Vol. XXII, No. 66 [ BusinessWorld Online ]
Monday, October 27, 2008 | MANILA, PHILIPPINES
The STATE owns the 18.4-hectare "Payanig sa Pasig" property, therefore exempting it from paying real property taxes imposed by the local government, the Court of Appeals has ruled.
In an eight-page amended decision penned by Associate Justice Marlene Gonzales-Sison, the special former fourteenth division of the appellate court reversed a previous ruling and sided with the Presidential Commission on Good Government, which argued that the area had been relinquished to the government in 1986 by a known Marcos crony, businessman Jose Campos.
Mr. Campos used to be the owner of the controlling stake in Mid-Pasig and Independent Realty Corp., which owns the property. After the overthrow of the late dictator in 1986, he voluntarily surrendered the asset in return for immunity from suit.
In its original decision last March 31, the appellate court upheld the warrants of levy and the subsequent sale of the property through public auction by the city government of Pasig in December 2005.
The appellate court said then that the area was not public property for being registered under the name of Mid-Pasig Land. It upheld Pasig’s actions as the "private owner" had failed to pay real property taxes amounting to P389 million, which covered the years 1987 to 2005.
In its amended decision, the appellate court said the property is, in fact, still in the name of Mid-Pasig Land. It however noted that this is only by virtue of a pending case at the Sandiganbayan.
The Payanig property is also being contested by the Ortigas family, which claims to own 180,000 square meters within the area. The Ortigases earlier questioned a deal allowing the government to turn the lot over to a property management firm.
The court however noted that the Ortigas family "did not question the relinquishment of the subject properties by Campos to the state in said case, and that despite not being titled in the name of the Republic, any suit involving said properties will eventually benefit or injure the Republic."
"Having settled that the subject properties belong to the state being in the nature of ill-gotten wealth, they are perforce outside of the taxing power of local government units," it added.
The Local Government Code prescribes that local governments can impose taxes on properties that belong to the state if their beneficial uses have been granted to taxable entities, the court said.
Thus, real property taxes should be imposed upon the private lessees of the property, and not on the government, it said. — Ira P. Pedrasa
