FACTS
The Oil Price Stabilization Fund (OPSF), a Special Account in the General Fund designed to reimburse oil companies for cost increases in crude oil, was created by then President Ferdinand Marcos by virtue of P.D. 1956.
Petitioner challenged the validity of such issuance, arguing, among others, that since “a ‘special fund’ consists of monies collected through the taxing power of a State, such amounts belong to the State, although the use thereof is limited to the special purpose/objective for which it was created.”
He added that all money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purposes only, and that if the purpose for which a special fund was created has been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds of the Government.
RULING
The Supreme Court ruled in favor of the Government.
The exaction of funds collected under PD 1956 is an exercise of the State’s power of taxation. The OPSF was established precisely to protect local consumers from the adverse consequences frequent oil price adjustments may have upon the economy. It is levied with a regulatory purpose, which, in this case, is to provide a means for the stabilization of the oil industry.
