G.R. No.

181756 June 15, 2015

MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner,

vs.

CITY OF LAPU-LAPU and ELENA T. PACALDO, Respondents.

LEONARDO-DE CASTRO, J.:

(Lifted portions of the decision of 2006 MIAA case)

The Republic may grant the beneficial use of its real property to an agency or
instrumentality of the national government. This happens when title of the real property
is transferred to an agency or instrumentality even as the Republic remains the owner of
the real property. Such arrangement does not result in the loss of the tax exemption.
Section 234(a) of the Local Government Code states that real property owned by the
Republic loses its tax exemption only if the "beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person." MIAA, as a government
instrumentality, is not a taxable person under Section 133(o) of the Local Government
Code. Thus, even if we assume that the Republic has granted to MIAA the beneficial
use of the Airport Lands and Buildings, such fact does not make these real properties
subject to real estate tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private entities
are not exempt from real estate tax. For example, the land area occupied by hangars
that MIAA leases to private corporations is subject to real estate tax. In such a case,
MIAA has granted the beneficial use of such land area for a consideration to a taxable
person and therefore such land area is subject to real estate tax. x x x.

In light of the foregoing, the Authority should be classified as an instrumentality of the

national government which is liable to pay taxes only with respect to the portions of the
property, the beneficial use of which were vested in private entities. When local
governments invoke the power to tax on national government instrumentalities, such
power is construed strictly against local governments. The rule is that a tax is never
presumed and there must be clear language in the law imposing the tax. Any doubt
whether a person, article or activity is taxable is resolved against taxation. This rule
applies with greater force when local governments seek to tax national government
instrumentalities.

Thus, the real property tax assessments issued by the City of Iloilo should be upheld only
with respect to the portions leased to private persons. In case the Authority fails to pay
the real property taxes due thereon, said portions cannot be sold at public auction to
satisfy the tax delinquency. x x x.

To summarize, MIAA is not a government-owned or controlled corporation under

Section 2(13) of the Introductory Provisions of the Administrative Code because it is not
organized as a stock or non-stock corporation. Neither is MIAA a government-owned or
controlled corporation under Section 16, Article XII of the 1987 Constitution because
MIAA is not required to meet the test of economic viability. MIAA is a government
instrumentality vested with corporate powers and performing essential public services
pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. As a
government instrumentality, MIAA is not subject to any kind of tax by local governments
under Section 133(o) of the Local Government Code. The exception to the exemption
in Section 234(a) does not apply to MIAA because MIAA is not a taxable entity under
the Local Government Code. Such exception applies only if the beneficial use of real
property owned by the Republic is given to a taxable entity.

Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use
and thus are properties of public dominion. Properties of public dominion are owned by
the State or the Republic. x x x.

Under Section 2(10) and (13) of the Introductory Provisions of the Administrative Code,
which governs the legal relation and status of government units, agencies and offices within
the entire government machinery, MIAA is a government instrumentality and not a
government-owned or controlled corporation. Under Section 133(o) of the Local
Government Code, MIAA as a government instrumentality is not a taxable person because
it is not subject to "[t]axes, fees or charges of any kind" by local governments. The only
exception is when MIAA leases its real property to a "taxable person" as provided in Section
234(a) of the Local Government Code, in which case the specific real property leased
becomes subject to real estate tax. Thus, only portions of the Airport Lands and Buildings
leased to taxable persons like private parties are subject to real estate tax by the City of
Paraaque.

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted
to public use, are properties of public dominion and thus owned by the State or the
Republic of the Philippines. Article 420 specifically mentions "ports x x x constructed by the
State," which includes public airports and seaports, as properties of public dominion and
owned by the Republic. As properties of public dominion owned by the Republic, there is
no doubt whatsoever that the Airport Lands and Buildings are expressly exempt from real
estate tax under Section 234(a) of the Local Government Code. This Court has also
repeatedly ruled that properties of public dominion are not subject to execution or
foreclosure sale.(Emphases added.) WHEREFORE, we hereby GRANT the petition. We
REVERSE and SET ASIDE the Decision dated October 8, 2007 and the Resolution dated
February 12, 2008 of the Court of Appeals (Cebu City) in CA-G.R. SP No. 01360. Accordingly,
we DECLARE:
 1. Petitioner's properties that are actually, solely and exclusively used for public
purpose, consisting of the airport terminal building, airfield, runway, taxiway and the
lots on which they are situated, EXEMPT from real property tax imposed by the City of
Lapu-Lapu.

2. VOID all the real property tax assessments, including the additional tax for the
special education fund and the penalty interest, as well as the final notices of real
property tax delinquencies, issued by the City of Lapu-Lapu on petitioner's
properties, except the assessment covering the portions that petitioner has leased to
private parties.

3. NULL and VOID the sale in public auction of 27 of petitioner's properties and the
eventual forfeiture and purchase of the said properties by respondent City of Lapu-
Lapu. We likewise declare VOID the corresponding Certificates of Sale of Delinquent
Property issued to respondent City of Lapu-Lapu.

G.R. No. 191109 July 18, 2012

REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE RECLAMATION AUTHORITY

(PRA), Petitioner,

vs.

CITY OF PARANAQUE, Respondent.

MENDOZA, J.:

Thus, PRA insists that, as an incorporated instrumentality of the National Government, it

is exempt from payment of real property tax except when the beneficial use of the real
property is granted to a taxable person. PRA claims that based on Section 133(o) of the
LGC, local governments cannot tax the national government which delegate to local
governments the power to tax.

It explains that reclaimed lands are part of the public domain, owned by the State,
thus, exempt from the payment of real estate taxes. Reclaimed lands retain their
inherent potential as areas for public use or public service. While the subject reclaimed
lands are still in its hands, these lands remain public lands and form part of the public
domain. Hence, the assessment of real property taxes made on said lands, as well as
the levy thereon, and the public sale thereof on April 7, 2003, including the issuance of
the certificates of sale in favor of the respondent Paraaque City, are invalid and of no
force and effect.

This Court is convinced that PRA is not a GOCC either under Section 2(3) of the
Introductory Provisions of the Administrative Code or under Section 16, Article XII of the
1987 Constitution. The facts, the evidence on record and jurisprudence on the issue
support the position that PRA was not organized either as a stock or a non-stock
corporation. Neither was it created by Congress to operate commercially and
compete in the private market. Instead, PRA is a government instrumentality vested
with corporate powers and performing an essential public service pursuant to Section
2(10) of the Introductory Provisions of the Administrative Code. Being an incorporated
government instrumentality, it is exempt from payment of real property tax.

Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands
managed by PRA. On the other hand, Section 234(a) of the LGC, in relation to its
Section 133(o), exempts PRA from paying realty taxes and protects it from the taxing
powers of local government units.

Sections 234(a) and 133(o) of the LGC provide, as follows:

SEC. 234. Exemptions from Real Property Tax The following are exempted from
payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its political
subdivisions except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person.

xxxx

SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities,
municipalities, and barangays shall not extend to the levy of the following:

xxxx

(o) Taxes, fees or charges of any kinds on the National Government, its agencies and
instrumentalities, and local government units. [Emphasis supplied]

It is clear from Section 234 that real property owned by the Republic of the Philippines
(the Republic) is exempt from real property tax unless the beneficial use thereof has
been granted to a taxable person. In this case, there is no proof that PRA granted the
beneficial use of the subject reclaimed lands to a taxable entity. There is no showing on
record either that PRA leased the subject reclaimed properties to a private taxable
entity.

G.R. No. 155650 July 20, 2006

MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner,

vs.
COURT OF APPEALS, CITY OF PARAAQUE, CITY MAYOR OF PARAAQUE,
SANGGUNIANG PANGLUNGSOD NG PARAAQUE, CITY ASSESSOR OF PARAAQUE, and
CITY TREASURER OF PARAAQUE, respondents.

CARPIO, J.:

e. Real Property Owned by the Republic is Not Taxable

Section 234(a) of the Local Government Code exempts from real estate tax any "[r]eal
property owned by the Republic of the Philippines." Section 234(a) provides:

SEC. 234. Exemptions from Real Property Tax. The following are exempted from
payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its political
subdivisions except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person;

x x x.

This exemption should be read in relation with Section 133(o) of the same Code, which
prohibits local governments from imposing "[t]axes, fees or charges of any kind on the
National Government, its agencies and instrumentalitiesx x x." The real properties
owned by the Republic are titled either in the name of the Republic itself or in the name
of agencies or instrumentalities of the National Government. The Administrative Code
allows real property owned by the Republic to be titled in the name of agencies or
instrumentalities of the national government. Such real properties remain owned by the
Republic and continue to be exempt from real estate tax.

The Republic may grant the beneficial use of its real property to an agency or
instrumentality of the national government. This happens when title of the real property
is transferred to an agency or instrumentality even as the Republic remains the owner of
the real property. Such arrangement does not result in the loss of the tax exemption.
Section 234(a) of the Local Government Code states that real property owned by the
Republic loses its tax exemption only if the "beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person." MIAA, as a government
instrumentality, is not a taxable person under Section 133(o) of the Local Government
Code. Thus, even if we assume that the Republic has granted to MIAA the beneficial
use of the Airport Lands and Buildings, such fact does not make these real properties
subject to real estate tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private entities
are not exempt from real estate tax. For example, the land area occupied by hangars
that MIAA leases to private corporations is subject to real estate tax. In such a case,
MIAA has granted the beneficial use of such land area for a consideration to a taxable
person and therefore such land area is subject to real estate tax. In Lung Center of the
Philippines v. Quezon City, the Court ruled:

Accordingly, we hold that the portions of the land leased to private entities as well as
those parts of the hospital leased to private individuals are not exempt from such taxes.
On the other hand, the portions of the land occupied by the hospital and portions of
the hospital used for its patients, whether paying or non-paying, are exempt from real
property taxes.

Local governments have no power to tax the national government, its agencies and
instrumentalities, except as otherwise provided in the Local Government Code pursuant
to the saving clause in Section 133 stating "[u]nless otherwise provided in this Code." This
exception which is an exception to the exemption of the Republic from real estate
tax imposed by local governments refers to Section 234(a) of the Code. The
exception to the exemption in Section 234(a) subjects real property owned by the
Republic, whether titled in the name of the national government, its agencies or
instrumentalities, to real estate tax if the beneficial use of such property is given to a
taxable entity.

G.R. No. 186242 December 23, 2009

GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner,

vs.
CITY TREASURER and CITY ASSESSOR of the CITY OF MANILA, Respondents.

VELASCO, JR., J.:

Second Core Issue: Beneficial Use Doctrine Applicable

The foregoing notwithstanding, the leased Katigbak property shall be taxable pursuant
to the "beneficial use" principle under Sec. 234(a) of the LGC.

It is true that said Sec. 234(a), quoted below, exempts from real estate taxes real
property owned by the Republic, unless the beneficial use of the property is, for
consideration, transferred to a taxable person.

SEC. 234. Exemptions from Real Property Tax. The following are exempted from
payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any of its political
subdivisions except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person.

This exemption, however, must be read in relation with Sec. 133(o) of the LGC, which
prohibits LGUs from imposing taxes or fees of any kind on the national government, its
agencies, and instrumentalities:

SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless
otherwise provided herein, the exercise of the taxing powers of provinces, cities,
municipalities, and barangays shall not extend to the levy of the following:

xxxx

(o) Taxes, fees or charges of any kinds on the National Government, its agencies
and instrumentalities, and local government units. (Emphasis supplied.)

Thus read together, the provisions allow the Republic to grant the beneficial use of its
property to an agency or instrumentality of the national government. Such grant does
not necessarily result in the loss of the tax exemption. The tax exemption the property of
the Republic or its instrumentality carries ceases only if, as stated in Sec. 234(a) of the
LGC of 1991, "beneficial use thereof has been granted, for a consideration or otherwise,
to a taxable person." GSIS, as a government instrumentality, is not a taxable juridical
person under Sec. 133(o) of the LGC. GSIS, however, lost in a sense that status with
respect to the Katigbak property when it contracted its beneficial use to MHC,
doubtless a taxable person. Thus, the real estate tax assessment of PhP 54,826,599.37
covering 1992 to 2002 over the subject Katigbak property is valid insofar as said tax
delinquency is concerned as assessed over said property.

Taxable entity having beneficial use of leased

property liable for real property taxes thereon

The next query as to which between GSIS, as the owner of the Katigbak property, or
MHC, as the lessee thereof, is liable to pay the accrued real estate tax, need not detain
us long. MHC ought to pay.

As we declared in Testate Estate of Concordia T. Lim, "the unpaid tax attaches to the
property and is chargeable against the taxable person who had actual or beneficial
use and possession of it regardless of whether or not he is the owner." Of the same tenor
is the Courts holding in the subsequent Manila Electric Company v. Barlis and later
in Republic v. City of Kidapawan. Actual use refers to the purpose for which the
property is principally or predominantly utilized by the person in possession thereof.2

Being in possession and having actual use of the Katigbak property since November
1991, MHC is liable for the realty taxes assessed over the Katigbak property from 1992 to
2002.
The foregoing is not all. As it were, MHC has obligated itself under the GSIS-MHC
Contract of Lease to shoulder such assessment. Stipulation l8 of the contract pertinently
reads:

18. By law, the Lessor, [GSIS], is exempt from taxes, assessments and levies. Should there
be any change in the law or the interpretation thereof or any other circumstances
which would subject the Leased Property to any kind of tax, assessment or levy which
would constitute a charge against the Lessor or create a lien against the Leased
Property, the Lessee agrees and obligates itself to shoulder and pay such tax,
assessment or levy as it becomes due.(Emphasis ours.)

As a matter of law and contract, therefore, MHC stands liable to pay the realty taxes
due on the Katigbak property. Considering, however, that MHC has not been
impleaded in the instant case, the remedy of the City of Manila is to serve the realty tax
assessment covering the subject Katigbak property to MHC and to pursue other
available remedies in case of nonpayment, for said property cannot be levied upon as
shall be explained below.

Third Core Issue: GSIS Properties Exempt from Levy

In light of the foregoing disquisition, the issue of the propriety of the threatened levy of
subject properties by the City of Manila to answer for the demanded realty tax
deficiency is now moot and academic. A valid tax levy presupposes a corresponding
tax liability. Nonetheless, it will not be remiss to note that it is without doubt that the
subject GSIS properties are exempt from any attachment, garnishment, execution, levy,
or other legal processes. This is the clear import of the third paragraph of Sec. 39, RA
8291, which we quote anew for clarity:

SEC. 39. Exemption from Tax, Legal Process and Lien. x x x.

xxxx

The funds and/or the properties referred to herein as well as the benefits, sums or
monies corresponding to the benefits under this Act shall be exempt from attachment,
garnishment, execution, levy or other processes issued by the courts, quasi-judicial
agencies or administrative bodies including Commission on Audit (COA) disallowances
and from all financial obligations of the members, including his pecuniary
accountability arising from or caused or occasioned by his exercise or performance of
his official functions or duties, or incurred relative to or in connection with his position or
work except when his monetary liability, contractual or otherwise, is in favor of the GSIS.

The Court would not be indulging in pure speculative exercise to say that the underlying
legislative intent behind the above exempting proviso cannot be other than to isolate
GSIS funds and properties from legal processes that will either impair the solvency of its
fund or hamper its operation that would ultimately require an increase in the
contribution rate necessary to sustain the benefits of the system. Throughout GSIS life
under three different charters, the need to ensure the solvency of GSIS fund has always
been a legislative concern, a concern expressed in the tax-exempting provisions.
Thus, even granting arguendo that GSIS liability for realty taxes attached from 1992,
when RA 7160 effectively lifted its tax exemption under PD 1146, to 1996, when RA 8291
restored the tax incentive, the levy on the subject properties to answer for the assessed
realty tax delinquencies cannot still be sustained. The simple reason: The governing law,
RA 8291, in force at the time of the levy prohibits it. And in the final analysis, the
proscription against the levy extends to the leased Katigbak property, the beneficial
use doctrine, notwithstanding.

Summary

In sum, the Court finds that GSIS enjoys under its charter full tax exemption. Moreover, as
an instrumentality of the national government, it is itself not liable to pay real estate
taxes assessed by the City of Manila against its Katigbak and Concepcion-Arroceros
properties. Following the "beneficial use" rule, however, accrued real property taxes are
due from the Katigbak property, leased as it is to a taxable entity. But the
corresponding liability for the payment thereof devolves on the taxable beneficial user.
The Katigbak property cannot in any event be subject of a public auction sale,
notwithstanding its realty tax delinquency. This means that the City of Manila has to
satisfy its tax claim by serving the accrued realty tax assessment on MHC, as the taxable
beneficial user of the Katigbak property and, in case of nonpayment, through means
other than the sale at public auction of the leased property.

WHEREFORE, the instant petition is hereby GRANTED. The November 15, 2007 Decision
and January 7, 2009 Order of the Regional Trial Court, Branch 49, Manila
are REVERSED and SET ASIDE. Accordingly, the real property tax assessments issued by
the City of Manila to the Government Service Insurance System on the subject
properties are declared VOID, except that the real property tax assessment pertaining
to the leased Katigbak property shall be valid if served on the Manila Hotel
Corporation, as lessee which has actual and beneficial use thereof. The City of Manila is
permanently restrained from levying on or selling at public auction the subject
properties to satisfy the payment of the real property tax delinquency.

G.R. No. 185023 August 24, 2011

CITY OF PASIG, REPRESENTED BY THE CITY TREASURER and THE CITY ASSESSOR, Petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT, Respondent.

CARPIO, J.:

Section 234(a) of Republic Act No. 7160 states that properties owned by the Republic of
the Philippines are exempt from real property tax "except when the beneficial use
thereof has been granted, for consideration or otherwise, to a taxable person." Thus, the
portions of the properties not leased to taxable entities are exempt from real estate tax
while the portions of the properties leased to taxable entities are subject to real estate
tax. The law imposes the liability to pay real estate tax on the Republic of the Philippines
for the portions of the properties leased to taxable entities. It is, of course, assumed that
the Republic of the Philippines passes on the real estate tax as part of the rent to the
lessees.

In Philippine Fisheries Development Authority v. Central Board of Assessment

Appeals, the Court held:

In the 2007 case of Philippine Fisheries Development Authority v. Court of Appeals, the
Court resolved the issue of whether the PFDA is a government-owned or controlled
corporation or an instrumentality of the national government. In that case, the City of
Iloilo assessed real property taxes on the Iloilo Fishing Port Complex (IFPC), which was
managed and operated by PFDA. The Court held that PFDA is an instrumentality of the
government and is thus exempt from the payment of real property tax, thus:

The Court rules that the Authority is not a GOCC but an instrumentality of the national
government which is generally exempt from payment of real property tax. However,
said exemption does not apply to the portions of the IFPC which the Authority leased to
private entities. With respect to these properties, the Authority is liable to pay property
tax. Nonetheless, the IFPC, being a property of public dominion cannot be sold at
public auction to satisfy the tax delinquency.

xxxx

This ruling was affirmed by the Court in a subsequent PFDA case involving the Navotas
Fishing Port Complex, which is also managed and operated by the PFDA. In
consonance with the previous ruling, the Court held in the subsequent PFDA case that
the PFDA is a government instrumentality not subject to real property tax except those
portions of the Navotas Fishing Port Complex that were leased to taxable or private
persons and entities for their beneficial use.

Similarly, we hold that as a government instrumentality, the PFDA is exempt from real
property tax imposed on the Lucena Fishing Port Complex, except those portions which
are leased to private persons or entities. (Emphasis supplied)

In Government Service Insurance System v. City Treasurer of the City of Manila, the
Court held:

x x x The tax exemption the property of the Republic or its instrumentalities carries
ceases only if, as stated in Sec. 234(a) of the LGC of 1991, "beneficial use thereof has
been granted, for a consideration or otherwise, to a taxable person." GSIS, as a
government instrumentality, is not a taxable juridical person under Sec. 133(o) of the
LGC. GSIS, however, lost in a sense that status with respect to the Katigbak property
when it contracted its beneficial use to MHC, doubtless a taxable person. Thus, the real
estate tax assessment of Php 54,826,599.37 covering 1992 to 2002 over the subject
Katigbak property is valid insofar as said tax delinquency is concerned as assessed
over said property. (Emphasis supplied)
In Manila International Airport Authority v. Court of Appeals, the Court held:

x x x Section 234(a) of the Local Government Code states that real property owned by
the Republic loses its tax exemption only if the "beneficial use thereof has been
granted, for consideration or otherwise, to a taxable person." MIAA, as a government
instrumentality, is not a taxable person under Section 133(o) of the local Government
Code. Thus, even if we assume that the Republic has granted to MIAA the beneficial
use of the Airport Lands and Buildings, such fact does not make these real properties
subject to real estate tax.

However, portions of the Airport Lands and Buildings that MIAA leases to private entities
are not exempt from real estate tax. For example, the land area occupied by hangars
that MIAA leases to private corporations is subject to real estate tax. In such a case,
MIAA has granted the beneficial use of such land area for a consideration to a taxable
person and therefore such land area is subject to real estate tax. (Emphasis supplied)

In Lung Center of the Philippines v. Quezon City, the Court held:

x x x While portions of the hospital are used for the treatment of patients and the
dispensation of medical services to them, whether paying or non-paying, other portions
thereof are being leased to private individuals for their clinics and a canteen. Further, a
portion of the land is being leased to a private individual for her business enterprise
under the business name "Elliptical Orchids and Garden Center." Indeed, the
petitioners evidence shows that it collected P1,136,483.45 as rentals in 1991
and P1,679,999.28 for 1992 from the said lessees.

Accordingly, we hold that the portions of the land leased to private entities as well as
those parts of the hospital leased to private individuals are not exempt from such taxes.
On the other hand, the portions of the land occupied by the hospital and portions of
the hospital used for its patients, whether paying or non-paying, are exempt from real
property taxes. (Emphasis supplied)

Article 420 of the Civil Code classifies as properties of public dominion those that are
"intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads" and those that "are intended for
some public service or for the development of the national wealth." Properties of public
dominion are not only exempt from real estate tax, they are exempt from sale at public
auction. In Heirs of Mario Malabanan v. Republic, the Court held that, "It is clear that
property of public dominion, which generally includes property belonging to the State,
cannot be x x x subject of the commerce of man."

In Philippine Fisheries Development Authority v. Court of Appeals, the Court held:

x x x [T]he real property tax assessments issued by the City of Iloilo should be upheld only
with respect to the portions leased to private persons. In case the Authority fails to pay
the real property taxes due thereon, said portions cannot be sold at public auction to
satisfy the tax delinquency. In Chavez v. Public Estates Authority it was held
that reclaimed lands are lands of the public dominion and cannot, without
Congressional fiat, be subject of a sale, public or private x x x.

In the same vein, the port built by the State in the Iloilo fishing complex is a property of
the public dominion and cannot therefore be sold at public auction. Article 420 of the
Civil Code, provides:

"Article 420. The following things are property of public dominion:

1. Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;

2. Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth."

The Iloilo fishing port which was constructed by the State for public use and/or public
service falls within the term "port" in the aforecited provision. Being a property of public
dominion the same cannot be subject to execution or foreclosure sale. In like manner,
the reclaimed land on which the IFPC is built cannot be the object of a private or
public sale without Congressional authorization. (Emphasis supplied)

In Manila International Airport Authority, the Court held:

x x x [T]he Airport Lands and Buildings of MIAA are properties devoted to public use and
thus are properties of public dominion. Properties of public dominion are owned by the
State or the Republic. Article 420 of the Civil Code provides:

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;

(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.

The term "ports x x x constructed by the Sate" includes airports and seaports. The Airport
Lands and Buildings of MIAA are intended for public use, and at the very least intended
for public service. Whether intended for public use or public service, the Airport Lands
and Buildings are properties of public dominion. As properties of public dominion, the
the Airport lands and Buildings are owned by the Republic and thus exempt from real
estate tax under Section 234(a) of the Local Government Code.

xxxx

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being
devoted to public use, are properties of public dominion and thus owned by the State
or the Republic of the Philippines. Article 420 specifically mentions "ports x x x
constructed by the State," which includes public airports and seaports, as properties of
public dominion and owned by the Republic. As properties of public dominion owned
by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are
expressly exempt from real estate tax under Section 234(a) of the local Government
Code. This Court has also repeatedly ruled that properties of public dominion are not
subject to execution or foreclosure sale.

In the present case, the parcels of land are not properties of public dominion because
they are not "intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads." Neither are they "intended
for some public service or for the development of the national wealth." MPLDC leases
portions of the properties to different business establishments. Thus, the portions of the
properties leased to taxable entities are not only subject to real estate tax, they can
also be sold at public auction to satisfy the tax delinquency.

In sum, only those portions of the properties leased to taxable entities are subject to real
estate tax for the period of such leases. Pasig City must, therefore, issue to respondent
new real property tax assessments covering the portions of the properties leased to
taxable entities. If the Republic of the Philippines fails to pay the real property tax on the
portions of the properties leased to taxable entities, then such portions may be sold at
public auction to satisfy the tax delinquency.