G.R. No.

163072 April 2, 2009

MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner,
vs.
CITY OF PASAY, SANGGUNIANG PANGLUNGSOD NG PASAY, CITY MAYOR OF PASAY, CITY TREASURER OF PASAY, and CITY ASSESSOR
OF PASAY, Respondents.

Administrative Agencies; Manila International Airport Authority; Manila International Airport Authority (MIAA) is a government
“instrumentality” that does not qualify as a “government-owned or controlled corporation.”—A close scrutiny of the definition of
“government-owned or controlled corporation” in Section 2(13) will show that MIAA would not fall under such definition. MIAA is a government
“instrumentality” that does not qualify as a “government-owned or controlled corporation.” As explained in the 2006 MIAA case: “A
government-owned or controlled corporation must be “organized as a stock or non-stock corporation.” MIAA is not organized as a stock or non-stock
corporation. MIAA is not a stock corporation because it has no capital stock divided into shares. MIAA has no stockholders or voting shares. x x x”

Same; Same; Taxation; Tax Exemptions; Local Government Code; Manila International Airport Authority (MIAA) is not a
government-owned or controlled corporation but a government instrumentality which is exempt from any kind of tax from the local
governments.—MIAA is not a government-owned or controlled corporation but a government instrumentality which is exempt from any kind of tax
from the local governments. Indeed, the exercise of the taxing power of local government units is subject to the limitations enumerated in Section 133
of the Local Government Code. Under Section 133(o) of the Local Government Code, local government units have no power to tax instrumentalities of
the national government like the MIAA. Hence, MIAA is not liable to pay real property tax for the NAIA Pasay properties.

Same; Same; Same; Property; The airport lands and buildings of Manila International Airport Authority (MIAA) are properties of
public dominion intended for public use; and as such are exempt from real property tax under Section 234(a) of the Local Government
Code (LGC); Only those portions of the Ninoy Aquino International Airport (NAIA) Pasay properties which are leased to taxable
persons like private parties are subject to real property tax by the City of Pasay.—The airport lands and buildings of MIAA are properties of
public dominion intended for public use, and as such are exempt from real property tax under Section 234(a) of the Local Government Code. However,
under the same provision, if MIAA leases its real property to a taxable person, the specific property leased becomes subject to real property tax. In this
case, only those portions of the NAIA Pasay properties which are leased to taxable persons like private parties are subject to real property tax by the
City of Pasay.

FACTS:

Petitioner MIAA operates and administers the Ninoy Aquino International Airport (NAIA) Complex under Executive Order No. 903, of which
provides that approximately 600 hectares of land, including the runways, the airport tower, and other airport buildings, were transferred to MIAA. The
NAIA Complex is located along the border between Pasay City and Parañaque City. Petitioner received Final Notices of Real Property Tax Delinquency
from the City of Pasay for the taxable years 1992 to 2001, for its NAIA Pasay properties.

The City of Pasay, through its City Treasurer, issued notices of levy and warrants of levy for the NAIA Pasay properties, petitioner received the
same. Thereafter, the City Mayor of Pasay threatened to sell at public auction the NAIA Pasay properties if the delinquent real property taxes remain
unpaid.

Petitioner filed with the CA a petition for prohibition and injunction with prayer for preliminary injunction or temporary restraining order, to
enjoin the City of Pasay from imposing real property taxes on, levying against, and auctioning for public sale the NAIA Pasay properties. The CA
dismissed the petition and upheld the power of the City of Pasay to impose and collect realty taxes on the NAIA Pasay properties, stating that the Local
Government Code, withdrew the exemption from payment of real property taxes granted to natural or juridical persons, including GOCCs, except local
water districts, cooperatives, non-stock and non-profit hospitals and educational institutions.

Hence, this petition.

ISSUE:
WON the NAIA Pasay properties of MIAA are exempt from real property tax.

RULING:
YES.
MIAA is not a GOCC but a government instrumentality which is exempt from any kind of tax from the local governments. Indeed, the exercise
of the taxing power of local government units is subject to the limitations enumerated in Section 133 of the Local Government Code.10 Under Section
133(o), of the Local Government Code, local government units have no power to tax instrumentalities of the national government like the MIAA. Hence,
MIAA is not liable to pay real property tax for the NAIA Pasay properties.

Furthermore, the airport lands and buildings of MIAA are properties of public dominion intended for public use, and as such are exempt from
real property tax under Section 234(a) of the Local Government Code. However, under the same provision, if MIAA leases its real property to a taxable
person, the specific property leased becomes subject to real property tax.12 In this case, only those portions of the NAIA Pasay properties which are
leased to taxable persons like private parties are subject to real property tax by the City of Pasay.

DISPOSITIVE PORTION:

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 30 October 2002 and the Resolution dated 19 March 2004 of the
Court of Appeals in CA-G.R. SP No. 67416. We DECLARE the NAIA Pasay properties of the Manila International Airport Authority EXEMPT from real
property tax imposed by the City of Pasay. We declare VOID all the real property tax assessments, including the final notices of real property tax
delinquencies, issued by the City of Pasay on the NAIA Pasay properties of the Manila International Airport Authority, except for the portions that the
Manila International Airport Authority has leased to private parties. No costs. SO ORDERED.