LGUs have no power to regulate PCSO's small town lottery--DOJ PDF Print E-mail
Tuesday, 26 October 2010 14:06

Despite being named as such, the Philippine Charity Sweepstakes Office (PCSO)'s small town lottery (STL) or any other existing lottery games cannot be regulated by the local government units (LGUs), Justice Secretary Leila De Lima said on Sunday.

De Lima made this clarification in response to the letter of PCSO chairman Margarita Juico, asking whether LGU chief executives have the "authority to summarily and unilaterally stop or suspend the operations of PCSO’s STL and similar lotteries in their areas of jurisdiction."

She also reiterated the DOJ’s views in Legal Opinion No. 74 issued in 1995 in order to guide the PCSO in addressing the issues it raised pertaining to its STL and other lottery operations.

In the said legal opinion, the DOJ stressed that while Section 447 and 458 of the Local Government Code of 1991 gives the municipality or city the power to regulate businesses within their area of jurisdiction, such power does not cover national government agencies and its instrumentalities.

“Put differently, it means LGUs have no power to issue business permits, licenses to the agencies and instrumentalities of the State, of which the PCSO is one, nor demand or collect permit/license fees incident to the issuance of such permits/licenses,” the 1995 DOJ legal opinion said.

“Its duly appointed sales agents are, as you have pointed out, mere extensions of the PCSO, and should, like the PCSO, be also considered exempt from the licensing authority of the LGUs where they operate,” it said.

Juico made this request to the DOJ after receiving word that some governors and mayors have ordered the stoppage or suspension of STL operations in their areas, invoking their decentralized powers to regulate any business within their territorial jurisdiction pursuant to the Local Government Code of 1991.

Juico said that this cannot be done by LGU chiefs since they did not have "neither power nor authority to suspend or stop lottery games sanctioned or operated by the PCSO” as stated by Republic Act No. 1169, the operating charter of the gaming agency and certain decisions of the Supreme Court.

But De Lima declined to render a full opinion on the matter, citing Executive Order No. 596 which states that the Office of the Government Corporate Counsel (OGCC) shall be the principal law office of government-owned and controlled corporations, and government instrumentality vested with corporate powers.

De Lima also said that Section 1 of Administrative Order No. 130, mandates that all legal matters pertaining to GOCCs, their subsidiaries, corporate offsprings and government-acquired asset corporations be referred to and handled by the OGCC, unless their respective charters expressly name the Office of the Solicitor General as head legal counsel.

“Thus, as we have consistently stated, for OGCC to be able to discharge its function as such, it shall be the duty of all said corporations to refer to it all important legal questions for opinion, advice and determination, all proposed contracts and all important court cases for his services,” she said.