• MERALCO installed two oil storage tanks on a lot leased from Caltex Philippines. The tanks were used to store fuel oil for Meralco’s power plants.
  • The tanks were not fastened into the ground, nor was it permanently installed. It was supported by an asphalt bed and concrete walls to prevent from sliding.
  • Central Board of Assessment Appeals ruled that the tanks together with the foundation, walls, dikes, steps and pipelines constitute taxable improvements.
  • Meralco contested that the tanks were not under any of the real property enumerated in Art. 415.


  • Whether or not the oil tanks are subject to real property tax.


  • Although the tanks were not listed in Art. 415, the case must be viewed in conjunction with the Assessment Law (section 2) and the Real Property Tax Code (section 3 and 38).
    • Assessment Law, Section 2
      • realty tax is due “on real property, including land, buildings, machinery, and other improvements
    • Real Property Tax Code
      • Section 38
        • Ad valorem tax on property including other improvements affixed or attached to real property
      • Section 3
        • Improvements
          • valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adapt it for new or further purposes.
        • Tanks were not embedded to the ground but considered improvements on the land.

Disclaimer: All case digests posted in this blog are my own. If you think I missed important points raised in the case, feel free to let me know and I will credit you for corrections and/or suggestions you may have. Hope this helps!


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