G.R. No. 106357 - People vs. Balasa

On May 21, 1963, respondents filed a motion requesting this Court to reconsider its decision dated April 30, 1963.
Alternatively, respondents sought that the lower court elevate the evidence already submitted in a pending declaratory relief case (Civil Case No. 48516).
The Court granted the alternative request and received the elevated evidence for consideration.

Consolidated balance sheets of the Social Security System (SSS) for several fiscal years:

Resolution No. 669 of the SSC addressing the construction of a five-million peso building in Quezon City, including multiple indorsements regarding:

Whether the proposed building should fall under the supervision of the Bureau of Public Works pursuant to Section 1901 of the Revised Administrative Code.
Opinions of the Director of Public Works, Government Corporate Counsel, and the Auditor of the SSS.

A letter dated November 16, 1962 from the Acting Secretary of Finance, which denied the SSS’s request for exemption from customs duties and taxes on the importation of a Recordak Reliant 500 Microfilmer.
A brochure titled "The Philippine Social Security Program in Brief" prepared by the SSS’s Research and Public Information Staff, which:

Applies Republic Act 2254 to the SSS, categorizing it as a government-owned or controlled corporation.
Describes the SSS as an insurance scheme of general application.

Illustrate the operational style of the SSS, comparing it to government entities such as the GSIS.
Highlight the investment nature of the SSS funds (real estate, banks, stocks, bonds, and time deposits).
Document the fiduciary and trust fund aspect of the SSS funds.

Organizational documents including structural and functional charts of the SSS, along with a list of its employees.
Job forms detailing the duties of personnel (e.g., field representatives and claims department staff).
The Social Security Act of 1954 and additional rules and regulations governing key aspects of the System (e.g., compulsory coverage, premium payments, retirement, and other employee benefits).
Documents evidencing the quasi-legislative and quasi-judicial powers of the SSC.
A copy of the agreement between the SSC and the PAFLU, recognizing the latter as the sole and exclusive bargaining agent, and a resolution regarding wage payments during strikes.
An actuarial graph and various printed records on appeals pending in court, supplemented by testimonies from SSS officials (Higinio B. Francisco and Pedro Sen).
A rebuttal letter from Acting Secretary Rodrigo D. Perez dated March 7, 1963, concerning the payment of customs duties and taxes on imported equipment.

The Acting Secretary of Finance, in his November 16, 1962 letter, invoked Section 1205 of the Tariff and Customs Code to deny the SSS’s request for tax exemption.
His rationale was that the SSS, although a government entity by some measures, was operating in a manner similar to a business corporation and not performing strictly governmental functions.

The SSS contended that its five-million peso building project need not be under the supervision of the Bureau of Public Works since it was not a strictly government project.
Conversely, the Director of Public Works maintained it fell within the ambit of a national public building, thereby necessitating supervision.
The Government Corporate Counsel and the Auditor both opined that the SSS undertakes ministrant functions common to government-owned or controlled corporations and is not an integral part of the government.

Evidence from various SSS publications and annual reports indicated that the SSS is managed along business lines, with significant investments and operational activities.
Financial data shows a steady and considerable increase in both assets and income, as well as rising benefit payments to members over the years.

The discussion concludes that the SSS, despite possessing quasi-governmental powers, fundamentally functions as a proprietary entity.
This operational character places the SSS within the ambit of the Magna Carta of Labor rather than as a pure governmental agency.

The detailed consolidation of financial reports and organizational documents confirms extensive proprietary and corporate functions.
All evidence supports the view that the SSS operates in a manner akin to other government-owned or controlled corporations.
The escalating financial figures serve as a testament to its successful engagement in business-like, investment-oriented operations.

Whether the SSS, as a government-owned or controlled corporation performing proprietary functions, is entitled to exemption from customs duties and taxes on imported equipment.
Whether the proposed construction of the five-million peso building should be subject to supervision by the Bureau of Public Works under Section 1901 of the Revised Administrative Code.
Whether the operational nature of the SSS—being managed like a business corporation with investment and trust fund features—aligns it more with a commercial entity than a strictly governmental body.
The proper classification of the SSS’s functions:

Whether its functions are predominantly proprietary, reflective of a business operation.
Or whether they fall under the purview of traditional governmental or political functions which might afford it greater statutory privileges.