other for's of &a'blin& shall be issued by the national &overn'ent upon proper application and verification of the 7ualification of the applicant . . . Therefore, only the National #overn'ent has the po"er to issue !licenses or per'its! for the operation of &a'blin&. Necessarily, the po"er to de'and or collect license fees "hich is a conse7uence of the issuance of !licenses or per'its! is no lon&er vested in the City of Manila. )d* =ocal &overn'ents have no po"er to ta4 instru'entalities of the National #overn'ent. PA#C$R is a &overn'ent o"ned or controlled corporation "ith an ori&inal charter, P+ ,-./. All of its shares of stoc(s are o"ned by the National #overn'ent. 0n addition to its corporate po"ers ):ec. ;, Title 00, P+ ,-./* it also e4ercises re&ulatory po"ers thus

:ec. /. egulator" Power. % The Corporation shall 'aintain a Re&istry of the affiliated entities, and shall e4ercise all the po"ers, authority and the responsibilities vested in the :ecurities and E4chan&e Co''ission over such affiliatin& entities 'entioned under the precedin& section, includin&, but not li'ited to a'end'ents of Articles of 0ncorporation and By?=a"s, chan&es in corporate ter', structure, capitali2ation and other 'atters concernin& the operation of the affiliated entities, the provisions of the Corporation Code of the Philippines to the contrary not"ithstandin&, e4cept only "ith respect to ori&inal incorporation. PA#C$R has a dual role, to operate and to re&ulate &a'blin& casinos. The latter role is &overn'ental, "hich places it in the cate&ory of an a&ency or instru'entality of the #overn'ent. Bein& an instru'entality of the #overn'ent, PA#C$R should be and actually is e4e'pt fro' local ta4es. $ther"ise, its operation 'i&ht be burdened, i'peded or sub1ected to control by a 'ere =ocal &overn'ent. The states have no po"er by ta4ation or other"ise, to retard, i'pede, burden or in any 'anner control the operation of constitutional la"s enacted by Con&ress to carry into e4ecution the po"ers vested in the federal &overn'ent. )MC Culloch v. Marland, B Gheat ;,., B = Ed. C9/* This doctrine e'anates fro' the !supre'acy! of the National #overn'ent over local &overn'ents. @ustice Dol'es, spea(in& for the :upre'e Court, 'ade reference to the entire absence of po"er on the part of the :tates to touch, in that "ay )ta4ation* at least, the instru'entalities of the Anited :tates )@ohnson v. Maryland, 8CB A: C,* and it can be a&reed that no state or political subdi#ision can regulate a federal instrumentalit" in suc, a wa" as to pre#ent it from consummating its federal responsibilities , or e#en to seriousl" burden it in t,e accomplis,ment of t,em. )Antieau, Modern Constitutional =a", Vol. 8, p. ,B>, e'phasis supplied* $ther"ise, 'ere creatures of the :tate can defeat National policies thru e4ter'ination of "hat local authorities 'ay perceive to be undesirable activities or enterprise usin& the po"er to ta4 as !a tool for re&ulation! )A.:. v. :anche2, ;B> A: B8*. The po"er to ta4 "hich "as called by @ustice Marshall as the !po"er to destroy! )Mc Culloch v. Maryland, supra* cannot be allo"ed to defeat an instru'entality or creation of the very entity "hich has the inherent po"er to "ield it. )e* Petitioners also ar&ue that the =ocal Autono'y Clause of the Constitution "ill be violated by P.+. ,-./. This is a pointless ar&u'ent. Article < of the ,/-9 Constitution )on =ocal Autono'y* provides :ec. C. Each local &overn'ent unit shall have the po"er to create its o"n source of revenue and to levy ta4es, fees, and other char&es sub.ect to suc, guidelines and limitation as t,e congress ma" pro#ide, consistent "ith the basic policy on local autono'y. :uch

ta4es, fees and char&es shall accrue e4clusively to the local &overn'ent. )e'phasis supplied* The po"er of local &overn'ent to !i'pose ta4es and fees! is al"ays sub1ect to !li'itations! "hich Con&ress 'ay provide by la". :ince P+ ,-./ re'ains an !operative! la" until !a'ended, repealed or revo(ed! ):ec. ;, Art. <V000, ,/-9 Constitution*, its !e4e'ption clause! re'ains as an e4ception to the e4ercise of the po"er of local &overn'ents to i'pose ta4es and fees. 0t cannot therefore be violative but rather is consistent "ith the principle of local autono'y. Besides, the principle of local autono'y under the ,/-9 Constitution si'ply 'eans !decentrali2ation! )000 Records of the ,/-9 Constitutional Co''ission, pp. B;C?B;., as cited in Bernas, The Constitution of the Republic of the Philippines, Vol. 00, 6irst Ed., ,/--, p. ;9B*. 0t does not 'a(e local &overn'ents soverei&n "ithin the state or an !imperium in imperio.! =ocal #overn'ent has been described as a political subdivision of a nation or state "hich is constituted by la" and has substantial control of local affairs. 0n a unitary syste' of &overn'ent, such as the &overn'ent under the Philippine Constitution, local &overn'ents can only be an intra so#ereign subdi#ision of one so#ereign nation, it cannot be an imperium in imperio. =ocal &overn'ent in such a syste' can only 'ean a 'easure of decentrali2ation of the function of &overn'ent. )e'phasis supplied* As to "hat state po"ers should be !decentrali2ed! and "hat 'ay be dele&ated to local &overn'ent units re'ains a 'atter of policy, "hich concerns "isdo'. 0t is therefore a political 7uestion. )Citi2ens Alliance for Consu'er Protection v. Ener&y Re&ulatory Board, ,.8 :CRA C;/*. Ghat is settled is that the 'atter of re&ulatin&, ta4in& or other"ise dealin& "ith &a'blin& is a :tate concern and hence, it is the sole prero&ative of the :tate to retain it or dele&ate it to local &overn'ents. As gambling is usually an offense against t,e /tate, legislati#e grant or e-press c,arter power is generall" necessar" to empower t,e local corporation to deal wit, t,e sub.ect. . . . 0n the absence of e4press &rant of po"er to enact, ordinance pro#isions on t,is sub.ect w,ic, are inconsistent wit, t,e state laws are #oid. )=i&an v. #adsden, Ala App. ,>9 :o. 9;; E4?Parte :olo'on, /, Cals. BB>, 89 PAC 9C9 follo"in& in re Ah Fou, -- Cal. //, 8C PAC /9B, 88 A' :t. Rep. 8->, ,, =RA B->, as cited in Mc Luinllan Vol. ; +bid, p. CB-, e'phasis supplied* Petitioners ne4t contend that P.+. ,-./ violates the e7ual protection clause of the Constitution, because !it le&ali2ed PA#C$R % conducted &a'blin&, "hile 'ost &a'blin& are outla"ed to&ether "ith prostitution, dru& traffic(in& and other vices! )p. -8, ollo*. Ge, li(e"ise, find no valid &round to sustain this contention. The petitioners3 posture i&nores the "ell?accepted 'eanin& of the clause !e7ual protection of the la"s.! The clause does not preclude classification of individuals "ho 'ay be accorded different treat'ent under the la" as lon& as the classification is not unreasonable or arbitrary

)0tchon& v. Dernande2, ,>, Phil. ,,CC*. A la" does not have to operate in e7ual force on all persons or thin&s to be confor'able to Article 000, :ection , of the Constitution )+EC: v. :an +ie&o, #.R. No. -/C98, +ece'ber 8,, ,/-/*. The !e7ual protection clause! does not prohibit the =e&islature fro' establishin& classes of individuals or ob1ects upon "hich different rules shall operate )=aurel v. Misa, B; $.#. 8-B9*. The Constitution does not re7uire situations "hich are different in fact or opinion to be treated in la" as thou&h they "ere the sa'e )#o'e2 v. Palo'ar, 8C :CRA -89*. @ust ho" P.+. ,-./ in le&ali2in& &a'blin& conducted by PA#C$R is violative of the e7ual protection is not clearly e4plained in the petition. The 'ere fact that so'e &a'blin& activities li(e coc(fi&htin& )P.+ BB/* horse racin& )R.A. ;>. as a'ended by RA /-;*, s"eepsta(es, lotteries and races )RA ,,./ as a'ended by B.P. B8* are le&ali2ed under certain conditions, "hile others are prohibited, does not render the applicable la"s, P.+. ,-./ for one, unconstitutional. 0f the la" presu'ably hits the evil "here it is 'ost felt, it is not to be overthro"n because there are other instances to "hich it 'i&ht have been applied. )#o'e2 v. Palo'ar, 8C :CRA -89* The e7ual protection clause of the ,Bt, A'end'ent does not 'ean that all occupations called by the sa'e na'e 'ust be treated the sa'e "ay5 the state 'ay do "hat it can to prevent "hich is dee'ed as evil and stop short of those cases in "hich har' to the fe" concerned is not less than the har' to the public that "ould insure if the rule laid do"n "ere 'ade 'athe'atically e4act. )+o'inican Dotel v. Ari2ona, 8B/ A: 8.C,*. Anent petitioners3 clai' that P+ ,-./ is contrary to the !avo"ed trend of the Cory #overn'ent a"ay fro' 'onopolies and crony econo'y and to"ard free enterprise and privati2ation! suffice it to state that this is not a &round for this Court to nullify P.+. ,-./. 0f, indeed, P+ ,-./ runs counter to the &overn'ent3s policies then it is for the E4ecutive +epart'ent to reco''end to Con&ress its repeal or a'end'ent. The 1udiciary does not settle policy issues. The Court can only declare "hat the la" is and not "hat the la" should be. Ander our syste' of &overn'ent, policy issues are "ithin the do'ain of the political branches of &overn'ent and of the people the'selves as the repository of all state po"er. )Val'onte v. Bel'onte, @r., ,9> :CRA 8C.*. $n the issue of !'onopoly,! ho"ever, the Constitution provides that :ec. ,/. The :tate shall re&ulate or prohibit 'onopolies "hen public interest so re7uires. No co'binations in restraint of trade or unfair co'petition shall be allo"ed. )Art. <00, National Econo'y and Patri'ony* 0t should be noted that, as the provision is "orded, 'onopolies are not necessarily prohibited by the Constitution. The state 'ust still decide "hether public interest

de'ands that 'onopolies be re&ulated or prohibited. A&ain, this is a 'atter of policy for the =e&islature to decide. $n petitioners3 alle&ation that P.+. ,-./ violates :ections ,, )Personality +i&nity* ,8 )6a'ily* and ,; )Role of Fouth* of Article 005 :ection ,; ):ocial @ustice* of Article <000 and :ection 8 )Educational Values* of Article <0V of the ,/-9 Constitution, suffice it to state also that these are 'erely state'ents of principles and, policies. As such, they are basically not self?e4ecutin&, 'eanin& a la" should be passed by Con&ress to clearly define and effectuate such principles. 0n &eneral, therefore, the ,/;C provisions "ere not intended to be self?e4ecutin& principles ready for enforce'ent throu&h the courts. They "ere rather directives addressed to the e4ecutive and the le&islature. 0f the e4ecutive and the le&islature failed to heed the directives of the articles the available re'edy "as not 1udicial or political. The electorate could e4press their displeasure "ith the failure of the e4ecutive and the le&islature throu&h the lan&ua&e of the ballot. )Bernas, Vol. 00, p. 8* Every la" has in its favor the presu'ption of constitutionality )Fu Con& En& v. Trinidad, B9 Phil. ;-95 :alas v. @arencio, B- :CRA 9;B5 Peralta v. Co'elec, -8 :CRA ;>5 Abbas v. Co'elec, ,9/ :CRA 8-9*. Therefore, for P+ ,-./ to be nullified, it 'ust be sho"n that there is a clear and une7uivocal breach of the Constitution, not 'erely a doubtful and e7uivocal one. 0n other "ords, the &rounds for nullity 'ust be clear and beyond reasonable doubt. )Peralta v. Co'elec, supra* Those "ho petition this Court to declare a la", or parts thereof, unconstitutional 'ust clearly establish the basis for such a declaration. $ther"ise, their petition 'ust fail. Based on the &rounds raised by petitioners to challen&e the constitutionality of P.+. ,-./, the Court finds that petitioners have failed to overco'e the presu'ption. The dis'issal of this petition is therefore, inevitable. But as to "hether P.+. ,-./ re'ains a "ise le&islation considerin& the issues of !'orality, 'onopoly, trend to free enterprise, privati2ation as "ell as the state principles on social 1ustice, role of youth and educational values! bein& raised, is up for Con&ress to deter'ine. As this Court held in Citi%ens( Alliance for Consumer Protection #. $nerg" Board, ,.8 :CRA C8, % egulator"

Presidential +ecree No. ,/C., as a'ended by E4ecutive $rder No. ,;9 has, in any case, in its favor the presu'ption of validity and constitutionality "hich petitioners Val'onte and the KMA have not overturned. Petitioners have not underta(en to identify the provisions in the Constitution "hich they clai' to have been violated by that statute. This Court, ho"ever, is not co'pelled to speculate and to i'a&ine ho" the assailed le&islation 'ay possibly offend so'e provision of the Constitution. The Court notes, further, in this respect that petitioners have in the 'ain put in 7uestion the "isdo', 1ustice and e4pediency of the establish'ent of the $P:6, issues "hich are not properly addressed to this Court and "hich this Court 'ay not constitutionally pass upon. Those issues should be addressed rather to the political depart'ents of &overn'ent the President and the Con&ress.

Parenthetically, Ge "ish to state that &a'blin& is &enerally i''oral, and this is precisely so "hen the &a'blin& resorted to is e4cessive. This e4cessiveness necessarily depends not only on the financial resources of the &a'bler and his fa'ily but also on his 'ental, social, and spiritual outloo( on life. Do"ever, the 'ere fact that so'e persons 'ay have lost their 'aterial fortunes, 'ental control, physical health, or even their lives does not necessarily 'ean that the sa'e are directly attributable to &a'blin&. Gambling ma" ,a#e been t,e antecedent,but certainl" not necessaril" t,e cause. 6or the sa'e conse7uences could have been preceded by an overdose of food, drin(, e4ercise, "or(, and even se4. GDERE6$RE, the petition is +0:M0::E+ for lac( of 'erit. :$ $R+ERE+. 0ernan, C.1., 2ar#asa, Gutierre%, 1r., Cru%, 0eliciano, Ganca"co, Bidin, /armiento, Gri3o4A5uino, 6edialdea, egalado and !a#ide, 1r., 11., concur.

S !a"a#

O!$%$o%&

PADILLA, J., concurrin& 0 concur in the result of the learned decision penned by 'y brother Mr. @ustice Paras. This 'eans that 0 a&ree "ith the decision insofar as it holds that the prohibition, control, and re&ulation of the entire activity (no"n as &a'blin& properly pertain to !state polic".! 0t is, therefore, the political depart'ents of &overn'ent, na'ely, the le&islative and the e4ecutive that should decide on "hat &overn'ent should do in the entire area of &a'blin&, and assu'e full responsibility to the people for such policy. The courts, as the decision states, cannot in7uire into the "isdo', 'orality or e4pediency of policies adopted by the political depart'ents of &overn'ent in areas "hich fall "ithin their authority, e4cept only "hen such policies pose a clear and present dan&er to the life, liberty or property of the individual. This case does not involve such a factual situation. Do"ever, 0 hasten to 'a(e of record that 0 do not subscribe to &a'blin& in any for'. 0t de'eans the hu'an personality, destroys self?confidence and eviscerates one3s self?respect, "hich in the lon& run "ill corrode "hatever is left of the 6ilipino 'oral character. #a'blin& has "rec(ed and "ill continue to "rec( fa'ilies and ho'es5 it is an antithesis to individual reliance and reliability as "ell as personal industry "hich are the touchstones of real econo'ic pro&ress and national develop'ent.

#a'blin& is reprehensible "hether 'aintained by &overn'ent or privati2ed. The revenues reali2ed by the &overn'ent out of !le&ali2ed! &a'blin& "ill, in the lon& run, be 'ore than offset and ne&ated by the irreparable da'a&e to the people3s 'oral values. Also, the 'oral standin& of the &overn'ent in its repeated avo"als a&ainst !ille&al &a'blin&! is fatally fla"ed and beco'es untenable "hen it itself en&a&es in the very activity it see(s to eradicate. $ne can &o throu&h the Court3s decision today and 'entally replace the activity referred to therein as gambling, "hich is le&al only because it is authori2ed by la" and run by the &overn'ent, "ith the activity (no"n asprostitution. Gould prostitution be any less reprehensible "ere it to be authori2ed by la", franchised, and !re&ulated! by the &overn'ent, in return for the substantial revenues it "ould yield the &overn'ent to carry out its laudable pro1ects, such as infrastructure and social a'eliorationN The 7uestion, 0 believe, ans"ers itself. 0 sub'it that the sooner the le&islative depart'ent outla"s all for's of &a'blin&, as a fundamental state polic", and the sooner the e4ecutive i'ple'ents such policy, the better it "ill be for the nation. 6elencio4Herrera, 1., concur.

S !a"a#

O!$%$o%&

PADILLA, J., concurrin& 0 concur in the result of the learned decision penned by 'y brother Mr. @ustice Paras. This 'eans that 0 a&ree "ith the decision insofar as it holds that the prohibition, control, and re&ulation of the entire activity (no"n as &a'blin& properly pertain to !state polic".! 0t is, therefore, the political depart'ents of &overn'ent, na'ely, the le&islative and the e4ecutive that should decide on "hat &overn'ent should do in the entire area of &a'blin&, and assu'e full responsibility to the people for such policy. The courts, as the decision states, cannot in7uire into the "isdo', 'orality or e4pediency of policies adopted by the political depart'ents of &overn'ent in areas "hich fall "ithin their authority, e4cept only "hen such policies pose a clear and present dan&er to the life, liberty or property of the individual. This case does not involve such a factual situation. Do"ever, 0 hasten to 'a(e of record that 0 do not subscribe to &a'blin& in any for'. 0t de'eans the hu'an personality, destroys self?confidence and eviscerates one3s self?respect, "hich in the lon& run "ill corrode "hatever is left of the 6ilipino 'oral character. #a'blin& has "rec(ed and "ill continue to "rec( fa'ilies and ho'es5 it is an antithesis to individual reliance and reliability as "ell as personal industry "hich are the touchstones of real econo'ic pro&ress and national develop'ent.

#a'blin& is reprehensible "hether 'aintained by &overn'ent or privati2ed. The revenues reali2ed by the &overn'ent out of !le&ali2ed! &a'blin& "ill, in the lon& run, be 'ore than offset and ne&ated by the irreparable da'a&e to the people3s 'oral values. Also, the 'oral standin& of the &overn'ent in its repeated avo"als a&ainst !ille&al &a'blin&! is fatally fla"ed and beco'es untenable "hen it itself en&a&es in the very activity it see(s to eradicate. $ne can &o throu&h the Court3s decision today and 'entally replace the activity referred to therein as gambling, "hich is le&al only because it is authori2ed by la" and run by the &overn'ent, "ith the activity (no"n asprostitution. Gould prostitution be any less reprehensible "ere it to be authori2ed by la", franchised, and !re&ulated! by the &overn'ent, in return for the substantial revenues it "ould yield the &overn'ent to carry out its laudable pro1ects, such as infrastructure and social a'eliorationN The 7uestion, 0 believe, ans"ers itself. 0 sub'it that the sooner the le&islative depart'ent outla"s all for's of &a'blin&, as a fundamental state polic", and the sooner the e4ecutive i'ple'ents such policy, the better it "ill be for the nation. 6elencio4Herrera, 1., concurs.