Republic of the Philippines D.

It violates the avowed trend of the Cory government away from monopolistic and
SUPREME COURT crony economy, and toward free enterprise and privatization. (p. 2, Amended Petition;
Manila p. 7, Rollo)

EN BANC In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the
declared national policy of the "new restored democracy" and the people's will as expressed in
  the 1987 Constitution. The decree is said to have a "gambling objective" and therefore is
contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article
XIV, of the present Constitution (p. 3, Second Amended Petition; p. 21, Rollo).
G.R. No. 91649             May 14, 1991
The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND Basco being also the Chairman of the Committee on Laws of the City Council of Manila), can
LORENZO SANCHEZ, petitioners, question and seek the annulment of PD 1869 on the alleged grounds mentioned above.
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D.
1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated
H.B. Basco & Associates for petitioners. January 1, 1977 "to establish, operate and maintain gambling casinos on land or water within
Valmonte Law Offices collaborating counsel for petitioners. the territorial jurisdiction of the Philippines." Its operation was originally conducted in the well
Aguirre, Laborte and Capule for respondent PAGCOR. known floating casino "Philippine Tourist." The operation was considered a success for it
proved to be a potential source of revenue to fund infrastructure and socio-economic projects,
thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing franchise or
PARAS, J.: permitted by law, under the following declared policy —

A TV ad proudly announces: Sec. 1. Declaration of Policy. — It is hereby declared to be the policy of the State to
centralize and integrate all games of chance not heretofore authorized by existing
"The new PAGCOR — responding through responsible gaming." franchises or permitted by law in order to attain the following objectives:

But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul (a) To centralize and integrate the right and authority to operate and conduct games
the Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD 1869, because it of chance into one corporate entity to be controlled, administered and supervised by
is allegedly contrary to morals, public policy and order, and because — the Government.

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized (b) To establish and operate clubs and casinos, for amusement and recreation,
by law. It waived the Manila City government's right to impose taxes and license fees, including sports gaming pools, (basketball, football, lotteries, etc.) and such other
which is recognized by law; forms of amusement and recreation including games of chance, which may be
allowed by law within the territorial jurisdiction of the Philippines and which will: (1)
generate sources of additional revenue to fund infrastructure and socio-civic projects,
B. For the same reason stated in the immediately preceding paragraph, the law has
such as flood control programs, beautification, sewerage and sewage projects,
intruded into the local government's right to impose local taxes and license fees. This,
Tulungan ng Bayan Centers, Nutritional Programs, Population Control and such other
in contravention of the constitutionally enshrined principle of local autonomy;
essential public services; (2) create recreation and integrated facilities which will
expand and improve the country's existing tourist attractions; and (3) minimize, if not
C. It violates the equal protection clause of the constitution in that it legalizes totally eradicate, all the evils, malpractices and corruptions that are normally prevalent
PAGCOR — conducted gambling, while most other forms of gambling are outlawed, on the conduct and operation of gambling clubs and casinos without direct
together with prostitution, drug trafficking and other vices; government involvement. (Section 1, P.D. 1869)

Page 1 of 6 Basco v PAGCOR

To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under wisdom, justice, policy or expediency of a statute and that a liberal interpretation of
its Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, the constitution in favor of the constitutionality of legislation should be adopted.
inconsistent therewith, are accordingly repealed, amended or modified. (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta
It is reported that PAGCOR is the third largest source of government revenue, next to the v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes,
Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v.
P3.43 Billion, and directly remitted to the National Government a total of P2.5 Billion in form of Energy Regulatory Board, 162 SCRA 521, 540)
franchise tax, government's income share, the President's Social Fund and Host Cities' share.
In addition, PAGCOR sponsored other socio-cultural and charitable projects on its own or in Of course, there is first, the procedural issue. The respondents are questioning the legal
cooperation with various governmental agencies, and other private associations and personality of petitioners to file the instant petition.
organizations. In its 3 1/2 years of operation under the present administration, PAGCOR
remitted to the government a total of P6.2 Billion. As of December 31, 1989, PAGCOR was Considering however the importance to the public of the case at bar, and in keeping with the
employing 4,494 employees in its nine (9) casinos nationwide, directly supporting the livelihood Court's duty, under the 1987 Constitution, to determine whether or not the other branches of
of Four Thousand Four Hundred Ninety-Four (4,494) families. government have kept themselves within the limits of the Constitution and the laws and that
they have not abused the discretion given to them, the Court has brushed aside technicalities of
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is procedure and has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa
"null and void" for being "contrary to morals, public policy and public order," monopolistic and Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371)
tends toward "crony economy", and is violative of the equal protection clause and local
autonomy as well as for running counter to the state policies enunciated in Sections 11 With particular regard to the requirement of proper party as applied in the cases
(Personal Dignity and Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 before us, We hold that the same is satisfied by the petitioners and intervenors
(Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 because each of them has sustained or is in danger of sustaining an immediate injury
Constitution. as a result of the acts or measures complained of. And even if, strictly speaking they
are not covered by the definition, it is still within the wide discretion of the Court to
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most waive the requirement and so remove the impediment to its addressing and resolving
deliberate consideration by the Court, involving as it does the exercise of what has been the serious constitutional questions raised.
described as "the highest and most delicate function which belongs to the judicial department of
the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323). In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
As We enter upon the task of passing on the validity of an act of a co-equal and coordinate although they were involving only an indirect and general interest shared in common
branch of the government We need not be reminded of the time-honored principle, deeply with the public. The Court dismissed the objection that they were not proper parties
ingrained in our jurisprudence, that a statute is presumed to be valid. Every presumption must and ruled that "the transcendental importance to the public of these cases demands
be indulged in favor of its constitutionality. This is not to say that We approach Our task with that they be settled promptly and definitely, brushing aside, if we must technicalities of
diffidence or timidity. Where it is clear that the legislature or the executive for that matter, has procedure." We have since then applied the exception in many other cases.
over-stepped the limits of its authority under the constitution, We should not hesitate to wield (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform,
the axe and let it fall heavily, as fall it must, on the offending statute (Lozano v. 175 SCRA 343).
Martinez, supra).
Having disposed of the procedural issue, We will now discuss the substantive issues raised.
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice
Zaldivar underscored the — Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police
. . . thoroughly established principle which must be followed in all cases where power.
questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a statute The concept of police power is well-established in this jurisdiction. It has been defined as the
alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a "state authority to enact legislation that may interfere with personal liberty or property in order to
law may work hardship does not render it unconstitutional; that if any reasonable promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1)
basis may be conceived which supports the statute, it will be upheld and the an imposition or restraint upon liberty or property, (2) in order to foster the common good. It is
challenger must negate all possible basis; that the courts are not concerned with the not capable of an exact definition but has been, purposely, veiled in general terms to

Page 2 of 6 Basco v PAGCOR

underscore its all-comprehensive embrace. (Philippine Association of Service Exporters, Inc. v. Their contention stated hereinabove is without merit for the following reasons:
Drilon, 163 SCRA 386).
(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v.
where it could be done, provides enough room for an efficient and flexible response to Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an
conditions and circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra) intent to confer that power or the municipality cannot assume it" (Medina v. City of Baguio, 12
SCRA 62). Its "power to tax" therefore must always yield to a legislative act which is superior
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the having been passed upon by the state itself which has the "inherent power to tax" (Bernas, the
charter. Along with the taxing power and eminent domain, it is inborn in the very fact of Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).
statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been (b) The Charter of the City of Manila is subject to control by Congress. It should be stressed
credited, refers to it succinctly as the plenary power of the state "to govern its citizens". (Tribe, that "municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909,
American Constitutional Law, 323, 1978). The police power of the State is a power co-extensive January 18, 1957) which has the power to "create and abolish municipal corporations" due to its
with self-protection and is most aptly termed the "law of overwhelming necessity." (Rubi v. "general legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA
Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable 541). Congress, therefore, has the power of control over Local governments (Hebron v. Reyes,
of powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the G.R. No. 9124, July 2, 1950). And if Congress can grant the City of Manila the power to tax
state to meet the agencies of the winds of change. certain matters, it can also provide for exemptions or even take back the power.

What was the reason behind the enactment of P.D. 1869? (c) The City of Manila's power to impose license fees on gambling, has long been revoked. As
early as 1975, the power of local governments to regulate gambling thru the grant of "franchise,
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National
an appropriate institution all games of chance authorized by existing franchise or permitted by Government, thus:
law" (1st whereas clause, PD 1869). As was subsequently proved, regulating and centralizing
gambling operations in one corporate entity — the PAGCOR, was beneficial not just to the Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered
Government but to society in general. It is a reliable source of much needed revenue for the cities and other local governments to issue license, permit or other form of franchise
cash strapped Government. It provided funds for social impact projects and subjected gambling to operate, maintain and establish horse and dog race tracks, jai-alai and other forms
to "close scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, of gambling is hereby revoked.
PD 1869). With the creation of PAGCOR and the direct intervention of the Government, the evil
practices and corruptions that go with gambling will be minimized if not totally eradicated. Public Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse
welfare, then, lies at the bottom of the enactment of PD 1896. and dog race tracks, jai-alai and other forms of gambling shall be issued by the
national government upon proper application and verification of the qualification of the
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to applicant . . .
impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle
of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts Therefore, only the National Government has the power to issue "licenses or permits" for the
PAGCOR, as the franchise holder from paying any "tax of any kind or form, income or operation of gambling. Necessarily, the power to demand or collect license fees which is a
otherwise, as well as fees, charges or levies of whatever nature, whether National or Local." consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.

(2) Income and other taxes. — a) Franchise Holder: No tax of any kind or form, (d) Local governments have no power to tax instrumentalities of the National Government.
income or otherwise as well as fees, charges or levies of whatever nature, whether PAGCOR is a government owned or controlled corporation with an original charter, PD 1869.
National or Local, shall be assessed and collected under this franchise from the All of its shares of stocks are owned by the National Government. In addition to its corporate
Corporation; nor shall any form or tax or charge attach in any way to the earnings of powers (Sec. 3, Title II, PD 1869) it also exercises regulatory powers thus:
the Corporation, except a franchise tax of five (5%) percent of the gross revenues or
earnings derived by the Corporation from its operations under this franchise. Such tax
shall be due and payable quarterly to the National Government and shall be in lieu of Sec. 9. Regulatory Power. — The Corporation shall maintain a Registry of the
all kinds of taxes, levies, fees or assessments of any kind, nature or description, affiliated entities, and shall exercise all the powers, authority and the responsibilities
levied, established or collected by any municipal, provincial or national government vested in the Securities and Exchange Commission over such affiliating entities
authority (Section 13 [2]). mentioned under the preceding section, including, but not limited to amendments of

Page 3 of 6 Basco v PAGCOR

 Articles of Incorporation and By-Laws, changes in corporate term, structure, The power of local government to "impose taxes and fees" is always subject to "limitations"
capitalization and other matters concerning the operation of the affiliated entities, the which Congress may provide by law. Since PD 1869 remains an "operative" law until
provisions of the Corporation Code of the Philippines to the contrary notwithstanding, "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause"
except only with respect to original incorporation. remains as an exception to the exercise of the power of local governments to impose taxes and
fees. It cannot therefore be violative but rather is consistent with the principle of local autonomy.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the Besides, the principle of local autonomy under the 1987 Constitution simply means
Government. Being an instrumentality of the Government, PAGCOR should be and actually is "decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in
exempt from local taxes. Otherwise, its operation might be burdened, impeded or subjected to Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It
control by a mere Local government. does not make local governments sovereign within the state or an "imperium in imperio."

The states have no power by taxation or otherwise, to retard, impede, burden or in Local Government has been described as a political subdivision of a nation or state
any manner control the operation of constitutional laws enacted by Congress to carry which is constituted by law and has substantial control of local affairs. In a unitary
into execution the powers vested in the federal government. (MC Culloch v. Marland, system of government, such as the government under the Philippine Constitution,
4 Wheat 316, 4 L Ed. 579) local governments can only be an intra sovereign subdivision of one sovereign nation,
it cannot be an imperium in imperio. Local government in such a system can only
This doctrine emanates from the "supremacy" of the National Government over local mean a measure of decentralization of the function of government. (emphasis
governments. supplied)

Justice Holmes, speaking for the Supreme Court, made reference to the entire As to what state powers should be "decentralized" and what may be delegated to local
absence of power on the part of the States to touch, in that way (taxation) at least, the government units remains a matter of policy, which concerns wisdom. It is therefore a political
instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be question. (Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA
agreed that no state or political subdivision can regulate a federal instrumentality in 539).
such a way as to prevent it from consummating its federal responsibilities, or even to
seriously burden it in the accomplishment of them. (Antieau, Modern Constitutional What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a
Law, Vol. 2, p. 140, emphasis supplied) State concern and hence, it is the sole prerogative of the State to retain it or delegate it to local
governments.
Otherwise, mere creatures of the State can defeat National policies thru extermination of what
local authorities may perceive to be undesirable activities or enterprise using the power to tax As gambling is usually an offense against the State, legislative grant or express
as "a tool for regulation" (U.S. v. Sanchez, 340 US 42). charter power is generally necessary to empower the local corporation to deal with
the subject. . . . In the absence of express grant of power to enact, ordinance
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v. provisions on this subject which are inconsistent with the state laws are void. (Ligan v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757
which has the inherent power to wield it. following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as
cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)

(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by
P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution,
provides: because "it legalized PAGCOR — conducted gambling, while most gambling are outlawed
together with prostitution, drug trafficking and other vices" (p. 82, Rollo).

Sec. 5. Each local government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such guidelines and We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the
limitation as the congress may provide, consistent with the basic policy on local well-accepted meaning of the clause "equal protection of the laws." The clause does not
autonomy. Such taxes, fees and charges shall accrue exclusively to the local preclude classification of individuals who may be accorded different treatment under the law as
government. (emphasis supplied) long as the classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil.
1155). A law does not have to operate in equal force on all persons or things to be conformable
to Article III, Section 1 of the Constitution (DECS v. San Diego, G.R. No. 89572, December 21,
1989).

Page 4 of 6 Basco v PAGCOR

The "equal protection clause" does not prohibit the Legislature from establishing classes of On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family)
individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2
The Constitution does not require situations which are different in fact or opinion to be treated in (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these
law as though they were the same (Gomez v. Palomar, 25 SCRA 827). are merely statements of principles and, policies. As such, they are basically not self-executing,
meaning a law should be passed by Congress to clearly define and effectuate such principles.
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal
protection is not clearly explained in the petition. The mere fact that some gambling activities In general, therefore, the 1935 provisions were not intended to be self-executing
like cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, principles ready for enforcement through the courts. They were rather directives
lotteries and races (RA 1169 as amended by B.P. 42) are legalized under certain conditions, addressed to the executive and the legislature. If the executive and the legislature
while others are prohibited, does not render the applicable laws, P.D. 1869 for one, failed to heed the directives of the articles the available remedy was not judicial or
unconstitutional. political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2)
If the law presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied. (Gomez v. Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil.
Palomar, 25 SCRA 827) 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec,
179 SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that there is a clear
The equal protection clause of the 14th Amendment does not mean that all and unequivocal breach of the Constitution, not merely a doubtful and equivocal one. In other
occupations called by the same name must be treated the same way; the state may words, the grounds for nullity must be clear and beyond reasonable doubt. (Peralta v.
do what it can to prevent which is deemed as evil and stop short of those cases in Comelec, supra) Those who petition this Court to declare a law, or parts thereof,
which harm to the few concerned is not less than the harm to the public that would unconstitutional must clearly establish the basis for such a declaration. Otherwise, their petition
insure if the rule laid down were made mathematically exact. (Dominican Hotel v. must fail. Based on the grounds raised by petitioners to challenge the constitutionality of P.D.
Arizona, 249 US 2651). 1869, the Court finds that petitioners have failed to overcome the presumption. The dismissal of
this petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation
considering the issues of "morality, monopoly, trend to free enterprise, privatization as well as
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government the state principles on social justice, role of youth and educational values" being raised, is up
away from monopolies and crony economy and toward free enterprise and privatization" suffice for Congress to determine.
it to state that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs
counter to the government's policies then it is for the Executive Department to recommend to
Congress its repeal or amendment. As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board,
162 SCRA 521 —

The judiciary does not settle policy issues. The Court can only declare what the law is
and not what the law should be.1âwphi1 Under our system of government, policy Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any
issues are within the domain of the political branches of government and of the people case, in its favor the presumption of validity and constitutionality which petitioners
themselves as the repository of all state power. (Valmonte v. Belmonte, Jr., 170 Valmonte and the KMU have not overturned. Petitioners have not undertaken to
SCRA 256). identify the provisions in the Constitution which they claim to have been violated by
that statute. This Court, however, is not compelled to speculate and to imagine how
the assailed legislation may possibly offend some provision of the Constitution. The
On the issue of "monopoly," however, the Constitution provides that: Court notes, further, in this respect that petitioners have in the main put in question
the wisdom, justice and expediency of the establishment of the OPSF, issues which
Sec. 19. The State shall regulate or prohibit monopolies when public interest so are not properly addressed to this Court and which this Court may not constitutionally
requires. No combinations in restraint of trade or unfair competition shall be allowed. pass upon. Those issues should be addressed rather to the political departments of
(Art. XII, National Economy and Patrimony) government: the President and the Congress.

It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so
the Constitution. The state must still decide whether public interest demands that monopolies when the gambling resorted to is excessive. This excessiveness necessarily depends not only
be regulated or prohibited. Again, this is a matter of policy for the Legislature to decide. on the financial resources of the gambler and his family but also on his mental, social, and
spiritual outlook on life. However, the mere fact that some persons may have lost their material
fortunes, mental control, physical health, or even their lives does not necessarily mean that the
same are directly attributable to gambling. Gambling may have been the antecedent, but

Page 5 of 6 Basco v PAGCOR

certainly not necessarily the cause. For the same consequences could have been preceded by return for the substantial revenues it would yield the government to carry out its laudable
an overdose of food, drink, exercise, work, and even sex. projects, such as infrastructure and social amelioration? The question, I believe, answers itself.
I submit that the sooner the legislative department outlaws all forms of gambling, as a
WHEREFORE, the petition is DISMISSED for lack of merit. fundamental state policy, and the sooner the executive implements such policy, the better it will
be for the nation.

SO ORDERED.
Melencio-Herrera, J., concur.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Griño-
Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This
means that I agree with the decision insofar as it holds that the prohibition, control, and
regulation of the entire activity known as gambling properly pertain to "state policy." It is,
therefore, the political departments of government, namely, the legislative and the executive
that should decide on what government should do in the entire area of gambling, and assume
full responsibility to the people for such policy.

The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of
policies adopted by the political departments of government in areas which fall within their
authority, except only when such policies pose a clear and present danger to the life, liberty or
property of the individual. This case does not involve such a factual situation.

However, I hasten to make of record that I do not subscribe to gambling in any form. It
demeans the human personality, destroys self-confidence and eviscerates one's self-respect,
which in the long run will corrode whatever is left of the Filipino moral character. Gambling has
wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance
and reliability as well as personal industry which are the touchstones of real economic progress
and national development.

Gambling is reprehensible whether maintained by government or privatized. The revenues

realized by the government out of "legalized" gambling will, in the long run, be more than offset
and negated by the irreparable damage to the people's moral values.

Also, the moral standing of the government in its repeated avowals against "illegal gambling" is
fatally flawed and becomes untenable when it itself engages in the very activity it seeks to
eradicate.

One can go through the Court's decision today and mentally replace the activity referred to
therein as gambling, which is legal only because it is authorized by law and run by the
government, with the activity known as prostitution. Would prostitution be any less
reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in

Page 6 of 6 Basco v PAGCOR