Legal standing to file a taxpayers’ suit
By: Atty. Joshua Rizlan A. Simbillo on September 25,2024
Taxpayers have the standing to institute a taxpayer’s suit when public resources are at risk of being misused.
A taxpayer’s suit is where an individual taxpayer seeks to prevent the illegal disbursement of public funds. It is an effective tool for ordinary citizens to challenge governmental actions.
In Mamba v. Lara (GR. No. 165109, 14 December 2009) (the “Mamba case”), the Supreme Court affirmed that a taxpayer is allowed to sue when there is a claim that public funds are illegally disbursed, that the public money is being deflected to any improper purpose, or that there is wastage of public funds through the enforcement of an invalid or unconstitutional law. In instituting such action, however, the taxpayer must have legal standing or “locus standi.” This article explores the principles governing legal standing and how Philippine jurisprudence has interpreted this doctrine in key cases.
Section 1, Article VIII of the 1987 Constitution confers on the Supreme Court the power to exercise judicial review. When issues of constitutionality are raised, the Court can exercise its power of judicial review only if the following requisites are present: (1) the existence of an actual and appropriate case; (2) the existence of a personal and substantial interest of the party raising the constitutional question, or legal standing; (3) the exercise of judicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.
Among these requirements, most critical is the concept of legal standing or locus standi, which refers to a party’s personal and substantial interest in a case, typically arising from a direct injury suffered as a result of the challenged governmental action. Unless a person’s constitutional rights are adversely affected, he or she generally lacks the legal standing to challenge a statute or action.
In private suits, legal standing is governed by the “real parties-in-interest“. (Section 2 of Rule 3 of the Rules of Court). It means that every private action or suit shall be prosecuted or defended in the name of a real party-in-interest—the party who would be benefited or injured by the judgment, or the party entitled to the avails of the suit.
For public suits, however, there is some difficulty in determining locus standi because of their constitutional and public policy underpinnings, which are quite different from the concept of a real party-in-interest. The plaintiff who asserts a “public right” in assailing an allegedly illegal official action does so as a representative of the general public. Hence, the plaintiff must make out a sufficient interest in the vindication of the public order and the securing of relief.
In the Mamba case, the Supreme Court held that for a taxpayer’s suit to proceed, two conditions must be met:
- public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularity is committed, and
- the petitioner must demonstrate that they are directly affected by the alleged illegal act. This second condition was referred to by the Court as the “direct injury test” in jurisprudence.
The Supreme Court held that the first requisite was present in the Mamba case because public funds were to be disbursed for the construction of a town center. While the construction costs were to be funded from the proceeds of bonds issued to the public, government support was still spent for paying the interest of the bonds. In fact, the governor therein requested an appropriation from the Sangguniang Panlalawigan for the payment of bond interest.
As to the second requisite of direct injury, the Supreme Court acknowledged that jurisprudence has relaxed the stringent “direct injury test” bearing in mind that locus standi is a procedural technicality. Thus, the Supreme Court recognized that by invoking “transcendental importance”, “paramount public interest”, or “far-reaching implications”, ordinary citizens and taxpayers have been allowed to sue even if they failed to show direct injury. The Court then noted that in cases where serious legal issues were raised or where public expenditures of millions of pesos were involved, the Court had liberally upheld the standing of taxpayers.
In the more recent case of Syjuco, Jr. v. Abayan (GR Nos. 215650, 215653, 215703, 215704 & 216735, 28 March 2023), the taxpayer’s suit therein also prospered, and the legal standing of petitioners were upheld. In this case, petitioners, together as taxpayers, legislators, labor groups, and commuters, challenged Department Order (DO) No. 2014-014, which adjusted fares for the Light Rail Transit (LRT) and Metro Rail Transit (MRT) systems. The Supreme Court held that where government funds were being re-directed to unknown development projects and relief operations in other parts of the country, a taxpayer may institute a taxpayer’s suit since public money is under threat of being deflected to an improper purpose. The Supreme Court also found that the matter was of transcendental importance and gave the petitioners sufficient standing.
Ultimately, the principles surrounding locus standi in taxpayer suits are more than legal technicalities—they are essential mechanisms for ensuring governmental transparency and protecting public funds. Thus, the fact that standing requirements are relaxed in cases of significant public interest reflects the enduring importance of the judiciary in preserving constitutional order.
Joshua Rizlan A. Simbillo is a Lawyer and an associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com.