G.R. No. 157581 December 1, 2004
Manila International Airport Authority, petitioner, vs. Francisco Blancaflor, appellant.

FACTS

The Manila International Airport Authority (MIAA), a government-owned corporation attached to the Department of Transportation and Communications, issued Resolutions Nos. 98-30 and 99-11, which increased various fees, charges, and rentals for the use of its airport facilities and services. These included increases in rentals for terminal buildings and hangars, business concession fees, and parking charges. The resolutions were implemented through corresponding administrative orders. The respondents, who were users, lessees, and occupants of MIAA properties, requested a deferment of the implementation, arguing the increases lacked prior notice and public hearing. MIAA denied the request and took actions such as refusing to renew identification cards and vehicle stickers, effectively barring entry. This prompted the respondents to file a complaint for injunction with the Regional Trial Court (RTC) of Makati.
The RTC issued a writ of preliminary injunction and, after proceedings, rendered a summary judgment nullifying MIAA’s resolutions and accompanying orders for want of the required notice and public hearing. It permanently enjoined MIAA from collecting the increased rates and ordered refunds. MIAA elevated the case via certiorari, contending its charter authorizes it to increase fees without a public hearing, that its services are not those of a public utility, and that the increases were fair and reasonable as they reflected current price levels and were validated by an independent accountant.

ISSUE

Whether prior notice and a public hearing are required before MIAA can increase its rates and charges for the use of its facilities.

RULING

The Supreme Court affirmed the RTC decision, ruling that prior notice and a public hearing are mandatory. The Court clarified that while MIAA is not a public utility, it is a government instrumentality vested with corporate powers and is attached to the DOTC. Its primary function is to manage the airport for public use, imbued with public interest. The Court examined MIAA’s charter, Executive Order No. 903, and found it does not grant unbridled authority to fix rates. Instead, it requires that fees and charges “reflect adequately the costs and increases in price levels and the volume of traffic.” This statutory parameter necessitates a factual basis, which is best determined through a public hearing where affected parties can be heard. The Court emphasized that such increases have a profound impact on the economy and the public, as they are ultimately passed on to consumers and could affect employment. The balancing of interests in a public hearing is therefore essential. The Court rejected MIAA’s claim that its fees are purely contractual, noting the compulsory and public character of airport services. Consequently, the resolutions were invalid for lack of the required procedural due process.