Basco vs PAGCOR

On June 23, 2011

Municipal Corporation Local Autonomy imperium in imperio
On July 11, 1983, PAGCOR was created under PD 1869 to enable the Government
to regulate and centralize all games of chance authorized by existing franchise or
permitted by law. Basco and four others (all lawyers) assailed the validity of the law
creating PAGCOR on constitutional grounds among others particularly citing that
the PAGCORs charter is against the constitutional provision on local autonomy.
Basco et al contend that P.D. 1869 constitutes a waiver of the right of the City of
Manila to impose taxes and legal fees; that Section 13 par. (2) of P.D. 1869 which
exempts PAGCOR, as the franchise holder from paying any tax of any kind or
form, income or otherwise, as well as fees, charges or levies of whatever nature,
whether National or Local is violative of the local autonomy principle.
ISSUE: Whether or not PAGCORs charter is violative of the principle of local
autonomy.
HELD: NO. Section 5, Article 10 of the 1987 Constitution provides:
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.
A close reading of the above provision does not violate local autonomy (particularly
on taxing powers) as it was clearly stated that the taxing power of LGUs are subject
to such guidelines and limitation as Congress may provide.
Further, the City of Manila, being a mere Municipal corporation has no inherent
right to impose taxes. 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 which has the power to create and abolish municipal corporations due
to its general legislative powers. Congress, therefore, has the power of control
over 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.
Further still, 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. Otherwise, its operation might be burdened, impeded or
subjected to control by a mere Local government.
This doctrine emanates from the supremacy of the National Government over
local governments.
Province of Batangas vs. Romulo
Posted on November 20, 2012
GR 152774
May 27, 2004
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 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.
According to Art. II, Sec.25 of the Constitution, the State shall ensure the local
autonomy of local governments. Consistent with the principle of local autonomy,
the Constitution confines the Presidents power over the LGUs to one of general
supervision, which has been interpreted to exclude the power of control. Drilon v.
Lim distinguishes supervision from control: control lays down the rules in the doing
of an act the officer has the discretion to order his subordinate to do or redo the
act, or decide to do it himself; supervision merely sees to it that the rules are
followed but has no authority to set down the rules or the discretion to
modify/replace them.
The entire process involving the distribution & release of the LGSEF is
constitutionally impermissible. The LGSEF is part of the IRA or just share of the
LGUs in the national taxes. Sec.6, Art.X of the Constitution mandates that the
just share shall be automatically released to the LGUs. Since the release is
automatic, the LGUs arent required to perform any act to receive the just share
it shall be released to them without need of further action. To subject its
distribution & release to the vagaries of the implementing rules & regulations as
sanctioned by the assailed provisos in the GAAs of 1999-2001 and the OCD
Resolutions would violate this constitutional mandate.
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%
of the collections of the 3rd preceding fiscal year. The exception does not apply in
this case.
The Oversight Committees authority is limited to the implementation of the LGC of
1991 not to supplant or subvert the same, and neither can it exercise control over the
IRA of the LGUs.
Congress may amend any of the provisions of the LGC but only through a separate
law and not through appropriations laws or GAAs. Congress cannot include in a
general appropriations bill matters that should be more properly enacted in a
separate legislation.
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. Increasing/decreasing the IRA of LGUs
fixed in the LGC of 1991 are matters of general & substantive law. To permit the
Congress to undertake these amendments through the GAAs would unduly infringe
the fiscal autonomy of the LGUs.
The value of LGUs as institutions of democracy is measured by the degree of
autonomy they enjoy. Our national officials should not only comply with the
constitutional provisions in local autonomy but should also appreciate the spirit and
liberty upon which these provisions are based.
Miranda vs Aguirre
Posted by kaye lee on 12:46 PM
G.R. No. 133064 September 16 1999

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

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

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

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

That when an amendment of the law involves creation, merger, division, abolition or
substantial alteration of boundaries of local government units, a plebiscite in the
political units directly affected is mandatory.
Petitioners are directly affected in the imple-mentation of RA No. 8528. Miranda
was the mayor of Santiago City, Afiado was the President of the Sangguniang Liga,
together with 3 other petitioners were all residents and voters in the City of
Santiago. It is their right to be heard in the conversion of their city through a
plebiscite to be conducted by the COMELEC. Thus, denial of their right in RA No.
8528 gives them proper standing to strike down the law as unconstitutional.

Sec. 1 of Art. VIII of the Constitution states that: the judicial power shall be vested
in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instru-mentality of the
Government
Limbona vs Mangelin
Posted on October 19, 2012

G.R. No. 80391
February 28, 1989
Facts:
Limbona was elected Speaker of the Regional Assembly of Central Mindanao. On
October 21, 1987, Congressman Matalam invited Limbona in a
consultation/dialogue with local government officials. Limbona 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, the Assembly held a meeting on November 2, 1987, and unseated
Limbona from his position. Limbona prays for the session to be declared null and
void and that he still be declared Speaker of the Regional Assembly.
Pending the case, the SC also received a resolution from the Assembly expelling
Limbonas membership.

Issues:
What is the extent of self-government given to the autonomous regions of Region
XII?
Held:
Yes.
Autonomy is either decentralization of administration or decentralization of power.
Decentralization of Administration is the delegation by the central government of
administrative powers to political subdivisions in order to broaden the base of
government power and, in the process, to makelocal governments moreresponsive
and accountable and ensure their development as self-reliant communities and
make them more effective partners in the pursuit of national development and
progress.
It also relieves the central government of the burden of managing local affairs and
enables it to concentrate on national concerns. An autonomous government under
this category is under the supervision of the national government through the
President. The President exercises supervision but has no control over them and
does so only to ensure local affairs are administered according to law.
Decentralization of Power, on the other hand, involves the abdication of power in
favor of autonomous local governments. The autonomous government is free to
manage its affairs with minimum intervention from central authorities. An
autonomous government enjoying autonomy under this category is only subject to
the organic act creating it and accepted principles on the effects & limits of
autonomy.
PD 1618 mandates that the President shall have the power of general supervision
and control over autonomous regions. Hence, courts of law can assume jurisdiction.
The courts can validly review the removal of Limbona as Speaker.
Where a law is capable of 2 interpretations, one in favor of centralized power in
Malacaang and the other beneficial to local autonomy, the scales must be weighed
in favor of autonomy.
Under Sec. 31 of Region XII Sanggunian Rules, sessions shall not be suspended or
adjourned except by direction of the Sangguniang Pampook.
However, the November 2 and 5, 1987 sessions are declared invalid since at the time
Limbona called the recess, it was not a settled matter whether or not he could do
so. Secondly, the invitation by the House of Representatives Committee on Muslim
Affairs provides a plausible reason for the intermission sought. Also, assuming that
a valid recess could not be called, it does not appear that respondents called his
attention to his mistake. What appears is they opened the sessions themselves behind
his back in an apparent act of mutiny. Under these circumstances, equity is on his
side. The recess was called on the ground of good faith.
Alvarez vs Guingona
On June 23, 2011
Municipal Corporation LGU Requirement Income Inclusion of IRAs
In April 1993, HB 8817 (An Act Converting the Municipality of Santiago into an
Independent Component City to be known as the City of Santiago) was passed in the
HOR.
In May 1993, a Senate bill (SB 1243) of similar title and content with that of HB
8817 was introduced in the Senate.
In January 1994, the HB 8817 was transmitted to the Senate. In February 1994, the
Senate conducted a public hearing on SB 1243. In March 1994, the Senate
Committee on Local Government rolled out its recommendation for approval of HB
8817 as it was totally the same with SB 1243. Eventually, HB 8817 became a law
(RA 7720).
Now Alvarez et al are assailing the constitutionality of the said law on the ground
that the bill creating the law did not originate from the lower house and that the
Santiago was not able to comply with the income of at least P20M per annum in
order for it to be a city. That in the computation of the reported average income of
P20,974,581.97 included the IRA which should not be.
ISSUES:
1. Whether or not RA 7720 is invalid for not being originally from the HOR.
2. Whether or not the IRA should be included in the computation of an LGUs
income.
HELD: 1. NO. The house bill was filed first before the senate bill as the record
shows. Further, the Senate held in abeyance any hearing on the said SB while the
HB was on its 1
st
, 2
nd
and 3
rd
reading in the HOR. The Senate only conducted its 1
st

hearing on the said SB one month after the HB was transmitted to the Senate (in
anticipation of the said HB as well).
2. YES. The IRA should be added in the computation of an LGUs average annual
income as was done in the case at bar. The IRAs are items of income because they
form part of the gross accretion of the funds of the local government unit. The IRAs
regularly and automatically accrue to the local treasury without need of any further
action on the part of the local government unit. They thus constitute income which
the local government can invariably rely upon as the source of much needed funds.
To reiterate, IRAs are a regular, recurring item of income; nil is there a basis, too, to
classify the same as a special fund or transfer, since IRAs have a technical definition
and meaning all its own as used in the Local Government Code that unequivocally
makes it distinct from special funds or transfers referred to when the Code speaks of
funding support from the national government, its instrumentalities and
government-owned-or-controlled corporations.
Tan vs. COMELEC
by Maki
TAN vs. COMELEC
G.R. No. 73155 July 11, 1986
Governing law: Art XI Sec. 3 of Constitution in relation to Sec. 197 of Local
Government Code
Facts:
This case was prompted by the enactment of Batas Pambansa Blg. 885, An Act
Creating a New Province in the Island of Negros to be known as the Province of
Negros del Norte, effective Dec. 3, 1985. (Cities of Silay, Cadiz and San Carlos and
the municipalities of Calatrava, Taboso, Escalante, Sagay, Manapla, Victorias, E.R.
Magalona, and Salvador Benedicto proposed to belong to the new province).
Pursuant to and in implementation of this law, the COMELEC scheduled a
plebiscite for January 3, 1986. Petitioners opposed, filing a case for Prohibition and
contending that the B.P. 885 is unconstitutional and not in complete accord with the
Local Government Code because:
The voters of the parent province of Negros Occidental, other than those living
within the territory of the new province of Negros del Norte, were not included in
the plebiscite.
The area which would comprise the new province of Negros del Norte would only
be about 2,856.56 sq. km., which is lesser than the minimum area prescribed by the
governing statute, Sec. 197 of LGC.
Issue:
WON the plebiscite was legal and complied with the constitutional requisites of the
Consititution, which states that Sec. 3. No province, city, municipality or barrio
may be created, divided, merged, abolished, or its boundary substantially altered
except in accordance with the criteria established in the Local Government Code,
and subject to the approval by a majority of the votes in a plebiscite in the unit or
units affected? NO.
Held:
Whenever a province is created, divided or merged and there is substantial alteration
of the boundaries, the approval of a majority of votes in the plebiscite in the unit or
units affected must first be obtained. The creation of the proposed new province of
Negros del Norte will necessarily result in the division and alteration of the existing
boundaries of Negros Occidental (parent province).
Plain and simple logic will demonstrate that two political units would be affected.
The first would be the parent province of Negros Occidental because its boundaries
would be substantially altered. The other affected entity would be composed of
those in the area subtracted from the mother province to constitute the proposed
province of Negros del Norte.
Paredes vs. Executive (G.R. No. 55628) should not be taken as a doctrinal or
compelling precedent. Rather, the dissenting view of Justice Abad Santos is
applicable, to wit:
when the Constitution speaks of the unit or units affected it means all of the
people of the municipality if the municipality is to be divided such as in the case at
bar or of the people of two or more municipalities if there be a merger.
The remaining portion of the parent province is as much an area affected. The
substantial alteration of the boundaries of the parent province, not to mention the
adverse economic effects it might suffer, eloquently argue the points raised by the
petitioners.
SC pronounced that the plebscite has no legal effect for being a patent nullity.