John Hay PAC v. Lim

JOHN HAY PEOPLES ALTERNATIVE COALITION, MATEO CARIÑO FOUNDATION INC.
, CENTER FOR
ALTERNATIVE SYSTEMS FOUNDATION INC., REGINA VICTORIA A. BENAFIN REPRESENTED AND JOINED
BY HER MOTHER MRS. ELISA BENAFIN, IZABEL M. LUYK REPRESENTED AND JOINED BY HER MOTHER
MRS. REBECCA MOLINA LUYK, KATHERINE PE REPRESENTED AND JOINED BY HER MOTHER ROSEMARIE
G. PE, SOLEDAD S. CAMILO, ALICIA C. PACALSO ALIAS "KEVAB," BETTY I. STRASSER, RUBY C. GIRON,
URSULA C. PEREZ ALIAS "BA-YAY," EDILBERTO T. CLARAVALL, CARMEN CAROMINA, LILIA G. YARANON,
DIANE MONDOC, petitioners, vs. VICTOR LIM, PRESIDENT, BASES CONVERSION DEVELOPMENT
AUTHORITY; JOHN HAY PORO POINT DEVELOPMENT CORPORATION, CITY OF BAGUIO, TUNTEX (B.V.I.)
CO. LTD., ASIAWORLD INTERNATIONALE GROUP, INC., DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES, respondents.
Facts:
The controversy stemmed from the issuance of Proclamation No. 420 by then President Ramos declaring a portion
of Camp John Hay as a Special Economic Zone (SEZ) and creating a regime of tax exemption within the John Hay
Special Economic Zone. In the present petition, petitioners assailed the constitutionality of the proclamation.
The Court also held that it is the legislature, unless limited by a provision of the Constitution, that has the full power
to exempt any person or corporation or class of property from taxation, its power to exempt being as broad as its
power to tax. The challenged grant of tax exemption would circumvent the Constitution's imposition that a law
granting any tax exemption must have the concurrence of a majority of all the members of Congress. Moreover, the
claimed statutory exemption of the John Hay SEZ from taxation should be manifest and unmistakable from the
language of the law on which it is based. Thus, the Court declared that the grant by Proclamation No. 420 of tax
exemption and other privileges to the John Hay SEZ was void for being violative of the Constitution. However, the
entire assailed proclamation cannot be declared unconstitutional, the other parts thereof not being repugnant to
the law or the Constitution. The delineation and declaration of a portion of the area covered by Camp John Hay as a
SEZ was well within the powers of the President to do so by means of a proclamation. Where part of a statute is
void as contrary to the Constitution, while another part is valid, the valid portion, if separable from the invalid, as in
the case at bar, may stand and be enforced.
Issue: WON the petitioners have legal standing to bring the petition
Ruling: YES
Rationale:
R.A. No. 7227 expressly requires the concurrence of the affected local government units to the creation of SEZs out
of all the base areas in the country. The grant by the law on local government units of the right of concurrence on
the bases' conversion is equivalent to vesting a legal standing on them, for it is in effect a recognition of the real
interests that communities nearby or surrounding a particular base area have in its utilization.
Thus, the interest of petitioners, being inhabitants of Baguio, in assailing the legality of Proclamation No. 420, is
personal and substantial such that they have sustained or will sustain direct injury as a result of the government act
being challenged. Theirs is a material interest, an interest in issue affected by the proclamation and not merely an
interest in the question involved or an incidental interest, for what is at stake in the enforcement of Proclamation
No. 420 is the very economic and social existence of the people of Baguio City. ... Moreover, petitioners Edilberto T.
Claravall and Lilia G. Yaranon were duly elected councilors of Baguio at the time, engaged in the local governance
of Baguio City and whose duties included deciding for and on behalf of their constituents the question of whether to
concur with the declaration of a portion of the area covered by Camp John Hay as a SEZ. Certainly then, petitioners
Claravall and Yaranon, as city officials who voted against the sanggunian Resolution No. 255 (Series of 1994)
supporting the issuance of the now challenged Proclamation No. 420, have legal standing to bring the present
petition.

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JOHN HAY PEOPLES ALTERNATIVE COALITION, MATEO CARIÑO FOUNDATION INC.

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