The Philippine Amusement and Gaming Corporation (PAGCOR), pursuant to its power under the law, decided to expand its casino operations in San Fernando City, by leasing and renovating a portion of Surfer Hotel. In response to the strong opposition from various conservative groups who denounced the project as inimical to public morals and welfare, the Sangguniang Panlungsod of San Fernando City enacted two ordinances, one prohibiting the issuance of business permits to any establishment used wholly or partly for casino operations and another ordinance providing for the outright prohibition of casino operations within city limits and prescribing administrative fines, closure, and imprisonment for violators. PAGCOR and the owner of Surfer Hotel filed a petition challenging both ordinances as ultra vires and invalid for violating the policy on local autonomy and exercise of delegated power to local governments. Are the ordinances valid? Explain.
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Answer: No, the ordinances are not valid. Both ordinances enacted by the Sangguniang Panlungsod of San Fernando City are ultra vires, unconstitutional, and null and void.
Legal Basis: To be valid, a local ordinance must conform to the fundamental substantive requirement that it must not contravene the Constitution or any statute. Under Section 16 of the Local Government Code (R.A. No. 7160), local government units (LGUs) exercise delegated police power merely as agents of the State. As established in Magtajas v. Pryce Properties Corporation, Inc., LGUs cannot undo or modify acts of Congress, nor can they prohibit an activity that a national statute explicitly permits. Local legislative councils exercise only delegated authority; hence, the delegate cannot be superior to its principal or negate the mandate of national law.
Application: Applying these principles, PAGCOR's authority to regulate, centralize, and operate casinos nationwide is directly conferred by Congress through its charter, Presidential Decree No. 1869. By enacting ordinances that outright ban casino operations within city limits and deny business permits to establishments hosting casinos, the Sangguniang Panlungsod of San Fernando City arrogated unto itself the power to override a national law. While LGUs have the authority to regulate local trades and businesses for the general welfare, they cannot completely prohibit or penalize a legal activity authorized by a national legislative franchise.
Conclusion: Therefore, the ordinances must be declared invalid. The Sangguniang Panlungsod acted in excess of its delegated legislative powers by enacting measures that directly contradict P.D. No. 1869.
Quick check
Are the ordinances enacted by the Sangguniang Panlungsod of San Fernando City valid?
Under Magtajas v. Pryce Properties, local government units exercise mere delegated legislative power and cannot enact ordinances that contradict national statutes. Since P.D. No. 1869 (the PAGCOR Charter) explicitly authorizes PAGCOR to regulate and operate casinos nationwide, local ordinances prohibiting casino operations and denying business permits therefor contravene a statute and are ultra vires, null, and void.