We rule that MIAA's Airport Lands and Buildings are exempt from real estate tax imposed by
local governments.
1.) MIAA is not a government-owned or controlled corporation but an instrumentality of the National Government and
thus exempt from local taxation. MIAA has no capital stock divided into shares, no stockholders or voting shares, nor
members (non-stock corporation). MIAA is also not organized for purposes enumerated in Section 88 of the
Corporation Code. It is merely a government instrumentality vested with corporate powers to perform efficiently its
governmental functions.
2.) The real properties of MIAA are owned by the Republic of the Philippines and thus exempt from real estate tax.
a.) Airport Lands and Buildings are of Public Domain. Section 420 of the Civil Code provides:
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;
b.) Airport Lands and Buildings are Outside the Commerce of Man since they are devoted to public use and thus are
properties of public dominion. The Civil Code, article 1271, prescribes that everything which is not outside the
commerce of man may be the object of a contract, and plazas and streets are outside of this commerce, as was
decided by the supreme court of Spain in its
decision of February 12, 1895, which says: "Communal things that cannot be sold because they are by their very
nature outside of commerce are those for public use, such as the plazas, streets, common lands, rivers,
fountains, etc." (Emphasis supplied)
Before MIAA can encumber the Airport Lands and Buildings, the President must first withdraw from public use the
Airport Lands and Buildings.
MIAA arguments:
1.) The Airport lands and buildings although have titles under the name of MIAA, the real owner of said lands and
buildings is the Republic of the Philippines, thus they are inalienable and not subject to real estate tax by local
governments (Section 234 of the Local Government Code).
2.) MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA from the payment of real
estate tax.
City of Paranaque arguments:
1.) Respondents invoke Section 193 of the Local Government Code, which expressly withdrew
the tax exemption privileges of "government-owned and-controlled corporations" upon
the effectivity of the Local Government Code
2.) Respondents also argue that a basic rule ofstatutory construction is that the express mention of one person, thing,
or act excludes all others. An international airport is not among the exceptions mentioned in Section 193 of the Local
Government Code.
3.) MIAA already paid some of the real estate tax and therefore estopped from claiming that the Airport Lands and
Buildings are exempt from real estate tax.
SECTION 88 of the Public Land Law or Commonwealth Act No. 141 provides that "The tract or tracts of land
reserved under the provisions of Section eighty-three shall be non-alienable and shall not be subject to
occupation, entry, sale, lease, or other disposition until again declared alienable under the provisions of this
Act or by proclamation of the
President. SEC. 14. Chapter 4, Title I, Book III of the Administrative Code of 1987 Power to Reserve Lands of the
Public and Private Domain of the Government. - (1) The President shall have the power to reserve for settlement
or public use, and for specific public purposes, any of the lands of the public domain, the use of which is not
otherwise directed by law. The reserved land shall thereafter remain subject to the specific public purpose
indicated until otherwise provided by law or
proclamation.
c.) MIAA is a mere trustee of the Republic for the Airport land and buildings.
d.) Transfer to MIAA was Meant to Implement a Reorganization.
e.) Real Property Owned by the Republic is Not Taxable
f.) Refutation of Arguments of Minority - The minority asserts that the MIAA is not exempt from real estate tax because
Section 193 of the Local Government Code of 1991 withdrew the tax exemption of "all persons, whether natural or
juridical" upon the effectivity of the Code. Read Section 133 of the LG Code
Clearly, the rule is local governments have no power to tax the national government, its agencies and
instrumentalities. As an exception to this rule, local governments may tax the national government, its agencies and
instrumentalities only if the Local Government Code expressly so provides.
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