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G.R. No. 91649
May 14, 1991

Basco vs. PAGCOR

Facts:

On July 11, 1983, PAGCOR was created under PD 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchises or permitted by law. Petitioners assailed the validity of the law creating PAGCOR on constitutional grounds among others particularly citing that the PAGCOR’s charter is against the constitutional provision on local autonomy, because it constitutes a waiver of the right of the City of Manila to impose taxes and legal fees from PAGCOR provided by the exemption clause of it's charter.

Admin. Issue:

1. What is the nature of PAGCOR's charter? Does the City of Manila have the rights to impose tax on PAGCOR?

Held:

PAGCOR is a government owned or controlled corporation. All its shares of stocks are owned by the National Government. In addition to its corporate powers, it also exercises regulatory powers. PAGCOR has a dual role, first, to operate gambling, and secondly, to regulate gambling. The latter regulatory power is a governmental function, which places PAGCOR as an agency or instrumentality of the National Government. Being such, PAGCOR is actually exempted from local taxes. Otherwise, its operation might be burdened, impeded or subject to control by a mere Local Government. The National Government is always supreme over the Local.