This was the question answered in the case of Iloilo Bottlers vs. City of Iloilo (164 SCRA 607), and the answer is yes. The business of manufacturing carries with it the business of selling, except when there are warehouses where separate selling is done.
Says the Supreme Court:
"The right to manufacture implies the right to sell/distribute the manufactured products [See Central Azucarera de Don Pedro v. City of Manila and Sarmiento, 97 Phil. 627 (1955); Caltex (Philippines), Inc. v. City of Manila and Cudiamat, G.R. No. L-22764, July 28, 1969, 28 SCRA 840, 843.] Hence, for tax purposes, a manufacturer does not necessarily become engaged in the separate business of selling simply because it sells the products it manufactures. In certain cases, however, a manufacturer may also be considered as engaged in the separate business of selling its products."In this case, Iloilo Bottlers, Inc. distributed its softdrinks by delivery trucks directly to customers in lloilo province. Sales were perfected and consummated by route salesmen. Truck sales were made independently of transactions in the main office. The delivery trucks were not used solely for the purpose of delivering softdrinks but served also as selling units or "rolling stores". Iloilo Bottlers, Inc. thus was engaged in the separate business of selling or distributing soft-drinks, independently of its business of bottling them, and therefore subject to the tax ordinance.
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