G.R. No. 177131. June 7, 2011.
* the BSP, an attached agency, to the government, through the DECS, is defined in the
BOY SCOUTS OF THE PHILIPPINES, petitioner, vs. COMMISSION ON AUDIT,
respondent.
Corporation Law; Commission on Audit; Boy Scouts of the Philippines; The Boy Scouts
of the Philippines (BSP) is a public corporation and its funds are subject to the
Commission on Audit’s (COA’s) audit jurisdiction.—After looking at the legislative history
of its amended charter and carefully studying the applicable laws and the arguments of
both parties, we find that the BSP is a public corporation and its funds are subject to the
COA’s audit jurisdiction.
Same; Same; Same; Boy Scouts of the Philippines (BSP) as presently constituted under
Republic Act No. 7278, falls under the second classification of juridical persons under
Article 44 of the Civil Code.—There are three classes of juridical persons under Article 44
of the Civil Code and the BSP, as presently constituted under Republic Act No. 7278, falls
under the second classification. Article 44 reads: Art. 44. The following are juridical
persons: (1) The State and its political subdivisions; (2) Other corporations, institutions
and entities for public interest or purpose created by law; their personality begins as soon
as they have been constituted according to law; (3) Corporations, partnerships and
associations for private interest or purpose to which the law grants a juridical personality,
separate and distinct from that of each shareholder, partner or member.
Same; Same; Same; The Boy Scouts of the Philippines (BSP) which was created by a
special law to serve a public purpose in pursuit of a constitutional mandate, comes within
the class of “public corporations” defined by paragraph 2, Article 44 of the Civil Code.—
Evidently, the BSP, which was created by a special law to serve a public purpose in
pursuit of a constitutional mandate, comes within the class of “public corporations” defined
by paragraph 2, Article 44 of the Civil Code and governed by the law which creates it,
pursuant to Article 45 of the same Code.
Same; Same; Same; The Boy Scouts of the Philippines (BSP) is a public corporation or
a government agency or instrumentality with judicial personality, which does not fall within
the constitutional prohibition in Article XII, Section 16, notwithstanding the amendments
to its charter; Not all corporations, which are not government owned or controlled, are
ipso facto to be considered private corporations, as there exists another distinct class of
corporations or chartered institutions which are otherwise known as “public
corporations.”—The BSP is a public corporation or a government agency or
instrumentality with juridical personality, which does not fall within the constitutional
prohibition in Article XII, Section 16, notwith-standing the amendments to its charter. Not
all corporations, which are not government owned or controlled, are ipso facto to be
considered private corporations as there exists another distinct class of corporations or
chartered institutions which are otherwise known as “public corporations.” These
corporations are treated by law as agencies or instrumentalities of the government which
are not subject to the tests of ownership or control and economic viability but to different
criteria relating to their public purposes/interests or constitutional policies and objectives
and their administrative relationship to the government or any of its Departments or
Offices.
Same; Same; Same; The ownership and control test is likewise irrelevant for a public
corporation like the Boy Scouts of the Philippines (BSP).—The ownership and control test
is likewise irrelevant for a public corporation like the BSP. To reiterate, the relationship of
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Revised Administrative Code of 1987. The BSP meets the minimum statutory requirement
of an attached government agency as the DECS Secretary sits at the BSP Board ex
officio, thus facilitating the policy and program coordination between the BSP and the
DECS.
Same; Same; Same; Boy Scouts of the Philippines (BSP) is subject to the exercise by the
Commission on Audit (COA) of its audit jurisdiction in the manner consistent with the
provisions of the BSP charter.—Since the BSP, under its amended charter, continues to
be a public corporation or a government instrumentality, we come to the inevitable
conclusion that it is subject to the exercise by the COA of its audit jurisdiction in the
manner consistent with the provisions of the BSP Charter.
CARPIO, J., Dissenting Opinion: Corporation Law; Commission on Audit; Boy Scouts of
the Philippines; The Boy Scouts of the Philippines (BSP) is a private, non-stock, and non-
profit corporation beyond the Commission on Audit’s (COA’s) audit jurisdiction.—The Boy
Scouts of the Philippines (BSP) is neither a government-owned or controlled corporation
nor a government instrumentality subject to the Commission on Audit’s (COA) jurisdiction.
The BSP is a private, non-stock, and non-profit corporation beyond the COA’s audit
jurisdiction.
Same; Same; Same; Entities over which Commission on Audit (COA) exercises
jurisdiction on a pre-audit and post-audit basis under Section 2 (1) Article IX-D of the
Constitution.—Based on this Constitutional provision, the COA exercises jurisdiction on
a pre-audit basis over the (1) Government, (2) any of its subdivisions, (3) agencies, (4)
instrumentalities, and (5) GOCCs with original charters. The COA also has jurisdiction on
a post-audit basis over (1) constitutional bodies, commissions and offices that have been
granted fiscal autonomy under the Constitution; (2) autonomous state colleges and
universities; (3) other GOCCs and their subsidiaries; and (4) non-governmental entities
receiving subsidy or equity, directly or indirectly, from or through the government, which
are required by law or the granting institution to submit to such audit as a condition of
subsidy or equity.
Same; Same; Same; The determining factor of Commission on Audit’s (COA’s) audit
jurisdiction is government ownership or control of the corporation.—In Feliciano v.
Commission on Audit, 419 SCRA 363 (2004), the Court declared that the determining
factor of COA’s audit jurisdiction is government ownership or control of the corporation.
Citing Philippine Veterans Bank Employees Union-NUBE v. Philippine Veterans Bank,
189 SCRA 14 (1990), the Court held in Feliciano that the criterion of ownership and control
is more important than the issue of original charter.
Same; Same; Same; The structural set-up and membership of Boy Scouts of the
Philippines (BSP) governing body under RA 7278, where all except one come from the
private sector, glaringly negate any form of government control over the BSP.—As
pointed out by the BSP, under RA 7278 only one Cabinet Secretary remains a member
of the National Executive Board, as opposed to the previous composition where the
President of the Philippines and six cabinet secretaries were members of the same board.
To repeat, the National Executive Board is presently composed of (1) a charter member
of the BSP; (2) the regional chairmen of the scouts regions; (3) the Secretary of Education,
Culture and Sports; (4) National President of the Girl Scouts of the Philippines; (5) a senior
scout, one each from Luzon, Visayas and Mindanao; (6) twelve regular members to be
elected by the members of the National Council; (7) at least ten but not more than fifteen
1
additional members from the private sector. Significantly, the lone cabinet member, who
is the Education Secretary, merely serves as an ex-officio member. Meanwhile, the
President of the Philippines is no longer a member of the National Executive Board and
simply acts as the Chief Scout of the BSP. Except for the Education Secretary, none of
the other members of the National Executive Board is a government official or holds such
position or membership through appointment or designation by the government.
Moreover, the government lacks the power to fill up vacancies in the National Executive
Board of the BSP or remove any of its members. In fact, “vacancies in the National
Executive Board shall be filled by a majority vote of the remaining members.” This
structural set-up and membership of BSP’s governing body under RA 7278, where all
except one come from the private sector, glaringly negate any form of government control
over the BSP.
Same; Same; Same; It is crystal-clear that the funds of the Boy Scouts of the Philippines
(BSP) come from private sources; as such, the BSP funds are necessarily beyond the
jurisdiction of the Commission on Audit (COA), which exclusively audits public funds and
assets.—BSP’s properties are being managed and operated by the BSP itself, not by the
government or any of its agencies. Therefore, it is crystal-clear that the funds of the BSP
come from private sources. As such, the BSP funds are necessarily beyond the
jurisdiction of the COA, which exclusively audits public funds and assets.
Same; Same; Same; Only corporations controlled and owned by the government, which
are subject to the test of economic viability, and government instrumentalities, as defined
by the Administrative Code, fall under Commission on Audit’s (COA’s) audit jurisdiction.—
The majority theorizes that public corporations are “treated by law as agencies or
instrumentalities of the government which are not subject to the tests of ownership or
control and economic viability but to different criteria relating to their public
purposes/interests or constitutional policies and objectives and their administrative
relationship to the government or any of its Departments or Offices.” This theory finds no
basis in law. As the Court emphatically stated in Philippine Society for the Prevention of
Cruelty to Animals, “the fact that a certain juridical entity is impressed with public interest
does not, by that circumstance alone, make the entity a public corporation, inasmuch as
a corporation may be private although its charter contains provisions of a public character,
incorporated solely for the public good.” Neither does “administrative relationship to the
government” indicate that an entity is an instrumentality within the purview of the COA’s
audit jurisdiction. Only corporations controlled and owned by the government, which are
subject to the test of economic viability, and government instrumentalities, as defined by
the Administrative Code, fall under COA’s audit jurisdiction. The BSP is neither; hence, it
is beyond the COA’s audit jurisdiction.
Same; Same; Same; Definition of a Government Instrumentality; Elements to be
Considered a Government Instrumentality; The BSP is not an agency of the National
Government because the Boy Scouts of the Philippines (BSP) is not a unit of the National
Government; Boy Scouts of the Philippines (BSP) is not vested with special functions or
jurisdiction by law.—A government instru-mentality is defined by the Revised
Administrative Code as “any agency of the National Government, not integrated within
the department framework vested with special functions or jurisdiction by law, endowed
with some if not all corporate powers, administering special funds, and enjoying
operational autonomy, usually through a charter.” In other words, to be considered a
government instrumentality, an entity must be (1) an agency of the National Government;
(2) outside the department framework of the National Government; (3) vested with special
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functions or jurisdiction by law; (4) endowed with some, if not all, corporate powers; (5)
administering special funds; and (6) enjoying operational autonomy. The BSP is not an
agency of the National Government because the BSP is not a unit of the National
Government, like a “department, bureau, office, instrumentality or government owned or
controlled corporation, or a local government or a distinct unit therein.” There is also no
dispute that the BSP does not administer special funds of the government. While the BSP
may receive donations or contributions from the government just like other non-
government organizations, the same cannot be characterized as special funds. Moreover,
the BSP is not vested with special functions or jurisdiction by law. Hence, the BSP is not
a government instrumentality.
FACTS: The Commission on Audit issued COA Resolution No. 99-011 in which the said
resolution state that the BSP was created as a public corporation under Commonwealth
Act No. 111, as amended by Presidential Decree No. 460 and Republic Act No. 7278;
that in Boy Scouts of the Philippines vs. National Labor Relations Commission, the
Supreme Court ruled that the BSP, as constituted under its charter, was a “government-
controlled corporation within the meaning of Article IX (B)(2)(1) of the Constitution; and
that “the BSP is appropriately regarded as a government instrumentality under the 1987
Administrative Code.”
The BSP sought reconsideration of the COA Resolution in a letter signed by the BSP
National President Jejomar Binay. He claimed that RA 7278 eliminated the “substantial
government participation” in the National Executive Board by removing: (i) the President
of the Philippines and executive secretaries, with the exception of the Secretary of
Education, as members thereof; and (ii) the appointment and confirmation power of the
President of the Philippines, as Chief Scout, over the members of the said Board.
The BSP further claimed that the 1987 Administrative Code itself, of which the BSP s.
NLRC relied on for some terms, defines government-owned and controlled corporations
as agencies organized as stock or non-stock corporations which the BSP, under its
present charter, is not.
And finally, they claim that the Government, like in other GOCCs, does not have funds
invested in the BSP. The BSP is not an entity administering special funds. The BSP is
neither a unit of the Government; a department which refers to an executive department
as created by law; nor a bureau which refers to any principal subdivision or unit of any
department.
ISSUE: Whether the BSP falls under the COA’s audit jurisdiction.
RULING: After considering the legislative history of the amended charter and the
applicable laws and the arguments of both parties, the Court found that the BSP is a
public corporation and its funds are subject to the COA’s audit jurisdiction.
The BSP Charter created the BSP as a “public corporation” to serve the following public
interest or purpose: xxx to promote through organization and cooperation with other
agencies, the ability of boys to do useful things for themselves and others, to train them
in scout craft, and to inculcate in them patriotism, civic consciousness and responsibility,
courage, self-reliance, discipline and kindred virtues, and moral values, using the method
which are in common use by boy scouts.
The purpose of the BSP as stated in its amended charter shows that it was created in
order to implement a State policy declared in Article II, Section 13 of the Constitution.
2
Evidently, the BSP, which was created by a special law to serve a public purpose in
pursuit of a constitutional mandate, comes within the class of “public corporations” defined
by paragraph 2, Article 44 of the Civil Code and governed by the law which creates it,
pursuant to Article 45 of the same Code.
The Constitution emphatically prohibits the creation of private corporations except by a
general law applicable to all citizens. The purpose of this constitutional provision is to ban
private corporations created by special charters, which historically gave certain
individuals, families or groups special privileges denied to other citizens.
The BSP is a public corporation or a government agency or instrumentality with juridical
personality, which does not fall within the constitutional prohibition in Article XII, Section
16, notwithstanding the amendments to its charter. Not all corporations, which are not
government owned or controlled, are ipso facto to be considered private corporations as
there exist another distinct class of corporations or chartered institutions which are
otherwise known as “public corporations.” These corporations are treated by law as
agencies or instrumentalities of the government which are not subject to the test of
ownership or control and economic viability but to different criteria relating to their public
purposes/interests or constitutional policies and objectives and their administrative
relationship to the government or any of its Departments or Offices.
Since BSP, under its amended charter, continues to be a public corporation or a
government instrumentality, the Court concludes that it is subject to the exercise by the
COA of its audit jurisdiction in the manner consistent with the provisions of the BSP
Charter.
G.R. No. 80391. February 28, 1989.*
SULTAN ALIMBUSAR P. LIMBONA, petitioner, vs. CONTE MANGELIN, SALIC ALI,
SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS, GERRY TOMAWIS,
JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAKIL
DAGALANGIT, and BIMBO SINSUAT, respondents.
Constitutional Law; Due Process in Administrative Proceedings; Access to Judicial
Remedies; No one may be punished for seeking redress in the courts, unless the recourse
amounts to malicious prosecution.—In the second place, the resolution appears strongly
to be a bare act of vendetta by the other Assemblyman against the petitioner arising from
what the former perceive to be obduracy on the part of the latter. Indeed, it (the resolution)
speaks of “a case [having been filed] [by the petitioner] before the Supreme Court . . . on
question which should have been resolved within the confines of the Assembly—an act
which some members claimed unnecessarily and unduly assails their integrity and
character as representative of the people,” an act that cannot possibly justify expulsion.
Access to judicial remedies is guaranteed by the Constitution, and, unless the recourse
amounts to malicious prosecution, no one may be punished for seeking redress in the
courts.
Same; Autonomous Regions; Administrative Law; The autonomous governments of
Mindanao are subject to the jurisdiction of our national courts.—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, that is, in which
the central government commits an act of self-immolation. Presidential Decree No. 1618,
in the first place, mandates that “[t]he President shall have the power of general
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supervision and control over Autonomous Regions.” In the second place, the
Sangguniang Pampook, their legislative arm, is made to discharge chiefly administrative
services. x x x 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.
Same; Same; Same; Decentralization; Autonomy is either decentralization of
administration or decentralization of power.—Now, autonomy is either decentralization of
administration or decentralization of power. There is decentralization of administration
when the central government delegates administrative powers to political subdivision in
order to broaden the base of government power and in the process to make local
governments “more responsive and accountable,” and “ensure their fullest development
as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress.” 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.
Same; Same; Same; Same; Same; Decentralization of power involves an abdication of
political power in favor of local government units declared to be autonomous.—
Decentralization of power, on the other hand, involves an abdication of political power in
favor of local government 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. According to a constitutional author, decentralization of power
amounts to “self-immolation,” since in that event, the autonomous government becomes
accountable not to the central authorities but to its constituency.
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
3
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.
G.R. No. 91649. May 14, 1991.*
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN
AND LORENZO SANCHEZ, petitioners, vs. PHILIPPINE AMUSEMENTS AND
GAMING CORPORATION (PAGCOR), respondent.
Constitutional Law; Taxation; Municipal Corporations; Municipal corporations have no
inherent power to tax; their power to tax must always yield to a legislative act.—The City
of Manila, being a mere Municipal corporation has no inherent right to impose taxes (Icard
v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v.
Municipality of Caloocan, 7 SCRA 643). Thus, “the Charter or statute must plainly show
an intent to confer that power or the municipality cannot assume it” (Medina v. City of
Baguio, 12 SCRA 62). Its “power to tax” therefore must always yield to a legislative act
which is superior having been passed upon by the state itself which has the “inherent
power to tax” (Bernas, the Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).
Same; Same; Same; Same; Congress has the power of control over local governments;
if Congress can grant a municipal corporation the power to tax certain matters, it can also
provide for exemptions or even take back the power.—The Charter of the City of Manila
is subject to control by Congress. It should be stressed that “municipal corporations are
mere creatures of Congress” (Unson v. Lacson, G.R. No. 7909, January 18, 1957) which
has the power to “create and abolish municipal corporations” due to its “general legislative
powers” (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541).
Congress, therefore, has the power of control over local governments (Hebron v. Reyes,
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G.R. No. 9124, July 2, 1950). And if Congress can grant the City of Manila the power to
tax certain matters, it can also provide for exemptions or even take back the power.
Same; Same; Same; License Fees; The power of local governments to regulate gambling
thru the grant of franchises, licenses or permits was withdrawn by PD 771, it is now vested
exclusively on the National Government.—The City of Manila’s power to impose license
fees on gambling, has long been revoked. As early as 1975, the power of local
governments to regulate gambling thru the grant of “franchise, licenses or permits” was
withdrawn by P.D. No. 771 and was vested exclusively on the National Government. xxx
xxx Therefore, only the National Government has the power to issue “licenses or permits”
for the operation of gambling. Necessarily, the power to demand or collect license fees
which is a consequence of the issuance of “licenses or permits” is no longer vested in the
City of Manila.
Same; Same; Same; Same; Local governments have no power to tax instrumentalities of
the National Government; PAGCOR, being an instrumentality of the Government, is
therefore exempt from local taxes.—Local governments have no power to tax
instrumentalities of the National Government. PAGCOR is a government owned or
controlled corporation with an original charter, PD 1869. All of its shares of stocks are
owned by the National Government. xxx xxx PAGCOR has a dual role, to operate and to
regulate gambling casinos. The latter role is governmental, which places it in the category
of an agency or instrumentality of the Government. Being an instrumentality of the
Government, PAGCOR should be and actually is exempt from local taxes. Otherwise, its
operation might be burdened, impeded or subjected to control by a mere Local
government. “The states have no power by taxation or otherwise, to retard, impede,
burden or in any manner control the operation of constitutional laws enacted by Congress
to carry into execution the powers vested in the federal government.” (MC Culloch v.
Maryland, 4 Wheat 316, 4 L Ed. 579) This doctrine emanates from the “supremacy” of the
National Government over local governments. “Justice Holmes, speaking for the Supreme
Court, made reference to the entire absence of power on the part of the States to touch,
in that way (taxation) at least, the instrumentalities of the United States (Johnson v.
Maryland, 254 US 51) and it can be agreed that no state or political subdivision can
regulate a federal instrumentality in such a way as to prevent it from consummating its
federal responsibilities, or even to seriously burden it in the accomplishment of them.”
(Antieau, Modern Constitutional Law, Vol. 2, p. 140, italics supplied). Otherwise, mere
creatures of the State can defeat National policies thru extermination of what local
authorities may perceive to be undesirable activities or enterprise using the power to tax
as “a tool for regulation” (U.S. v. Sanchez, 340 US 42). The power to tax which was called
by Justice Marshall as the “power to destroy” (Mc Culloch v. Maryland, supra) cannot be
allowed to defeat an instrumentality or creation of the very entity which has the inherent
power to wield it.
Same; Same; Same; Same; The power of local government to impose taxes and fees is
always subject to limitations which Congress may provide by law.—The power of local
government to “impose taxes and fees” is always subject to “limitations” which Congress
may provide by law. Since PD 1869 remains an “operative” law until “amended, repealed
or revoked” (Sec. 3, Art. XVIII, 1987 Constitution), its “exemption clause” remains as an
exception to the exercise of the power of local governments to impose taxes and fees. It
cannot therefore be violative but rather is consistent with the principle of local autonomy.
Same; Same; Same; Local Autonomy; The principle of local autonomy does not make
local governments sovereign within the state, it simply means decentralization.—Besides,
4
the principle of local autonomy under the 1987 Constitution simply means
“decentralization” (III Records of the 1987 Constitutional Commission, pp. 435-436, as
cited in Bernas, the Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988,
p. 374). It does not make local governments sovereign within the state or an “imperium in
imperio.” Local Government has been described as a political subdivision of a nation or
state which is constituted by law and has substantial control of local affairs. In a unitary
system of government, such as the government under the Philippine Constitution, local
governments can only be an intra sovereign subdivision of one sovereign nation, it cannot
be an imperium in imperio. Local government in such a system can only mean a measure
of decentralization of the function of government. (italics supplied)
Same; Equal Protection Clause; The “equal protection” clause does not preclude
classification of individuals who may be accorded different treatment under the law as
long as the classification is not unreasonable or arbitrary.—Petitioners next contend that
P.D. 1869 violates the equal protection clause of the Constitution, because “it legalized
PAGCOR—conducted gambling, while most gambling are outlawed together with
prostitution, drug trafficking and other vices” (p. 82, Rollo). We, likewise, find no valid
ground to sustain this contention. The petitioners’ posture ignores the well-accepted
meaning of the clause “equal protection of the laws.” The clause does not preclude
classification of individuals who may be accorded different treatment under the law as
long as the classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil.
1155). A law does not have to operate in equal force on all persons or things to be
conformable to Article III, Section 1 of the Constitution (DECS v. San Diego, G.R. No.
89572, December 21, 1989). The “equal protection clause” does not prohibit the
Legislature from establishing classes of individuals or objects upon which different rules
shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not require situations
which are different in fact or opinion to be treated in law as though they were the same
(Gomez v. Palomar, 25 SCRA 827). Just how P.D. 1869 in legalizing gambling conducted
by PAGCOR is violative of the equal protection is not clearly explained in the petition. The
mere fact that some gambling activities like cockfighting (P.D. 449) horse racing (R.A.
306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as amended by
B.P. 42) are legalized under certain conditions, while others are prohibited, does not
render the applicable laws, P.D. 1869 for one, unconstitutional. “If the law presumably hits
the evil where it is most felt, it is not to be overthrown because there are other instances
to which it might have been applied.” (Gomez v. Palomar, 25 SCRA 827) “The equal
protection clause of the 14 th Amendment does not mean that all occupations called by
the same name must be treated the same way; the state may do what it can to prevent
which is deemed as evil and stop short of those cases in which harm to the few concerned
is not less than the harm to the public that would insure if the rule laid down were made
mathematically exact.” (Dominican Hotel v. Arizana, 249 U.S. 2651).
Same; Statutes; Every law has in its favor the presumption of constitutionality, for a law
to be nullified, it must be shown that there is a clear and unequivocal breach of the
Constitution.—Every law has in its favor the presumption of constitutionality (Yu Cong
Eng v. Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82
SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified, it
must be shown that there is a clear and unequivocal breach of the Constitution, not merely
a doubtful and equivocal one. In other words, the grounds for nullity must be clear and
beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to
declare a law, or parts thereof, unconstitutional must clearly establish the basis for such
a declaration. Otherwise, their petition must fail. Based on the grounds raised by
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petitioners to challenge the constitutionality of P.D. 1869, the Court finds that petitioners
have failed to overcome the presumption. The dismissal of this petition is therefore,
inevitable. But as to whether P.D. 1869 remains a wise legislation considering the issues
of “morality, monopoly, trend to free enterprise, privatization as well as the state principles
on social justice, role of youth and educational values” being raised, is up for Congress
to determine.
PADILLA, J., Concurring: Constitutional Law; Legislative Department; The legislative
department must outlaw all forms of gambling, as a fundamental policy.—Gambling is
reprehensible whether maintained by government or privatized. The revenues realized by
the government out of “legalized” gambling will, in the long run, be more than offset and
negated by the irreparable damage to the people’s moral values. Also, the moral standing
of the government in its repeated avowals against “illegal gambling” is fatally flawed and
becomes untenable when it itself engages in the very activity it seeks to eradicate. One
can go through the Court’s decision today and mentally replace the activity referred to
therein as gambling, which is legal only because it is authorized by law and run by the
government, with the activity known as prostitution. Would prostitution be any less
reprehensible were it to be authorized by law, franchised, and “regulated” by the
government, in return for the substantial revenues it would yield the government to carry
out its laudable projects, such as infrastructure and social amelioration? The question, I
believe, answers itself. I submit that the sooner the legislative department outlaws all
forms of gambling, as a fundamental state policy, and the sooner the executive
implements such policy, the better it will be for the nation.
Facts: Petitioner is seeking to annul the Philippine Amusement and Gaming Corporation
(PAGCOR) Charter -- PD 1869, because it is allegedly contrary to morals, public policy
and order, and because it constitutes a waiver of a right prejudicial to a third person with
a right recognized by law. It waived the Manila Cit government’s right to impose taxes and
license fees, which is recognized by law. For the same reason, the law has intruded into
the local government’s right to impose local taxes and license fees. This is in
contravention of the constitutionally enshrined principle of local autonomy.
Issue: Whether or not Presidential Decree No. 1869 is valid.
Ruling:
1. The City of Manila, being a mere Municipal corporation has no inherent right to impose
taxes. Their charter or statute must plainly show an intent to confer that power, otherwise
the municipality cannot assume it. Its power to tax therefore must always yield to a
legislative act which is superior having been passed upon by the state itself which has
the “inherent power to tax.”
The Charter of Manila is subject to control by Congress. It should be stressed that
“municipal corporations are mere creatures of Congress”, which has the power to “create
and abolish municipal corporations” due to its “general legislative powers”. Congress,
therefore, has the power of control over the Local governments. And if Congress can
grant the City of Manila the power to tax certain matters, it can also provide for exemptions
or even take back the power.
2. The City of Manila’s power to impose license fees on gambling, has long been revoked
by P.D. No. 771 and vested exclusively on the National Government. Therefore, only the
5
National Government has the power to issue “license or permits” for the operation of
gambling.
3. Local governments have no power to tax instrumentalities of the National Government.
PAGCOR is government owned or controlled corporation with an original charter, P.D.
No. 1869. All of its shares of stocks are owned by the National Government. PAGCOR
has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened, impeded
or subjected to control by a mere Local Government.
4. Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. No. 1869.
Article 10, Section 5 of the 1987 Constitution:
“Each local government unit shall have the power to create its own source of revenue and
to levy taxes, fees, and other charges subject to such guidelines and limitation as the
congress may provide, consistent with the basic policy on local autonomy. Such taxes,
fees and charges shall accrue exclusively to the local government.”
SC said this is a pointless argument. The power of the local government to “impose taxes
and fees” is always subject to “limitations” which Congress may provide by law. Besides,
the principle of local autonomy under the 1987 Constitution simply means
“decentralization.” It does not make local governments sovereign within the state.
G.R. No. 129093. August 30, 2001.*
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and HON.
CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO DIZON PAÑO and TONY
CALVENTO, respondents.
Municipal Corporations; Local Government Units; Ordinances; Gambling; An ordinance
which merely states the “objection” of the council to lotto is but a mere policy statement
on the part of the local council which is not self-executing, and could not serve as a valid
ground to prohibit the operation of the lotto system in the province.—The entire
controversy stemmed from the refusal of Mayor Cataquiz to issue a mayor’s permit for
the operation of a lotto outlet in favor of private respondent. According to the mayor, he
based his decision on an existing ordinance prohibiting the operation of lotto in the
province of Laguna. The ordinance, however, merely states the “objection” of the council
to the said game. It is but a mere policy statement on the part of the local council, which
is not selfexecuting. Nor could it serve as a valid ground to prohibit the operation of the
lotto system in the province of Laguna.
Same; Same; Same; Same; While a policy statement expressing the local government’s
objection to the lotto is valid, as it is part of the local government’s autonomy to air its
views which may be contrary to that of the national government’s, this freedom to exercise
contrary views does not mean that local governments may actually enact ordinances that
go against laws duly enacted by Congress.—As a policy statement expressing the local
government’s objection to the lotto, such resolution is valid. This is part of the local
government’s autonomy to air its views which may be contrary to that of the national
government’s. However, this freedom to exercise contrary views does not mean that local
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governments may actually enact ordinances that go against laws duly enacted by
Congress. Given this premise, the assailed resolution in this case could not and should
not be interpreted as a measure or ordinance prohibiting the operation of lotto.
Same; Same; Same; Same; What the national legislature allows by law, such as lotto, a
provincial board may not disallow by ordinance or resolution.—The game of lotto is a
game of chance duly authorized by the national government through an Act of Congress.
Republic Act 1169, as amended by Batas Pambansa Blg. 42, is the law which grants a
franchise to the PCSO and allows it to operate the lotteries, x x x This statute remains
valid today. While lotto is clearly a game of chance, the national government deems it
wise and proper to permit it. Hence, the Sangguniang Panlalawigan of Laguna, a local
government unit, cannot issue a resolution or an ordinance that would seek to prohibit
permits. Stated otherwise, what the national legislature expressly allows by law, such as
lotto, a provincial board may not disallow by ordinance or resolution.
Same; Same; Same; In our system of government, the power of local government units
to legislate and enact ordinances and resolutions is merely a delegated power coming
from Congress.—In our system of government, the power of local government units to
legislate and enact ordinances and resolutions is merely a delegated power coming from
Congress. As held in Tatel vs. Virac, ordinances should not contravene an existing statute
enacted by Congress. The reasons for this is obvious, as elucidated in Magtajas v. Pryce
Properties Corp. Municipal governments are only agents of the national government.
Local councils exercise only delegated legislative powers conferred upon them by
Congress as the national lawmaking body. The delegate cannot be superior to the
principal or exercise powers higher than those of the latter. It is a heresy to suggest that
the local government units can undo the acts of Congress, from which they have derived
their power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly from
the legislature. It breathes into them the breath of life, without which they cannot exist. As
it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there
is some constitutional limitation on the right, the legislature might, by a single act, and if
we can suppose it capable of so great a folly and so great a wrong, sweep from existence
all of the municipal corporations in the state, and the corporation could not prevent it. We
know of no limitation on the right so far as the corporation themselves are concerned.
They are, so to phrase it, the mere tenants at will of the legislature (citing Clinton vs.
Ceder Rapids, etc. Railroad Co., 24 Iowa 455).
Same; Same; Same; Ours is a unitary form of government, not a federal state.—Ours is
still a unitary form of government, not a federal state. Being so, any form of autonomy
granted to local governments will necessarily be limited and confined within the extent
allowed by the central authority. Besides, the principle of local autonomy under the 1987
Constitution simply means “decentralization”. It does not make local governments
sovereign within the state or an “imperium in imperio.”
Same; Same; Same; Gambling; Sections 2 (c) and 27 of the Local Government Code
(Republic Act 7160) apply only to national programs and/or projects which are to be
implemented in a particular local community—lotto is neither a program nor a project of
the national government, but of a charitable institution, the PCSO, and it is far fetched to
say that lotto falls within the contemplation of aforesaid legal provisions.—From a careful
reading of said provisions, we find that these apply only to national programs and/or
projects which are to be implemented in a particular local community. Lotto is neither a
program nor a project of the national government, but of a charitable institution, the PCSO.
6
Though sanctioned by the national government, it is far fetched to say that lotto falls within
the contemplation of Sections 2 (c) and 27 of the Local Government Code.
FACTS: On December 29, 1995, respondent Tony Calvento was appointed agent by the
Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation
of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayor’s
permit to open the lotto outlet. This was denied by Mayor Cataquiz in a letter dated
February 19, 1996. The ground for said denial was an ordinance passed by the
Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T. 1995which was
issued on September 18, 1995.As a result of this resolution of denial, respondent
Calvento filed a complaint for declaratory relief with prayer for preliminary injunction and
temporary restraining order. In the said complaint, respondent Calvento asked the
Regional Trial Court of San Pedro Laguna, Branch 93, for the following reliefs: (1) a
preliminary injunction or temporary restraining order, ordering the defendants to refrain
from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring
Hon. Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of
a lotto outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T.
1995.On February 10, 1997, the respondent judge, Francisco Dizon Paño, promulgated
his decision enjoining the petitioners from implementing or enforcing resolution or
Kapasiyahan Blg. 508, T. 1995.
ISSUE: WON Kapasiyahan Blg. 508, T. 1995 is valid
HELD: As a policy statement expressing the local government’s objection to the lotto,
such resolution is valid. This is part of the local government’s autonomy to air its views
which may be contrary to that of the national government’s. However, this freedom to
exercise contrary views does not mean that local governments may actually enact
ordinances that go against laws duly enacted by Congress. Given this premise, the
assailed resolution in this case could not and should not be interpreted as a measure or
ordinance prohibiting the operation of lotto.n our system of government, the power of local
government units to legislate and enact ordinances and resolutions is merely a delegated
power coming from Congress. As held in Tatel vs. Virac, ordinances should not
contravene an existing statute enacted by Congress. The reasons for this is obvious, as
elucidated in Magtajas v. Pryce Properties Corp.
G.R. No. 79956. January 29, 1990.*
CORDILLERA BROAD COALITION, petitioner, vs. COMMISSION ON AUDIT,
respondent.
Constitutional Law; Legislative Enactments; Legislative enactments must be accorded the
presumption of constitutionality.—It is well-settled in our jurisprudence that respect for the
inherent and stated powers and prerogatives of the law-making body, as well as faithful
adherence to the principle of separation of powers, require that its enactment be accorded
the presumption of constitutionality. Thus, in any challenge to the constitutionality of a
statute, the burden of clearly and unequivocally proving its unconstitutionality always rests
upon the challenger. Conversely, failure to so prove will necessarily defeat the challenge.
Same; Same; Autonomous Regions; E.O. 220; E.O. 220 does not create the autonomous
region, it merely provides for transitory measures in anticipation of the enactment of an
organic act and the creation of an autonomous region; E.O. 220, not unconstitutional.—
A reading of E.O. No. 220 will easily reveal that what it actually envisions is the
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consolidation and coordination of the delivery of services of line departments and
agencies of the National Government in the areas covered by the administrative region
as a step preparatory to the grant of autonomy to the Cordilleras. It does not create the
autonomous region contemplated in the Constitution. It merely provides for transitory
measures in anticipation of the enactment of an organic act and the creation of an
autonomous region. In short, it prepares the ground for autonomy. This does not
necessarily conflict with the provisions of the Constitution on autonomous regions, as we
shall show later.
Same; Same; Same; Same; The Cordillera Administrative Region is not a territorial or
political subdivision, it is a mere sophisticated version of a regional consultative council.—
After carefully considering the provisions of E.O. No. 220, we find that it did not create a
new territorial and political subdivision or merge existing ones into a larger subdivision. 1.
Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does
not have a separate juridical personality, unlike provinces, cities and municipalities. x x x
Then, considering the control and supervision exercised by the President over the CAR
and the offices created under E.O. No. 220, and considering further the indispensable
participation of the line departments of the National Government, the CAR may be
considered more than anything else as a regional coordinating agency of the National
Government, similar to the regional development councils which the President may create
under the Constitution [Art. X, sec. 14]. x x x In this wise, the CAR may be considered as
a more sophisticated version of the regional development council.
Same; Same; Same; Same; Creation of autonomous regions in Muslim Mindanao and
the Cordilleras contemplates the grant of political autonomy and not just administrative
autonomy to these regions.—The creation of autonomous regions in Muslim Mindanao
and the Cordilleras, which is peculiar to the 1987 Constitution, contemplates the grant of
political autonomy and not just administrative autonomy to these regions. Thus, the
provision in the Constitution for an autonomous regional government with a basic
structure consisting of an executive department and a legislative assembly and special
courts with personal, family and property law jurisdiction in each of the autonomous
regions [Art. X, sec. 18].
Facts: Pursuant to a ceasefire agreement signed on September 13, 1986, the Cordillera
People’s Liberation Army (CPLA) and the Cordillera Bodong Administration agreed that
the Cordillera people shall not undertake their demands through armed and violent
struggle but by peaceful means, such as political negotiations.
A subsequent joint agreement was then arrived at by the two parties. Such agreement
states that they are to:
Par. 2. Work together in drafting an Executive Order to create a preparatory body that
could perform policy-making and administrative functions and undertake consultations
and studies leading to a draft organic act for the Cordilleras.
Par. 3. Have representatives from the Cordillera panel join the study group of the R.P.
Panel in drafting the Executive Order.
Pursuant to the above joint agreement, E.O. 220 was drafted by a panel of the Philippine
government and of the representatives of the Cordillera people. This was then signed
into law by President Corazon Aquino, in the exercise of her legislative powers, creating
7
the Cordillera Administrative Region [CAR], which covers the provinces of Abra, Benguet,
Ifugao, Kalinga-Apayao and Mountain Province and the City of Baguio.
Petitioners assail the constitutionality of E.O. 220 on the primary ground that by issuing
the said order, the President, in the exercise of her legislative powers, had virtually pre-
empted Congress from its mandated task of enacting an organic act and created an
autonomous region in the Cordilleras.
Issue: Whether or not E.O. 220 is constitutional
Ruling: The Supreme Court has come to the conclusion that petitioners’ are unfounded.
E.O. 220 does not create the autonomous region contemplated in the Constitution. It
merely provides for transitory measures in anticipation of the enactment of an organic act
and the creation of an autonomous region. In short, it prepares the ground for autonomy.
This does not necessarily conflict with the provisions of the Constitution on autonomous
regions.
The Constitution outlines a complex procedure for the creation of an autonomous region
in the Cordilleras. Since such process will undoubtedly take time, the President saw it fit
to provide for some measures to address the urgent needs of the Cordilleras in the
meantime that the organic act had not yet been passed and the autonomous region
created. At this time, the President was still exercising legislative powers as the First
Congress had not yet convened.
Based on Article X Section 18 of the Constitution (providing the basic structure of
government in the autonomous region), the Supreme Court finds that E. O. No. 220 did
not establish an autonomous regional government. The bodies created by E. O. No. 220
do not supplant the existing local governmental structure; nor are they autonomous
government agencies. They merely constitute the mechanism for an "umbrella" that
brings together the existing local governments, the agencies of the National Government,
the ethno-linguistic groups or tribes and non-governmental organizations in a concerted
effort to spur development in the Cordilleras.
In fact, it was Republic Act No. 6766, the organic act for the Cordillera autonomous region
signed into law on October 23, 1989, and the plebiscite for the approval of the act which
completed the autonomous region-creating process outlined in the Constitution.
Therefore, E.O. 220 is constitutional.
G.R. No. 195770. July 17, 2012.*
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON ALCANTARA,
petitioners, vs. EXECUTIVE SECRETARY PAQUITO N. OCHOA and SECRETARY
CORAZON JULIANO-SOLIMAN OF THE DEPARTMENT OF SOCIAL WELFARE and
DEVELOPMENT, respondents.
Constitutional Law; Autonomy of Local Governments; State Policies; The Constitution
declares it a policy of the State to ensure the autonomy of local governments.―The
Constitution declares it a policy of the State to ensure the autonomy of local governments
and even devotes a full article on the subject of local governance which includes the
following pertinent provisions: Section 3. The Congres shall enact a local government
code which shall provide for a more responsive and accountable local government
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structure instituted through a system of decentralization with effective mechanisms of
recall, initiative, and referendum, allocate among the different local government units their
powers, responsibilities, and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation of the local units.
x x x Section 14. The President shall provide for regional development councils or other
similar bodies composed of local government officials, regional heads of departments and
other government offices, and representatives from non-governmental organizations
within the regions for purposes of administrative decentralization to strengthen the
autonomy of the units therein and to accelerate the economic and social growth and
development of the units in the region. (Underscoring supplied)
Same; Same; Same; While it is through a system of decentralization that the State shall
promote a more responsive and accountable local government structure, the concept of
local autonomy does not imply the conversion of local government units into “mini-
states.”―The Court held in Ganzon v. Court of Apeals, 200 SCRA 271 (1991), that while
it is through a system of decentralization that the State shall promote a more responsive
and accountable local government structure, the concept of local autonomy does not
imply the conversion of local government units into “mini-states.” We explained that, with
local autonomy, the Constitution did nothing more than “to break up the monopoly of the
national government over the afairs of the local government” and, thus, did not intend to
sever “the relation of partnership and interdependence betwen the central administration
and local government units.”
Same; Every law has in its favor the presumption of constitutionality, and to justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a
doubtful and argumentative one.―Every law has in its favor the presumption of
constitutionality, and to justify its nullification, there must be a clear and unequivocal
breach of the Constitution, not a doubtful and argumentative one. Petitioners have failed
to discharge the burden of proving the invalidity of the provisions under the GAA of 2011.
The allocation of a P21 billion budget for an intervention program formulated by the
national government itself but implemented in partnership with the local government units
to achieve the common national goal development and social progress can by no means
be an encroachment upon the autonomy of local governments.
Facts:
1. The petitioners filed a petition for mandamus to compel the Office of the Executive
Secretary and the Department of Foreign Affairs to transmit the signed copy of the Rome
Statute of the International Criminal Court to the Senate of the Philippinesfor its
concurrence pursuant to Sec. 21, Art VII of the 1987 Constitution.
2. The Rome Statute established the Int'l Criminal Court which will have jurisdiction over
the most serious crimes as genocide, crimes against humanity, war crimes and crimes of
aggression as defined by the Statute. The Philippines through the Chargie du Affairs in
UN. The provisions of the Statute however require that it be subject to ratification,
acceptance or approval of the signatory state.
3. Petitioners contend that ratification of a treaty, under both domestic and international
law, is a function of the Senate, hence it is the duty of the Executive Department to
transmit the signed copy to the senate to allow it to exercise its discretion.
8
Issue: Whether or not the Exec. Secretary and the DFA have the ministerial duty to
transmit to the Senate the copy of the Rome Statute signed by a member of the Philippine
mission to the U.N. even without the signature of the President.
The Supreme Court held NO.
1. The President as the head of state is the sole organ and authorized in the external
relations and he is also the country's sole representative with foreign nations, He is the
mouthpiece with respect to the country's foreign affairs.
2. In treaty-making, the President has the sole authority to negotiate with other states and
enter into treaties but this power is limited by the Constitution with the 2/3 required vote
of all the members of the Senate for the treaty to be valid. (Sec. 21, Art VII).
3. The legislative branch part is essential to provide a check on the executive in the field
of foreign relations, to ensure the nation's pursuit of political maturity and growth.
G.R. Nos. 120865-71. December 7, 1995.*
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS
Ecology; It is difficult for a man, scavenging on the garbage dump or fishing in the murky
waters of the Pasig River and the Laguna Lake or making a clearing in the forest to
understand why protecting birds, fish, and trees is more important than protecting him
and keeping his family alive.—It is difficult for a man, scavenging on the garbage dump
created by affluence and profligate consumption and extravagance of the rich or fishing
in the murky waters of the Pasig River and the Laguna Lake or making a clearing in the
forest so that he can produce food for his family, to understand why protecting birds, fish,
and trees is more important than protecting him and keeping his family alive.
Administrative Law; Laguna Lake Development Authority (LLDA); Local Government
Code; Statutes; The provisions of R.A. 7160 do not necessarily repeal the laws creating
the Laguna Lake Development Authority and granting the latter water rights authority over
Laguna de Bay and the lake region.—Section 4 (k) of the charter of the Laguna Lake
Development Authority, Republic Act No. 4850, the provisions of Presidential Decree No.
813, and Section 2 of Executive Order No. 927, cited above, specifically provide that the
Laguna Lake Development Authority shall have exclusive jurisdiction to issue permits for
the use of all surface water for any projects or activities in or affecting the said region,
including navigation, construction, and operation of fishpens, fish enclosures, fish corrals
and the like. On the other hand, Republic Act No. 7160, the Local Government Code of
1991, has granted to the municipalities the exclusive authority to grant fishery privileges
in municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish
corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite zone of
the municipal waters. We hold that the provisions of Republic Act No. 7160 do not
necessarily repeal the aforementioned laws creating the Laguna Lake Development
Authority and granting the latter water rights authority over Laguna de Bay and the lake
region.
Same; Same; Same; Same; Statutory Construction; The repeal of laws should be made
clear and expressed.—The Local Government Code of 1991 does not contain any
express provision which categorically expressly repeal the charter of the Authority. It has
to be conceded that there was no intent on the part of the legislature to repeal Republic
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Act No. 4850 and its amendments. The repeal of laws should be made clear and
expressed.
Same; Same; Same; Same; Same; It is basic in statutory construction that the enactment
of a later legislation which is a general law cannot be construed to have repealed a special
law.—It has to be conceded that the charter of the Laguna Lake Development Authority
constitutes a special law. Republic Act No. 7160, the Local Government Code of 1991, is
a general law. It is basic in statutory construction that the enactment of a later legislation
which is a general law cannot be construed to have repealed a special law. It is a well-
settled rule in this jurisdiction that a “special statute, provided for a particular case or class
of cases, is not repealed by a subsequent statute, general in its terms, provisions and
application, unless the intent to repeal or alter is manifest, although the terms of the
general law are broad enough to include the cases embraced in the special law.”
Same; Same; Same; Same; Same; A special law cannot be re pealed, amended or altered
by a subsequent general law by mere implication—thus, the charter of the LLDA should
prevail over the Local Government Code of 1991.—Where there is a conflict between a
general law and a special statute, the special statute should prevail since it evinces the
legislative intent more clearly than the general statute. The special law is to be taken as
an exception to the general law in the absence of special circumstances forcing a contrary
conclusion. This is because implied repeals are not favored and as much as possible,
effect must be given to all enactments of the legislature. A special law cannot be repealed,
amended or altered by a subsequent general law by mere implication. Thus, it has to be
concluded that the charter of the Authority should prevail over the Local Government
Code of 1991.
Same; Same; Same; Police Power; The charter of the LLDA should prevail over the Local
Government Code of 1991 on matters affecting Laguna de Bay.—The power of the local
government units to issue fishing privileges was clearly granted for revenue purposes.
This is evident from the fact that Section 149 of the New Local Government Code
empowering local governments to issue fishing permits is embodied in Chapter 2, Book
II, of Republic Act No. 7160 under the heading, “Specific Provisions On The Taxing And
Other Revenue Raising Power Of Local Government Units” On the other hand, the power
of the Authority to grant permits for fishpens, fishcages and other aquaculture structures
is for the purpose of effectively regulating and monitoring activities in the Laguna de Bay
region (Section 2, Executive Order No. 927) and for lake quality control and management.
It does partake of the nature of police power which is the most pervasive, the least
limitable and the most demanding of all State powers including the power of taxation.
Accordingly, the charter of the Authority which embodies a valid exercise of police power
should prevail over the Local Government Code of 1991 on matters affecting Laguna de
Bay.
Same; Same; The LLDA has express powers as a regulatory and quasi-judicial body.—
In respect to the question as to whether the Authority is a quasi-judicial agency or not, it
is our holding that, considering the provisions of Section 4 of Republic Act No. 4850 and
Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in
Laguna Lake Development Authority vs. Court of Appeals, 231 SCRA 304, 306 (1994),
there is no question that the Authority has express powers as a regulatory and quasi-
judicial body in respect to pollution cases with authority to issue a “cease and desist order”
and on matters affecting the construction of illegal fishpens, fishcages and other aqua
culture structures in Laguna de Bay.
9
Same; Same; Courts; Jurisdiction; The LLDA is not co-equal to the Regional Trial Courts,
and on actions necessitating the resolution of legal questions affecting the powers of the
Authority as provided in its charter, the Regional Trial Courts have jurisdiction.—The
Authority’s pretense, however, that it is co equal to the Regional Trial Courts such that all
actions against it may only be instituted before the Court of Appeals cannot be sustained.
On actions necessitating the resolution of legal questions affecting the powers of the
Authority as provided for in its charter, the Regional Trial Courts have jurisdiction.
Same; Same; Jurisdiction; The LLDA has the exclusive jurisdic tion to issue permits for
the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities
situated therein and the authority to exercise such powers as are by its charter vested on
it.—In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, has not repealed the provisions
of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, as
amended. Thus, the Authority has the exclusive jurisdiction to issue permits for the
enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated
therein and the authority to exercise such powers as are by its charter vested on it.
FACTS: The Laguna Lake Development Authority (LLDA) was created through Republic
Act No. 4850. It was granted, inter alia, exclusive jurisdiction to issue permits for the use
of all surface water for any project or activity in or affecting the said region including
navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the
like.
Then came RA 7160, the Local Government Code of 1991. The municipalities in the
Laguna Lake region interpreted its provisions to mean that the newly passed law gave
municipal governments the exclusive jurisdiction to issue fishing privileges within their
municipal waters.
ISSUE: Who should exercise jurisdiction over the Laguna Lake and its environs insofar
as the issuance of permits for fishing privileges is concerned, the LLDA or the towns and
municipalities comprising the region?
HELD: LLDA has jurisdiction over such matters because the charter of the LLDA prevails
over the Local Government Code of 1991. The said charter constitutes a special law,
while the latter is a general law. It is basic in statutory construction that the enactment of
a later legislation which is a general law, cannot be construed to have repealed a special
law. The special law is to be taken as an exception to the general law in the absence of
special circumstances forcing a contrary conclusion.
In addition, the charter of the LLDA embodies a valid exercise of police power for the
purpose of protecting and developing the Laguna Lake region, as opposed to the Local
Government Code, which grants powers to municipalities to issue fishing permits for
revenue purposes.
G.R. No. 135962. March 27, 2000.*
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. BEL-AIR
VILLAGE ASSOCIATION, INC., respondent.
Constitutional Law; Political Subdivision; Police Power; Definition of Police Power.—
Police power is an inherent attribute of sovereignty. It has been defined as the power
vested by the Constitution in the legislature to make, ordain, and establish all manner of
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wholesome and reasonable laws, statutes and ordinances, either with penalties or
without, not repugnant to the Constitution, as they shall judge to be for the good and
welfare of the commonwealth, and for the subjects of the same. The power is plenary and
its scope is vast and pervasive, reaching and justifying measures for public health, public
safety, public morals, and the general welfare.
Same; Same; Same; Police power is lodged primarily in the National Legislature which
may delegate the power to the President and administrative boards as well as the
lawmaking bodies of municipal corporations or local government units.—It bears stressing
that police power is lodged primarily in the National Legislature. It 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.
Once delegated, the agents can exercise only such legislative powers as are conferred
on them by the national lawmaking body.
Same; Same; Same; Definition of Local Government.—A local government is a “political
subdivision of a nation or state which is constituted by law and has substantial control of
local affairs.” The Local Government Code of 1991 defines a local government unit as a
“body politic and corporate”—one endowed with powers as a political subdivision of the
National Government and as a corporate entity representing the inhabitants of its territory.
Local government units are the provinces, cities, municipalities and barangays. They are
also the territorial and political subdivisions of the state.
Same; Same; Same; Same; Police power delegated to the local government units in the
Local Government Code of 1991.—Our Congress delegated police power to the local
government units in the Local Government Code of 1991. This delegation is found in
Section 16 of the same Code, known as the general welfare clause.
Same; Same; Same; Same; Local government units exercise police power through their
respective legislative bodies.—Local government units exercise police power through
their respective legislative bodies. The legislative body of the provincial government is the
sangguniang panlalawigan, that of the city government is the sangguniang panlungsod,
that of the municipal government is the sangguniang bayan, and that of the barangay is
the sangguniang barangay. The Local Government Code of 1991 empowers the
sangguniang panlalawigan, sangguniang panlungsod and sangguniang bayan to “enact
ordinances, approve resolutions and appropriate funds for the general welfare of the
[province, city or municipality, as the case may be], and its inhabitants pursuant to Section
16 of the Code and in the proper exercise of the corporate powers of the [province, city
municipality] provided under the Code x x x.” The same Code gives the sangguniang
barangay the power to “enact ordinances as may be necessary to discharge the
responsibilities conferred upon it by law or ordinance and to promote the general welfare
of the inhabitants thereon.”
Same; Same; Same; There is no syllable in Republic Act No. 7924 that grants the Metro
Manila Development Authority police power, let alone legislative power.—It will be noted
that the powers of the MMDA are limited to the following acts: formulation, coordination,
regulation, implementation, preparation, management, monitoring, setting of policies,
installation of a system and administration. There is no syllable in R.A. No. 7924 that
grants the MMDA police power, let alone legislative power. Even the Metro Manila Council
has not been delegated any legislative power. Unlike the legislative bodies of the local
government units, there is no provision in R.A. No. 7924 that empowers the MMDA or its
10
Council to “enact ordinances, approve resolutions and appropriate funds for the general
welfare” of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself,
a “development authority.”
Same; Same; Same; Metro Manila Development Authority is not a political unit of
government.—Clearly, the MMDA is not a political unit of government. The power
delegated to the MMDA is that given to the Metro Manila Council to promulgate
administrative rules and regulations in the implementation of the MMDA’s functions. There
is no grant of authority to enact ordinances and regulations for the general welfare of the
inhabitants of the metropolis.
Same; Same; Same; Metro Manila Development Authority is not a local government unit
or a public corporation endowed with legislative power.—It is thus beyond doubt that the
MMDA is not a local government unit or a public corporation endowed with legislative
power. It is not even a “special metropolitan political subdivision” as contemplated in
Section 11, Article X of the Constitution. The creation of a “special metropolitan political
subdivision” requires the approval by a majority of the votes cast in a plebiscite in the
political units directly affected. R.A. No. 7924 was not submitted to the inhabitants of Metro
Manila in a plebiscite. The Chairman of the MMDA is not an official elected by the people,
but appointed by the President with the rank and privileges of a cabinet member. In fact,
part of his function is to perform such other duties as may be assigned to him by the
President, whereas in local government units, the President merely exercises supervisory
authority. This emphasizes the administrative character of the MMDA.
Same; Same; Same; Unlike the Metro Manila Commission, the Metro Manila
Development Authority has no power to enact ordinances for the welfare of the
community.—Clearly then, the MMC under P.D. No. 824 is not the same entity as the
MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact
ordinances for the welfare of the community. It is the local government units, acting
through their respective legislative councils, that possess legislative power and police
power. In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any
ordinance or resolution ordering the opening of Neptune Street, hence, its proposed
opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in
so ruling.
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.
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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.
G.R. No. 149848. November 25, 2004.*
ARSADI M. DISOMANGCOP and RAMIR M. DIMALOTANG, petitioners, vs. THE
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS,
SIMEON A. DATUMANONG and THE SECRETARY OF BUDGET and MANAGEMENT
EMILIA T. BONCODIN, respondents.
Constitutional Law; Political Law; The 1987 Constitution is explicit in defining the scope
of judicial power; It establishes the authority of the courts to determine in an appropriate
action the validity of acts of the political departments; Requisites for the exercise of judicial
power.—The 1987 Constitution is explicit in defining the scope of judicial power. It
establishes the authority of the courts to determine in an appropriate action the validity of
acts of the political departments. It speaks of judicial prerogative in terms of duty.
Jurisprudence has laid down the following requisites for the exercise of judicial power:
First, there must be before the Court an actual case calling for the exercise of judicial
review. Second, the question before the Court must be ripe for adjudication. Third, the
person challenging the validity of the act must have standing to challenge. Fourth, the
question of constitutionality must have been raised at the earliest opportunity. Fifth, the
issue of constitutionality must be the very lis mota of the case.
Same; Same; Where an action of the legislative branch is seriously alleged to have
infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary
to settle the dispute; Grounds to strike down acts of the political departments of
government.—In seeking to nullify acts of the legislature and the executive department
on the ground that they contravene the Constitution, the petition no doubt raises a
justiciable controversy. As held in Tañada v. Angara, “where an action of the legislative
branch is seriously alleged to have infringed the Constitution, it becomes not only the right
but in fact the duty of the judiciary to settle the dispute.” But in deciding to take jurisdiction
over this petition questioning acts of the political departments of government, the Court
will not review the wisdom, merits, or propriety thereof, but will strike them down only on
either of two grounds: (1) unconstitutionality or illegality and (2) grave abuse of discretion.
Same; Same; Definition of Legal Standing or Law Stands; Petitioner must show that he
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
11
complained of.—Legal standing or locus standi is defined as a personal and substantial
interest in the case such that the party has sustained or will sustain direct injury as a result
of the governmental act that is being challenged. The term “interest” means a material
interest, an interest in issue affected by the decree, as distinguished from a mere interest
in the question involved, or a mere incidental interest. A party challenging the
constitutionality of a law, act, or statute must show “not only that the law is invalid, but
also that he has sustained or is in immediate, or imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely that he suffers thereby in some
indefinite way.” He must show that he 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 complained of.
Same; Same; Court is inclined to take cognizance of a suit although it does not satisfy
the requirement of legal standing when paramount interests are involved.—Following the
new trend, this Court is inclined to take cognizance of a suit although it does not satisfy
the requirement of legal standing when paramount interests are involved. In several
cases, the Court has adopted a liberal stance on the locus standi of a petitioner where
the petitioner is able to craft an issue of transcendental significance to the people.
Same; Same; Petitioners can legitimately challenge the validity of the enactments subject
of the instant case.—As the two offices have apparently been endowed with functions
almost identical to those of DPWH-ARMM First Engineering District in Lanao del Sur, it is
likely that petitioners are in imminent danger of being eased out of their duties and, not
remotely, even their jobs. Their material and substantial interests will definitely be
prejudiced by the enforcement of D.O. 119 and R.A. 8999. Such injury is direct and
immediate.
Thus, they can legitimately challenge the validity of the enactments subject of the instant
case.
Same; Statutes; The organic acts are more than ordinary statutes hence the provisions
thereof cannot be amended by an ordinary statute such as R.A. 8999.—The ARMM
Organic Acts are deemed a part of the regional autonomy scheme. While they are
classified as statutes, the Organic Acts are more than ordinary statutes because they
enjoy affirmation by a plebiscite. Hence, the provisions thereof cannot be amended by an
ordinary statute, such as R.A. 8999 in this case. The amendatory law has to be submitted
to a plebiscite.
FACTS: On Aug. 1, 1989, RA 6734 was passed (Organic Act of ARMM). Four provinces
voted for inclusion in ARMM, namely: Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi.
In accordance with it, EO 426 was issued by Pres. Cory Aquino on Oct. 12, 1990. The
same devolved to the ARMM the power of the DPWH. Consequently, DO 119 entitled
"Creation of Marawi Sub-District Engineering Office." was issued by DPWH Sec. Vigilar
last May 20, 1999, which is in accordance with the E.O 124. It created a DPWH Marawi
Sub-District Engineering Office which shall have jurisdiction over all national infrastructure
projects and facilities under the DPWH within Marawi City and Lanao del Sur. On Jan. 17,
2001, RA 8999 which created a new Engineering District in the first district of Lanao del
Sur was passed by Pres. Estrada entitled “An act establishing an engineering district as
the first district of Lanao Del Sur and appropriating funds therefor”. On March 31, 2001,
RA 9054 which amended RA 6734 was passed. The province of Basilan and the City of
Marawi voted to join ARMM through said law.
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Disomangcop and Dimalotang sin their capacity as Officer-in-Charge and Engineer II
respectively of the First Engineering District of DPWH-ARMM in Lanao del Sur filed a
petition questioning the constitutionality and validity of DO 119 and RA 8999 on the
ground that they contravene the constitution and the organic acts of the ARMM. Moreover
they sought mainly the following relief: to prohibit respondent DPWH Secretary from
implementing D.O 119 and R.A 8999 and releasing funds for public work projects
intended for Lanao Del Sur and Marawi City to the Marawi Sub-District Engineering Office
and other administrative regions of DPWH.
ISSUE: WON DO 119 and RA 8999 are both invalid and constitutionally infirm
HELD: Yes, Republic Act 8999 never became an operative and was superseded or
repealed by Republic Act 9054. RA 8999 is patently inconsistent with RA 9054 which is a
later law. RA 9054, which is anchored on the 1987 Constitution advances the
constitutional grant of autonomy by detailing the powers of the ARMM which covers
among others Lanao del Sur. However, RA 8999 ventures to re-establish the National
Government's jurisdiction over the infrastructure programs in Lanao del Sur. RA 8999 is
patently inconsistent with RA 9054, and it destroys the latter law's objective of devolution
of the functions of DPWH in line with the policy of the Constitution to grant LGUs
meaningful and authentic regional autonomy.
DO 119 creating the Marawi Sub-District Engineering Office which has jurisdiction over
infrastructure projects within Marawi City and Lanao del Sur is violate of the provisions of
EO 426 which implements the transfer of control and supervision of the DPWH to the
ARMM in line with RA 6734. The office created under DO 119 having essentially the same
powers with the District Engineering Office of Lanao del Sur as created under EO 426, is
a duplication. The DO in effect takes back powers which have been previously devolved
under EO 426. RA 9054 however has repealed DO Department Order 119.
Thus, R.A 8999 is antagonistic to and cannot be reconciled with both ARMM Organic
Acts. It contravened true decentralization which is the essence of regional autonomy. And,
D.O were issued unconstitutional and were issued grave abuse of discretion
G.R. No. 152774. May 27, 2004.*
THE PROVINCE OF BATANGAS, represented by its Governor, HERMILANDO I.
MANDANAS, petitioner, vs. HON. ALBERTO G. ROMULO, Executive Secretary and
Chairman of the Oversight Committee on Devolution; HON. EMILIA BONCODIN,
Secretary, Department of Budget and Management; HON. JOSE D. LINA, JR.,
Secretary, Department of Interior and Local Government, respondents.
Actions; Parties; Locus Standi; The gist of the question of standing is whether a party has
“alleged such a personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions.”—The gist of the
question of standing is whether a party has “alleged such a personal stake in the outcome
of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions.” 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,
12
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.
Same; Same; Same; Local Autonomy; Local Government Code; A local government unit
(LGU), seeking relief in order to protect or vindicate an interest of its own, and of the other
LGUs, pertaining to their interest in their share in the national taxes or the Internal
Revenue Allotment (IRA), has the requisite standing to bring suit.—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. This interest pertains to the LGUs’ share in the national taxes or
the IRA. The petitioner’s constitutional claim is, in substance, that the assailed provisos
in the GAAs of 1999, 2000 and 2001, and the OCD resolutions contravene Section 6,
Article X of the Constitution, mandating the “automatic release” to the LGUs of their share
in the national taxes. Further, the injury that the petitioner
claims to suffer is the diminution of its share in the IRA, as provided under Section 285 of
the Local Government Code of 1991, occasioned by the implementation of the assailed
measures. These allegations are sufficient to grant the petitioner standing to question the
validity of the assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD
resolutions as the petitioner clearly has “a plain, direct and adequate interest” in the
manner and distribution of the IRA among the LGUs.
Same; Hierarchy of Courts; The rule on hierarchy of courts may be relaxed when the
redress desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the exercise
of the Supreme Court’s primary jurisdiction.—Considering that these facts, which are
necessary to resolve the legal question now before this Court, are no longer in issue, the
same need not be determined by a trial court. In any case, the rule on hierarchy of courts
will not prevent this Court from assuming jurisdiction over the petition. The said rule may
be relaxed when the redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment of a remedy within and
calling for the exercise of this Court’s primary jurisdiction. 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.
Same; Moot and Academic Questions; Supervening events, whether intended or
accidental, cannot prevent the Court from rendering a decision if there is a grave violation
of the Constitution; Another reason justifying the resolution by the 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.”—Granting arguendo that, as
contended by the respondents, the resolution of the case had already been overtaken by
supervening events as the IRA, including the LGSEF, for 1999, 2000 and 2001, had
already been released and the government is now operating under a new appropriations
law, still, there is compelling reason for this Court to resolve the substantive issue raised
by the instant petition. Supervening 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
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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.
Municipal Corporations; Local Autonomy; Local Government Code; Consistent with the
principle of local autonomy, the Constitution confines the President’s power over the
LGUs to one of general supervision, which provision has been interpreted to exclude the
power of control.—Consistent with the principle of local autonomy, the Constitution
confines the President’s power over the LGUs to one of general supervision. This
provision has been interpreted to exclude the power of control. The distinction between
the two powers was enunciated in 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 redone 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.
Same; Same; Same; When parsed, it would be readily seen that Section 6, Article X of
the Constitution readily 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 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.
Same; Same; Same; Words and Phrases; The LGUs are not required to perform any act
to receive the “just share” accruing to them from the national coffers—the “just share” of
the LGUs shall be released to them “without need of further action”; “Automatic” means
“involuntary either wholly or to a major extent so that any activity of the will is largely
negligible; of a reflex nature; without volition; mechanical; like or suggestive of an
automation.”—Webster’s Third New International Dictionary defines “automatic” as
“involuntary either wholly or to a major extent so that any activity of the will is largely
negligible; of a reflex nature; without volition; mechanical; like or suggestive of an
automaton.” Further, the word “automatically” is defined as “in an automatic manner:
without thought or conscious intention.” Being “automatic,” thus, connotes something
mechanical, spontaneous and perfunctory. As such, the LGUs are not required to perform
any act to receive the “just share” accruing to them from the national coffers. As
emphasized by the Local Government Code of 1991, the “just share” of the LGUs shall
be released to them “without need of further action.”
Same; Same; Same; Internal Revenue Allotments; Local Government Service
Equalization Fund (LGSEF); Statutory Construction; The entire process involving the
13
distribution and release of the LGSEF is constitutionally impermissible—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, makes the release not automatic; Where the law, the
Constitution in this case, is clear and unambiguous, it must be taken to mean exactly what
it says, and courts have no choice but to see to it that the mandate is obeyed.—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. Where the law, the Constitution in
this case, is clear and unambiguous, it must be taken to mean exactly what it says, and
courts have no choice but to see to it that the mandate is obeyed. Moreover, as correctly
posited by the petitioner, the use of the word “shall” connotes a mandatory order. Its use
in a statute denotes an imperative obligation and is inconsistent with the idea of discretion.
Same; Same; Same; Same; Same; The Oversight Committee exercising discretion, even
control, over the distribution and release of a portion of the IRA, the LGSEF, is an
anathema to and subversive of the principle of local autonomy as embodied in the
Constitution; The Oversight Committee’s authority is undoubtedly limited to the
implementation of the Local Government Code of 1991, not to supplant or subvert the
same, and neither can it exercise control over the IRA, or even a portion thereof, of the
LGUs.—Indeed, the Oversight Committee exercising discretion, even control, over the
distribution and release of a portion of the IRA, the LGSEF, is an anathema to and
subversive of the principle of local autonomy as embodied in the Constitution. Moreover,
it finds no statutory basisat all as the Oversight Committee was created merely to
formulate the rules and regulations for the efficient and effective implementation of the
Local Government Code of 1991 to ensure “compliance with the principles of local
autonomy as defined under the Constitution.” In fact, its creation was placed under the
title of “Transitory Provisions,” signifying its ad hoc character. According to Senator
Aquilino Q. Pimentel, the principal author and sponsor of the bill that eventually became
Rep. Act No. 7160, the Committee’s work was supposed to be done a year from the
approval of the Code, or on October 10, 1992. The Oversight Committee’s authority is
undoubtedly limited to the implementation of the Local Government Code of 1991, not to
supplant or subvert the same. Neither can it exercise control over the IRA, or even a
portion thereof, of the LGUs.
Same; Same; Same; Same; Same; The assailed provisos in the Gen-eral Appropriations
Acts (GAAs) of 1999, 2000 and 2001, and the Oversight Committee on Devolution (OCD)
resolutions constitute a “withholding” of a portion of the IRA—they effectively encroach
on the fiscal autonomy enjoyed by the LGUs and must be struck down.—In like manner,
the assailed provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions
constitute a “withholding” of a portion of the IRA. They put on hold the distribution and
release of the five billion pesos LGSEF and subject the same to the implementing rules
and regulations, including the guidelines and mechanisms prescribed by the Oversight
Committee from time to time. Like Section 4 of A.O. 372, the assailed provisos in the
GAAs of 1999, 2000 and 2001 and the OCD resolutions effectively encroach on the fiscal
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autonomy enjoyed by the LGUs and must be struck down. They cannot, therefore, be
upheld.
Same; Same; Same; Same; Same; The only possible exception to the mandatory
automatic release of the LGUs’ IRA is if the national internal revenue collections for the
current fiscal year is less than 40 percent of the collections of the preceding third fiscal
year, in which case what should be automatically released shall be a proportionate
amount of the collections for the current fiscal year.—Thus, from the above provision, the
only possible exception to the mandatory automatic release of the LGUs’ IRA is if the
national internal revenue collections for the current fiscal year is less than 40 percent of
the collections of the preceding third fiscal year, in which case what should be
automatically released shall be a proportionate amount of the collections for the current
fiscal year. The adjustment may even be made on a quarterly basis depending on the
actual collections of national internal revenue taxes for the quarter of the current fiscal
year. In the instant case, however, there is no allegation that the national internal revenue
tax collections for the fiscal years 1999, 2000 and 2001 have fallen compared to the
preceding three fiscal years.
Same; Same; Same; Same; Same; Statutes; Appropriations Bills; Amendments and
Repeals of Laws; While it is conceded that Congress may amend any of the provisions of
the Local Government Code, a substantive law, it may not do so through appropriations
laws or GAAs—any amendment to the Local Government Code should be done in a
separate law, not in the appropriations law, because Congress cannot include in a general
appropriations bill matters that should be more properly enacted in a separate
legislation.—The respondents argue that this modification is allowed since the
Constitution does not specify that the “just share” of the LGUs shall only be determined
by the Local Government Code of 1991. That it is within the power of Congress to enact
other laws, including the GAAs, to increase or decrease the “just share” of the LGUs. This
contention is untenable. The Local Government Code of 1991 is a substantive law. And
while it is conceded that Congress may amend any of the provisions therein, it may not
do so through appropriations laws or GAAs. Any amendment to the Local Government
Code of 1991 should be done in a separate law, not in the appropriations law, because
Congress cannot include in a general appropriation bill matters that should be more
properly enacted in a separate legislation.
Same; Same; Same; Same; Same; Same; Same; Doctrine of Inappropriate Provisions;
Words and Phrases; A general appropriations bill is a special type of legislation, whose
content is limited to specified sums of money dedicated to a specific purpose or a separate
fiscal unit—any provision therein which is intended to amend another law is considered
an “inappropriate provision.”—A general appropriations bill is a special type of legislation,
whose content is limited to specified sums of money dedicated to a specific purpose or a
separate fiscal unit. Any provision therein which is intended to amend another law is
considered an “inappropriate provision.” The category of “inappropriate provisions”
includes unconstitutional provisions and provisions which are intended to amend other
laws, because clearly these kinds of laws have no place in an appropriations bill.
Increasing or decreasing the IRA of the LGUs or modifying their percentage sharing
therein, which are fixed in the Local Government Code of 1991, are matters of general
and substantive law. To permit Congress to undertake these amendments through the
GAAs, as the respondents contend, would be to give Congress the unbridled authority to
unduly infringe the fiscal autonomy of the LGUs, and thus put the same in jeopardy every
year. This, the Court cannot sanction.
14
Same; Same; It is well to note that the principle of local autonomy, while concededly
expounded in greater detail in the present Constitution, dates back to the turn of the
century when President William McKinley, in his Instructions to the Second Philippine
Commission dated 7 April 1900, ordered the new Government “to devote their attention
in the first instance to the establishment of municipal governments in which the natives of
the Islands, both in the cities and in the rural communities, shall be afforded the
opportunity to manage their own affairs to the fullest extent of which they are capable,
and subject to the least degree of supervision and control in which a careful study of their
capacities and observation of the workings of native control show to be consistent with
the maintenance of law, order and loyalty.”—In closing, it is well to note that the principle
of local autonomy, while concededly expounded in greater detail in the present
Constitution, dates back to the turn of the century when President William McKinley, in
his Instructions to the Second Philippine Commission dated April 7, 1900, ordered the
new Government “to devote their attention in the first instance to the establishment of
municipal governments in which the natives of the Islands, both in the cities and in the
rural communities, shall be afforded the opportunity to manage their own affairs to the
fullest extent of which they are capable, and subject to the least degree of supervision
and control in which a careful study of their capacities and observation of the workings of
native control show to be consistent with the maintenance of law, order and loyalty.” While
the 1935 Constitution had no specific article on local autonomy, nonetheless, it limited the
executive power over local governments to “general supervision . . . as may be provided
by law.” Subsequently, the 1973 Constitution explicitly stated that “[t]he State shall
guarantee and promote the autonomy of local government units, especially the barangay
to ensure their fullest development as self-reliant communities.” An entire article on Local
Government was incorporated therein. The present Constitution, as earlier opined, has
broadened the principle of local autonomy. The 14 sections in Article X thereof markedly
increased the powers of the local governments in order to accomplish the goal of a more
meaningful local autonomy.
Same; Same; The value of local governments as institutions of democracy is measured
by the degree of autonomy that they enjoy—our national officials should not only comply
with the constitutional provisions on local autonomy but should also appreciate the spirit
and liberty upon which these provisions are based.—Indeed, the value of local
governments as institutions of democracy is measured by the degree of autonomy that
they enjoy. As eloquently put by M. De Tocqueville, a distinguished French political writer,
“[l]ocal assemblies of citizens constitute the strength of free nations. Township meetings
are to liberty what primary schools are to science; they bring it within the people’s reach;
they teach men how to use and enjoy it. A nation may establish a system of free
governments but without the spirit of municipal institutions, it cannot have the spirit of
liberty.” Our national officials should not only comply with the constitutional provisions on
local autonomy but should also appreciate the spirit and liberty upon which these
provisions are based.
FACTS: In 1998, then President Estrada issued EO No. 48 establishing the “Program for
Devolution Adjustment and Equalization” to enhance the capabilities of LGUs in the
discharge of the functions and services devolved to them through the LGC.
The Oversight Committee under Executive Secretary Ronaldo Zamora passed
Resolutions No. OCD-99-005, OCD-99-006 and OCD-99-003 which were approved by
Pres. Estrada on October 6, 1999. The guidelines formulated by the Oversight Committee
required the LGUs to identify the projects eligible for funding under the portion of LGSEF
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and submit the project proposals and other requirements to the DILG for appraisal before
the Committee serves notice to the DBM for the subsequent release of the corresponding
funds.
Hon. Herminaldo Mandanas, Governor of Batangas, petitioned to declare unconstitutional
and void certain provisos contained in the General Appropriations Acts (GAAs) of 1999,
2000, and 2001, insofar as they uniformly earmarked for each corresponding year the
amount of P5billion for the Internal Revenue Allotment (IRA) for the Local Government
Service Equalization Fund (LGSEF) & imposed conditions for the release thereof.
ISSUE: Whether the assailed provisos in the GAAs of 1999, 2000, and 2001, and the
OCD resolutions infringe the Constitution and the LGC of 1991.
HELD: Yes. The assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD
resolutions constitute a “withholding” of a portion of the IRA – they effectively encroach
on the fiscal autonomy enjoyed by LGUs and must be struck down.
G.R. No. 132988. July 19, 2000.*
AQUILINO Q. PIMENTEL, JR., petitioner, vs. Hon. ALEXANDER AGUIRRE in his
capacity as Executive Secretary, Hon. EMILIA BONCODIN in her capacity as
Secretary of the Department of Budget and Management, respondents. ROBERTO
PAGDANGANAN, intervenor.
Presidency; Administrative Law; Municipal Corporations; Local Governments; Power of
Control and Supervision; In administrative law, supervision means overseeing or the
power or authority of an officer to see that subordinate officers perform their duties, and
if the latter fail or neglect to fulfill them, the former may take such action or step as
prescribed by law to make them perform their duties; Supervisory power, when contrasted
with control, is the power of mere oversight over an inferior body—it does not include any
restraining authority over such body.—This provision has been interpreted to exclude the
power of control. In Mondano v. Silvosa, the Court contrasted the President’s power of
supervision over local government officials with that of his power of control over executive
officials of the national government. It was emphasized that the two terms—supervision
and control—differed in meaning and extent. The Court distinguished them as follows: “x
x x In administrative law, supervision means overseeing or the power or authority of an
officer to see that subordinate officers perform their duties. If the latter fail or neglect to
fulfill them, the former may take such action or step as prescribed by law to make them
perform their duties. Control, on the other hand, means the power of an officer to alter or
modify or nullify or set aside what a subordinate officer ha[s] done in the performance of
his duties and to substitute the judgment of the former for that of the latter.” In Taule v.
Santos, we further stated that the Chief Executive wielded no more authority than that of
checking whether local governments or their officials were performing their duties as
provided by the fundamental law and by statutes. He cannot interfere with local
governments, so long as they act within the scope of their authority. “Supervisory power,
when contrasted with control, is the power of mere oversight over an inferior body; it does
not include any restraining authority over such body,” we said.
Same; Same; Same; Same; Same; By constitutional fiat, the heads of political
subdivisions are subject to the President’s supervision only, not control, so long as their
acts are exercised within the sphere of their legitimate powers, and by the same token,
the President may not withhold or alter any authority or power given them by the
15
Constitution and the law.—Under our present system of government, executive power is
vested in the President. The members of the Cabinet and other executive officials are
merely alter egos. As such, they are subject to the power of control of the President, at
whose will and behest they can be removed from office; or their actions and decisions
changed, suspended or reversed. In contrast, the heads of political subdivisions are
elected by the people. Their sovereign powers emanate from the electorate, to whom they
are directly accountable. By constitutional fiat, they are subject to the President’s
supervision only, not control, so long as their acts are exercised within the sphere of their
legitimate powers. By the same token, the President may not withhold or alter any
authority or power given them by the Constitution and the law.
Municipal Corporations; Local Autonomy; Decentralization; Decentralization simply
means the devolution of national administration, not power, to local governments.—
Decentralization simply means the devolution of national administration, not power, to
local governments. Local officials remain accountable to the central government as the
law may provide. The difference between decentralization of administration and that of
power was explained in detail in Limbona v. Mangelin as follows: “Now, 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,’ and ‘ensure their
fullest development as self-reliant communities and make them more effective partners
in the pursuit of national development and social progress.’ 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 government 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. According to a constitutional author, decentralization
of power amounts to ‘self-immolation,’ since in that event, the autonomous government
becomes accountable not to the central authorities but to its constituency.”
Same; Same; Same; Under the Philippine concept of local autonomy, the national
government has not completely relinquished all its powers over local governments,
including autonomous regions—municipal governments are still agents of the national
government.—Under the Philippine concept of local autonomy, the national government
has not completely relinquished all its powers over local governments, including
autonomous regions. Only administrative powers over local affairs are delegated to
political subdivisions. The purpose of the delegation is to make governance more directly
responsive and effective at the local levels. In turn, economic, political and social
development at the smaller political units are expected to propel social and economic
growth and development. But to enable the country to develop as a whole, the programs
and policies effected locally must be integrated and coordinated towards a common
national goal. Thus, policy-setting for the entire country still lies in the President and
Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., municipal
governments are still agents of the national government.
Same; Same; Same; Fiscal Autonomy; Words and Phrases; Fiscal autonomy means that
local governments have the power to create their own sources of revenue in addition to
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their equitable share in the national taxes released by the national government.—Under
existing law, Local government units, in addition to having administrative autonomy in the
exercise of their functions, enjoy fiscal autonomy as well. Fiscal autonomy means that
local governments have the power to create their own sources of revenue in addition to
their equitable share in the national taxes released by the national government, as well
as the power to allocate their resources in accordance with their own priorities. It extends
to the preparation of their budgets, and local officials in turn have to work within the
constraints thereof. They are not formulated at the national level and imposed on local
governments, whether they are relevant to local needs and resources or not. Hence, the
necessity of a balancing of viewpoints and the harmonization of proposals from both local
and national officials, who in any case are partners in the attainment of national goals.
Same; Same; Same; Same; Local fiscal autonomy does not, however, rule out any
manner of national government intervention by way of supervision, in order to ensure that
local programs, fiscal and otherwise, are consistent with national goals.—Local fiscal
autonomy does not, however, rule out any manner of national government intervention
by way of supervision, in order to ensure that local programs, fiscal and otherwise, are
consistent with national goals. Significantly, the President, by constitutional fiat, is the
head of the economic and planning agency of the government, primarily responsible for
formulating and implementing continuing, coordinated and integrated social and
economic policies, plans and programs for the entire country. However, under the
Constitution, the formulation and the implementation of such policies and programs are
subject to “consultations with the appropriate public agencies, various private sectors,
and local government units.” The President cannot do so unilaterally.
Same; Same; AO 372; The directive to “identify and implement measures x x x that will
reduce total expenditures x x x by at least 25% of authorized regular appropriation” is
merely advisory in character—no legal sanction, however, may be imposed upon LGUs
and their officials who do not follow such advise.—While the wordings of Section 1 of AO
372 have a rather commanding tone, and while we agree with petitioner that the
requirements of Section 284 of the Local Government Code have not been satisfied, we
are prepared to accept the solicitor general’s assurance that the directive to “identify and
implement measures x x x that will reduce total expenditures x x x by at least 25% of
authorized regular appropriation” is merely advisory in character, and does not constitute
a mandatory or binding order that interferes with local autonomy. The language used,
while authoritative, does not amount to a command that emanates from a boss to a
subaltern. Rather, the provision is merely an advisory to prevail upon local executives to
recognize the need for fiscal restraint in a period of economic difficulty. Indeed, all
concerned would do well to heed the President’s call to unity, solidarity and teamwork to
help alleviate the crisis. It is understood, however, that no legal sanction may be imposed
upon LGUs and their officials who do not follow such advice. It is in this light that we
sustain the solicitor general’s contention in regard to Section 1.
Same; Same; Statutory Construction; A basic feature of local fiscal autonomy is the
automatic release of the shares of LGUs in the national internal revenue—the provision
in the Local Government Code providing for such release uses the word “shall” and as a
rule, the term “shall” is a word of command that must be given compulsory meaning.—
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. This is
mandated by no less than the Constitution. The Local Government Code specifies further
that the release shall be made directly to the LGU concerned within five (5) days after
16
every quarter of the year and “shall not be subject to any lien or holdback that may be
imposed by the national government for whatever purpose.” As a rule, the term “shall” is
a word of command that must be given a compulsory meaning. The provision is, therefore,
imperative.
Same; Same; The withholding of 10% of the LGUs’ IRA pending the assessment and
evaluation by the Development Budget Coordinating Committee, pursuant to Section 4 of
AO 372, although temporary, is equivalent to a holdback, which means “something held
back or withheld, often temporarily,” and contravenes the Constitution.—Section 4 of AO
372, however, orders the withholding, effective January 1, 1998, of 10 percent of the
LGUs’ IRA “pending the assessment and evaluation by the Development Budget
Coordinating Committee of the emerging fiscal situation” in the country. Such withholding
clearly contravenes the Constitution and the law. Although temporary, it is equivalent to
a holdback, which means “something held back or withheld, often temporarily.” Hence,
the “temporary” nature of the retention by the national government does not matter. Any
retention is prohibited.
Same; Same; Rule of Law; Although the President was well-intentioned in issuing AO 372
withholding the LGUs’ IRA, the rule of law requires that even the best intentions must be
carried out within the parameters of the Constitution and the law.—While Section 1 of AO
372 may be upheld as an advisory effected in times of national crisis, Section 4 thereof
has no color of validity at all. The latter provision effectively encroaches on the fiscal
autonomy of local governments. Concededly, the President was well-intentioned in
issuing his Order to withhold the LGUs’ IRA, but the rule of law requires that even the best
intentions must be carried out within the parameters of the Constitution and the law. Verily,
laudable purposes must be carried out by legal methods.
Judicial Review; By the mere enactment of the questioned law or the approval of the
challenged action, the dispute is said to have ripened into a judicial controversy even
without any other overt act—indeed, even a singular violation of the Constitution and/or
the law is enough to awaken judicial duty.—This is a rather novel theory—that people
should await the implementing evil to befall on them before they can question acts that
are illegal or unconstitutional. Be it remembered that the real issue here is whether the
Constitution and the law are contravened by Section 4 of AO 372, not whether they are
violated by the acts implementing it. In the unanimous en banc case Tañada v. Angara,
this Court held that when an act of the legislative department is seriously alleged to have
infringed the Constitution, settling the controversy becomes the duty of this Court. By the
mere enactment of the questioned law or the approval of the challenged action, the
dispute is said to have ripened into a judicial controversy even without any other overt
act. Indeed, even a singular violation of the Constitution and/or the law is enough to
awaken judicial duty.
Same; When an act of the President, who in our constitutional scheme is a co-equal of
Congress, is seriously alleged to have infringed the Constitution and the laws, settling the
dispute becomes the duty and the responsibility of the courts.—By the same token, when
an act of the President, who in our constitutional scheme is a coequal of Congress, is
seriously alleged to have infringed the Constitution and the laws, as in the present case,
settling the dispute becomes the duty and the responsibility of the courts.
Same; Due Process; Considerations of due process prevents the use of an issue against
a party that has not given sufficient notice of its presentation, and thus has not been given
the opportunity to refute it.—The issue that the Petition is premature has not been raised
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by the parties; hence it is deemed waived. Considerations of due process really prevents
its use against a party that has not been given sufficient notice of its presentation, and
thus has not been given the opportunity to refute it.
Facts: In 1997, President Ramos issued AO 372 which: (1) required all government
departments and agencies, including SUCs, GOCCs and LGUs to identify and implement
measures in FY 1998 that will reduce total expenditures for the year by at least 25% of
authorized regular appropriations for non--personal services items (Section 1) and (2)
ordered the withholding of 10% of the IRA to LGUs (Section 4) . On 10 December 1998,
President Estrada issued AO 43, reducing to 5% the amount of IRA to be withheld from
LGU.
Issues:
1. Whether or not the president committed grave abuse of discretion in ordering all LGUS
to adopt a 25% cost reduction program in violation of the LGU'S fiscal autonomy
2. Whether Section 4 of the same issuance, which withholds 10 percent of their internal
revenue allotments, are valid exercises of the President's power of general supervision
over local governments
Held:
1. Section 1 of AO 372 does not violate local fiscal autonomy. Local fiscal autonomy does
not rule out any manner of national government intervention by way of supervision, in
order to ensure that local programs, fiscal and otherwise, are consistent with national
goals. Significantly, the President, by constitutional fiat, is the head of the economic and
planning agency of the government, primarily responsible for formulating and
implementing continuing, coordinated and integrated social and economic policies, plans
and programs for the entire country. However, under the Constitution, the formulation and
the implementation of such policies and programs are subject to "consultations with the
appropriate public agencies, various private sectors, and local government units." The
President cannot do so unilaterally.
Consequently, the Local Government Code provides:
"x x x [I]n the event the national government incurs an unmanaged public sector deficit,
the President of the Philippines is hereby authorized, upon the recommendation of [the]
Secretary of Finance, Secretary of the Interior and Local Government and Secretary of
Budget and Management, and subject to consultation with the presiding officers of both
Houses of Congress and the presidents of the liga, to make the necessary adjustments
in the internal revenue allotment of local government units but in no case shall the
allotment be less than thirty percent (30%) of the collection of national internal revenue
taxes of the third fiscal year preceding the current fiscal year x x x."
There are therefore several requisites before the President may interfere in local fiscal
matters: (1) an unmanaged public sector deficit of the national government; (2)
consultations with the presiding officers of the Senate and the House of Representatives
and the presidents of the various local leagues; and (3) the corresponding
recommendation of the secretaries of the Department of Finance, Interior and Local
Government, and Budget and Management. Furthermore, any adjustment in the allotment
shall in no case be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current one.
17
Petitioner points out that respondents failed to comply with these requisites before the
issuance and the implementation of AO 372. At the very least, they did not even try to
show that the national government was suffering from an unmanageable public sector
deficit. Neither did they claim having conducted consultations with the different leagues
of local governments. Without these requisites, the President has no authority to adjust,
much less to reduce, unilaterally the LGU's internal revenue allotment.
AO 372, however, is merely directory and has been issued by the President consistent
with his power of supervision over local governments. It is intended only to advise all
government agencies and instrumentalities to undertake cost-reduction measures that
will help maintain economic stability in the country, which is facing economic difficulties.
Besides, it does not contain any sanction in case of noncompliance. Being merely an
advisory, therefore, Section 1 of AO 372 is well within the powers of the President. Since
it is not a mandatory imposition, the directive cannot be characterized as an exercise of
the power of control.
2. Section 4 of AO 372 cannot be upheld. A basic feature of local fiscal autonomy is the
automatic release of the shares of LGUs in the national internal revenue. This is mandated
by no less than the Constitution. The Local Government Code specifies further that the
release shall be made directly to the LGU concerned within five (5) days after every
quarter of the year and "shall not be subject to any lien or holdback that may be imposed
by the national government for whatever purpose." As a rule, the term "shall" is a word of
command that must be given a compulsory meaning. The provision is, therefore,
imperative. (Pimentel vs. Aguirre, G.R. No. 132988, July 19, 2000)
G.R. No. 93252. August 5, 1991.*
RODOLFO T. GANZON, petitioner, vs. THE HONORABLE COURT OF APPEALS, and
LUIS T. SANTOS, respondents.
Local Governments; Power to discipline local officials.—It is the considered opinion of the
Court that notwithstanding the change in the constitutional language, the charter did not
intend to divest the legislature of its right—or the President of her prerogative as conferred
by existing legislation to provide administrative sanctions against local officials. It is our
opinion that the omission (of “as may be provided by law”) signifies nothing more than to
underscore local governments ‘autonomy from congress and to break Congress’ “control”
over local governments affairs. The Constitution did not, however, intend, for the sake of
local autonomy, to deprive the legislature of all authority over municipal corporations, in
particular, concerning discipline.
Same; Same; Local autonomy explained.—It is noteworthy that under the Charter, “local
autonomy” is not instantly self-executing, but subject to, among other things, the passage
of a local government code, a local tax law, income distribution legislation, and a national
representation law, and measures designed to realize autonomy at the local level. It is
also noteworthy that in spite of autonomy, the Constitution places the local governments
under the general supervision of the Executive. It is noteworthy finally, that the Charter
allows Congress to include in the local government code provisions for removal of local
officials, which suggest that Congress may exercise removal powers, and as the existing
Local Government Code has done, delegate its exercise to the President.
Same; Same; Supervision and control, meaning of.—The petitioners are under the
impression that the Constitution has left the President mere supervisory powers, which
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supposedly excludes the power of investigation, and denied her control, which allegedly
embraces disciplinary authority. It is a mistaken impression because legally, “supervision”
is not incompatible with disciplinary authority. x x x “Control” has been defined as “the
power of an officer to alter or modify or nullify or set aside what a subordinate officer had
done in the performance of his duties and to substitute the judgment of the former for test
of the latter.” “Supervision” on the other hand means “overseeing or the power or authority
of an officer to see that subordinate officers perform their duties.”
Same; Same; Suspension.—The successive sixty-day suspensions imposed on Mayor
Rodolfo Ganzon is albeit another matter. What bothers the Court, and what indeed looms
very large, is the fact that since the Mayor is facing ten administrative charges, the Mayor
is in fact facing the possibility of 600 days of suspension, in the event that all ten cases
yield prima facie findings. The Court is not of course tolerating misfeasance in public office
(assuming that Mayor Ganzon is guilty of misfeasance) but it is certainly another question
to make him serve 600 days of suspension, which is effectively, to suspend him out of
office. x x x.
Same; Same; Same.—The plain truth is that this Court has been ill at ease with
suspensions, x x x because it is out of the ordinary to have a vacancy in local government.
The sole objective of a suspension, x x x is simply “to prevent the accused from hampering
the normal cause of the investigation with his influence and authority over possible
witnesses” or to keep him off “the records and other evidence.” It is a means, and no
more, to assist prosecutors in firming up a case, if any, against an erring local official.
Under the Local Government Code, it can not exceed sixty days, which is to say that it
need not be exactly sixty days long if a shorter period is otherwise sufficient, and which
is also to say that it ought to be lifted if prosecutors have achieved their purpose in a
shorter span.
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 successive 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 President, acting thru the Secretary of Local Government, has
the power to suspend, remove, or both, local officials.
HELD: Yes. It is the considered opinion of the Court that notwithstanding the change in
the Constitutional language, the charter did not intend to divest the legislature of its right-
or the President of her prerogative as conferred by existing legislation to provide
administrative sanction against local officials. The Constitution did not…intend
G.R. No. 92299. April 19, 1991.*
18
REYNALDO R. SAN JUAN, petitioner, vs. CIVIL SERVICE COMMISSION,
DEPARTMENT OF BUDGET AND MANAGEMENT and CECILIA ALMAJOSE,
respondents.
Local Governments; Municipal Corporations; Civil Service; Appointments; The
Department of Budget and Management may appoint provincial budget officers, only from
the list of qualified recommendees nominated by the Governor.—When the Civil Service
Commission interpreted the recommending power of the Provincial Governor aspurely
directory, it went against the letter and spirit of the constitutional provisions on l ocal
autonomy. If the DBM Secretary jealously hoards the entirety of budgetary powers and
ignores the right of local governments to develop self-reliance and resoluteness in the
handling of their own funds, the goal of meaningful local autonomy is frustrated and set
back. The right given by Local Budget Circular No. 31 which states: “SEC. 6.0—The DBM
reserves the right to fill up any existing vacancy where none of the nominees of the local
chief executive meet the prescribed requirements.” is ultra vires and is, accordingly, set
aside. The DBM may appoint only from the list of qualified recommendees nominated by
the Governor. If none is qualified, he must return the list of nominees to the Governor
explaining why no one meets the legal requirements and ask for new recommendees who
have the necessary eligibilities and qualifications. The PBO is expected to synchronize
his work with DBM. More important, however, is the proper administration of fiscal affairs
at the local level. Provincial and municipal budgets are prepared at the local level and
after completion are forwarded to the national officials for review. They are prepared by
the local officials who must work within the constraints of those budgets. They are not
formulated in the inner sanctums of an all-knowing DBM and unilaterally imposed on local
governments whether or not they are relevant to local needs and resources. It is for this
reason that there should be a genuine interplay, a balancing of viewpoints, and a
harmonization of proposals from both the local and national officials. It is for this reason
that the nomination and appointment process involves a sharing of power between the
two levels of government.
Same; Same; Same; Same; National officials should not only comply with the
constitutional provisions on local autonomy but should also appreciate the spirit of liberty
upon which these provisions are based.—In his classic work “Philippine Political Law”
Dean Vicente G. Sinco stated that the value of local governments as institutions of
democracy is measured by the degree of autonomy that they enjoy. Citing Tocqueville,
he stated that “local assemblies of citizens constitute the strength of free nations. x x x A
people may establish a system of free government but without the spirit of municipal
institutions, it cannot have the spirit of liberty.” (Sinco, Philippine Political Law, Eleventh
Edition, pp. 705-706). Our national officials should not only comply with the constitutional
provisions on local autonomy but should also appreciate the spirit of liberty upon which
these provisions are based.
Facts: The Provincial Budget Officer of Rizal (PBO) was left vacant; thereafter Rizal
Governor San Juan, peititioner, nominated Dalisay Santos for the position and the latter
quickly assumed position. However, Director Abella of Region IV Department of Budget
and Management (DBM) did not endorse the nominee, and recommended private
respondent Cecilia Almajose as PBO on the ground that she was the most qualified. This
appointment was subsequently approved by the DBM. Petitioner protested the
appointment of Almajose before the DBM and the Civil Service Commission who both
dismissed his complaints. His arguments rest on his contention that he has the sole right
and privilege to recommend the nominees to the position of PBO and that the appointee
PUBCORP MIDTERM CASE NOTES, 2ND SEM AY 2018-2019 - cjamiemelchor
should come only from his nominees. In support thereof, he invokes Section 1 of
Executive Order No. 112.
Issue: Whether or not DBM is empowered to appoint a PBO who was not expressly
nominated by the provincial governor.
Held: Under the cited Sec 1 of EO 112, the petitioner's power to recommend is subject to
the qualifications prescribed by existing laws for the position of PBO. Consequently, in
the event that the recommendations made by the petitioner fall short of the required
standards, the appointing authority, public respondent DBM is expected to reject the
same. In the event that the Governor recommends an unqualified person, is the
Department Head free to appoint anyone he fancies?
The DBM may appoint only from the list of qualified recommendees nominated by the
Governor. If none is qualified, he must return the list of nominees to the Governor
explaining why no one meets the legal requirements and ask for new recommendees who
have the necessary eligibilities and qualifications.
G.R. No. 199752. February 17, 2015.*
LUCENA D. DEMAALA, petitioner, vs. COMMISSION ON AUDIT, represented by
its Chairperson MA. GRACIA M. PULIDO-TAN, respondent.
Taxation; Local Taxation; Power to Tax; Local Government Units; The power to tax is an
attribute of sovereignty. It is inherent in the state. Provinces, cities, municipalities, and
barangays are mere territorial and political subdivisions of the state. They act only as part
of the sovereign. Thus, they do not have the inherent power to tax. Their power to tax
must be prescribed by law.—The power to tax is an attribute of sovereignty. It is inherent
in the state. Provinces, cities, municipalities, and barangays are mere territorial and
political subdivisions of the state. They act only as part of the sovereign. Thus, they do
not have the inherent power to tax. Their power to tax must be prescribed by law.
Consistent with the view that the power to tax does not inhere in local government units,
this court has held that a reserved temperament must be adhered to in construing the
extent of a local government unit’s power to tax. As explained in Icard v. City Council of
Baguio, 83 Phil. 870 (1949): It is settled that a municipal corporation unlike a sovereign
state is clothed with no inherent power of taxation. The charter or statute must plainly
show an intent to confer that power or the municipality, cannot assume it. And the power
when granted is to be construed in strictissimi juris. Any doubt or ambiguity arising out of
the term used in granting that power must be resolved against the municipality.
Inferences, implications, deductions — all these — have no place in the interpretation of
the taxing power of a municipal corporation.
Same; Same; In addition to stating that local government units (LGUs) have the power to
tax (subject to Congressional guidelines and limitations), Article X, Section 5 of the 1987
Constitution adds the phrase “consistent with the basic policy of local autonomy.”—Article
X, Section 5 of the 1987 Constitution is more emphatic in empowering local government
units in the matter of taxation compared with Article XI, Section 5 of the 1973 Constitution.
In addition to stating that local government units have the power to tax (subject to
Congressional guidelines and limitations), Article X, Section 5 of the 1987 Constitution
adds the phrase “consistent with the basic policy of local autonomy.” Further, it is definite
with the use of funds generated by local government units through the exercise of their
19
taxing powers, providing that “[s]uch taxes, fees, and charges shall accrue exclusively to
the local governments.”
Same; Same; Consistent with the 1987 Constitution’s declared preference, the taxing
powers of local government units (LGUs) must be resolved in favor of their local fiscal
autonomy.—Consistent with the 1987 Constitution’s declared preference, the taxing
powers of local government units must be resolved in favor of their local fiscal autonomy.
Same; Same; Special Education Fund; Section 235 of the Local Government Code (LGC)
allows provinces and cities, as well as municipalities in Metro Manila, to collect, on top of
the basic annual real property tax, an additional levy which shall exclusively accrue to the
special education fund.—Section 235 of the Local Government Code allows provinces
and cities, as well as municipalities in Metro Manila, to collect, on top of the basic annual
real property tax, an additional levy which shall exclusively accrue to the special education
fund: Section 235. Additional Levy on Real Property for the Special Education Fund.—A
province or city, or a municipality within the Metropolitan Manila Area, may levy and collect
an annual tax of one percent (1%) on the assessed value of real property which shall be
in addition to the basic real property tax. The proceeds thereof shall exclusively accrue to
the Special Education Fund (SEF).
Same; Same; Fiscal Autonomy; Fiscal autonomy entails “the power to create . . . own
sources of revenue.”—Fiscal autonomy entails “the power to create . . . own sources of
revenue.” In turn, this power necessarily entails enabling local government units with the
capacity to create revenue sources in accordance with the realities and contingencies
present in their specific contexts. The power to create must mean the local government
units’ power to create what is most appropriate and optimal for them; otherwise, they
would be mere automatons that are turned on and off to perform prearranged operations.
Statutes; It is basic that laws and local ordinances are “presumed to be valid unless and
until the courts declare the contrary in clear and unequivocal terms.”—It is basic that laws
and local ordinances are “presumed to be valid unless and until the courts declare the
contrary in clear and unequivocal terms.” Thus, the concerned officials of the Municipality
of Narra, Palawan must be deemed to have conducted themselves in good faith and with
regularity when they acted pursuant to Chapter 5, Section 48 of Provincial Ordinance No.
332-A, Series of 1995, and collected the additional levy for the special education fund at
the rate of 0.5%. Accordingly, it was improper for respondent to attribute personal liability
to petitioner and to require her to personally answer to the deficiency in special education
fund collections.
FACTS: The Sangguniang Panlalawigan of Palawan enacted Provincial Ordinance No.
332-A, Series of 1995, entitled “An Ordinance Approving and Adopting the Code
Governing the Revision of Assess-ments, Classification and Valuation of Real Properties
in the Province of Palawan” (Ordi-nance).Chapter 5, Section 48 of the Ordinance provides
for an additional levy on real property tax for the special education fund at the rate of one-
half percent or 0.5%.
In conformity with Section 48 of the Ordinance, the Municipality of Narra, Palawan, with
Demaala as mayor, collected from owners of real properties located within its territory an
annual tax as special education fund at the rate of 0.5% of the assessed value of the
property subject to tax. This collection was effected through the municipal treasurer.
PUBCORP MIDTERM CASE NOTES, 2ND SEM AY 2018-2019 - cjamiemelchor
On post-audit, Audit Team Leader Juanito A. Nostratis issued Audit Observation
Memorandum (AOM) No. 03-005 dated August 7, 2003 in which he noted supposed
deficiencies in the special education fund collected by the Municipality of Narra. He
questioned the levy of the special edu-cation fund at the rate of only 0.5% rather than at
1%, the rate stated in Section 235 of Republic Act No. 7160, otherwise known as the
Local Government Code of 1991 (Local Government Code).
After evaluating AOM No. 03-005, Regional Cluster Director Sy issued NC No. 2004-04-
101 dated August 30, 2004 in the amount of P1,125,416.56. He held Demaala, the
municipal treasurer of Nar-ra, and all special education fund payors liable for the
deficiency in special education fund collec-tions.
The Municipality of Narra, through Demaala, filed the Motion for Reconsideration dated
December 2, 2004. It stressed that the collection of the special education fund at the rate
of 0.5% was mere-ly in accordance with the Ordinance. On March 9, 2005, Regional
Cluster Director Sy issued an In-dorsement denying this Motion for Reconsideration.
Following this, the Municipality of Narra, through Demaala, filed an appeal with the
Commission on Audit’s Legal and Adjudication Office. In Local Decision No. 2006-05618
dated April 19, 2006, this appeal was denied.
The Municipality of Narra, through Demaala, then filed a Petition for Review with the
Commission on Audit.
In Decision No. 2008-087 dated September 22, 2008, the Commission on Audit ruled
against Demaala and affirmed LAO Local Decision No. 2006-056 with the modification
that former Palawan Vice Governor Joel T. Reyes and the other members of the
Sangguniang Panlalawigan of Palawan who enacted the Ordinance were held jointly and
severally liable with Demaala, the municipal treasurer of Narra, and the special education
fund payors.
Thereafter, Demaala, who was no longer the mayor of the Municipality of Narra, filed a
Motion for Reconsideration. Former Vice Governor Joel T. Reyes and the other members
of the Sangguniang Panlalawigan of Palawan who were held liable under Decision No.
2008-087 filed a separate Mo-tion for Reconsideration. The Commission on Audit’s
Decision No. 2011-083 dated November 16, 2011 affirmed its September 22, 2008
Decision.
Demaala then filed with this court the present Petition for Certiorari.
Respondent Commission on Audit, through the Office of the Solicitor General, filed its
Com-ment on April 20, 2012. Petitioner Demaala filed her Reply on September 6, 2012.
Thereafter, the parties filed their respective Memoranda.
ISSUE: Whether respondent committed grave abuse of discretion amounting to lack or
excess of ju-risdiction in holding that there was a deficiency in the Municipality of Narra’s
collection of the ad-ditional levy for the special education fund. Subsumed in this issue is
the matter of whether a mu-nicipality within the Metropolitan Manila Area, a city, or a
province may have an additional levy on real property for the special education fund at
the rate of less than 1%
20
RULING: YES. Consistent with the 1987 Constitution’s declared preference, the taxing
powers of local govern-ment units must be resolved in favor of their local fiscal autonomy.
In City Government of San Pablo v. Reyes:
The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be
exercised by local legislative bodies, no longer merely by virtue of a valid delegation as
before, but pursu-ant to direct authority conferred by Section 5, Article X of the
Constitution.
The limits on the level of additional levy for the special education fund under Section 235
of the Local Government Code should be read as granting fiscal flexibility to local
government units.
Book II of the Local Government Code governs local taxation and fiscal matters. Title II
of Book II governs real property taxation.
Section 235 of the Local Government Code allows provinces and cities, as well as
municipalities in Metro Manila, to collect, on top of the basic annual real property tax, an
additional levy which shall exclusively accrue to the special education fund.
The operative phrase in Section 235’s grant to municipalities in Metro Manila, cities, and
provinces of the power to impose an additional levy for the special education fund is
prefixed with “may,” thus, “may levy and collect an annual tax of one percent (1%).”
In Buklod nang Magbubukid sa Lupaing Ramos, Inc. v. E.M. Ramos and Sons, Inc. the
meaning of “may” was discussed as follows:
Where the provision reads “may,” this word shows that it is not mandatory but
discretionary. It is an auxiliary verb indicating liberty, opportunity, permission and
possibility. The use of the word “may” in a statute denotes that it is directory in nature and
generally permissive only.
Respondent concedes that Section 235’s grant to municipalities in Metro Manila, to cities,
and to provinces of the power to impose an additional levy for the special education fund
makes its col-lection optional. It is not mandatory that the levy be imposed and collected.
The controversy which the Commission on Audit created is not whether these local
government units have discre-tion to collect but whether they have discretion on the rate
at which they are to collect.
It is respondent’s position that the option granted to a local government unit is limited to
the matter of whether it shall actually collect, and that the rate at which it shall collect
(should it choose to do so) is fixed by Section 235. In contrast, it is petitioner’s contention
that the option given to a local government unit extends not only to the matter of whether
to collect but also to the rate at which collection is to be made.
We sustain the position of petitioner. Section 235’s permissive language is unqualified.
Moreover, there is no limiting qualifier to the articulated rate of 1% which unequivocally
indicates that any and all special education fund collections must be at such rate.
CITY OF GENERAL SANTOS, represented by its Mayor, HON. DARLENE
MAGNOLIA R. ANTONINO-CUSTODIO, petitioner, vs. COMMISSION ON AUDIT,
respondent.
PUBCORP MIDTERM CASE NOTES, 2ND SEM AY 2018-2019 - cjamiemelchor
Remedial Law; Special Civil Actions; Certiorari; Grave Abuse of Discretion; Not every
error in the proceedings, or every erroneous conclusion of law or fact, constitutes grave
abuse of discretion.—We have ruled that “not every error in the proceedings, or every
erroneous conclusion of law or fact, constitutes grave abuse of discretion.” Grave abuse
of discretion has been defined as follows: By grave abuse of discretion is meant such
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. Mere
abuse of discretion is not enough. It must be grave abuse of discretion as when the power
is exercised in an arbitrary or despotic manner by reason of passion or personal hostility,
and must be so patent and so gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in contemplation of law.
Same; Same; Same; Constitutional Commissions; Unless otherwise provided by the
Constitution or by law, any decision, order, or ruling of each Commission may be brought
to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt
of a copy thereof.—Article IX-A, Section 7 of the Constitution provides that “unless
otherwise provided by this Constitution or by law, any decision, order, or ruling of each
Commission may be brought to the Supreme Court on certiorari by the aggrieved party
within thirty days from receipt of a copy thereof.” Rule 64, Section 2 of the Revised Rules
of Civil Procedure also provides that “a judgment or final order or resolution of the
Commission on Elections and the Commission on Audit may be brought by the aggrieved
party to the Supreme Court on certiorari under Rule 65, except as hereinafter provided.”
Local Government Units; Designing and implementing a local government unit’s own
“organizational structure and staffing pattern” also implies the power to revise and
reorganize.—Section 5, paragraph (a) of the Local Government Code states that “any
provision on a power of a local government unit shall be liberally interpreted in its favor,
and in case of doubt, any question thereon shall be resolved in favor or devolution of
powers x x x.” Section 5, paragraph (c) also provides that “the general welfare provisions
in this Code shall be liberally interpreted to give more powers to local government units
in accelerating economic development and upgrading the quality of life for the people in
the community.” These rules of interpretation emphasize the policy of local autonomy and
the devolution of powers to the local government units. Designing and implementing a
local government unit’s own “organizational structure and staffing pattern” also implies
the power to revise and reorganize. Without such power, local governments will lose the
ability to adjust to the needs of its constituents. Effective and efficient governmental
services especially at the local government level require rational and deliberate changes
planned and executed in good faith from time to time.
Facts: Former Mayor Acharon of General Santos City issued Executive Order No. 40,
series of 2008, creating management teams pursuant to its organization development
program. In addition to, Executive Order No. 13, series of 2009 was also adopted
embodying the organization development masterplan. This was followed by Resolution
No. 004, series of 2009, requesting for the mayor’s support for GenSan SERVES, an
early retirement program to be proposed to the Sangguniang Panlungsod.
Consequently, Ordinance No. 08, series of 2009, was passed together with its
implementing rules and regulations. The said ordinance “provides for separation benefits
for sickly employees who have not yet reached retirement age.”
Respondent Commission on Audit (COA) argued that Ordinance No. 08, series of 2009,
partakes of the nature of a supplementary retirement benefit plan proscribed by Section
28, paragraph (b) of Commonwealth Act No. 186 as amended. COA also observed that
21
GenSan SERVES was not based on a law passed by Congress but on ordinances and
resolutions passed and approved by the Sangguniang Panlungsod and Executive Orders
by the city mayor. Moreover, nowhere in Section 76 of the Local Government Code, does
it provide a specific power for local government units to establish an early retirement
program.
Issue: Does the constitutional mandate for local autonomy grant local governments the
power to streamline and reorganize as well as the authority to create a separate or
supplementary retirement benefit plan?
Ruling: Local autonomy also grants local governments the power to streamline and
reorganize. This power is inferred from Section 76 of the Local Government Code on
organizational structure and staffing pattern, and Section 16 otherwise known as the
general welfare clause. In this case, the constitutional mandate for local autonomy
supports petitioner city’s issuance of Executive Order No. 40, series of 2008, creating
change management teams as an initial step for its organization development masterplan.
As for the supplementary retirement benefit plan, however, it is proscribed by Section
28, paragraph (b) of Commonwealth Act No. 186, otherwise known as the Government
Service Insurance Act, as amended by Republic Act No. 4968. This provision bans all
supplementary retirement or pension plans for government employees in order to prevent
the undue and inequitous proliferation of such plans.
G.R. No. 182574. September 28, 2010.*
THE PROVINCE OF NEGROS OCCIDENTAL, represented by its Governor ISIDRO
P. ZAYCO, petitioner, vs. THE COMMISSIONERS, COMMISSION ON AUDIT; THE
DIRECTOR, CLUSTER IV-VISAYAS; THE REGIONAL CLUSTER DIRECTORS; and
THE PROVINCIAL AUDITOR, NEGROS OCCIDENTAL, respondents.
Local Government Units; Productivity Incentive Benefit; Administrative Order No. 103; In
Section 2 of Administrative Order No. 103, the President enjoined all heads of government
offices and agencies from granting productivity incentive benefits or any and all similar
forms of allowances and benefits without the President’s prior approval.—It is clear from
Section 1 of AO 103 that the President authorized all agencies of the national government
as well as LGUs to grant the maximum amount of P2,000 productivity incentive benefit to
each employee who has rendered at least one year of service as of 31 December 1993.
In Section 2, the President enjoined all heads of government offices and agencies from
granting productivity incentive benefits or any and all similar forms of allowances and
benefits without the President’s prior approval.
Same; Same; Same; Control and Supervision; The requirement then of prior approval
from the President under Administrative Order No. 103 is applicable only to departments,
bureaus, offices and government-owned and controlled corporations under the Executive
branch.—In the present case, petitioner, through an approved Sangguniang
Panlalawigan resolution, granted and released the disbursement for the hospitalization
and health care insurance benefits of the province’s officials and employees without any
prior approval from the President. The COA disallowed the premium payment for such
benefits since petitioner disregarded AO 103 and RA 6758. We disagree with the COA.
From a close reading of the provisions of AO 103, petitioner did not violate the rule of
prior approval from the President since Section 2 states that the prohibition applies only
to “government offices/agencies, including government-owned and/orcontrolled
PUBCORP MIDTERM CASE NOTES, 2ND SEM AY 2018-2019 - cjamiemelchor
corporations, as well as their respective governing boards.” Nowhere is it indicated in
Section 2 that the prohibition also applies to LGUs. The requirement then of prior approval
from the President under AO 103 is applicable only to departments, bureaus, offices and
government-owned and controlled corporations under the Executive branch. In other
words, AO 103 must be observed by government offices under the President’s control as
mandated by Section 17, Article VII of the Constitution which states: “Section 17. The
President shall have control of all executive departments, bureaus and offices. He shall
ensure that the laws be faithfully executed.” (Emphasis supplied) Being an LGU, petitioner
is merely under the President’s general supervision pursuant to Section 4, Article X of the
Constitution.
Same; Same; Same; Same; Since Local Government Units (LGUs) are subject only to
the power of general supervision of the President, the President’s authority is limited to
seeing to it that rules are followed and laws are faithfully executed; The grant by a Local
Government Unit (LGU) of additional compensation like hospitalization and health care
insurance benefits in the present case does not need the approval of the President to be
valid.—The President’s power of general supervision means the power of a superior
officer to see to it that subordinates perform their functions according to law. This is
distinguished from the President’s power of control which is the power to alter or modify
or set aside what a subordinate officer had done in the performance of his duties and to
substitute the judgment of the President over that of the subordinate officer. The power
of control gives the President the power to revise or reverse the acts or decisions of a
subordinate officer involving the exercise of discretion. Since LGUs are subject only to
the power of general supervision of the President, the President’s authority is limited to
seeing to it that rules are followed and laws are faithfully executed. The President may
only point out that rules have not been followed but the President cannot lay down the
rules, neither does he have the discretion to modify or replace the rules. Thus, the grant
of additional compensation like hospitalization and health care insurance benefits in the
present case does not need the approval of the President to be valid.
Same; Same; Same; Same; Local Autonomy; Consistent with the state policy of local
autonomy as guaranteed by the 1987 Constitution, under Section 25, Article II and
Section 2, Article X, and the Local Government Code of 1991, the Court declares that the
grant and release of the hospitalization and health care insurance benefits given to
petitioner’s officials and employees were validly enacted through an ordinance passed by
petitioner’s Sangguniang Panlalawigan.—The CSC, through CSC MC No. 33, as well as
the President, through AO 402, recognized the deficiency of the state of health care and
medical services implemented at the time. Republic Act No. 7875 or the National Health
Insurance Act of 1995 instituting a National Health Insurance Program (NHIP) for all
Filipinos was only approved on 14 February 1995 or about two months after petitioner’s
Sangguniang Panlalawigan passed Resolution No. 720-A. Even with the establishment
of the NHIP, AO 402 was still issued three years later addressing a primary concern that
basic health services under the NHIP either are still inadequate or have not reached
geographic areas like that of petitioner. Thus, consistent with the state policy of local
autonomy as guaranteed by the 1987 Constitution, under Section 25, Article II and
Section 2, Article X, and the Local Government Code of 1991, we declare that the grant
and release of the hospitalization and health care insurance benefits given to petitioner’s
officials and employees were validly enacted through an ordinance passed by petitioner’s
Sangguniang Panlalawigan.
22
Issue: WON the insurance benefits granted to the employees require prior approval from
the President as required under Administrative Order No. 103
Petitioner:
• The payment of the insurance premium for the health benefits of its officers and
employees was not unlawful and improper since it was paid from an allocation of its
retained earnings pursuant to a valid appropriation ordinance.
O Such enactment was a clear exercise of its express powers under the principle of local
fiscal autonomy which includes the power of LGUs to allocate their resources in
accordance with their own priorities.
O Also, an LGU has fiscal control over its own revenues derived solely from its own tax
base.
Respondent:
• Although LGUs are afforded local fiscal autonomy, LGUs are still bound by RA 6758 and
their actions are subject to the scrutiny of the DBM and applicable auditing rules and
regulations enforced by the COA.
• The grant of additional compensation, like the hospitalization and health care insurance
benefits in the present case, must have prior Presidential approval to conform with the
state policy on salary standardization for government workers.
Held: NO
• AO 103 took effect eleven months before the Sangguniang Panlalawigan passed
Resolution No. 720-A. The main purpose of AO 103 is to prevent discontentment,
dissatisfaction and demoralization among government personnel, national or local, who
do not receive, or who receive less, productivity incentive benefits or other forms of
allowances or benefits.
• It is clear from Sec. 1 of AO 103 that the President authorized all agencies of the national
government as well as LGUs to grant the maximum amount of P2,000 productivity
incentive benefit to each employee. In Sec. 2, the President enjoined all heads of
government offices and agencies from granting productivity incentive benefits or any and
all similar forms of allowances and benefits without the President’s prior approval.
• From a close reading of the provisions of AO 103, petitioner did not violate the rule of
prior approval from the President since Sec. 2 states that the prohibition applies only to
“government offices/agencies, including GOCCs, as well as their respective governing
boards.” Nowhere is it indicated that the prohibition also applies to LGUs. The
requirement then of prior approval from the President under AO 103 is applicable only to
departments, bureaus, offices and GOCCs.
O Since LGUs are subject only to the power of general supervision of the President, the
President’s authority is limited to seeing to it that rules are followed and laws are faithfully
executed. Thus, the grant of additional compensation like hospitalization and health care
insurance benefits in the present case does not need the approval of the President to be
valid.
PUBCORP MIDTERM CASE NOTES, 2ND SEM AY 2018-2019 - cjamiemelchor
• Also, while it is true that LGUs are still bound by RA 6758, the COA did not clearly
establish that the medical care benefits given by the government at the time under PD
1519 were sufficient to cover the needs of government employees especially those
employed by LGUs.
• Petitioner correctly relied on the CSC Memorandum Circular No. 33 which provided the
policy framework for working conditions at the workplace. All government offices including
LGUs were directed to provide a health program for government employees which
included hospitalization services and annual mental, medical-physical examinations.
O The CSC, through MC No. 33, as well as the President, through AO 402, recognized
the deficiency of the state of health care and medical services implemented at the time.
RA 7875 (National Health Insurance Act) instituting a National Health Insurance Program
(NHIP) for all Filipinos was only approved two months after the Sangguniang
Panlalawigan passed Resolution No. 720-A. Even with the establishment of the NHIP,
AO 402 was still issued three years later addressing a primary concern that basic health
services under the NHIP either are still inadequate or have not reached geographic areas
like that of petitioner.
• Thus, consistent with the state policy of local autonomy as guaranteed by the 1987
Constitution, under Sec. 25, Article II and Section 2, Article X, and the LGC, the Court
declares that the grant and release of the hospitalization and health care insurance
benefits were validly enacted through an ordinance passed by the Sangguniang
Panlalawigan.
G.R. No. 195390. December 10, 2014.*
GOV. LUIS RAYMUND F. VILLAFUERTE, JR., and the PROVINCE OF CAMARINES
SUR, petitioners, vs. HON. JESSE M. ROBREDO, in his capacity as Secretary of the
Department of the Interior and Local Government, respondent.
Remedial Law; Civil Procedure; Courts; Judicial Review; Elements of.—It is well-settled
that the Court’s exercise of the power of judicial review requires the concurrence of the
following elements: (1) there must be an actual case or controversy calling for the exercise
of judicial power; (2) the person challenging the act must have the standing to question
the validity of the subject act or issuance; otherwise stated, he must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as
a result of its enforcement; (3) the question of constitutionality must be raised at the
earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the
case.
Same; Same; Same; Same; Actual Case or Controversy; Words and Phrases; An actual
case or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the decision of the court would amount
toan advisory opinion.—In La Bugal-B’laan Tribal Association, Inc. v. Ramos, 421 SCRA
148 (2004), the Court characterized an actual case or controversy, viz.: An actual case
or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the decision of the court would amount
to an advisory opinion. The power does not extend to hypothetical questions since any
attempt at abstraction could only lead to dialectics and barren legal questions and to
sterile conclusions unrelated to actualities. (Citations omitted) The existence of an actual
controversy in the instant case cannot be overemphasized. At the time of filing of the
23
instant petition, the respondent had already implemented the assailed memorandum
circulars. In fact, on May 26, 2011, Villafuerte received Audit Observation Memorandum
(AOM) No. 2011-009 dated May 10, 2011 from the Office of the Provincial Auditor of
Camarines Sur, requiring him to comment on the observation of the audit team.
Same; Same; Exhaustion of Administrative Remedies; In challenging the validity of an
administrative issuance carried out pursuant to the agency’s rule-making power, the
doctrine of exhaustion of administrative remedies does not stand as a bar in promptly
resorting to the filing of a case in court.—There is likewise no merit in the respondent’s
claim that the petitioners’ failure to exhaust administrative remedies warrants the
dismissal of the petition. It bears emphasizing that the assailed issuances were issued
pursuant to the rule-making or quasi-legislative power of the DILG. This pertains to “the
power to make rules and regulations which results in delegated legislation that is within
the confines of the granting statute.” Not to be confused with the quasi-legislative or rule-
making power of an administrative agency is its quasi-judicial or administrative
adjudicatory power. This is the power to hear and determine questions of fact to which
the legislative policy is to apply and to decide in accordance with the standards laid down
by the law itself in enforcing and administering the same law. In challenging the validity
of an administrative issuance carried out pursuant to the agency’s rule-making power, the
doctrine of exhaustion of administrative remedies does not stand as a bar in promptly
resorting to the filing of a case in court.
Constitutional Law; Local Autonomy; The Constitution has expressly adopted the policy
of ensuring the autonomy of Local Government Units (LGUs).—The Constitution has
expressly adopted the policy of ensuring the autonomy of LGUs. To highlight its
significance, the entire Article X of the Constitution was devoted to laying down the
bedrock upon which this policy is anchored. It is also pursuant to the mandate of the
Constitution of enhancing local autonomy that the LGC was enacted.
Same; Same; Words and Phrases; Local autonomy means a more responsive and
accountable local government structure instituted through a system of decentralization.—
Verily, local autonomy means a more responsive and accountable local government
structure instituted through a system of decentralization. In Limbona v. Mangelin, 170
SCRA 786 (1989), the Court elaborated on the concept of decentralization, thus:
[A]utonomy 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,”
and “ensure their fullest development as self-reliant communities and make them more
effective partners in the pursuit of national development and social progress.” At the same
time, it relieves the central government of the burden of managing local affairs and
enables it to concentrate on national concerns. x x x. Decentralization of power, on the
other hand, involves an abdication of political power in the favor of local governments [sic]
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.
Same; Same; To safeguard the state policy on local autonomy, the Constitution confines
the power of the President over Local Government Units (LGUs) to mere supervision.—
To safeguard the state policy on local autonomy, the Constitution confines the power of
the President over LGUs to mere supervision. “The President exercises ‘general
supervision’ over them, but only to ‘ensure that local affairs are administered according
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to law.’ He has no control over their acts in the sense that he can substitute their
judgments with his own.” Thus, Section 4, Article X of the Constitution, states: Section 4.
The President of the Philippines shall exercise general supervision over local
governments. Provinces with respect to component cities and municipalities, and cities
and municipalities with respect to component barangays, shall ensure that the acts of
their component units are within the scope of their prescribed powers and functions.
Same; Same; Notwithstanding the local fiscal autonomy being enjoyed by Local
Government Units (LGUs), they are still under the supervision of the President and maybe
held accountable for malfeasance or violations of existing laws.—Notwithstanding the
local fiscal autonomy being enjoyed by LGUs, they are still under the supervision of the
President and maybe held accountable for malfeasance or violations of existing laws.
“Supervision is not incompatible with discipline. And the power to discipline and ensure
that the laws be faithfully executed must be construed to authorize the President to order
an investigation of the act or conduct of local officials when in his opinion the good of the
public service so requires.”
Bids and Bidding; Republic Act (RA) No. 9184 requires the posting of the invitation to bid,
notice of award, notice to proceed, and approved contract in the procuring entity’s
premises, in newspapers of general circulation, and the website of the procuring entity.—
R.A. No. 9184, on the other hand, requires the posting of the invitation to bid, notice of
award, notice to proceed, and approved contract in the procuring entity’s premises, in
newspapers of general circulation, and the website of the procuring entity. It is well to
remember that fiscal autonomy does not leave LGUs with unbridled discretion in the
disbursement of public funds. They remain accountable to their constituency. For, public
office was created for the benefit of the people and not the person who holds office
Constitutional Law; Local Autonomy; Fiscal Autonomy; Words and Phrases; To be clear,
[f]iscal autonomy means that local governments have the power to create their own
sources of revenue in addition to their equitable share in the national taxes released by
the national government, as well as the power to allocate their resources in accordance
with their own priorities.—A scrutiny of the contents of the mentioned issuances shows
that they do not, in any manner, violate the fiscal autonomy of LGUs. To be clear, “[f]iscal
autonomy means that local governments have the power to create their own sources of
revenue in addition to their equitable share in the national taxes released by the national
government, as well as the power to allocate their resources in accordance with their own
priorities. It extends to the preparation of their budgets, and local officials in turn have to
work within the constraints thereof.”
Same; Transparency; The Constitution commands the strict adherence to full disclosure
of information on all matters relating to official transactions and those involving public
interest.—The Constitution, which was drafted after long years of dictatorship and abuse
of power, is now replete with numerous provisions directing the adoption of measures to
uphold transparency and accountability in government, with a view of protecting the nation
from repeating its atrocious past. In particular, the Constitution commands the strict
adherence to full disclosure of information on all matters relating to official transactions
and those involving public interest.
SUMMARY: Villafuerte filed a petition assailing the three memorandum circulars issued
by Robredo. The circulars pertain to full disclosure of local budget and finances and other
guidelines regarding budget. Villafuerte argues that the circulars violate the principles of
local and fiscal autonomy of the LGU. The Court ruled that the circulars merely reiterated
24
what was already provided in the law and that the order on public disclosure is consistent
with the policy of promoting good governance through transparency, accountability and
participation.
ISSUE: Whether or not the assailed memorandum circulars violate the principles of local
and fiscal autonomy enshired in the Constitution and the LGC? – NO
• Petitioners: assailed issuances interfere with the local and fiscal autonomy of LGUs
embodied in the Constitution and the LGC.
O MC 2010-138 transgressed these constitutionally-protected liberties when it restricted
the meaning of “development” and enumerated activities which the local government must
finance from the 20% development fund component of the IRA and provided sanctions
for local authorities who shall use the said component of the fund for the excluded
purposes stated therein.
O Robredo cannot substitute his own discretion with that of the local legislative council in
enacting its annual budget and specifying the development projects that the 20%
component of its IRA should fund.
• Court: Petitioners’ arguments are untenable.
G.R. No. 175368. April 11, 2013.*
LEAGUE OF PROVINCES OF THE PHILIPPINES, petitioner, vs. DEPARTMENT OF
ENVIRONMENT and NATURAL RESOURCES and HON. ANGELO T. REYES, in his
capacity as Secretary of DENR, respondents.
Constitutional Law; National Economy and Patrimony; Mines and Mining; Paragraph 1 of
Section 2, Article XII (National Economy and Patrimony) of the Constitution provides that
the exploration, development and utilization of natural resources shall be under the full
control and supervision of the State; Pursuant to Section 2, Article XII of the Constitution,
R.A. No. 7076 or the People’s Small-Scale Mining Act of 1991, was enacted, establishing
under Section 4 thereof a People’s Small-Scale Mining Program to be implemented by
the Department of Environment and Natural Resources (DENR) Secretary in coordination
with other concerned government agencies.—Paragraph 1 of Section 2, Article XII
(National Economy and Patrimony) of the Constitution provides that “[t]he exploration,
development and utilization of natural resources shall be under the full control and
supervision of the State.” Moreover, paragraph 3 of Section 2, Article XII of the
Constitution provides that “[t]he Congress may, by law, allow small-scale utilization of
natural resources by Filipino citizens x x x.” Pursuant to Section 2, Article XII of the
Constitution, R.A. No. 7076 or the People’s Small-Scale Mining Act League of Provinces
of the Philippines vs. Department of Environment and Natural Resources of 1991, was
enacted, establishing under Section 4 thereof a People’s Small-Scale Mining Program to
be implemented by the DENR Secretary in coordination with other concerned government
agencies.
Same; Same; Same; The People’s Small-Scale Mining Act of 1991 (R.A. No. 7076);
Small-Scale Mining; Words and Phrases; The People’s Small-Scale Mining Act of 1991
defines “small-scale mining” as referring to mining activities, which rely heavily on manual
labor using simple implement and methods and do not use explosives or heavy mining
equipment.—The People’s Small-Scale Mining Act of 1991 defines “small-scale mining”
as “refer[ring] to mining activities, which rely heavily on manual labor using simple
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implement and methods and do not use explosives or heavy mining equipment.” It should
be pointed out that the Administrative Code of 1987 provides that the DENR is, subject to
law and higher authority, in charge of carrying out the State’s constitutional mandate,
under Section 2, Article XII of the Constitution, to control and supervise the exploration,
development, utilization and conservation of the country’s natural resources. Hence, the
enforcement of small-scale mining law in the provinces is made subject to the supervision,
control and review of the DENR under the Local Government Code of 1991, while the
People’s Small-Scale Mining Act of 1991 provides that the People’s Small-Scale Mining
Program is to be implemented by the DENR Secretary in coordination with other
concerned local government agencies.
Same; Local Government Units; Administrative Autonomy; Administrative autonomy may
involve devolution of powers, but subject to limitations like following national policies or
standards, and those provided by the Local Government Code, as the structuring of local
governments and the allocation of powers, responsibilities, and resources among the
different local government units and local officials have been placed by the Constitution
in the hands of Congress under Section 3, Article X of the Constitution.—Indeed, Section
4, Article X (Local Government) of the Constitution states that “[t]he President of the
Philippines shall exercise general supervision over local governments,” and Section 25 of
the Local Government Code reiterates the same. General supervision by the President
means no more than seeing to it that laws are faithfully executed or that subordinate
officers act within the law. The Court has clarified that the constitutional guarantee of local
autonomy in the Constitution [Art. X, Sec. 2] refers to the administrative autonomy of local
government units or, cast in more technical language, the decentralization of government
authority. It does not make local governments sovereign within the State. Administrative
autonomy may involve devolution of powers, but subject to limitations like following
national policies or standards, and those provided by the Local Government Code, as the
structuring of local governments and the allocation of powers, responsibilities, and
resources among the different local government units and local officials have been placed
by the Constitution in the hands of Congress under Section 3, Article X of the Constitution.
Same; Same; Same; National Economy and Patrimony; Mines and Mining; The People’s
Small-Scale Mining Act of 1991 (R.A. No. 7076); Small-Scale Mining; The Local
Government Code did not fully devolve the enforcement of the small-scale mining law to
the provincial government, as its enforcement is subject to the supervision, control and
review of the Department of Environment and Natural Resources (DENR), which is in
charge, subject to law and higher authority, of carrying out the State’s constitutional
mandate to control and supervise the exploration, development, utilization of the country’s
natural resources.—Clearly, the Local Government Code did not fully devolve the
enforcement of the small-scale mining law to the provincial government, as its
enforcement is subject to the supervision, control and review of the DENR, which is in
charge, subject to law and higher authority, of carrying out the State’s constitutional
mandate to control and supervise the exploration, development, utilization of the country’s
natural resources. Section 17 (b)(3)(iii) of the Local Government Code of 1991 is in
harmony with R.A. No. 7076 or the People’s Small-Scale Mining Act of 1991, which
established a People’s Small-Scale Mining Program to be implemented by the Secretary
of the DENR.
Same; National Economy and Patrimony; Mines and Mining; The People’s Small-Scale
Mining Act of 1991 (R.A. No. 7076); Small-Scale Mining; The settlement of disputes over
conflicting claims in small-scale mining is provided for in Section 24 of R.A. No. 7076.—
25
The settlement of disputes over conflicting claims in small-scale mining is provided for in
Section 24 of R.A. No. 7076, thus: Sec. 24. Provincial/City Mining Regulatory Board.—
There is hereby created under the direct supervision and control of the Secretary a
provincial/city mining regulatory board, herein called the Board, which shall be the
implementing agency of the Department, and shall exercise the following powers and
functions, subject to review by the Secretary: x x x x (e) Settle disputes, conflicts or
litigations over conflicting claims within a people’s small-scale mining area, an area that
is declared a small mining area; x x x Section 24, paragraph (e) of R.A. No. 7076 cited
above is reflected in Section 22, paragraph 22.5 of the Implementing Rules and
Regulations of R.A. No. 7076, to wit: SEC. 22. Provincial/City Mining Regulatory Board.—
The Provincial/City Mining Regulatory Board created under R.A. No. 7076 shall exercise
the following powers and functions, subject to review by the Secretary: x x x x 22.5 Settles
disputes, conflicts or litigations over conflicting claims within ninety (90) days upon filing
of protests or complaints; Provided, That any aggrieved party may appeal within five (5)
days from the Board’s decision to the Secretary for final resolution otherwise the same is
considered final and executory.
Same; Same; Same; Same; The Department of Environment and Natural Resources
(DENR) Secretary’s power to review and, therefore, decide the issue on the validity of the
issuance of the Small-Scale Mining Permits by the Provincial Governor as recommended
by the Provincial Mining Regulatory Board (PMRB), is a quasi-judicial function, which
involves the determination of what the law is, and what the legal rights of the contending
parties are, with respect to the matter in controversy and, on the basis thereof and the
facts obtaining, the adjudication of their respective rights.—The decision of the DENR
Secretary, declaring that the Application for Exploration Permit of AMTC was valid and
may be given due course, and canceling the Small-Scale Mining Permits issued by the
Provincial Governor, emanated from the power of review granted to the DENR Secretary
under R.A. No. 7076 and its Implementing Rules and Regulations. The DENR Secretary’s
power to review and, therefore, decide, in this case, the issue on the validity of the
issuance of the Small-Scale Mining Permits by the Provincial Governor as recommended
by the PMRB, is a quasi-judicial function, which involves the determination of what the
law is, and what the legal rights of the contending parties are, with respect to the matter
in controversy and, on the basis thereof and the facts obtaining, the adjudication of their
respective rights. The DENR Secretary exercises quasi-judicial function under R.A. No.
7076 and its Implementing Rules and Regulations to the extent necessary in settling
disputes, conflicts or litigations over conflicting claims. This quasi-judicial function of the
DENR Secretary can neither be equated with “substitution of judgment” of the Provincial
Governor in issuing Small-Scale Mining Permits nor “control” over the said act of the
Provincial Governor as it is a determination of the rights of AMTC over conflicting claims
based on the law.
Same; Statutes; The fundamental criterion is that all reasonable doubts should be
resolved in favor of the constitutionality of a statute. Every law has in its favor the
presumption of constitutionality.—In determining whether Section 17 (b)(3)(iii) of the Local
Government Code of 1991 and Section 24 of R.A. No. 7076 are unconstitutional, the
Court has been guided by Beltran v. The Secretary of Health, 476 SCRA 168 (2005),
which held: The fundamental criterion is that all reasonable doubts should be resolved in
favor of the constitutionality of a statute. Every law has in its favor the presumption of
constitutionality. For a law to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution. The ground for nullity must be clear and beyond
reasonable doubt. Those who petition this Court to declare a law, or parts thereof,
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unconstitutional must clearly establish the basis therefor. Otherwise, the petition must fail.
In this case, the Court finds that the grounds raised by petitioner to challenge the
constitutionality of Section 17 (b)(3)(iii) of the Local Government Code of 1991 and
Section 24 of R.A. No. 7076 failed to overcome the constitutionality of the said provisions
of law.
FACTS :Golden Falcon applied for FTAA before the MGB-RO. On April 29, 1998, MGB-
RO denied Golden Falcon’s application for FTAA on for failure to secure the required area
clearances from the Forest Management Sector and Lands Management Sector of the
DENR-RO. Golden Falcon appealed the denial with the Mines and Geosciences Bureau-
Central Office (MGB-CO).
On February 10, 2004, pending Golden Falcon's appeal to the MGB-CO, MCCS filed with
the PENRO of Bulacan their applications for quarry permit covering the same area subject
of Golden Falcon's FTAA application. MGB-CO finally denied Golden Falcon’s appeal on
July 16, 2004.
AMTC filed with the PENRO of Bulacan an application for exploration permit covering the
same subject area on September 13, 2004. Confusion of rights resulted from the
overlapping applications of AMTC and the persons applying for quarry permits – the
contention was the date the area of Golden Falcon’s application became open to other
permit applications from other parties
On October 19, 2004, upon query by MGB-RO Director Cabantog, DENR-MGB Director
Ramos stated that the denial of Golden Falcon’s application became final on August 11,
2004, or fifteen days after Golden Falcon received the order of denial of its application.
Hence, the area of Golden Falcon’s application became open to permit applications only
on that date.
Subsequently, the Provincial Legal Officer of Bulacan issued a legal opinion on the issue,
stating that the subject area became open for new applications on the date of the first
denial on April 29, 1998 (MGB-RO’s order of denial), as MGB-CO’s order of denial on
July 16, 2004 was a mere reaffirmation of the MGB-RO’s April 29 order; hence, the
reckoning period should be April 29.
Based on this legal opinion, MGB-RO Director Cabantog endorsed the applications for
quarry permit, now apparently converted to applications for small-scale mining permit, to
the Governor of Bulacan. PENRO of Bulacan recommended to the Governor the approval
of said applications. Eventually, the Governor issued the small-scale mining permits.
AMTC appealed to the DENR Secretary.
The DENR Secretary decided in favor of the AMTC and nullified and cancelled the
governor’s issuance of small-scale mining permits. It agreed with DENR-MGB Director
Ramos that the area was open to mining location only on August 11, 2004 (15 days after
the MGB-CO denial). Hence, the applications for quarry permit filed on February 10, 2004
were null as these were filed when the area was still closed to mining location. On the
other hand, AMTC filed its application when the area was already open to other mining
applicants, hence, its application was valid. The small-scale mining permits were also
issued in violation of Section 4 of R.A. No. 7076 and beyond the authority of the Governor
pursuant to Sec. 43 of RA 7942 because the area was never proclaimed to be under the
small-scale mining program.
26
The petitioner League of the Provinces of the Philippines filed this petition saying that that
this is not an action of one province alone, but the collective action of all provinces through
the League, as a favorable ruling will not only benefit one province, but all provinces and
all local governments.
ISSUES
1. Whether DENR’s act of nullifying the small-scale mining permits amounts to executive
control, not merely supervision and usurps the devolved powers of all provinces, as the
DENR Secretary substituted the judgment of the Provincial Governor of Bulacan.
2. Whether or not Section 17, b(3)(III) of the Local Government Code and Section 24 of
the Small-Scale Mining Act, which confer upon DENR and the DENR Secretary the power
of control are unconstitutional, as the Constitution states that the President (and Exec
Depts) has the power of supervision only, not control over acts of LGUs
RULING: [The Court finds that petitioner has legal standing to file this petition because it
is tasked under Section 504 of the Local Government Code of 1991 to promote local
autonomy at the provincial level; adopt measures for the promotion of the welfare of all
provinces and its officials and employees; and exercise such other powers and perform
such other duties and functions as the league may prescribe for the welfare of the
provinces.]
DENR Sec’s act was valid and authorized pursuant to its power of review under the RA
7076 and its IRR; Assailed statutes did not overcome the presumption of constitutionality,
hence, are not unconstitutional.
Control of the DENR/DENR Secretary over small-scale mining in the provinces is granted
by three statutes: (1) R.A. 7061 or The Local Government Code of 1991; (2) R.A. 7076
or the People's Small Scale Mining Act of 1991; and (3) R.A. No. 7942 or the Philippine
Mining Act of 1995.
Control is the power of an officer to alter or modify or set aside what a subordinate officer
had done in the performance of his/her duties and to substitute the judgment of the former
for the latter. Supervision is the power of a superior officer to see to it that lower officers
perform their function in accordance with law.
The Constitutional guarantee of local autonomy in the Article X, Sec. 2 of the Constitution
refers to the administrative autonomy of the LGUs or the decentralization of government
authority. It does not make local governments within the State. Administrative autonomy
may involve devolution of powers, but it is still subject to limitations, like following national
policies or standards and those provided by the Local Government Code, as the
structuring of LGUs and the allocation of powers/responsibilities/resources among the
LGUs and local officials are placed by the Constitution to Congress under Article X
Section 3
It is the DENR which is in-charge of carrying out the State’s constitutional mandate to
control and supervise the exploration, development and utilization of the country’s natural
resources, pursuant to the provisions of Section 17, b(3)(III) of the LGC. Hence, the
enforcement of the small-scale mining law by the provincial government is subject to the
supervision, control and review of the DENR. The LGC did not fully devolve to the
provincial government the enforcement of the small-scale mining law.
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RA 7076 or the People’s Small-Scale Mining program was established to be implemented
by the DENR Secretary in coordination with other government agencies (Section 4, RA
7076). Section 24 of the law makes the Provincial/ Mining Regulatory Board under the
direct supervision and control of the Secretary, its powers and functions subject to review
by the same.
Under Section 123 of DENR AO No. 23, small-scale mining applications should be filed
with the PMRB and the permits shall be issued by the provincial governor, for applications
outside the mineral reservations.
DENR Administrative Order No. 34 (1992) which contains the IRR of RA 7076 likewise
provides that the DENR Secretary shall exercise direct supervision and control over the
People’s Small-Scale Mining Program, and that the Provincial/City Mining Regulatory
Board’s (PMRB) powers and functions shall be subject to review by the DENR Secretary.
DENR Administrative Order No. 96-40 or the Revised IRR of the Philippine Mining Act of
1995 provides that applications for Small-Scale Mining Permits shall be filed with the
Provincial Governor/City Mayor through their respective Mining Regulatory Boards for
areas outside the Mineral Reservations, and further, that the LGUs in coordination with
the Bureau/Regional Offices shall approve applications for small-scale mining, sand and
gravel, quarry xxx and gravel permits not exceeding 5 hectares.
Petitioner’s contention that the aforementioned laws and rules did not confer upon DENR
and DENR Secretary the power to reverse, abrogate, nullify, void, cancel the permits
issued by the Provincial Governor or small-scale mining contracts entered into by the
Board are without merit because the DENR Secretary was granted the power of review
in the PMRB’s resolution of disputes under Sec. 24 of RA 7076 and Section 22 of its IRR.
The decision of the DENR Secretary to nullify and cancel the Governor’s issuance of
permits emanated from its power of review under RA 7076 ad its IRR. Its power to review
and decide on the validity of the issuance of the Small-Scale Mining Permits by the
Provincial Governor is a quasi-judicial function which involves the determination of what
the law is and what the legal rights of the contending parties are, with respect to the matter
in controversy and on the basis thereof and the facts obtaining, the adjudication of their
respective rights.
The DENR Secretary exercises quasi-judicial function under RA 7076 and its IRR to the
extent necessary in settling disputes, conflicts, or litigations over conflicting claims. This
quasi-judicial power of the DENR can neither be equated with “substitution of judgment”
of the Provincial Governor in issuing Small-Scale Mining Permits nor “control” over the
said act of the Provincial Governor as it is a determination of the rights of the AMTC over
conflicting claims based on the law.
In Beltran v. Secretary of Health, the Court held that every law has in its favor the
presumption of constitutionality. For a law to be nullified, it must be shown that there is a
clear and unequivocal breach of the Constitution. The ground for nullity must be clear and
beyond reasonable doubt. In this case, the grounds raised by the petitioner to challenge
the constitutionality of Sec. 17 b(3)(iii) of the LGC and Section 24 of RA 7076 has failed
to overcome the constitutionality of the said provisions of the law.
G.R. No. 180050. May 12, 2010.*
RODOLFO G. NAVARRO, VICTOR F. BERNAL, and RENE O. MEDINA, petitioners,
vs. EXECUTIVE SECRETARY EDUARDO ERMITA, representing the President of the
27
Philippines; SENATE OF THE PHILIPPINES, represented by the SENATE
PRESIDENT; HOUSE OF REPRESENTATIVES, represented by the HOUSE
SPEAKER; GOVERNOR ROBERT ACE S. BARBERS, representing the Mother
Province of Surigao del Norte; GOVERNOR GERALDINE ECLEO VILLAROMAN,
representing the new Province of Dinagat Islands, respondents.
Municipal Corporations; Local Government Units; Creation of Local Government Units; It
must be emphasized that Section 7, Chapter 2 of the Local Government Code, which
provides for the general rule in the creation of a local government unit, states in paragraph
(c) thereof that the land area must be contiguous and sufficient to provide for such basic
services and facilities to meet the requirements of its populace.—It must be emphasized
that Section 7 above, which provides for the general rule in the creation of a local
government unit, states in paragraph (c) thereof that the land area must be contiguous
and sufficient to provide for such basic services and facilities to meet the requirements of
its populace. Therefore, there are two requirements for land area: (1) the land area must
be contiguous; and (2) the land area must be sufficient to provide for such basic services
and facilities to meet the requirements of its populace. A sufficient land area in the creation
of a province is at least 2,000 square kilometers, as provided by Section 461 of the Local
Government Code. Thus, Section 461 of the Local Government Code, providing the
requisites for the creation of a province, specifically states the requirement of “a
contiguous territory of at least two thousand (2,000) square kilometers.”
Same; Same; Same; The requirement of a contiguous territory and the requirement of a
land area of at least 2,000 square kilometers are distinct and separate requirements for
land area under paragraph (a) (i) of Section 461 and Section 7 (c) of the Local
Government Code; Nowhere in paragraph (b) of Section 461 of the Local Government
Code is it expressly stated or may it be implied that when a province is composed of two
or more islands, or when the territory of a province is separated by a chartered city or
cities, such province need not comply with the land area requirement of at least 2,000
square kilometers or the requirement in paragraph (a) (i) of Section 461.—Contrary to the
arguments of both movants, the requirement of a contiguous territory and the requirement
of a land area of at least 2,000 square kilometers are distinct and separate requirements
for land area under paragraph (a) (i) of Section 461 and Section 7 (c) of the Local
Government Code. However, paragraph (b) of Section 461 provides two instances of
exemption from the requirement of territorial contiguity, thus: (b) The territory need not be
contiguous if it comprises two (2) or more islands, or is separated by a chartered city or
cities which do not contribute to the income of the province. Contrary to the contention of
the movants, the exemption above pertains only to the requirement of territorial contiguity.
It clearly states that the requirement of territorial contiguity may be dispensed with in the
case of a province comprising two or more islands, or is separated by a chartered city or
cities which do not contribute to the income of the province. Nowhere in paragraph (b) is
it expressly stated or may it be implied that when a province is composed of two or more
islands, or when the territory of a province is separated by a chartered city or cities, such
province need not comply with the land area requirement of at least 2,000 square
kilometers or the requirement in paragraph (a) (i) of Section 461 of the Local Government
Code.
Same; Same; Statutory Construction; Where the law speaks in clear and categorical
language, there is no room for interpretation, but only for application.—Where the law is
free from ambiguity, the court may not introduce exceptions or conditions where none is
provided from considerations of convenience, public welfare, or for any laudable purpose;
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neither may it engraft into the law qualifications not contemplated, nor construe its
provisions by taking into account questions of expediency, good faith, practical utility and
other similar reasons so as to relax non-compliance therewith. Where the law speaks in
clear and categorical language, there is no room for interpretation, but only for application.
Same; Same; Same; The Constitution clearly mandates that the criteria in the Local
Government Code must be followed in the creation of a province—any derogation of or
deviation from the criteria prescribed in the Local Government Code violates Section 10,
Article X of the Constitution.—As the law-making branch of the government, indeed, it
was the Legislature that imposed the criteria for the creation of a province as contained
in Section 461 of the Local Government Code. No law has yet been passed amending
Section 461 of the Local Government Code, so only the criteria stated therein are the
bases for the creation of a province. The Constitution clearly mandates that the criteria in
the Local Government Code must be followed in the creation of a province; hence, any
derogation of or deviation from the criteria prescribed in the Local Government Code
violates Section 10, Article X of the Constitution.
Same; Same; Same; Judicial Review; The courts, as guardians of the Constitution, have
the inherent authority to determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law, and where the acts of the other
branches of government run afoul of the Constitution, it is the judiciary’s solemn and
sacred duty to nullify the same.—Contrary to the contention of the movants, the evidence
on record proved that R.A. No. 9355 failed to comply with either the population or territorial
requirement prescribed in Section 461 of the Local Government Code for the creation of
the Province of Dinagat Islands; hence, the Court declared R.A. No. 9355
unconstitutional. In Fariñas v. The Executive Secretary, 417 SCRA 503 (2003), the Court
held: Every statute is presumed valid. The presumption is that the legislature intended to
enact a valid, sensible and just law and one which operates no further than may be
necessary to effectuate the specific purpose of the law. It is equally well-established,
however, that the courts, as guardians of the Constitution, have the inherent authority to
determine whether a statute enacted by the legislature transcends the limit imposed by
the fundamental law. And where the acts of the other branches of government run afoul
of the Constitution, it is the judiciary’s solemn and sacred duty to nullify the same.
Same; Same; Same; Same; Operative Fact Doctrine; The Court, while respecting the
doctrine of separation of powers, cannot renege on its duty to determine whether the other
branches of the government have kept themselves within the limits of the Constitution,
and determine whether illegality attached to the creation of the province in question—to
abandon this duty only because a local government unit has began its existence is to
consent to the passage of a law that is violative of the provisions of the Constitution and
the Local Government Code.—In this case, R.A. No. 9355 was declared unconstitutional
because there was utter failure to comply with either the population or territorial
requirement for the creation of a province under Section 461 of the Local Government
Code. The Court, while respecting the doctrine of separation of powers, cannot renege
on its duty to determine whether the other branches of the government have kept
themselves within the limits of the Constitution, and determine whether illegality attached
to the creation of the province in question. To abandon this duty only because the
Province of Dinagat Islands has began its existence is to consent to the passage of a law
that is violative of the provisions of the Constitution and the Local Government Code,
rendering the law and the province created null and void. The Court cannot tolerate such
nullity to be in existence. Where the acts of other branches of the government go beyond
28
the limit imposed by the Constitution, it is the sacred duty of the judiciary to nullify the
same.
FACTS: October 2, 2006, the President of the Republic approved into law Republic Act
(R.A.) No. 9355 (An Act Creating the Province of Dinagat Islands).
December 3, 2006, the Commission on Elections (COMELEC) conducted the mandatory
plebiscite for the ratification of the creation of the province under the Local Government
Code (LGC). The plebiscite yielded 69,943 affirmative votes and 63,502 negative votes.
With the approval of the people from both the mother province of Surigao del Norte and
the Province of Dinagat Islands (Dinagat).
November 10, 2006, petitioners filed before this Court a petition for certiorari and
prohibition challenging the constitutionality of R.A. No. 9355. The Court dismissed the
petition on technical grounds. Their motion for reconsideration was also denied.
Undaunted, petitioners filed another petition for certiorari seeking to nullify R.A. No. 9355
for being unconstitutional. They alleged that the creation of Dinagat as a new province, if
uncorrected, would perpetuate an illegal act of Congress, and would unjustly deprive the
people of Surigao del Norte of a large chunk of the provincial territory, Internal Revenue
Allocation (IRA), and rich resources from the area. They pointed out that when the law
was passed, Dinagat had a land area of 802.12 square kilometers only and a population
of only 106,951, failing to comply with Section 10, Article X of the Constitution and of
Section 461 of the LGC.
May 12, 2010, movants-intervenors raised three (3) main arguments to challenge the
above Resolution, namely: (1) that the passage of R.A. No. 9355 operates as an act of
Congress amending Section 461 of the LGC; (2) that the exemption from territorial
contiguity, when the intended province consists of two or more islands, includes the
exemption from the application of the minimum land area requirement; and (3) that the
Operative Fact Doctrine is applicable in the instant case.
July 20, 2010, the Court denied the Motion for Leave to Intervene and to File and to Admit
Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010 on the
ground that the allowance or disallowance of a motion to intervene is addressed to the
sound discretion of the Court, and that the appropriate time to file the said motion was
before and not after the resolution of this case.
September 7, 2010, movants-intervenors filed a Motion for Reconsideration of the July
20, 2010 Resolution, citing several rulings of the Court, allowing intervention as an
exception to Section 2, Rule 19 of the Rules of Court that it should be filed at any time
before the rendition of judgment. They alleged that, prior to the May 10, 2010 elections,
their legal interest in this case was not yet existent. They averred that prior to the May 10,
2010 elections, they were unaware of the proceedings in this case.
October 5, 2010, the Court issued an order for Entry of Judgment, stating that the decision
in this case had become final and executory on May 18, 2010.
ISSUE: Whether or not the provision in Article 9(2) of the Rules and Regulations
Implementing the Local Government Code of 1991 valid.
HELD: Yes, the Congress, recognizing the capacity and viability of Dinagat to become a
full-fledged province, enacted R.A. No. 9355, following the exemption from the land area
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requirement, which, with respect to the creation of provinces, can only be found as an
express provision in the LGC-IRR. In effect, pursuant to its plenary legislative powers,
Congress breathed flesh and blood into that exemption in Article 9(2) of the LGC-IRR and
transformed it into law when it enacted R.A. No. 9355 creating the Island Province of
Dinagat.
The land area, while considered as an indicator of viability of a local government unit, is
not conclusive in showing that Dinagat cannot become a province, taking into account its
average annual income of P82,696,433.23 at the time of its creation, as certified by the
Bureau of Local Government Finance, which is four times more than the minimum
requirement of P20,000,000.00 for the creation of a province. The delivery of basic
services to its constituents has been proven possible and sustainable. Rather than looking
at the results of the plebiscite and the May 10, 2010 elections as mere fait accompli
circumstances which cannot operate in favor of Dinagat’s existence as a province, they
must be seen from the perspective that Dinagat is ready and capable of becoming a
province. This Court should not be instrumental in stunting such capacity.
Ratio legis est anima. The spirit rather than the letter of the law. A statute must be read
according to its spirit or intent, for what is within the spirit is within the statute although it
is not within its letter, and that which is within the letter but not within the spirit is not within
the statute. Put a bit differently, that which is within the intent of the lawmaker is as much
within the statute as if within the letter, and that which is within the letter of the statute is
not within the statute unless within the intent of the lawmakers. Withal, courts ought not
to interpret and should not accept an interpretation that would defeat the intent of the law
and its legislators.
G.R. No. 133064. September 16, 1999.*
JOSE C. MIRANDA, ALFREDO S. DIRIGE, MANUEL H. AFIADO, MARIANO V.
BABARAN and ANDRES R. CABUYADAO, petitioners, vs. HON. ALEXANDER
AGUIRRE, In his capacity as Executive Secretary
Constitutional Law; Statutes; It is now an ancient rule that the constitutionality of law can
be challenged by one who will sustain a direct injury as a result of its enforcement.—The
challenge to the locus standi of petitioners cannot succeed. It is now an ancient rule that
the constitutionality of law can be challenged by one who will sustain a direct injury as a
result of its enforcement. Petitioner Miranda was the mayor of Santiago City when he filed
the present petition in his own right as mayor and not on behalf of the city, hence, he did
not need the consent of the city council of Santiago City. It is also indubitable that the
change of status of the city of Santiago from independent component city to a mere
component city will affect his powers as mayor, as will be shown hereafter. The injury that
he would sustain from the enforcement of R.A. No. 8528 is direct and immediate and not
a mere generalized grievance shared with the people of Santiago City. Similarly, the
standing of the other petitioners rests on a firm foundation. They are residents and voters
in the city of Santiago. They have the right to be heard in the conversion of their city thru
a plebiscite to be conducted by the COMELEC. The denial of this right in R.A. No. 8528
gives them proper standing to strike the law as unconstitutional.
Same; Same; 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 instrumentality of the government.—
29
The plea that this court back off from assuming jurisdiction over the petition at bar on the
ground that it involves a political question has to be brushed aside. This plea has long
lost its appeal especially in light of Section 1 of Article VIII of the 1987 Constitution which
defines judicial power as including “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 instrumentality of the government.”
To be sure, the cut between a political and justiciable issue has been made by this Court
in many cases and need no longer mystify us.
Same; Same; The petition at bar presents a justiciable issue.—Clearly, the petition at bar
presents a justiciable issue. Petitioners claim that under Section 10, Article X of the 1987
Constitution they have a right to approve or disapprove R.A. No. 8528 in a plebiscite
before it can be enforced. It ought to be self-evident that whether or not petitioners have
the said right is a legal not a political question. For whether or not laws passed by
Congress comply with the requirements of the Constitution pose questions that this Court
alone can decide. The proposition that this Court is the ultimate arbiter of the meaning
and nuances of the Constitution need not be the subject of a prolix explanation.
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
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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.
G.R. No. 103328. October 19, 1992.*
HON. ROY A. PADILLA, JR., In his capacity as Governor of the Province of
Camarines Norte, petitioner, vs. COMMISSION ON ELECTIONS, respondent.
Constitutional Law; Election Law; When the law states that the plebiscite shall be
conducted in the political units directly affected, it means that residents of the political
entity who would be economically dislocated by the separation of a portion thereof have
a right to vote in said plebiscite.—It stands to reason that when the law states that the
plebiscite shall be conducted “in the political units directly affected,” it means that
residents of the political entity who would be economically dislocated by the separation of
a portion thereof have a right to vote in said plebiscite. Evidently, what is contemplated
by the phrase “political units directly affected,” is the plurality of political units which would
participate in the plebiscite.
Facts: Republic Act No. 7155 created the new municipality of Tulay-Na-Lupa in the
Province of Camarines Norte and pursuant to this law, the COMELEC (D) conducted a
plebiscite for its approval. In its resolution for the conduct of the plebiscite, the COMELEC
(D) included all the voters of the Municipality of Labo—the parent unit of the new
municipality.
The result of the plebiscite showed that the majority rejected the creation of the new
Municipality of Tulay-Na-Lupa. The governor, Hon. Roy Padilla, Jr. (P), petitioned the
court to set aside the result arguing that the phrase "political units directly affected" in
Section 10, Article X of the 1987 Constitution does not include the parent political unit—
the Municipality of Labo.
Issues: Is the result of the plebiscite valid?
Ruling: Yes. When the law states that the plebiscite shall be conducted "in the political
units directly affected," it means that residents of the political entity who would be
economically dislocated by the separation thereof have a right to vote in said plebiscite.
What is contemplated by the phrase "political units directly affected," is the plurality of
political units which would participate in the plebiscite. Logically, those to be included in
such political areas are the inhabitants of the proposed Municipality of Tulay-Na-Lupa as
well as those living in the the parent Municipality of Labo, Camarines Norte.
G.R. No. 118577. March 7, 1995.*
30
JUANITO MARIANO, JR., et al., petitioners, vs. THE COMMISSION ON ELECTIONS,
THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, THE MUNICIPAL
TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.
Constitutional Law; Local Government Code; The importance of drawing with precise
strokes the territorial boundaries of a local unit of government cannot be
overemphasized.—The importance of drawing with precise strokes the territorial
boundaries of a local unit of government cannot be overemphasized. The boundaries
must be clear for they define the limits of the territorial jurisdiction of a local government
unit. It can legitimately exercise powers of government only within the limits of its territorial
jurisdiction. Beyond these limits, its acts are ultra vires. Needless to state, any uncertainty
in the boundaries of local government units will sow costly conflicts in the exercise of
governmental powers which ultimately will prejudice the people’s welfare. This is the evil
sought to be avoided by the Local Government Code in requiring that the land area of a
local government unit must be spelled out in metes and bounds, with technical
descriptions.
Same; Same; Petitioners have not demonstrated that the delineation of the land area of
the proposed City of Makati will cause confusion as to its boundaries.—Given the facts of
the cases at bench, we cannot perceive how this evil can be brought about by the
description made in Section 2 of R.A. No. 7854. Petitioners have not demonstrated that
the delineation of the land area of the proposed City of Makati will cause confusion as to
its boundaries. We note that said delineation did not change even by an inch the land
area previously covered by Makati as a municipality. Section 2 did not add, subtract,
divide, or multiply the established land area of Makati. In language that cannot be any
clearer, Section 2 stated that the city’s land area “shall comprise the present territory of
the municipality.”
Same; Same; Court takes judicial notice of the fact that Congress has also refrained from
using the metes and bounds description of land areas of other local government units with
unsettled boundary disputes.—The deliberations of Congress will reveal that there is a
legitimate reason why the land area of the proposed City of Makati was not defined by
metes and bounds, with technical descriptions. At the time of the consideration of R.A.
No. 7854, the territorial dispute between the municipalities of Makati and Taguig over Fort
Bonifacio was under court litigation. Out of a becoming sense of respect to a co-equal
department of government, the legislators felt that the dispute should be left to the courts
to decide. They did not want to foreclose the dispute by making a legislative finding of fact
which could decide the issue. This would have ensued if they defined the land area of the
proposed city by its exact metes and bounds, with technical descriptions. We take judicial
notice of the fact that Congress has also refrained from using the metes and bounds
description of land areas of other local government units with unsettled boundary
disputes.
Same; Same; Considering the peculiar circumstances, Court is not prepared to hold that
Section 2 of R.A. No. 7854 is unconstitutional.—We hold that the existence of a boundary
dispute does not per se present an insurmountable difficulty which will prevent Congress
from defining with reasonable certitude the territorial jurisdiction of a local government
unit. In the cases at bench, Congress maintained the existing boundaries of the proposed
City of Makati but as an act of fairness, made them subject to the ultimate resolution by
the courts. Considering these peculiar circumstances, we are not prepared to hold that
Section 2 of R.A. No. 7854 is unconstitutional.
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Same; Statutes; Requirements before a litigant can challenge the constitutionality of a
law are well-delineated.—We cannot entertain this challenge to the constitutionality of
Section 51. The requirements before a litigant can challenge the constitutionality of a law
are well-delineated. They are: (1) there must be an actual case or controversy; (2) the
question of constitutionality must be raised by the proper party; (3) the constitutional
question must be raised at the earliest possible opportunity; and (4) the decision on the
constitutional question must be necessary to the determination of the case itself.
Same; Same; Reapportionment of legislative districts may be made through a special law,
such as in the charter of a new city.—These issues have been laid to rest in the recent
case of Tobias v. Abalos. In said case, we ruled that reapportionment of legislative
districts may be made through a special law, such as in the charter of a new city. The
Constitution clearly provides that Congress shall be composed of not more than two
hundred fifty (250) members, unless otherwise fixed by law. As thus worded, the
Constitution did not preclude Congress from increasing its membership by passing a law,
other than a general reapportionment law. This is exactly what was done by Congress in
enacting R.A. No. 7854 and providing for an increase in Makati’s legislative district.
Moreover, to hold that reapportionment can only be made through a general
apportionment law, with a review of all the legislative districts allotted to each local
government unit nationwide, would create an inequitable situation where a new city or
province created by Congress will be denied legislative representation for an
indeterminate period of time. That intolerable situation will deprive the people of a new
city or province a particle of their sovereignty. Sovereignty cannot admit of any kind of
subtraction. It is indivisible. It must be forever whole or it is not sovereignty.
Same; Same; Court reiterated the policy favoring a liberal construction of the “one title—
one subject” rule so as not to impede legislation.—Finally, we do not find merit in
petitioners’ contention that the creation of an additional legislative district in Makati should
have been expressly stated in the title of the bill. In the same case of Tobias v. Abalos,
op cit, we reiterated the policy of the Court favoring a liberal construction of the “one title-
one subject” rule so as not to impede legislation. To be sure, the Constitution does not
command that the title of a law should exactly mirror, fully index, or completely catalogue
all its details. Hence, we ruled that “it should be sufficient compliance if the title expresses
the general subject and all the provisions are germane to such general subject.”
FACTS: This is a petition for prohibition and declaratory relief filed by petitioners Juanito
Mariano, Jr., Ligaya S. Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo
Pascual, Teresita Abang, Valentina Pitalvero, Rufino Caldoza, Florante Alba, and
Perfecto Alba. Of the petitioners, only Mariano, Jr., is a resident of Makati. The others are
residents of Ibayo Ususan, Taguig, Metro Manila. Suing as taxpayers, they assail sections
2, 51, and 52 of Republic Act No. 7854 as unconstitutional.
ISSUE: Whether or not there is an actual case or controversy to challenge the
constitutionality of one of the questioned sections of R.A. No. 7854.
HELD: The requirements before a litigant can challenge the constitutionality of a law are
well delineated. They are: 1) there must be an actual case or controversy; (2) the question
of constitutionality must be raised by the proper party; (3) the constitutional question must
be raised at the earliest possible opportunity; and (4) the decision on the constitutional
question must be necessary to the determination of the case itself.
31
Petitioners have far from complied with these requirements. The petition is premised on
the occurrence of many contingent events, i.e., that Mayor Binay will run again in this
coming mayoralty elections; that he would be re-elected in said elections; and that he
would seek re-election for the same position in the 1998 elections. Considering that these
contingencies may or may not happen, petitioners merely pose a hypothetical issue which
has yet to ripen to an actual case or controversy. Petitioners who are residents of Taguig
(except Mariano) are not also the proper partiesto raise this abstract issue. Worse, they
hoist this futuristic issue in a petition for declaratory relief over which this Court has no
jurisdiction.
G.R. No. 146319. October 26, 2001.
BENJAMIN E. CAWALING, JR., petitioner, vs. THE COMMISSION ON ELECTIONS,
and Rep. FRANCIS JOSEPH G. ESCUDERO, respondents.
Constitutional Law; Statute; Every statute has in its favor the presumption of
constitutionality; Court may declare a law or portions thereof, unconstitutional, where a
petitioner has shown a clear and unequivocal breach of the Constitution not merely a
doubtful or argumentative one.—Every statute has in its favor the presumption of
constitutionality. This presumption is rooted in the doctrine of separation of powers which
enjoins upon the three coordinate departments of the Government a becoming courtesy
for each other’s acts. The theory is that every law, being the joint act of the Legislature
and the Executive, has passed careful scrutiny to ensure that it is in accord with the
fundamental law. This Court, however, may declare a law, or portions thereof,
unconstitutional, where a petitioner has shown a clear and unequivocal breach of the
Constitution, not merely a doubtful or argumentative one. In other words, the grounds for
nullity must be beyond reasonable doubt, for to doubt is to sustain, .
Administrative Law; Courts; The judiciary does not pass upon questions of wisdom, justice
or expediency of legislation; In the exercise of judi-cial power, Courts are allowed only to
settle actual controversies involving rights which are legally demandable and enforceable
and may not annul an act of the political departments simply because they feel it is unwise
or impractical.—Petitioner further submits that, in any case, there is no “compelling”
reason for merging the Municipalities of Bacon and Sorsogon in order to create the City
of Sorsogon considering that the Municipality of Sorsogon alone already qualifies to be
upgraded to a component city. This argument goes into the wisdom of R.A. No. 8806, a
matter which we are not competent to rule. In Angara v. Electoral Commission, this Court,
through Justice Jose P. Laurel, made it clear that “the judiciary does not pass upon
questions of wisdom, justice or expediency of legislation.” In the exercise of judicial power,
we are allowed only “to settle actual controversies involving rights which are legally
demandable and enforceable,” and “may not annul an act of the political departments
simply because we feel it is unwise or impractical.”
Facts: On August 16, 2000, former President Joseph E. Estrada signed into law R.A. No.
8806, an "Act Creating The City Of Sorsogon By Merging The Municipalities Of Bacon
And Sorsogon In The Province Of Sorsogon, And Appropriating Funds Therefor." The
COMELEC a plebiscite in the Municipalities of Bacon and Sorsogon and submitted the
matter for ratification proclaimed the creation of the City of Sorsogon as having been
ratified and approved by the majority of the votes cast in the plebiscite.
Invoking his right as a resident and taxpayer, the petitioner filed the present petition for
certiorari seeking the annulment of the plebiscite on the following grounds:
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A. The December 16, 2000 plebiscite was conducted beyond the required 120-day period
from the approval of R.A. 8806, in violation of Section 54 thereof; and
B. Respondent COMELEC failed to observe the legal requirement of twenty (20) day
extensive information campaign in the Municipalities of Bacon and Sorsogon before
conducting the plebiscite.
Petitioner instituted another petition declaring enjoin R.A. No. 8806 unconstitutional
,contending, in essence, that:
1. The creation of Sorsogon City by merging two municipalities violates Section 450(a) of
the Local Government Code of 1991 (in relation to Section 10, Article X of the
Constitution) which requires that only "a municipality or a cluster of barangays may be
converted into a component city"; and
2. R.A. No. 8806 contains two (2) subjects, namely, the (a) creation of the City of
Sorsogon and the (b) abolition of the Municipalities of Bacon and Sorsogon, thereby
violating the "one subject-one bill" rule prescribed by Section 26(1), Article VI of the
Constitution.
Petitioner contends that under Section 450(a) of the Code, a component city may be
created only by converting "a municipality or a cluster of barangays," not by merging two
municipalities, as what R.A. No. 8806 has done.
Issue: (1) WON a component city may be created by merging two municipalities.
(2) WON there exist a "compelling" reason for merging the Municipalities of Bacon and
Sorsogon in order to create the City of Sorsogon
(3) WON R.A. No. 8806 violatethe "one subject-one bill" rule enunciated in Section 26 (1),
Article VI of the Constitution
(4) WON R.A No 8806 is unconstitutional
Held: Yes. Petitioner's constricted reading of Section 450(a) of the Code is erroneous.
The phrase "A municipality or a cluster of barangays may be converted into a component
city" is not a criterion but simply one of the modes by which a city may be created. Section
10, Article X of the Constitution allows the merger of local government units to create a
province city, municipality or barangay in accordance with the criteria established by the
Code. the creation of an entirely new local government unit through a division or a merger
of existing local government units is recognized under the Constitution, provided that such
merger or division shall comply with the requirements prescribed by the Code.
32