Basco v. PAGCOR

GRN 91649, 14 May 1991)


FACTS:
On July 11, 1983, PAGCOR was created under Presidential Decree 1869, pursuant to the policy of the government, “ to regulate and centralize through an appropriate institution all games of chance authorized by existing franchise or permitted by law.” This was subsequently proven to be beneficial not just to the government but also to the society in general. It is a reliable source of much needed revenue for the cash-strapped Government.

Petitioners filed an instant petition seeking to annul the PAGCOR because it is allegedly contrary to morals, public policy and public order, among others.

ISSUES:
Whether PD 1869 is unconstitutional because:
1.) it is contrary to morals, public policy and public order;

2.) it constitutes a waiver of the right of the City of Manila to improve taxes and legal fees; and that the exemption clause in PD 1869 is violative of constitutional principle of Local Autonomy;

3.) it violates the equal protection clause of the Constitution in that it legalizes gambling thru PAGCOR while most other forms are outlawed together with prostitution, drug trafficking and other vices; and

4.) it is contrary to the avowed trend of the Cory Government, away from monopolistic and crony economy and toward free enterprise and privatization.

HELD:
1.) Gambling, in all its forms, is generally prohibited, unless allowed by law. But the prohibition of gambling does not mean that the government can not regulate it in the exercise of its police power, wherein the state has the authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare.

2.) The City of Manila, being a mere Municipal Corporation has no inherent right to impose taxes. Its charter was created by Congress, therefore subject to its control. Also, local governments have no power to tax instrumentalities of the National Government.

3.) Equal protection clause of the Constitution does not preclude classification of individuals who may be accorded different treatment under the law, provided it is not unreasonable or arbitrary. The clause does not prohibit the legislature from establishing classes of individuals or objects upon which different rules shall operate.

4.) The Judiciary does not settle policy issues which are within the domain of the political branches of government and the people themselves as the repository of all state power.

Every law has in its favor the presumption of constitutionality, thus, to be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution. In this case, the grounds raised by petitioners have failed to overcome the presumption. Therefore, it is hereby dismissed for lack of merit.