THE Philippine Ports Authority (PPA) has been advised to continue negotiations with local governments so that it can still seek real-estate tax exemptions.

Despite a Supreme Court decision indicating that the agency may be freed from paying real-estate dues, Atty. Franscisquiel O. Mancile said that the PPA should either continue receiving concessions with local government units or lobby for a law which will exempt it from paying local taxes.

According to estimates, the port body would need to pay P10 billion in real-estate taxes to local governments, five times the annual amount it currently earns. The agency, which collects port fees, remits half of its profits to the national government.

To avoid paying taxes, the PPA has been citing a July 2007 Supreme Court ruling which exempts the Manila International Airport Authority (MIAA) from paying millions of pesos to Parañaque City. In the decision, the Court said that the MIAA is not a government-owned or controlled corporation but a mere instrument of the national government and its properties are owned by the Republic of the Philippines. The Court also mentioned that the PPA is in the same category as in the MIAA, which manages the Ninoy Aquino International Airport.

“Yet, considering the insightful dissent of Justice [Dante] Tinga in MIAA [case], it may be well for PPA to proceed anyway with the clarification through legislation or concessions from LGUs that PPA, being a mere trustee of the Republic insofar as ports are concerned, is verily exempt fro local taxation,” Mancile, writing for an in-house PPA publication, said.

Since its creation in 1974, the port body has been exempted from taxes. However, these privileges were withdrawn after President Marcos issued Presidential Decree 1931, which reimposed taxes on all state-led institutions including the PPA.

Shortly after the High court’s decision, the Iloilo City local government sued the port agency for nonpayment of real estate taxes on the firm’s warehouse in Fort San Pedro, which was later extended to cover its other properties in the city, including the Iloilo Commercial Port Complex.

The port authority’s row between the LGUs became worse especially after the enactment of the Local Government Code of 1991, which said that international ports were not exempted from real estate taxes.

THE Philippine Ports Authority (PPA) has been advised to continue negotiations with local governments so that it can still seek real-estate tax exemptions.

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