MMDA vs.

Bel-Air

Facts: Metropolitan Manila Development Authority (MMDA), petitioner herein, is a

Government Agency tasked with the delivery of basic services in Metro Manila. Bel-Air
Village Association (BAVA), respondent herein, received a letter of request from the
petitioner to open Neptune Street of Bel-Air Village for the use of the public. The said
opening of Neptune Street will be for the safe and convenient movement of persons and
to regulate the flow of traffic in Makati City. This was pursuant to MMDA law or
Republic Act No. 7924. On the same day, the respondent was appraised that the
perimeter wall separating the subdivision and Kalayaan Avenue would be demolished.

The respondent, to stop the opening of the said street and demolition of the wall, filed a
preliminary injunction and a temporary restraining order. Respondent claimed that the
MMDA had no authority to do so and the lower court decided in favor of the Respondent.
Petitioner appealed the decision of the lower courts and claimed that it has the authority
to open Neptune Street to public traffic because it is an agent of the State that can
practice police power in the delivery of basic services in Metro Manila.

Issue: Whether or not the MMDA has the mandate to open Neptune Street to public
traffic pursuant to its regulatory and police powers.

Held: The Court held that the MMDA does not have the capacity to exercise police
power. Police power is primarily lodged in the National Legislature. However, police
power may be delegated to government units. Petitioner herein is a development
authority and not a political government unit. Therefore, the MMDA cannot exercise
police power because it cannot be delegated to them. It is not a legislative unit of the
government. Republic Act No. 7924 does not empower the MMDA to enact ordinances,
approve resolutions and appropriate funds for the general welfare of the inhabitants of
Manila. There is no syllable in the said act that grants MMDA police power.

It is an agency created for the purpose of laying down policies and coordinating with
various national government agencies, people’s organizations, non-governmental
organizations and the private sector for the efficient and expeditious delivery of basic
services in the vast metropolitan area.

MMDA V. GARIN

Facts: The issue arose from an incident involving the respondent Dante O. Garin, a
lawyer, who was issued a traffic violation receipt (TVR) by MMDA and his driver's
license confiscated for parking illegally along Gandara Street, Binondo, Manila, on
August 1995.

Shortly before the expiration of the TVR's validity, the respondent addressed a letter to
then MMDA Chairman Prospero Oreta requesting the return of his driver's license, and
expressing his preference for his case to be filed in court.

Receiving no immediate reply, Garin filed the original complaint with application for
preliminary injunction, contending that, in the absence of any implementing rules and
regulations, Sec. 5(f) of Rep. Act No. 7924 grants the MMDA unbridled discretion to
deprive erring motorists of their licenses, pre-empting a judicial determination of the
validity of the deprivation, thereby violating the due process clause of the Constitution.
j
The respondent further contended that the provision violates the constitutional prohibition
against undue delegation of legislative authority, allowing as it does the MMDA to fix
and impose unspecified — and therefore unlimited — fines and other penalties on erring
motorists.

The trial court rendered the assailed decision in favor of herein respondent.

Issue:

1. WON MMDA, through Sec. 5(f) of Rep. Act No. 7924 could validly exercise police
power.

HELD: Police Power, having been lodged primarily in the National Legislature, cannot
be exercised by any group or body of individuals not possessing legislative power. The
National Legislature, however, may delegate this power to the president and
administrative boards as well as the lawmaking bodies of municipal corporations or local
government units (LGUs). Once delegated, the agents can exercise only such legislative
powers as are conferred on them by the national lawmaking body.

Our Congress delegated police power to the LGUs in the Local Government Code of
1991. 15 A local government is a "political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs." 16 Local government units
are the provinces, cities, municipalities and barangays, which exercise police power
through their respective legislative bodies.

Metropolitan or Metro Manila is a body composed of several local government units.

With the passage of Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a
"special development and administrative region" and the administration of "metro-wide"
basic services affecting the region placed under "a development authority" referred to as
the MMDA. Thus: The MMDA is, as termed in the charter itself, a "development
authority." It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people's organizations, non-
governmental organizations and the private sector for the efficient and expeditious
delivery of basic services in the vast metropolitan area. All its functions are
administrative in nature and these are actually summed up in the charter itself
 Section 5 of Rep. Act No. 7924 enumerates the "Functions and Powers of the
Metro Manila Development Authority." The contested clause in Sec. 5(f) states
 that the petitioner shall "install and administer a single ticketing system, fix,
impose and collect fines and penalties for all kinds of violations of traffic rules
and regulations, whether moving or non-moving in nature, and confiscate and
suspend or revoke drivers' licenses in the enforcement of such traffic laws and
regulations, the provisions of Rep. Act No. 4136 and P.D. No. 1605 to the
contrary notwithstanding," and that "(f)or this purpose, the Authority shall enforce
all traffic laws and regulations in Metro Manila, through its traffic operation
center, and may deputize members of the PNP, traffic enforcers of local
government units, duly licensed security guards, or members of non-
governmental organizations to whom may be delegated certain authority, subject
to such conditions and requirements as the Authority may impose."

Alvarez vs. Guingona

Facts:

HB 8817, entitled “An Act Converting the Municipality of Santiago into an

Independent Component City to be known as the City of Santiago,” was filed in the
House of Representatives, subsequently passed by the House of Representatives, and
transmitted to the Senate. A counterpart of HB 8817, SB 1243 was filed in the Senate,
and was passed as well. The enrolled bill was submitted to and signed by the Chief
Executive as RA 7720. When a plebiscite on the Act was held on July 13, 1994, a great
majority of the registered voters of Santiago voted in favor of the conversion of Santiago
into a city.

Issue:

whether or not considering that the Senate passed SB 1243, its own version of HB 8817,
RA 7720 can be said to have originated in the House of Representatives
\
Held:

Yes. Bills of local application are required to originate exclusively in the

House of Representatives. Petitioners contend that since a bill of the same import was
passed in the Senate, it cannot be said to have originated in the House of Representatives.

Such is untenable because it cannot be denied that the HB was filed first (18 Apr 1993).
The SB was filed 19 May. The HB was approved on third reading 17 Dec, and was
transmitted to the Senate 28 Jan 1994.

The filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the
House, does not contravene the constitutional requirement that a bill of local application
should originate in the House of Representatives, for as long as the Senate does not act
thereupon until it receives the House bill.

The filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the
House of Representatives, does not contravene the constitutional requirement that a bill
of local application should originate in the House of Representatives, for as long as the
Senate does not act thereupon until it receives the House bill.

In Tolentino v. Secretary of Finance, the Court said that what the Constitution simply
means is that the initiative for filing revenue, tariff, or tax bills, bills authorizing an
increase of the public debt, private bills and bills of local application must come from the
House of Representatives on the theory that, elected as they are from the districts, the
members of the House can be expected to be more sensitive to the local needs and
problems. On the other hand, the senators, who are elected at large, are expected to
approach the same problems from the national perspective. Both views are thereby made
to bear on the enactment of such laws. Nor does the Constitution prohibit the filing in the
Senate of a substitute bill in anticipation of its receipt of the bill from the House, so long
as action by the Senate as a body is withheld pending receipt of the House bill.

COMELEC vs. UMALI

Facts:
On July 11, 2011, the Sangguniang Panglungsod of Cabanatuan City passed Resolution
No. 183-2011, requesting the President to declare the conversion of Cabanatuan City
from a component city of the province of Nueva Ecija into a highly urbanized city
(HUC). Acceding to the request, the President issued Presidential Proclamation No. 418,
Series of 2012, proclaiming the City of Cabanatuan as an HUC subject to “ratification in
a plebiscite by the qualified voters therein, as provided for in Section 453 of the Local
Government Code of 1991.”

Respondent COMELEC, acting on the proclamation, issued the assailed Minute

Resolution No. 12-0797 which reads:

WHEREFORE, the Commission RESOLVED, as it hereby RESOLVES, that for

purposes of the plebiscite for the conversion of Cabanatuan City from component city to
highly-urbanized city, only those registered residents of Cabanatuan City should
participate in the said plebiscite.

The COMELEC based this resolution on Sec. 453 of the Local Government Code of
1991 (LGC), citing conversion cases involving Puerto Princesa City in Palawan,
Tacloban City in Southern Leyte, and Lapu-Lapu City in Cebu, where only the residents
of the city proposed to be converted were allowed to vote in the corresponding plebiscite.

Petitioner Aurelio M. Umali, Governor of Nueva Ecija, filed a Verified Motion for
Reconsideration, maintaining that the proposed conversion in question will necessarily
and directly affect the mother province of Nueva Ecija. His main argument is that Section
453 of the LGC should be interpreted in conjunction with Sec. 10, Art. X of the
Constitution. He argues that while the conversion in question does not involve the
creation of a new or the dissolution of an existing city, the spirit of the Constitutional
provision calls for the people of the LGU directly affected to vote in a plebiscite
whenever there is a material change in their rights and responsibilities. The phrase
“qualified voters therein” used in Sec. 453 of the LGC should then be interpreted to refer
to the qualified voters of the units directly affected by the conversion and not just those in
the component city proposed to be upgraded. Petitioner Umali justified his position by
enumerating the various adverse effects of the Cabanatuan City’s conversion and how it
will cause material change not only in the political and economic rights of the city and its
residents but also of the province as a whole.

On October 4, 2012, the COMELEC En Banc on October 16, 2012, in E.M No.
12-045 (PLEB), by a vote of 5-2 ruled in favor of respondent Vergara through the
assailed Minute Resolution 12-0925.

Issue:
Whether the qualified registered voters of the entire province of Nueva Ecija or
only those in Cabanatuan City can participate in the plebiscite called for the conversion
of Cabanatuan City from a component city into a Highly Urbanized City (HUC).

Held:
Entire province of Nueva Ecija

Ratio:
The upward conversion of a component city, in this case Cabanatuan City, into an
HUC will come at a steep price. It can be gleaned from the above-cited rule that the
province will inevitably suffer a corresponding decrease in territory brought about by
Cabanatuan City’s gain of independence. With the city’s newfound autonomy, it will be
free from the oversight powers of the province, which, in effect, reduces the territorial
jurisdiction of the latter. What once formed part of Nueva Ecija will no longer be subject
to supervision by the province. In more concrete terms, Nueva Ecija stands to lose 282.75
sq. km. of its territorial jurisdiction with Cabanatuan City’s severance from its mother
province. This is equivalent to carving out almost 5% of Nueva Ecija’s 5,751.3 sq. km.
area. This sufficiently satisfies the requirement that the alteration be “substantial.”

Sema vs. Comelec

The Province of Maguindanao is part of ARMM. Cotabato City is part of the province of
Maguindanao but it is not part of ARMM because Cotabato City voted against its
inclusion in a plebiscite held in 1989. Maguindanao has two legislative districts. The 1st
legislative district comprises of Cotabato City and 8 other municipalities.

A law (RA 9054) was passed amending ARMM’s Organic Act and vesting it with power
to create provinces, municipalities, cities and barangays. Pursuant to this law, the ARMM
Regional Assembly created Shariff Kabunsuan (Muslim Mindanao Autonomy Act 201)
which comprised of the municipalities of the 1st district of Maguindanao with the
exception of Cotabato City.
For the purposes of the 2007 elections, COMELEC initially stated that the 1st district is
now only made of Cotabato City (because of MMA 201). But it later amended this stating
that status quo should be retained; however, just for the purposes of the elections, the first
district should be called Shariff Kabunsuan with Cotabato City – this is also while
awaiting a decisive declaration from Congress as to Cotabato’s status as a legislative
district (or part of any).

Bai Sandra Sema was a congressional candidate for the legislative district of S.
Kabunsuan with Cotabato (1st district). Later, Sema was contending that Cotabato City
should be a separate legislative district and that votes therefrom should be excluded in the
voting (probably because her rival Dilangalen was from there and D was winning – in
fact he won). She contended that under the Constitution, upon creation of a province (S.
Kabunsuan), that province automatically gains legislative representation and since S.
Kabunsuan excludes Cotabato City – so in effect Cotabato is being deprived of a
representative in the HOR.

COMELEC maintained that the legislative district is still there and that regardless of S.
Kabunsuan being created, the legislative district is not affected and so is its
representation.

ISSUE: Whether or not RA 9054 is unconstitutional. Whether or not ARMM can create
validly LGUs.

HELD: RA 9054 is unconstitutional. The creation of local government units is governed

by Section 10, Article X of the Constitution, which provides:
Sec. 10. No province, city, municipality, or barangay may be created, divided, merged,
abolished or its boundary substantially altered except in accordance with the criteria
established in the local government code and subject to approval by a majority of the
votes cast in a plebiscite in the political units directly affected.

Thus, the creation of any of the four local government units province, city, municipality
or barangay must comply with three conditions. First, the creation of a local government
unit must follow the criteria fixed in the Local Government Code. Second, such creation
must not conflict with any provision of the Constitution. Third, there must be a plebiscite
in the political units affected.

There is neither an express prohibition nor an express grant of authority in the

Constitution for Congress to delegate to regional or local legislative bodies the power to
create local government units. However, under its plenary legislative powers, Congress
can delegate to local legislative bodies the power to create local government units,
subject to reasonable standards and provided no conflict arises with any provision of the
Constitution. In fact, Congress has delegated to provincial boards, and city and municipal
councils, the power to create barangays within their jurisdiction, subject to compliance
with the criteria established in the Local Government Code, and the plebiscite
requirement in Section 10, Article X of the Constitution. Hence, ARMM cannot validly
create Shariff Kabunsuan province.
Note that in order to create a city there must be at least a population of at least 250k, and
that a province, once created, should have at least one representative in the HOR. Note
further that in order to have a legislative district, there must at least be 250k (population)
in said district. Cotabato City did not meet the population requirement so Sema’s
contention is untenable. On the other hand, ARMM cannot validly create the province of
S. Kabunsuan without first creating a legislative district. But this can never be legally
possible because the creation of legislative districts is vested solely in Congress. At most,
what ARMM can create are barangays not cities and provinces.

Miranda vs. Aguirre

FACTS:
1994, RA No. 7720 effected the conversion of the municipality of Santiago, Isabela, into
an independent component city. July 4th, RA No. 7720 was approved by the people of
Santiago in a plebiscite. 1998, RA No. 8528 was enacted and it amended RA No. 7720
that practically downgraded the City of Santiago from an independent component city to
a component city. Petitioners assail the constitutionality of RA No. 8528 for the lack of
provision to submit the law for the approval of the people of Santiago in a proper
plebiscite.

Respondents defended the constitutionality of RA No. 8528 saying that the said act
merely reclassified the City of Santiago from an independent component city into a
component city. It allegedly did not involve any “creation, division, merger, abolition, or
substantial alteration of boundaries of local government units,” therefore, a plebiscite of
the people of Santiago is unnecessary. They also questioned the standing of petitioners to
file the petition and argued that the petition raises a political question over which the
Court lacks jurisdiction.

ISSUE: Whether or not the Court has jurisdiction over the petition at bar.

RULING:
Yes. RA No. 8528 is declared unconstitutional. That Supreme Court has the jurisdiction
over said petition because it involves not a political question but a justiciable issue, and
of which only the court could decide whether or not a law passed by the Congress is
unconstitutional.

That when an amendment of the law involves creation, merger, division, abolition or
substantial alteration of boundaries of local government units, a plebiscite in the political
units directly affected is mandatory.
Petitioners are directly affected in the imple-mentation of RA No. 8528. Miranda was the
mayor of Santiago City, Afiado was the President of the Sangguniang Liga, together with
3 other petitioners were all residents and voters in the City of Santiago. It is their right to
be heard in the conversion of their city through a plebiscite to be conducted by the
COMELEC. Thus, denial of their right in RA No. 8528 gives them proper standing to
strike down the law as unconstitutional.
Sec. 1 of Art. VIII of the Constitution states that: the judicial power shall be vested in one
Supreme Court and in such lower courts as may be established by law. Judicial power
includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instru-mentality of the Government.

LOCAL AUTONOMY

Ganzon vs. CA

FACTS:
A series of administrative complaints, ten in number, were filed before the Department of
Local Government against petitioner Mayor Rodolfo T. Ganzon by various city officials
sometime in 1988 on various charges, among them, abuse of authority, oppression, grave
misconduct, etc. Finding probable grounds, the respondent Secretary of the Department
of Local Government Luis T. Santos issued 3 successive 60- day suspensions. The
petitioner then instituted an action for prohibition against the secretary in the RTC of
Iloilo City where he succeeded in obtaining a writ of preliminary injunction. He also
instituted actions for prohibition before the Court of Appeals but were both dismissed.
Thus, this petition for review with the argument that the respondent Secretary is devoid,
in any event, of any authority to suspend and remove local officials as the 1987
Constitution no longer allows the President to exercise said power.

ISSUE:
Whether or not the Secretary of Local Government (as the alter ego of the President) has
the authority to suspend and remove local officials.

RULING:
The Constitution did nothing more, and insofar as existing legislation authorizes the
President (through the Secretary of Local Government) to proceed against local officials
administratively, the Constitution contains no prohibition. The Chief Executive is not
banned from exercising acts of disciplinary authority because she did not exercise control
powers, but because no law allowed her to exercise disciplinary authority.

In those case that this Court denied the President the power (to suspend/remove) it was
not because that the President cannot exercise it on account of his limited power, but
because the law lodged the power elsewhere. But in those cases in which the law gave
him the power, the Court, as in Ganzon v. Kayanan, found little difficulty in sustaining
him.

We reiterate that we are not precluding the President, through the Secretary of Interior
from exercising a legal power, yet we are of the opinion that the Secretary of interior is
exercising that power oppressively, and needless to say, with a grave abuse of discretion.
As we observed earlier, imposing 600 days of suspension which is not a remote
possibility Mayor Ganzon is to all intents and purposes, to make him spend the rest of his
term in inactivity. It is also to make, to all intents and purposes, his suspension
permanent.

Limbona vs. Mangelin

Facts: Petitioner, Sultan Alimbusar Limbona, was elected Speaker of the Regional
Legislative Assembly or Batasang Pampook of Central Mindanao (Assembly). On
October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the Committee on
Muslim Affairs of the House of Representatives, invited petitioner in his capacity as
Speaker of the Assembly of Region XII in a consultation/dialogue with local government
officials. Petitioner accepted the invitation and informed the Assembly members through
the Assembly Secretary that there shall be no session in November as his presence was
needed in the house committee hearing of Congress. However, on November 2, 1987, the
Assembly held a session in defiance of the Limbona's advice, where he was unseated
from his position. Petitioner prays that the session's proceedings be declared null and
void and be it declared that he was still the Speaker of the Assembly. Pending further
proceedings of the case, the SC received a resolution from the Assembly expressly
expelling petitioner's membership therefrom. Respondents argue that petitioner had "filed
a case before the Supreme Court against some members of the Assembly on a question
which should have been resolved within the confines of the Assembly," for which the
respondents now submit that the petition had become "moot and academic" because its
resolution.

Issue: Whether or not the courts of law have jurisdiction over the autonomous
governments or regions. What is the extent of self-government given to the autonomous
governments of Region XII?

Held: Autonomy is either decentralization of administration or decentralization of power.

There is decentralization of administration when the central government delegates
administrative powers to political subdivisions in order to broaden the base of
government power and in the process to make local governments "more responsive and
accountable". At the same time, it relieves the central government of the burden of
managing local affairs and enables it to concentrate on national concerns. The President
exercises "general supervision" over them, but only to "ensure that local affairs are
administered according to law." He has no control over their acts in the sense that he can
substitute their judgments with his own. Decentralization of power, on the other hand,
involves an abdication of political power in the favor of local governments units declared
to be autonomous. In that case, the autonomous government is free to chart its own
destiny and shape its future with minimum intervention from central authorities.

An autonomous government that enjoys autonomy of the latter category [CONST.

(1987), Art. X, Sec. 15.] is subject alone to the decree of the organic act creating it and
accepted principles on the effects and limits of "autonomy." On the other hand, an
autonomous government of the former class is, as we noted, under the supervision of the
national government acting through the President (and the Department of Local
Government). If the Sangguniang Pampook (of Region XII), then, is autonomous in the
latter sense, its acts are, debatably beyond the domain of this Court in perhaps the same
way that the internal acts, say, of the Congress of the Philippines are beyond our
jurisdiction. But if it is autonomous in the former category only, it comes unarguably
under our jurisdiction. An examination of the very Presidential Decree creating the
autonomous governments of Mindanao persuades us that they were never meant to
exercise autonomy in the second sense (decentralization of power). PD No. 1618, in the
first place, mandates that "[t]he President shall have the power of general supervision and
control over Autonomous Regions." Hence, we assume jurisdiction. And if we can make
an inquiry in the validity of the expulsion in question, with more reason can we review
the petitioner's removal as Speaker.

This case involves the application of a most

important constitutional policy and principle, that of local autonomy. We have to obey
the clear mandate on local autonomy.

Where a law is capable of two interpretations, one in favor of centralized power in

Malacañang and the other beneficial to local autonomy, the scales must be weighed in
favor of autonomy.

Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid.
It is true that under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not
be suspended or adjourned except by direction of the Sangguniang Pampook". But while
this opinion is in accord with the respondents' own, we still invalidate the twin sessions in
question, since at the time the petitioner called the "recess," it was not a settled matter
whether or not he could do so. In the second place, the invitation tendered by the
Committee on Muslim Affairs of the House of Representatives provided a plausible
reason for the intermission sought. Also, assuming that a valid recess could not be called,
it does not appear that the respondents called his attention to this mistake. What appears
is that instead, they opened the sessions themselves behind his back in an apparent act of
mutiny. Under the circumstances, we find equity on his side. For this reason, we uphold
the "recess" called on the ground of good faith.

Prov. Of Batangas vs. Romulo

Facts:
On December 7, 1998, then President Joseph Ejercito Estrada issued Executive Order
(E.O.) No. 48 entitled "ESTABLISHING A PROGRAM FOR DEVOLUTION
ADJUSTMENT AND EQUALIZATION." The program was established to "facilitate the
process of enhancing the capacities of local government... units (LGUs) in the discharge
of the functions and services devolved to them by the National Government Agencies
concerned pursuant to the Local Government Code."[1] The Oversight Committee
(referred to as the Devolution Committee in E.O. No. 48)... constituted under Section
533(b) of Republic Act No. 7160 (The Local Government Code of 1991) has been tasked
to formulate and issue the appropriate rules and regulations necessary for its effective
implementation.[2] Further, to address the funding... shortfalls of functions and services
devolved to the LGUs and other funding requirements of the program, the "Devolution
Adjustment and Equalization Fund" was created.[3] For 1998, the DBM was directed to
set aside an amount to be determined by the

Oversight Committee based on the devolution status appraisal surveys undertaken by the
DILG.[4] The initial fund was to be sourced from the available savings of the national
government for CY 1998. [5] For 1999 and the succeeding... years, the corresponding
amount required to sustain the program was to be incorporated in the annual GAA.[6]
The Oversight Committee has been authorized to issue the implementing rules and
regulations governing the equitable allocation and distribution of... said fund to the
LGUs.

The petitioner now comes to this Court assailing as unconstitutional and void the
provisos in the GAAs of 1999, 2000 and 2001, relating to the LGSEF. Similarly assailed
are the Oversight Committee's Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-
006, OCD-2000-023, OCD-2001-029... and OCD-2002-001 issued pursuant thereto. The
petitioner submits that the assailed provisos in the GAAs and the OCD resolutions,
insofar as they earmarked the amount of five billion pesos of the IRA of the LGUs for
1999, 2000 and 2001 for the LGSEF and imposed conditions for the... release thereof,
violate the Constitution and the Local Government Code of 1991.

Section 6, Article X of the Constitution is invoked as it mandates that the "just share" of
the LGUs shall be automatically released to them. Sections 18 and 286 of the Local
Government Code of 1991, which enjoin that the "just share" of the LGUs shall be
"automatically and... directly" released to them "without need of further action" are,
likewise, cited.

The petitioner posits that to subject the distribution and release of the five- billion-peso
portion of the IRA, classified as the LGSEF, to compliance by the LGUs with the
implementing rules and regulations, including the mechanisms and guidelines prescribed
by the Oversight

Committee, contravenes the explicit directive of the Constitution that the LGUs' share in
the national taxes "shall be automatically released to them." The petitioner maintains that
the use of the word "shall" must be given a compulsory meaning.

To further buttress this argument, the petitioner contends that to vest the Oversight
Committee with the authority to determine the distribution and release of the LGSEF,
which is a part of the IRA of the LGUs, is an anathema to the principle of local autonomy
as embodied in the
Constitution and the Local Government Code of 1991.
Another infringement alleged to be occasioned by the assailed OCD resolutions is the
improper amendment to Section 285 of the Local Government Code of 1991 on the
percentage sharing of the IRA among the LGUs
Issues:
whether the issue had been rendered moot and academic.
(1) whether the petitioner has legal standing or locus standi to file the present suit; (2)
whether the petition involves factual questions that... are properly cognizable by the
lower courts; and (3) whether the issue had been rendered moot and academic.

Ruling:
The petitioner has locus standi... to maintain the present suit
Accordingly, it has been held that the interest of a party assailing the constitutionality of a
statute must be direct and personal. Such party must be able to show, not only that the
law or any government act is invalid, but... also that he has sustained or is in imminent
danger of sustaining some direct injury as a result of its enforcement, and not merely that
he suffers thereby in some indefinite way. It must appear that the person complaining has
been or is about to be denied some right or... privilege to which he is lawfully entitled or
that he is about to be subjected to some burdens or penalties by reason of the statute or
act complained of
.
The Court holds that the petitioner possesses the requisite standing to maintain the
present suit. The petitioner, a local government unit, seeks relief in order to protect or
vindicate an interest of its own, and of the other LGUs.

The petition involves a significant... legal issue

The crucial legal issue submitted for resolution of this Court entails the proper legal
interpretation of constitutional and statutory provisions. Moreover, the "transcendental
importance" of the case, as it necessarily involves the application of the constitutional
principle on... local autonomy, cannot be gainsaid. The nature of the present controversy,
therefore, warrants the relaxation by this Court of procedural rules in order to resolve the
case forthwith.
The substantive issue needs to be resolved... notwithstanding the supervening events
S... upervening events, whether intended or accidental, cannot prevent the Court from
rendering a decision if there is a grave violation of the
Constitution.

Even in cases where supervening events had made the cases moot, the Court did not
hesitate to resolve the legal or constitutional issues raised to formulate controlling
principles to guide the bench, bar and public.

Another reason justifying the resolution by this Court of the substantive issue now before
it is the rule that courts will decide a question otherwise moot and academic if it is
"capable of repetition, yet evading review."

For the GAAs in the coming... years may contain provisos similar to those now being
sought to be invalidated, and yet, the question may not be decided before another GAA is
enacted. It, thus, behooves this Court to make a categorical ruling on the substantive issue
now.
In Article II of the Constitution, the State has expressly... adopted as a policy that:
Section 25. The State shall ensure the autonomy of local governments.
Section 2. The territorial and political subdivisions shall enjoy local autonomy.
C... onsistent with the principle of local autonomy, the Constitution confines the
President's power over the LGUs to one of general supervision.

Drilon v. Lim:
An officer in control lays down the rules in the doing of an act. If they are not followed,
he may, in his discretion, order the act undone or re-done by his subordinate or he may
even decide to do it himself. Supervision does not cover such authority. The supervisor...
or superintendent merely sees to it that the rules are followed, but he himself does not lay
down such rules, nor does he have the discretion to modify or replace them. If the rules
are not observed, he may order the work done or re-done but only to conform to the
prescribed... rules. He may not prescribe his own manner for doing the act. He has no
judgment on this matter except to see to it that the rules are followed.
The assailed provisos in the GAAs of 1999, 2000... and 2001 and the OCD resolutions
violate the... constitutional precept on local autonomy
Section 6, Article X of the Constitution reads:
Sec. 6. Local government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them.
When parsed, it would be readily seen that this provision mandates that (1) the LGUs
shall have a "just share" in the national taxes; (2) the "just share" shall be determined by
law; and (3) the "just share" shall be automatically released to the LGUs.
Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the National internal revenue.
As a rule, the term
"SHALL" is a word of command that must be given a compulsory meaning. The
provision is, therefore, IMPERATIVE.
Significantly, the LGSEF could not be released to the LGUs without the Oversight
Committee's prior approval. Further, with respect to the portion of the LGSEF allocated
for various projects of the LGUs (P1 billion for 1999; P1.5 billion for 2000 and P2 billion
for 2001), the
Oversight Committee, through the assailed OCD resolutions, laid down guidelines and
mechanisms that the LGUs had to comply with before they could avail of funds from this
portion of the LGSEF. The guidelines required (a) the LGUs to identify the projects
eligible for funding... based on the criteria laid down by the Oversight Committee; (b) the
LGUs to submit their project proposals to the DILG for appraisal; (c) the project
proposals that passed the appraisal of the DILG to be submitted to the Oversight
Committee for review, evaluation and approval.
It was only upon approval thereof that the Oversight Committee would direct the DBM to
release the funds for the projects.
To the Court's mind, the entire process involving the distribution and release of the
LGSEF is constitutionally impermissible. The LGSEF is part of the IRA or "just share"
of the LGUs in the national taxes. To subject its distribution and release to the vagaries of
the... implementing rules and regulations, including the guidelines and mechanisms
unilaterally prescribed by the Oversight Committee from time to time, as sanctioned by
the assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions,
makes the release not... automatic, a flagrant violation of the constitutional and statutory
mandate that the "just share" of the LGUs "shall be automatically released to them." The
LGUs are, thus, placed at the mercy of the Oversight Committee.