The document discusses the legal status of the Philippine Ports Authority (PPA) and tax exemptions. It provides an overview of relevant laws and jurisprudence establishing that PPA is a government instrumentality, not a government-owned corporation, and its properties are exempt from local taxation. The document also presents the total current amount of tax assessments against PPA by local government units and discusses positions of the LGUs and actions needed regarding assessed properties and implementation of tax exemption.

1. Laws and Jurisprudence
 LOCAL GOVERNMENT CODE
 SECTION 234, R.A.7160
 Grant of Exemption from Realty Tax
“Section 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 ay of its political
subdivisions except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person;
xxxx
Except as provided herein, any exemption from payment of real property tax
previously granted to, or presently enjoyed by, all persons, whether natural or
juridical, including all government-owned or – controlled corporations are
hereby withdrawn upon he effectivity of this Code.”

2. Laws and Jurisprudence
• LOCAL GOVERNMENT CODE
• SECTION 133 of R. A. 7160
• Limitation on the Power of Local Government Units
“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 kind on the National Government,
its agencies and instrumentalities, and local government units.”

3. Laws and Jurisprudence
 Civil Code of the Philippines
 Article 420
 PPA administered properties are properties of public
dominion
“Article 420. The following things are properties 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 characters;
2. 2. Those which belong to the State, without being devoted for public use, and
are intended for some public service or for the development of the national
wealth.”

4. Laws and Jurisprudence
• Republic Act No. 10149
• Section 3 Definition of Terms
• Clarify PPA status and declaring it as Government Instrumentality
with corporate powers.
“Section 3 (n) Government Instrumentalities with Corporate Powers (GICP)
/ Government Entities (GCE) – refers to instrumentalities or agencies of
the government which are neither corporations nor agencies integrated
within the departmental framework but vested by law with special
functions or jurisdiction, endowed with some if not all corporate powers,
administering special funds and enjoying operational autonomy usually
through a charter including but not limited to the following :xxx... The
Philippine Ports Authority (PPA).”

5. Laws and Jurisprudence
• “Manila International Airport Authority v. Court of
Appeals, et., al.”
• Docketed as G.R. No. 155650 DECIDED ON July 2006
• Superseded the doctrine laid down in the two (2) Iloilo cases
“Many government instrumentalities are vested with corporate powers but they
do not become stock or non-stock corporations which is a necessary
condition before an agency or instrumentality is deemed a government-owned
or controlled corporation. Examples are xxx, the Philippine Ports
Authority, xxx. These government instrumentalities are sometime loosely
called government corporate entities. However, they are not government-owned
or controlled corporations in the strict sense as understood under
the Administrative Code, which is the governing law defining the legal
relationship and status of government entities.” (Underscoring)

6. Laws and Jurisprudence
 “Sps. Ernesto F. Curata and Lourdes M. Curata,
et. Al., v. PPA”
 Docketed as G.R. No. 154211-12 decided on June 22, 2009
 Reiterating that PPA is a government instrumentality not
subject to local taxation
“PPA is a government instrumentality charged with carrying out
governmental functions through the management, supervision,
control and regulation of major ports of the country. It is an
attached agency of the Department of Transportation and
Communication pursuant to PD 505.”

7. Laws and Jurisprudence
• ‘‘Philippine Ports Authority v. Central Board of Assessment Appeals
(CBAA), Local Board of Assessment Appeals and City Assessors of
Davao”
• Docketed as C.T.A. 183 promulgated on July 30, 2007
• Entry of Judgement February 13, 2008
1. “The decisive issue had already been resolved by the Supreme Court, reiterating the
ruling in the case of Manila International Airport Authority vs. Court of Appeals
(MIAA) (495 SCRA 614-630)(G.R. No. 155650)
2. PPA akin to MIAA is not a Government-Owned or Controlled Corporation, but an
instrumentality of the National Government.
3. The Port of Sasa and its buildings, like MIAA’s airport lands and buildings, are
properties of Public Dominion
4. The transfer of assets and/or liabilities to PPA , like the case of MIAAA is not a transfer
of beneficial ownership but the transfer was for the purpose of promoting growth of
the regional port bodies that are responsive to the needs of their individual localities.”

8. Laws and Jurisprudence
• Philippine Ports Authority v. The Local Board of Assessment
Appeals of General Santos City and City Assessor and
Treasurer of General Santos City”
• Docketed as CBAA Case No. 02-05 promulgated on December 10,
2007
• Recognized the tax exempt status of PPA
“In the same manner, PPA is not a government-owned or controlled corporation but
an instrumentality of the National Government, as categorically pronounced by
the Supreme Court in the MIAA case. PPA is not organized as a stock or non-stock
corporation. It is not organized as a stock corporation since it has no
capital stock divided into shares...xxx

9. PRESENT AMOUNT OF TAX ASSESSMENTS ISSUED AGAINST
THE DIFFERENT PPA PORT MANAGEMENT OFFICE BY LGUs
PDO-MANILA/NORTHERN LUZON
SAN FERNANDO - 132,169.24
PDO-LUZON
BATANGAS - 206,238,560.88
LEGASPI - 716,698.88
PUERTO PRINCESA - 32,661,734.51
CALAPAN - 239,081.69
PDO-VISAYAS
TAGBILARAN - 10,710,370.18
ILOILO - 44,298,470.11
PULUPANDAN - 21,772,277.34
TACLOBAN - 66,799,840.11
DUMAGUETE - 19,887,951.15
ORMOC - 127,843,173.60
PDO -SOUTHERN MINDANAO
ZAMBOANGA - 79,388,507.54
PDO-NORTHERN MINDANAO
CAGAYAN DE ORO - 17,810,569.51
ILIGAN - 126,933,112.97
NASIPIT - 40,504,347.48
SURIGAO - 19,339,132.24
OZAMIS - 21,930,607.59
======================================
TOTAL 837,206,604.6
ASSESSMENT INCLUDE ALL PROPERTIES WHETHER LEASED OR EXCLUSIVELY USED BY PPA

10. AUCTIONED PORTS
• Iligan
• December 11, 2006
• Pasacao
• July 14, 2006
• Batangas
• November 17, 2004
• Puerto Princesa
• December 22,2004
• Pulupanadan
• November 25, 2004
• Tacloban
• September 15, 2009
• South Harbor
• North Harbor
• Iloilo
• December 16, 2004
• Davao
• December 10, 2004

11. LGU’s Position
• BLGF Memorandum Circular No. 17-2003 is still effective and has not
been recalled by the Department of Finance.
• PPA exemption from real property taxes was withdrawn by P.D. 1931 and
also under the Section 193 of the Local Government Code.
• PPA is a profit-earning corporation hence its patrimonial properties are
subject to tax.
• To question LGUs assessment, PPA should file a petition before the Local
Board of Assessment Appeals (LBAA) and not merely write letter to the
Mayor or to the Municipal Treasurer of the concerned LGUs,
• The MIAA case has no retroactive effect i.e. The ruling is applicable only
from when the case was decided or on July 20, 2006

12. POINT OF DISCUSSION
Actions to be taken:
• Auctioned Properties
• Properties subject of Assessments
• Implementation of PPA Finance Memorandum
Order No. 03-2004
• Participation of PDOs (PMOs)