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MANILA, Philippines—The Supreme Court on Wednesday stopped the Quezon City government from auctioning off the prime property now hosting the Ayala TechnoHub due to the supposed failure of its lessor, the University of the Philippines, to pay real estate taxes amounting to P117 million.
The high court’s Second Division granted UP’s petition for a temporary restraining order (TRO) against the auction scheduled on Nov. 20.
The UP administration, in a petition filed last week through the Office of the Solicitor General, maintained that it is exempt from paying such taxes to the local government under the university’s charter and the Local Government Code.
The state university is asking the court to nullify the statement of delinquency and the final notice of delinquency issued by the city government in May and July, respectively, in an effort to collect P117,182,700 in tax liabilities from 2009 to the first three quarters of 2014.
UP leased the property to Ayala Land Inc. in October 2006. Located along Commonwealth Avenue, the 380,630-square meter property has since been developed into an info-tech and research hub, with sections allotted for commercial establishments.
The court’s Second Division chaired by Justice Antonio Carpio ordered the respondent, the City Treasurer of Quezon City, to file its comment on the UP petition within 10 days.
In an earlier interview, Quezon City Treasurer Edgar Villanueva said the UP property became taxable when it started to be used in a proprietary function and not for educational purposes.
“We’re charging UP because our office thinks that they’re taxable, because the property is now being utilized by a private entity which is also taxable,” Villanueva said. “According to the Constitution, educational institutions are exempt from payment of real property tax if (the land) is being used directly and specifically for educational purposes. We recognize that. But when UP utilized the property in a proprietary function, they stepped into the (category) of an ordinary taxable entity.”
He said the Bureau of Local Government Finance, an agency under the Department of Finance, had concurred with this position.
But in its petition, UP insisted that the tax exemption applies to its properties “whether used for educational purposes or in support thereof,” and that the city government’s plan to take over and sell the land would cause irreparable damage to UP and deprive it of a major opportunity “to raise much-needed revenues in support of its mandate.”
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