Court Favors SBMA on CUSA Case Vs. Philip Morris
THE Regional Trial Court Branch 75 of Olongapo City has ruled that the Common Use Service Area (CUSA) fee imposed by the Subic Bay Metropolitan Authority (SBMA) is a “true CUSA fee” because it is “for reimbursement of expenses for specific municipal services for the benefit of locators and tenants.”
In the ruling signed on December 2, 2015 and received by the SBMA on December 7, Judge Raymond C. Viray also said that “the CUSA fee rates are not arbitrary and confiscatory,” the rates being “reasonable and bear a germane relation to the purpose of the implementation.”
The decision stemmed from a case filed by Phillip Morris Philippines Manufacturing, Inc.(PMPMI) seeking to declare null and void and permanently enjoin SBMA from implementing and enforcing Resolution No. 12-08-4505 approved by the SBMA Board of Directors on 3 August 2012 and issued on August 17, 2012, as well as Resolution No. 12-04-4348 approved by the SBMA Board of Directors on 13 April 2012 and issued April 27, 2012.
Among others, PMPMI questioned SBMA’s power under R.A. 7227 and its IRR to impose a CUSA, whether or not SBMA’s CUSA fee is a tax masquerading as a CUSA fee, if the imposition of the CUSA fee is sanctioned under the lease agreements and whether or not the CUSA fee rates are arbitrary and confiscatory.
Senior Deputy Administrator for Support Services Atty. Ramon O. Agregado testified that the CUSA fee “is a cost-recovery measure for actual services rendered for Security Services or Law Enforcement, Fire Protection and Prevention Services, Street Cleaning and Street lighting for the benefit of all its locators and tenants in the Freeport and, therefore, not a tax.
The court decision has a significant impact on all locators and tenants in the Subic Freeport, some of whom, like PMPMI, has gone to court to question the CUSA’s implementation. However, since the CUSA policy took effect in October 1, 2012, many locators and residents have already started to remit payments for the CUSA.
“In sum, the court rules, and so holds, that the questioned SBMA Resolutions and letter dated August 24, 2012 are not tax measures but cost recovery mechanisms validly issued by the SBMA pursuant to R.A. 7227 and sanctioned under the lease agreements. The measures, including the penalties, are reasonable, not confiscatory and duly published,” Judge Viray said in his decision dismissing the complaint of PMPMI. ( L. G. Vizcocho)
