Local government units have no power to stop STL - DOJ

MANILA, Philippines – Local government units (LGUs) have no power to stop the operations of the Philippine Charity Sweepstakes Office’s small town lottery (STL) and other similar lotteries in their cities and towns, according to the Department of Justice (DOJ).

Justice Secretary Leila de Lima said in a legal opinion that the authority of city or municipal governments to regulate business within their respective areas of jurisdiction given by Section 447 and 458 of the Local Government Code of 1991 does not include the power over operations of 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,” she said, citing DOJ’s Legal Opinion No. 74 issued in 1995

“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,” De Lima added.

The Justice secretary issued her stand on whether or not the chief executives of LGUs have authority to “summarily and unilaterally” stop or suspend the operations of PCSO’s STL and similar lotteries in their areas upon request of PCSO chair Margarita Juico.

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

The PCSO maintained that under its charter (RA 1169) and certain pronouncements of the Supreme Court, LGUs “ have neither power nor authority to suspend or stop lottery games sanctioned or operated by the PCSO.”

De Lima, however, advised the PCSO to seek the opinion of Office of the Government Corporate Counsel (OGCC), which has been designated by the President through Executive Order 596 as the principal law office of government-owned and controlled corporations (GOCCs), and government instrumentality vested with corporate powers.

The DOJ chief also noted that Section 1 of Administrative Order 130, mandates that all legal matters pertaining to GOCCs, their subsidiaries, corporate offspring 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,” De Lima added.