1) Why this matters

Public markets are typically owned and operated by local government units (LGUs)—cities, municipalities, and sometimes barangays—under their constitutional and statutory mandate to generate local revenues and provide basic services. Stallholders (vendors/tenants) often pay daily stall fees (sometimes called “puwesto,” “arkabala,” “rentals,” or “market fees”) and electricity charges (flat rates, sub-metered billing, or “light and power” fees). Disputes usually arise when charges feel excessive, lack transparency, or appear unauthorized.

The legality of these charges is not determined by custom alone. In Philippine law, an LGU must be able to point to a valid legal basis—most commonly a duly enacted ordinance—and must collect and account for funds according to auditing rules and due process standards.

2) Core legal framework (Philippine context)

A. Constitutional foundation

LGUs enjoy local autonomy and may create sources of revenue, subject to limitations and guidelines provided by Congress. This is the constitutional policy basis that supports local fees for public facilities like markets.

B. Local Government Code of 1991 (Republic Act No. 7160)

The Local Government Code (LGC) is the primary law governing:

LGU taxing and fee-imposing powers
Authority to operate and maintain public markets
Requirements for revenue measures (ordinances, publication, effectivity)
General limits: reasonableness, uniformity, public purpose, non-oppressiveness

In practice, stall fees and related charges are typically treated as “fees/charges” or “rentals” for the use of LGU property rather than “taxes,” though the distinction depends on how the ordinance is written and how the charge operates.

C. Power of the sanggunian and ordinance requirement

As a rule, recurring collections from the public (including market vendors) must be authorized by:

An ordinance (not just a memo, tarpaulin, or verbal instruction), and
Implementing rules or market code issued consistent with that ordinance.

If the amount, basis, or manner of collection is changed, a new or amended ordinance is normally required.

D. Government Auditing Code and COA rules (Presidential Decree No. 1445; COA regulations)

Even if a fee is substantively valid, collection can become legally problematic if:

No official receipt is issued,
Collections are not remitted intact and timely to the LGU cashier/treasurer,
Collectors lack authority/designation,
Funds are treated as “private” or “association money” despite being collected for a public facility,
The arrangement bypasses required accounting controls.

COA rules strongly influence what is permissible operationally (e.g., who may collect, how collections must be recorded, and how disbursements must be supported).

E. Electricity sector laws and regulation (EPIRA – RA 9136; ERC/DOE regulatory environment)

Electricity is a regulated industry. As a general policy:

Distribution utilities are regulated.
Retail sale and charging structures are regulated in various contexts.
“Resale” of electricity can raise regulatory issues unless structured as a recovery of actual costs under a lawful arrangement (e.g., sub-metering with pass-through, where permitted).

For LGU-run markets, electricity charging must be handled carefully: it should be clearly authorized, transparent, and typically structured as pass-through reimbursement of actual consumption/costs rather than profit-making—unless a clear lawful basis exists.

3) Daily stall fees: what makes them legal?

A. Valid basis: ordinance + market rules

A daily stall fee is generally legal when it is:

Authorized by a valid ordinance (and reflected in a revenue code/market code or schedule of fees),
Imposed for use/occupancy of market premises (LGU property),
Collected by authorized personnel and properly receipted,
Reasonable and non-oppressive, and
Applied uniformly to similarly situated vendors (unless valid classifications exist).

Red flags:

Fee is imposed only through an “office order,” “memorandum,” or a private association’s resolution without an ordinance.
Fee increased without amending the ordinance or without proper publication/effectivity requirements.
Fee is collected but not reflected in official receipts or not remitted to the LGU.

B. Fee vs. tax vs. rental: why the label matters

The label (“rent,” “fee,” “dues”) is less important than the substance:

A fee/charge is typically tied to use of a facility or regulatory/service cost.
A tax is primarily for raising general revenue, not necessarily tied to a specific service or facility use.
A rental/lease payment arises from contractual occupancy of LGU property.

Public market “daily fees” often operate like rentals/user fees. If structured like a tax (broad-based, not connected to facility use), it may require stricter compliance with limitations on local taxing power and may be more vulnerable to challenge.

C. Due process, transparency, and non-oppressiveness

Even with an ordinance, the LGU should ensure:

Clear schedule of fees (rate per stall size/type, location, frequency),
Clear consequences for non-payment that respect due process,
Non-discriminatory implementation,
Documented authority of collectors,
Accessible complaint and administrative review channels.

Non-oppressive is a recurring legal standard in local revenue measures. Excessive or arbitrary fees can be challenged as unreasonable, especially if unrelated to market maintenance, sanitation, security, or facility costs.

D. Common lawful classifications

Differentiation is usually lawful if based on rational criteria, such as:

Stall size, location (prime vs. regular), product category,
Use of cold storage/wet section requirements,
Temporary/ambulant vending vs. permanent stallholder,
Day-use tables vs. monthly leased stalls.

What’s risky is classification that appears punitive, politically targeted, or unrelated to legitimate market administration objectives.

4) Electricity charges in public markets: when are they legal?

Electricity charging becomes legally sensitive because it sits at the intersection of:

LGU property management (market operations),
Local revenue authority (fees and charges),
Auditing/accounting controls, and
National regulation of electricity pricing/retail arrangements.

A. The safest legal structure: pass-through reimbursement authorized by ordinance/contract

The most defensible structure is:

Electricity is supplied under an account billed by the distribution utility (in the LGU’s name or market authority’s name),
Vendors are charged based on:
- Sub-metered actual consumption, or
- A reasonable allocation formula (where sub-metering is not feasible), and
The charge is framed as reimbursement/pass-through of actual cost (plus only properly authorized administrative components, if any), and
The basis and method are authorized by ordinance and/or stall lease contracts, with:
- Transparent computation,
- Right to inspect readings/bills,
- Receipting and proper remittance.

B. Flat rates: allowed but vulnerable if not evidence-based

Flat “light and power” charges (e.g., ₱X/day) can be lawful if authorized, but are easier to attack if:

They exceed actual average costs,
There is no rational basis or periodic review,
They effectively become profit-making without clear authority,
They are imposed even on stalls without electrical access, or during outages.

C. “Resale” concern: avoid profit-taking and unclear arrangements

Charging vendors for electricity can be alleged as “resale” if the LGU appears to be acting like an electricity retailer. While LGUs may recover costs for operating a facility, the risk increases when:

Markups are unexplained or substantial,
There is no sub-metering/verification,
Collections are not tied to actual utility billing,
A third party “electricity collector” operates without a clear lawful concession/contract and transparency.

Practical rule: the closer the charge is to a documented pass-through of utility costs (with auditable support), the more defensible it is.

D. Third-party arrangements (cooperatives, associations, “market administrators”)

If an LGU allows a private entity (association/co-op/contractor) to collect electricity charges:

The legal basis must be extremely clear (contract, authority, ordinance, and compliance with procurement/concession rules where applicable).
Collections related to use of a public facility are often treated as public funds or public revenue in substance, triggering COA scrutiny.
Lack of official receipts and remittance pathways is a major vulnerability.

5) Procedural requirements that often decide legality

A. Enactment and effectivity of the ordinance

A valid charge typically needs:

Proper sanggunian enactment,
Approval/veto process compliance,
Publication/posting requirements for revenue measures,
Clear effectivity date,
Clear schedule of fees and collection mechanics.

B. Collection mechanics and controls

Legality is strengthened when:

Official receipts are issued,
Collectors are properly designated and bonded where required,
Daily collections are deposited/remitted intact,
Delinquencies are recorded properly,
Discounts/exemptions (if any) have a written basis.

C. Due process in enforcement

Common disputes involve penalties such as:

Padlocking stalls,
Confiscation of goods,
Disconnection of electricity,
Revocation of permits.

Even when the LGU has regulatory power, enforcement must be grounded in ordinance/rules and implemented with due process, including notice and an opportunity to be heard, especially for severe sanctions affecting livelihood.

6) Common grounds to challenge daily stall fees or electricity charges

A vendor (or group of vendors) typically challenges charges on grounds such as:

No ordinance / ultra vires The LGU or collector has no lawful authority for the specific fee or rate.
Improper increase or collection method Rate changes without proper legislative action or effectivity compliance.
Unreasonable, excessive, or oppressive Disproportionate to facility costs or burdens livelihood without justification.
Unequal application / discriminatory implementation Similarly situated vendors charged differently without rational basis.
Lack of transparency / no auditable basis (especially for electricity) No sub-metering, no access to utility bills, unexplained markups.
COA and public funds issues Collections not receipted or remitted; private entity collecting without safeguards.
Due process violations in penalties Summarily imposed sanctions without notice/hearing.

7) Practical compliance checklist (for LGUs, market administrators, and vendors)

If you are an LGU / market administrator

Ensure every recurring fee (stall, sanitation, security, electricity pass-through) is expressly authorized in an ordinance/revenue code/market code.
Publish/post revenue measures properly and keep proof of compliance.
Use official receipts and ensure collectors are designated and accountable.
For electricity:
- Prefer sub-metering or a documented allocation method.
- Keep utility bills, reading logs, and computation worksheets.
- Avoid unexplained markups; if an admin fee exists, authorize it clearly and justify it.
Provide a written grievance process and consistent enforcement.

If you are a vendor / stallholder

Ask for:
- The specific ordinance and schedule authorizing the stall fee and electricity charge,
- Official receipts and collector identification,
- For electricity: the basis (sub-meter reading or allocation) and utility bill reference.
Document:
- Payments, receipts, notices, disconnection threats, and unequal treatment.
Use administrative remedies first when possible (market office, treasurer, sanggunian committee), especially for computation disputes.

8) Remedies and dispute pathways (typical in practice)

Depending on the issue, remedies may include:

Administrative complaints within the LGU (market administrator, treasurer, mayor’s office),
Appeals or petitions to the sanggunian (committees on markets, ways and means),
DILG supervision mechanisms (for ordinance and governance issues),
COA involvement (for audit irregularities and accountability in collections),
Ombudsman (for alleged graft, abuse of authority, or misconduct),
Court action (e.g., declaratory relief, injunction, refund claims), especially when the core dispute is the validity of the ordinance or unconstitutional/oppressive implementation.

The best path depends on whether the problem is lack of legal authority, bad accounting/collection, or unreasonable/discriminatory enforcement.

9) Key takeaways

Daily stall fees are generally legal when grounded in a valid ordinance, reasonable, uniformly applied, and properly collected and accounted for as public funds.
Electricity charges are legal when structured as transparent, auditable pass-through reimbursements (ideally sub-metered) and authorized by ordinance/contract, with proper receipting and remittance.
The most common legal vulnerabilities are no ordinance, unauthorized rate increases, non-receipting/non-remittance, unexplained electricity markups, and due process violations in enforcement.

If you want, paste your city/municipality’s stated fee schedule (or a photo/text of the posted rates and any memo/order), and I can analyze it against these legality checkpoints and point out the strongest and weakest parts.