GR 190431; (January, 2017) (Digest)
G.R. No. 190431 . January 31, 2017.
BAYAN MUNA PARTY-LIST REP. SATUR C. OCAMPO, ET AL. vs. LEANDRO R. MENDOZA, ET AL.
FACTS
Petitioners, party-list representatives and a transport group, sought to annul the Radio Frequency Identification (RFID) Project for motor vehicles implemented through a DOTC Circular, an LTO Memorandum, and a Memorandum of Agreement (MOA) dated June 16, 2009, between the DOTC/LTO and Stradcom Corporation. The project required all vehicles to have an RFID tag as a prerequisite for registration, with a fee of ₱350. The MOA allocated the fee, with a significant portion going to Stradcom and a portion to an “IT Training Fund” deposited in a bank account under Stradcom’s sole control. Petitioners argued the project constituted an illegal exaction, violated procurement laws, and infringed on privacy rights.
ISSUE
The primary issue was whether the RFID Project, as implemented, was valid.
RULING
The Supreme Court declared the RFID Project void. The Court ruled that the ₱350 fee was an unauthorized and illegal exaction. While the state has the power to levy fees for useful government purposes, the fee here was not a regulatory fee but a charge for a proprietary service—the RFID tag and its associated IT system—provided by a private entity, Stradcom. The allocation of the fee, particularly the portion for the “IT Training Fund” under Stradcom’s sole control, effectively constituted an abdication of a government function and an unlawful delegation of the power to collect and manage public funds. The Court found this arrangement had no basis in law and violated established principles on the custody and disposition of public funds.
Furthermore, the Court found the procurement process flawed. The RFID Project was implemented as a mere “enhancement” to Stradcom’s existing Build-Own-Operate (BOO) agreement without a new, competitive public bidding. This circumvented the requirements of the BOT Law and its implementing rules, which mandate public bidding for such projects to ensure transparency and the best terms for the government. The project could not be validly shoehorned into the original BOO agreement. The Court did not reach the constitutional privacy issue, having resolved the case on the grounds of illegal exaction and infirm procurement. The writs of certiorari and prohibition were granted, nullifying the assailed issuances and the MOA.