This is a Petition for Certiorari, Prohibition, and Mandamus^[1] against the enactment and enforcement of Tax Ordinance No. 2023-226 (TO 2023-226, or the ordinance).

TO 2023-226 was passed by respondent Sangguniang Panlungsod (SP) of the City of Iloilo (Iloilo City) on June 27, 2023 and approved by Iloilo City Mayor Jerry P. Tre as on July 5, 2023.^[2] The measure took effect on January 1, 2024, after posting in two public places and publication in three newspapers of general circulation in the city.^[3]

TO 2023-226 adopts and prescribes a new schedule of land values for the assessment of real property tax in Iloilo City,^[4] as well as the procedure and parameters for such assessment.^[5] The new land value schedule superseded the previous one prescribed in a 2005 ordinance.^[6]

Petitioners, who own 35 parcels of land in Iloilo City,^[7] assert that TO 2023-226 is invalid and unconstitutional, for the following reasons:

First, the assessment value schedule under TO 2023-226 is oppressive, confiscatory, and inequitable, as it increased the base values for residential land by 750%, and those for commercial land by 1,933%,^[8] causing realty taxes to correspondingly increase. Petitioners submitted computations based on the new schedule showing a 1,000% increase in Riverside Holdings Corporation's (RHC) realty tax liability, a 1,400% increase in Riverside Boardwalk Properties, Inc.'s (RBPI) case, and a 3,143% increase in the case of another corporation owned by relatives of petitioners Teodoro and Rosalina Pis n (spouses Pis n). TO 2023-226 unjustifiably passes on to taxpayers the costs of the Iloilo City Local Government Unit's (LGU) failure to timely update the assessment values, resulting in tax burdens that petitioners are financially incapable of shouldering.^[9]

Second, the assessment value schedule under TO 2023-226 is arbitrary, as the ordinance does not explain the basis for, or the computation, of the new values.^[10] The Iloilo City LGU failed to prove the inadequacy of its realty tax collections in light of the devolution of additional functions and the increase in LGU's internal revenue allotment shares.^[11] Iloilo City's realty owners should not be forced to bear the consequences of the LGU's negligence in updating assessment values.^[12]

Third, TO 2023-226 violated petitioners' right to procedural due process, as the Iloilo City LGU enacted the ordinance without complying with the following due process regulations: a) Section 2 of Local Assessment Regulation (LAR) No. 1-92 issued by the Department of Finance (DOF), which requires the conduct of a general revision of property assessment every three years and lays down the component activities of the assessment process, the responsible officials for each activity, and the period for conducting said activities;^[13] b) Joint Memorandum Circular (JMC) No. 2010-01, which orders all city assessors to require the submission of sworn statements of properties from owners and administrators of all real properties, prior to the preparation of a new schedule of market values;^[14] and c) Article 276(b) of the Implementing Rules and Regulations of the Local Government Code (LGC IRR) and DOF Order No. 1-04, which prescribes the manner of public notice and hearing with respect to tax ordinances and revenue measures.^[15]

Petitioners reject the consultations and hearings conducted by the Iloilo City LGU as sham proceedings that did not elicit actual comments and observations from the city's realty owners.^[16] Petitioners maintain that their objections to TO 2023-226 were never heard, as shown by the LGU's failure to respond to their reconsideration letter.^[17] Petitioners ask this Court to revisit City of Batangas v. Tolentino,^[18] which held that the notice and hearing requirements for tax ordinances under Sections 186 and 223 of the LGC and Article 276 of the LGC IRR do not apply to ordinances setting property values for real property taxation. Petitioners argue that such distinction is simplistic, being based merely on the location of Sections 186 and 223 within the text of the LGC, and disregards "the broader principles of due process, transparency, and good governance that underpin the requirement of public consultation."^[19] There should be no distinction in the notice and hearing requirements for local tax ordinances per se and property value schedule ordinances, because both kinds of ordinances increase tax burdens on the basis of empirical economic data, and therefore require the same checks and balances against arbitrariness and caprice.^[20]

Fourth, there is no proof that TO 2023-226 was published and posted in accordance with its own rule therefor, i.e., publication for three consecutive days in a newspaper of general circulation in Iloilo City, and posting in at least three conspicuous public places.^[21]

Petitioners assert that the mere passage of TO 2023-226 into law created the actual controversy needed to properly invoke the power of judicial review. Consequently, they also argue that the immediate aftermath of the ordinance's enactment is the earliest opportunity to assail its constitutionality.^[22] Petitioners justify direct resort to this Court by claiming that the astronomical increase in assessment values and realty tax liabilities under TO 2023-226 creates an issue of transcendental importance that directly implicates the interests of Iloilo City's residents and real property owners. They further claim that the issues raised in the petition are pure questions of law that may be resolved by this Court.^[23] Petitioners claim that they have no other plain, speedy, and adequate remedies against TO 2023-226. Paying the increased taxes under protest is unfair, unreasonable, and impossible as petitioners cannot afford to pay the amounts assessed against them under the new schedule. Appeal to the Secretary of Justice is futile as it will not stop the Iloilo City LGU from collecting and assessing taxes based on the new schedule: something which petitioners claim has already come to pass.^[24]

Petitioners finally argue that the Iloilo City LGU may be compelled by mandamus to return all realty tax payments made under TO 2023-226, as the LGU will be unjustly enriched if it is allowed to keep the taxes it collected under a void revenue measure.^[25]

The Iloilo City LGU ripostes that petitioners failed to rebut the presumption of validity enjoyed by local ordinances. TO 2023-226 is a valid exercise of the LGU's lawmaking, taxing, and police powers. It was enacted in compliance with state audit recommendations, as Iloilo City's assessment values were already lagging behind those of its neighboring towns.^[26] The revenue it will generate is necessary in view of the additional functions that were devolved to LGUs in 2021 under Executive Order No. 138.^[27]

TO 2023-226 does not violate the procedural due process rights of Iloilo City's taxpayers, as it was enacted in compliance with Articles 275 and 276 of the LGC IRR. The Iloilo City LGU submitted documentary proof of the public consultations and committee hearings conducted, including certifications of posting of copies of the proposed ordinance in three conspicuous places, and certifications of its publication in newspapers of general circulation in the city.^[28] The Iloilo City LGU also submitted a timeline of the activities leading up to the enactment of TO 2023-226, in compliance with DOF LAR No. 1-92.^[29]

The new assessment values in TO 2023-226 are not oppressive, confiscatory, inequitable, or arbitrary, as they are based on opinion values obtained from local banks and real estate brokers, and were approved by the DOF's Bureau of Local Government Finance (BLGF).^[30] The sharp increase in values simply reflects the increased market value of lands in Iloilo City.

The Iloilo City LGU prays that the petition be dismissed for failure to exhaust the remedies under the LGC, which, it claims, is a necessary condition for the invocation of judicial review against a local tax ordinance.^[31] It further argues that petitioners failed to: 1) observe the hierarchy of courts;^[32] and 2) show the necessity of issuing mandamus.^[33]

The Petition fails.

Judicial review can be exercised only in the presence of: 1) an actual case or controversy; 2) a person with standing to invoke judicial review; 3) a question of constitutionality raised at the earliest possible opportunity; and 4) a question of constitutionality that is the very lis mota of the case.^[34]

The leading case of Gios-Samar, Inc. v. Department of Transportation and Communications^[35] instructs that:

[W]hen a question before the Court involves determination of a factual issue indispensable to the resolution of the legal issue, the Court will refuse to resolve the question regardless of the allegation or invocation of compelling reasons, such as the transcendental or paramount importance of the case. Such question must first be brought before the proper trial courts or the CA, both of which are specially equipped to try and resolve factual questions.^[36]

Almost all of petitioners' arguments against TO 2023-226 involve factual issues. Whether the Iloilo City LGU actually complied with the DOF-prescribed assessment revision procedure in the preparation of the new schedule under TO 2023-226 is a mixed question of fact and law which requires the evaluation, not only of the documentary trail leading to the enacted ordinance, but also the testimonies of the officers who participated in the preparation of the schedule. The same is true for petitioners' allegation of sham hearings conducted by its LGU. Only a trial court with the power to receive and evaluate documentary and testimonial evidence can determine the veracity of such a claim.

On the economic aspect, the first and second errors raised by petitioners pertain to the economic merits of TO 2023-226, which they argue are unreasonable, oppressive, confiscatory, inequitable, and arbitrary. Lopez v. City of Manila^[37] holds that the "determination of whether or not [a] tax is excessive, oppressive or confiscatory . . . is essentially a question of fact . . . [which the Supreme Court is precluded] from reviewing."^[38] This is exactly why the LGC provides taxpayers with the following administrative remedies against inappropriate, unjust, or illegal exercises of the realty taxation power: 1) the right to appeal the constitutionality or legality of tax ordinances and revenue measures before the Secretary of Justice;^[39] 2) the right to appeal property assessments before the assessment appeals tribunals;^[40] and 3) the right to protest tax assessments before the local treasurer.^[41] Thus, in realty tax protests, "administrative remedies must first be exhausted before resort to judicial action can prosper, [unless] the controversy does not involve questions of fact but only of law;"^[42] furthermore,

[W]here administrative remedies are available, petitions for the issuance of [the] peremptory writs [of certiorari, prohibition and mandamus] do not lie in order to give the administrative body the opportunity to decide the matter by itself correctly and to prevent unnecessary and premature resort to courts.

[S]hould the taxpayer/real property owner question the excessiveness or reasonableness of the assessment, ... the taxpayer should first pay the tax before his protest can be entertained.^[43]

Here, petitioners justify direct resort to this Court by: 1) claiming that their distressed finances render them unable to pay the greatly-increased assessments under TO 2023-226; and 2) invoking the adverse economic impacts of TO 2023-226 on Iloilo City's taxpayers as proof of the transcendental importance of ruling on its validity and constitutionality. Petitioners, however, forget that the power of judicial review through certiorari, prohibition, and mandamus is not vested in this Court alone. Gios-Samar instructs again:

This doctrine of hierarchy of courts guides litigants as to the proper venue of appeals and/or the appropriate forum for the issuance of extraordinary writs. Thus, although this Court, the CA, and the RTC have concurrent original jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus, parties are directed, as a rule, to file their petitions before the lower-ranked court. Failure to comply is sufficient cause for the dismissal of the petition.^[44]

Indeed, the Regional Trial Courts can issue and enforce writs of certiorari, prohibition, mandamus, and injunction within their respective territorial jurisdictions,^[45] while the CA is empowered to do so without territorial limitation, in exercise of its original jurisdiction.^[46] The question of whether petitioners' financial situation is dire enough to justify skipping administrative remedies is a question of fact which requires the presentation and evaluation of petitioners' financial and business records. Likewise, judging the economic impact of the new assessment values on Iloilo City's landholders as a class requires the presentation and evaluation of empirical economic data.

In Aala v. Uy,^[47] the Tagum City Council passed an assessment value schedule ordinance which allegedly increased assessment values by 833%. A group of Tagum residents challenged the ordinance by certiorari directly before this Court. This Court dismissed the petition for "serious procedural errors,"^[48] some of which have been repeated here:

1) As earlier mentioned, a certiorari action before the Supreme Court which raises mixed issues of fact and law violates the doctrines of hierarchy of courts and exhaustion of administrative remedies. Questions of fact should be ventilated before a court or tribunal that tries facts, which the Supreme Court does not.^[49] The Court in Aala thus refused to pass upon "the . . . issue of whether respondents committed grave abuse of discretion in preparing, enacting, and approving City Ordinance No. 558, s-2012," as it "requires the presentation of evidence on the procedure undertaken by the City Government of Tagum:"^[50] which is the gist of herein petitioners' third assignment of error, and which We must likewise refrain from passing upon.

2) Also in Aala the petitioners argued that the increased assessment values were exorbitant. Reiterating Lopez, the Court ruled therein that the exorbitance of an assessment value increase cannot be determined by mere comparison of the old and new values, as this requires reception of evidence and the assistance of technical experts.^[51]

3) In the same case, the petitioners also rejected the adequacy of Section 187 of the LGC as a remedy against realty assessment revisions, as the secretary of Justice has no power to enjoin any collection under an appealed assessment.^[52] The Court maintained that resort to Section 187 is mandatory. As the taxes under the new assessment schedule had not yet accrued and the petitioners therein have not received revised assessments, there was no collection to be enjoined and petitioners had ample time to question the new schedule before the secretary of Justice. Here, the Iloilo City LGU approved TO 2023-226 in July 2023 and thereafter started issuing new assessments based on the increased values therein, with petitioners receiving theirs on December 18, 2023.^[53] Petitioners are silent as to whether they contested their new assessments within the period prescribed in Section 226 of the LGC. Their chosen course of action appears to be a December 19, 2023 letter to the Mayor of Iloilo City praying that their assessments be "walked back and reconsidered."^[54] When TO 2023-226 finally took effect in January 2024, petitioners did not file a Section 187 appeal within the reglementary period. Instead, they filed the present Petition directly before this Court on March 11, 2024.^[55]

Admittedly, petitioners will remain obliged to pay taxes based on the new assessments even if they timely resorted to the remedies under Sections 187 and 226 of the LGC. However, as Associate Justice Maria Filomena D. Singh (Justice Singh) pointed out during the deliberations of this case, had petitioners availed of these remedies, any decision in their favor would have given them immediate relief from the increased tax burden, either by the cancellation of their assessments or the nullification of TO 2023-226. Given these circumstances, We again agree with Justice Singh that the present Petition appears to be a mere afterthought and an improper substitute for the lost remedy of appeal under Section 187 of the LGC. Worse, petitioners sought their desired remedies from the wrong court. A trial court could have enjoined respondents from collecting taxes under TO 2023-226 after a hearing to determine the factual merits of an injunction.^[56] Even then, direct resort to the courts against local tax ordinances is proper only when the facts are undisputed and only pure questions of law are raised,^[57] as in Alta Vista Golf and Country Club v. City of Cebu,^[58] where the lack of public hearings was not disputed and the central issue was a matter of statutory construction, i.e., whether the amusement tax under the LGC may be imposed on golf course operators; or in Ty v. Hon. Trampe,^[59] where the parties agreed that the issue is purely legal, i.e., whether the LGC repealed a law requiring the schedule of market values for real property assessment in Metro Manila to be prepared jointly by all the LGU assessors therein. Since petitioners failed to avail of the remedies under Sections 187 and 226 of the LGC, their remaining recourse is payment under protest under Section 252, which is mandatory where the taxpayer assails the economic merits, i.e., the reasonableness of the increase,^[60] as in the case at bar.

The assessment of real property values for taxation purposes is a technical matter which requires the gathering and evaluation of empirical data. This fact is amplified by Republic Act No. 12001, or the Real Property Valuation and Assessment Reform Act (RPVARA), which took effect on July 6, 2024, a few months after the effectivity of TO 2023-226. Section 5 of the RPVARA designates and empowers the BLGF as the lead implementor of the law, in coordination with the LGU assessment offices and other stakeholders. The RPVARA introduces a national system for real property valuation based on a common set of standards denominated as the Philippine Valuation Standards (PVS), which are "aligned with globally accepted principles and definitions in real property valuation with due consideration of the prevailing economic conditions."^[61] Section 14 of the RPVARA ordains that "all real properties. . . shall be valued or appraised based on prevailing market values in the locality where the property is situated, in conformity with the PVS." Section 19 of the RPVARA also requires all LGU assessment offices to update their schedules of market values within two years from the effectivity thereof. The same provision codifies the three-year cycle for the general revision of property assessments under LAR No. 1-92. As it now stands, LGUs are duty-bound to follow the provisions of the RPVARA and its implementing rules^[62] in the conduct of real property valuation and assessment. They can no longer rely merely on opinion values from selected local banks and appraisers, which is what respondents claim to have done; or delay the revision of the schedule of market values, which both parties admit the Iloilo City LGU is guilty of.

The RPVARA further recognizes that linking real property tax assessments to the market values of real properties can result in significant increases in the tax burden of real property tax. It thus provides for mitigating measures such a 6% cap on all real property tax increases for the first year of its effectivity,^[63] as well as a real property tax amnesty. Such amnesty covers penalties, surcharges, and interests from all unpaid real property taxes prior to the effectivity of the law, including special education fund levy, idle land tax, and other special levy taxes. The amnesty may be availed within a period of two years after the effectivity of the RPVARA.^[64]

Jurisprudence has been consistent in dealing with challenges against increased real property assessment levels. The adjudication of the substantive and procedural merits of real property assessments has been assigned by law to specialized administrative agencies which have the technical expertise to deal with the factual issues and masses of empirical data^[65] involved in the fields of land valuation and realty taxation. Following the hierarchy of courts, the adjudication of pure questions of law arising from the real property assessment process has assigned by law to the trial courts, not to the Supreme Court.

ACCORDINGLY, the Petition is DISMISSED.

SO ORDERED.

Gesmundo, C.J., Caguioa, Hernando, Inting, Zalameda, Rosario, Lopez, Dimaampao, Marquez, Kho, Jr., and Villanueva, JJ., concur.
Leonen, SAJ., see concurring opinion.
Lazaro-Javier, J., with dissent.
Singh,^* J., on leave.

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^* On leave.

^[1] Rollo, pp. 3-57.

^[2] Id. at. 159, 1397. Certified true machine copy of TO 2023-226; Comment.

^[3] Id. at 1398, Comment.

^[4] Id. at 59-110. Certified true machine copy of TO 2023-226.

^[5] Id. at 127-159.

^[6] Id. at 18, 268. Petition; Report of the Committee on Ways and Means of the SP of Iloilo City.

^[7] Id. at 7-10, Petition.

^[8] Id. at 28.

^[9] Id. at 20-22, 26-29, 2028-2031. The corporation faced with the 3,143% increase is not a party to the case.

^[10] Id. at 28.

^[11] Id. at 2012-2014, Reply.

^[12] Id. at 2014-2015.

^[13] Id. at 31-33, Petition.

^[14] Id. at 32-33.

^[15] Id. at 34-36.

^[16] Id. at 2019-2022, Reply.

^[17] Id. at 2013-2014.

^[18] 902 Phil. 120 (2021) [Per J. Leonen, Third Division].

^[19] Rollo, p. 2027.

^[20] Id. at 2024-2027.

^[21] Id. at 36, 2023-2024, Petition and Reply.

^[22] Id. at 37-38, Petition.

^[23] Id. at 39, 2032-2036.

^[24] Id. at 39-40, 2032-2034.

^[25] Id. at 40-41.

^[26] Id. at 1392-1393, 1407-1408, Comment.

^[27] Id. at 1392, 1399-1400.

^[28] Id. at 1492-1494, 1830-1877, 1980-2001.

^[29] Id. at 1411-1413.

^[30] Id. at 1413-1414.

^[31] Id. at 1415-1419.

^[32] Id. at 1419-1422.

^[33] Id. at 1424-1425.

^[34] Bayan Muna Party-List Representatives Ocampo and Casino v. President Macapagal-Arroyo, 932 Phil. 753, 766 (2023) [Per J. Gaerlan, En Banc].

^[35] 849 Phil. 120 (2019) [Per J. Jardeleza, En Banc].

^[36] Id. at 187.

^[37] 363 Phil. 68 (1999) [Per J. Quisumbing, Second Division].

^[38] Id. at 82.

^[39] LOCAL GOV'T. CODE, sec. 187.

^[40] LOCAL GOV'T. CODE, secs. 226-231.

^[41] LOCAL GOV'T. CODE, sec. 252.

^[42] Ty v. Hon. Trampe, 321 Phil. 81, 101 (1995) [Per J. Panganiban, En Banc]. Emphasis and underlining supplied.

^[43] Olivares v. Marquez, 482 Phil. 183, 188-189 (2004) [Per J. Austria-Martinez, Second Division].

^[44] Gios-Samar, Inc. v. Department of Transportation and Communications, 849 Phil. 120, 166-167 (2019) [Per J. Jardeleza, En Banc].

^[45] BATAS PAMBANSA BLG. 129, sec. 21.

^[46] BATAS PAMBANSA BLG. 129, sec. 9(1).

^[47] 803 Phil. 36 (2017) [Per J. Leonen, En Banc].

^[48] Id. at 54.

^[49] Id. at 57-59. See also Ty v. Hon. Trampe, 321 Phil. 81 (1995) [Per J. Panganiban, En Banc].

^[50] Id. at 58.

^[51] Id. at 59.

^[52] Id. at 47.

^[53] Rollo, pp. 345-363, Notices of Assessment.

^[54] Id. at 369. Letter from Riverside Group of Companies to Mayor Geronimo P. Tre as.

^[55] Id. at 1, 56-57. Processor's checklist and Affidavit of Service.

^[56] Courts can issue injunctions against the collection of local taxes because the LGC does not so prohibit. The rule on the non-injunctibility of tax collections is found only in the National Internal Revenue Code and therefore applies only to the collection of national internal revenue taxes. Angeles City v. Angeles Elec. Corp., 636 Phil. 43, 55-56 (2010) [Per J. Del Castillo, First Division].

^[57] Ty v. Hon. Trampe, 321 Phil. 81, 86 (1995) [Per J. Panganiban, En Banc]. Emphasis supplied.

^[58] 778 Phil. 685 (2016) [Per J. Leonardo-De Castro, First Division].

^[59] 321 Phil. 81 (1995) [Per J. Panganiban, En Banc].

^[60] Id. at 101-102.

^[61] REPUBLIC ACT No. 12001, secs. 4(j) and 13.

^[62] BLGF Memorandum Circular No. 001-2025 (2025), available at https://blgf.gov.ph/wp-content/uploads/2025/03/BLGF-MC-No.-001.2025-IRR-of-RA-No.-12001-or-the-RPVARA-Reform-Act-6-Jan-2025-Approved-3.pdf

^[63] REPUBLIC ACT NO. 12001, sec. 29, third paragraph.

^[64] REPUBLIC ACT NO. 12001, sec. 30.

^[65] See REPUBLIC ACT NO. 12001, secs 22-24, which mandate the development of a real property transaction information database which will be a future source of data for the refinement of the PVS.

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CONCURRING OPINION

LEONEN, SAJ:

I concur in the dismissal of the Petition.