REPUBLIC OF THE PHILIPPINES vs.

CITY OF PARAÑAQUE
(GR No. 191109, July 18, 2012)

FACTS: The Philippine Reclamation Authority (PRA), formerly Public Estates

Authority, was created and designated for integrating, directing and coordinating the
reclamation of lands, and the administration and operation of lands for and on behalf
of the National Government.
PRA then reclaimed several portions of the foreshore and offshore areas of
Manila Bay, including those located in Parañaque City, and was issued Original
Certificates of Title and Transfer Certificates of Title over the reclaimed lands.
On February 2003, then Parañaque City Treasurer Carabeo issued Warrants
of Levy on PRA’s reclaimed properties located in Parañaque City based on the
assessment for delinquent real property taxes made by then Parañaque City Assessor
for tax years 2001 and 2002.
On April 2003, PRA sent a letter to Carabeo requesting the latter not to
proceed with the public auction of the subject reclaimed properties on April 7, 2003.
In response, Carabeo sent a letter stating that the public auction could not be deferred
because the RTC had already denied PRA’s TRO application.
The RTC ruled that PRA was not exempt from payment of real property taxes
because it was a GOCC, therefore, as a GOCC, local tax exemption is withdrawn by
virtue of Section 193 of the Local Government Code which was the prevailing law
in 2001 and 2002 with respect to real property taxation.

ISSUE: Whether or not the reclaimed lands by PRA are part of public domain,
hence, exempt from real property tax.

RULING: YES. First of all, the SC stated that PRA is not a GOCC because it is
neither a stock nor a non-stock corporation. PRA is a government instrumentality
vested with corporate powers and performing an essential public service pursuant to
Section 2(10) of the Introductory Provisions of the Administrative Code. Being an
incorporated government instrumentality, it is exempt from payment of real property
tax. Section 234 of the LGC states that real property owned by the Republic is
exempt from real property tax unless the beneficial use thereof has been granted to
a taxable person. Here, there is no showing on record that PRA leased the subject
reclaimed properties to a private taxable entity. The subject reclaimed lands located
in the City of Parañaque are still part of the public domain, owned by the State. The
Administrative Code allows real property owned by the Republic to be titled in the
name of agencies or instrumentalities of the national government, hence, these real
properties remain owned by the Republic and continue to be exempt from real estate
tax.