G.R. No. 170656 & 170657; August 15, 2007
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, et al. vs. VIRON TRANSPORTATION CO., INC., and METROPOLITAN MANILA DEVELOPMENT AUTHORITY, et al. vs. MENCORP TRANSPORTATION SYSTEM, INC.

FACTS

President Gloria Macapagal-Arroyo issued Executive Order No. 179, designating the Metropolitan Manila Development Authority (MMDA) as the implementing agency for the Greater Manila Mass Transport System Project. The project aimed to decongest traffic by eliminating provincial bus terminals along major Metro Manila thoroughfares like EDSA and establishing integrated transport terminals. Pursuant to this, the MMDA ordered the closure of certain bus terminals. Affected bus companies, Viron Transportation and Mencorp, challenged the MMDA’s authority, arguing the order constituted an unreasonable exercise of police power. The Regional Trial Court declared EO 179 unconstitutional, prompting the MMDA to elevate the case to the Supreme Court.

ISSUE

Whether the MMDA, under EO 179, possesses the authority to order the closure of provincial bus terminals along major Metro Manila thoroughfares.

RULING

The Supreme Court ruled that the MMDA lacks the authority to order the closure of the bus terminals. The legal logic rests on the nature of the MMDA as a development authority, not a local government unit or a political corporation with legislative and police powers. The Court emphasized that the MMDA’s powers, as defined under Republic Act No. 7924 , are limited to planning, monitoring, and coordinative functions. It is a special development and administrative body whose functions are primarily administrative and coordinative. The implementation of a project like the terminal closures, which involves the exercise of police power through regulation of public utilities, requires legislative authority. Police power, the power to prescribe regulations to promote public welfare, is primarily lodged in the legislature. While it may be delegated, such delegation must be expressly granted by law. EO 179, an executive issuance, cannot validly delegate this power to the MMDA, as the law creating the MMDA did not grant it such regulatory or police powers. Consequently, the MMDA’s orders were issued without legal basis. The Court, however, clarified that its decision does not preclude the government from pursuing traffic decongestion projects through the proper exercise of police power by the legislative branch or through local government units, provided it is done within constitutional bounds.