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One of seven children, Lazo was born in Santo Niño, Cagayan, to Fortunato and Emiliana Lazo. His father was the local Justice of the Peace. Following his mother's death during childbirth in 1926, his aunt helped raise the family. Lazo graduated from Santo Nino Central School in 1933, and then attended Cagayan National High School and Christ the King Seminary, run by the Divine Word Missionaries. During the Japanese occupation of World War II, he and his fellow novices were forced to continue their studies at Immaculate Conception Seminary in Vigan City. His brother, also a seminarian, was killed during this time.
Leaving the Divine Word Missionaries to serve the Diocese of Tuguegarao, Lazo was ordained to the priesthood by Archbishop Mariano Madriaga on March 22, 1947. He then served as an assistant priest at St. Peter's Cathedral in Vigan, and later at San Jose parish in Baggao. He also founded San Jose Academy. In 1950, Lazo was named prefect of discipline at the newly-created San Jacinto Minor Seminary, of which he later became rector in 1951.
On December 1, 1969, Lazo was appointed Auxiliary Bishop of Tuguegarao and Titular Bishop of Selia by Pope Paul VI. He received his episcopal consecration on February 3, 1970 from Archbishop Carmine Rocco, with Archbishops Juan Sison and Teodulfo Domingo serving as co-consecrators. Following the death of Antonio Buenafe, he was named Auxiliary Bishop of Nueva Segovia on August 3, 1977.
On January 20, 1981, Lazo was appointed the second Bishop of San Fernando de La Union by Pope John Paul II; he was formally installed as Bishop on the following March 9. During his tenure, Lazo oversaw the construction of a seminary, chancery, episcopal residence, two convents, and St. Joseph Pastoral Center. The 1990 Luzon earthquake greatly damaged several churches, schools, and rectories in the Diocese.
Upon reaching the mandatory retirement age of 75, Lazo resigned his post as Bishop on May 28, 1993. He then lived with his cancer-stricken sister in Zamboanga City. He then came into contact with the Society of St. Pius X and began to identify himself as a Traditionalist Catholic, exclusively celebrating the Tridentine Mass by 1995. Appeals were made by Jaime Cardinal Sin and Archbishop Diosdado Talamayan for Lazo to discontinue his association with the SSPX, but he refused.
In 1998, he made a Declaration of Faith to John Paul II, saying, "I do not serve the Rome that is controlled by Freemasons who are the agents of Lucifer, the Prince of devils." Stating that "obedience must serve faith," Lazo also claimed that the reforms of the Second Vatican Council were "aimed to destroy the Catholic Religion." He once described Judaism as "visible chief enemy of the Catholic Church."