G.R. No. 185184, October 3, 2023
Metropolitan Waterworks and Sewerage System, represented by its Administrator, Diosdado Jose M. Allado, Petitioner, vs. Provincial Government of Bulacan, represented by Gov. Josefina M. Dela Cruz, Respondent.

FACTS

The Provincial Government of Bulacan filed a Complaint to collect its national wealth share from the Metropolitan Waterworks and Sewerage System (MWSS) for the use and development of the waters of Angat Dam, invoking Article X, Section 7 of the Constitution and Section 289 of the Local Government Code. It asserted that Angat Dam is within its territorial jurisdiction. MWSS contested liability, arguing that Angat Dam is an artificial structure, thus its impounded waters are not “national wealth” as the water is merely stored and does not originate from Bulacan. MWSS further contended it is not engaged in the commercial development or utilization of national wealth, as its functions are regulatory and governmental, aimed at public water supply, not profit generation.
The Regional Trial Court and the Court of Appeals ruled in favor of the Provincial Government of Bulacan. The Supreme Court, in the main ponencia, reversed these rulings, leading to this Separate Opinion by Justice Leonen concurring with the result but elaborating on foundational principles.

ISSUE

The core issue is whether MWSS is liable to pay the Provincial Government of Bulacan a share in the national wealth for the use of Angat Dam’s waters.

RULING

Justice Leonen concurs in the ponencia’s ruling that MWSS is not liable. The ponencia held that for a local government unit to claim a share, the resource must originate from a natural source. Dam water, being impounded in an artificial receptacle and diverted, is not considered part of the national wealth under the Local Government Code. Furthermore, MWSS is not engaged in the “utilization and development” of national wealth in a commercial sense, as it performs essential governmental functions for public welfare. Its fees are for operations and maintenance, constituting capital, not revenue from which a share can be derived.
In his Separate Opinion, Justice Leonen emphasizes the constitutional right of local government units to an equitable share in the proceeds from national wealth within their areas, a key component of local autonomy under Article X, Section 7 of the Constitution. He frames this right within the broader “public trust doctrine,” where the State holds natural resources in trust for the benefit of the people. This doctrine, as discussed in Maynilad Water Services, Inc. v. The Secretary of the DENR, posits that the government is a trustee of communal resources, obligated to manage them for public welfare, considering ecological balance and intergenerational equity.
Thus, the local government’s share is not merely a fiscal entitlement but a recognition that communities hosting natural resources should benefit from their development, reinforcing the State’s fiduciary duty. While concurring that the specific legal requisites for a claim are absent in this case against MWSS, Justice Leonen underscores that the constitutional principle ensuring local benefits from national wealth remains vital and must be protected to honor the public trust between the State and its citizens.