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ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO SANCHEZ, petitioners, vs.

PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent. A TV ad proudly announces: "The new PAGCOR responding through responsible gaming." But the petitioners think otherwise, that is why, they filed the instant petition 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 A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law. It waived the Manila City government's right to impose taxes and license fees, which is recognized by law; B. For the same reason stated in the immediately preceding paragraph, the law has intruded into the local government's right to impose local taxes and license fees. This, in contravention of the constitutionally enshrined principle of local autonomy; C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR conducted gambling, while most other forms of gambling are outlawed, together with prostitution, drug trafficking and other vices; D. It violates the avowed trend of the Cory government away from monopolistic and crony economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo) In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared national policy of the "new restored democracy" and the people's will as expressed in the 1987 Constitution. The decree is said to have a "gambling objective" and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended Petition; p. 21, Rollo). The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco being also the Chairman of the Committee on Laws of the City Council of Manila), can question and seek the annulment of PD 1869 on the alleged grounds mentioned above. The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines." Its operation was originally conducted in the well known floating casino "Philippine Tourist." The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective. Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law, under the following declared policy Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to centralize and integrate all games of chance not heretofore authorized by existing franchises or permitted by law in order to attain the following objectives: (a) To centralize and integrate the right and authority to operate and conduct games of chance into one corporate entity to be controlled, administered and supervised by the Government. (b) To establish and operate clubs and casinos, for amusement and recreation, including sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement and recreation including games of chance, which may be allowed by law within the territorial jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to fund infrastructure and socio-civic projects, such as flood control programs, beautification, sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs, Population Control and such other essential public services; (2) create recreation and integrated facilities which will expand and improve the country's existing tourist attractions; and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are normally prevalent on the conduct and operation of gambling clubs and casinos without direct government involvement. (Section 1, P.D. 1869) To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent therewith, are accordingly repealed, amended or modified. It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and directly remitted to the National Government a total of P2.5 Billion in form of franchise tax, government's income share, the President's Social Fund and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and charitable projects on its own or in cooperation with various governmental agencies, and other private associations and organizations. In its 3 1/2 years of operation under the present administration, PAGCOR remitted to the government a total of P6.2 Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9) casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families. But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null and void" for being "contrary to morals, public policy and public order," monopolistic and tends toward "crony economy", and is violative of the equal protection clause and local autonomy as well as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution. This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most deliberate consideration by the Court, involving as it does the exercise of what has been described as "the highest and most delicate function which belongs to the judicial department of the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323). As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the government We need not be reminded of the time-honored principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of its constitutionality. This is not to say that We approach Our task with diffidence or timidity. Where it is clear that the legislature or the executive for that matter, has over-stepped the limits of its authority under the constitution, We should not hesitate to wield the axe and let it fall heavily, as fall it must, on the offending statute (Lozano v. Martinez, supra). In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar underscored the . . . thoroughly established principle which must be followed in all cases where questions of constitutionality as obtain in the instant cases are involved. All presumptions are indulged in favor of constitutionality; one who attacks a statute alleging unconstitutionality must prove its invalidity beyond a reasonable doubt; that a law may work hardship does not render it unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will be upheld and the challenger must negate all possible basis; that the courts are not concerned with the wisdom, justice,

policy or expediency of a statute and that a liberal interpretation of the constitution in favor of the constitutionality of legislation should be adopted. (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521, 540) Of course, there is first, the procedural issue. The respondents are questioning the legal personality of petitioners to file the instant petition. Considering however the importance to the public of the case at bar, and in keeping with the Court's duty, under the 1987 Constitution, to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Court has brushed aside technicalities of procedure and has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371) With particular regard to the requirement of proper party as applied in the cases before us, We hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. And even if, strictly speaking they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised. In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were involving only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must technicalities of procedure." We have since then applied the exception in many other cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343). Having disposed of the procedural issue, We will now discuss the substantive issues raised. Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of gambling does not mean that the Government cannot regulate it in the exercise of its police power. The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace. (Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386). Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra) It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital functions of governance. Marshall, to whom the expression has been credited, refers to it succinctly as the plenary power of the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The police power of the State is a power co-extensive with self-protection and is most aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to meet the agencies of the winds of change. What was the reason behind the enactment of P.D. 1869? P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to society in general. It is a reliable source of much needed revenue for the cash strapped Government. It provided funds for social impact projects and subjected gambling to "close scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869). With the creation of PAGCOR and the direct intervention of the Government, the evil practices and corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896. Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local autonomy. They must be referring to 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." (2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income or otherwise as well as fees, charges or levies of whatever nature, whether National or Local, shall be assessed and collected under this franchise from the Corporation; nor shall any form or tax or charge attach in any way to the earnings of the Corporation, except a franchise tax of five (5%) percent of the gross revenues or earnings derived by the Corporation from its operations under this franchise. Such tax shall be due and payable quarterly to the National Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description, levied, established or collected by any municipal, provincial or national government authority (Section 13 [2]). Their contention stated hereinabove is without merit for the following reasons: (a) 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). (b) 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, 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. (c) 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, thus:

Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities and other local governments to issue license, permit or other form of franchise to operate, maintain and establish horse and dog race tracks, jai-alai and other forms of gambling is hereby revoked. Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog race tracks, jai-alai and other forms of gambling shall be issued by the national government upon proper application and verification of the qualification of the applicant . . . 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. (d) 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. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it also exercises regulatory powers thus: Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the affiliated entities, and shall exercise all the powers, authority and the responsibilities vested in the Securities and Exchange Commission over such affiliating entities mentioned under the preceding section, including, but not limited to amendments of Articles of Incorporation and By-Laws, changes in corporate term, structure, capitalization and other matters concerning the operation of the affiliated entities, the provisions of the Corporation Code of the Philippines to the contrary notwithstanding, except only with respect to original incorporation. 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. Marland, 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, emphasis 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. (e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides: Sec. 5. 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. (emphasis supplied) 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. Besides, 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. (emphasis supplied) As to what state powers should be "decentralized" and what may be delegated to local government units remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539). What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State concern and hence, it is the sole prerogative of the State to retain it or delegate it to local governments. As gambling is usually an offense against the State, legislative grant or express charter power is generally necessary to empower the local corporation to deal with the subject. . . . In the absence of express grant of power to enact, ordinance provisions on this subject which are inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied) 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 14th 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. Arizona, 249 US 2651). Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away from monopolies and crony economy and toward free enterprise and privatization" suffice it to state that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the government's policies then it is for the Executive Department to recommend to Congress its repeal or amendment. The judiciary does not settle policy issues. The Court can only declare what the law is and not what the law should be. Under our system of government, policy issues are within the domain of the political branches of government and of the people themselves as the repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256). On the issue of "monopoly," however, the Constitution provides that: Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National Economy and Patrimony) It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the Constitution. The state must still decide whether public interest demands that monopolies be regulated or prohibited. Again, this is a matter of policy for the Legislature to decide. On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements of principles and, policies. As such, they are basically not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles. In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through the courts. They were rather directives addressed to the executive and the legislature. If the executive and the legislature failed to heed the directives of the articles the available remedy was not judicial or political. The electorate could express their displeasure with the failure of the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p. 2) 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 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. As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521 Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in its favor the presumption of validity and constitutionality which petitioners Valmonte and the KMU have not overturned. Petitioners have not undertaken to identify the provisions in the Constitution which they claim to have been violated by that statute. This Court, however, is not compelled to speculate and to imagine how the assailed legislation may possibly offend some provision of the Constitution. The Court notes, further, in this respect that petitioners have in the main put in question the wisdom, justice and expediency of the establishment of the OPSF, issues which are not properly addressed to this Court and which this Court may not constitutionally pass upon. Those issues should be addressed rather to the political departments of government: the President and the Congress. Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when the gambling resorted to is excessive. This excessiveness necessarily depends not only on the financial resources of the gambler and his family but also on his mental, social, and spiritual outlook on life. However, the mere fact that some persons may have lost their material fortunes, mental control, physical health, or even their lives does not necessarily mean that the same are directly attributable to gambling. Gambling may have been the antecedent,but certainly not necessarily the cause. For the same consequences could have been preceded by an overdose of food, drink, exercise, work, and even sex. WHEREFORE, the petition is DISMISSED for lack of merit. METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. BEL-AIR VILLAGE ASSOCIATION, INC., respondent. DECISION PUNO, J.: Not infrequently, the government is tempted to take legal shortcuts to solve urgent problems of the people. But even when government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private subdivision. While we hold that the general welfare should be promoted, we stress that it should not be achieved at the expense of the rule of law. h Y Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members are homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a road inside Bel-Air Village. On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995 requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. The notice reads: Court "SUBJECT: NOTICE of the Opening of Neptune Street to Traffic "Dear President Lindo,

"Please be informed that pursuant to the mandate of the MMDA law or Republic Act No. 7924 which requires the Authority to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons, Neptune Street shall be opened to vehicular traffic effective January 2, 1996. "In view whereof, the undersigned requests you to voluntarily open the points of entry and exit on said street. "Thank you for your cooperation and whatever assistance that may be extended by your association to the MMDA personnel who will be directing traffic in the area. "Finally, we are furnishing you with a copy of the handwritten instruction of the President on the matter. "Very truly yours, PROSPERO I. ORETA Chairman"
[1]

On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished. Sppedsc On January 2, 1996, respondent instituted against petitioner before the Regional Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for injunction. Respondent prayed for the issuance of a temporary restraining order and preliminary injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall. The trial court issued a temporary restraining order the following day. On January 23, 1996, after due hearing, the trial court denied issuance of a preliminary injunction. Respondent questioned the denial before the [3] Court of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular inspection of Neptune Street and on February 13, 1996, it [4] issued a writ of preliminary injunction enjoining the implementation of the MMDAs proposed action. On January 28, 1997, the appellate court rendered a Decision on the merits of the case finding that the MMDA has no authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance. The decision disposed of as follows:Jurissc "WHEREFORE, the Petition is GRANTED; the challenged Order dated January 23, 1995, in Civil Case No. 96-001, is SET ASIDE and the Writ of Preliminary Injunction issued on February 13, 1996 is hereby made permanent. "For want of sustainable substantiation, the Motion to Cite Roberto L. del Rosario in contempt is denied. "No pronouncement as to costs. "SO ORDERED."
[6] [5] [2]

The Motion for Reconsideration of the decision was denied on September 28, 1998. Hence, this recourse. Jksm Petitioner MMDA raises the following questions: "I HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE TO OPEN NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND POLICE POWERS? II IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA MAY ORDER THE OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC? III IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING OR ASSAILING THE AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET? Jlexj V WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS HELD BETWEEN MMDA AND THE AFFECTED BEL-AIR RESIDENTS AND BAVA OFFICERS? V HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?"
[7]

Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air Village, a private residential subdivision in the heart of the financial and commercial district of Makati City. It runs parallel to Kalayaan Avenue, a national road open to the general public. Dividing the two (2) streets is a concrete perimeter wall approximately fifteen (15) feet high. The western end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a subdivision road open to public vehicular traffic, while its eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street are guarded by iron gates. Edp mis Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state endowed with police power in the delivery of basic services in Metro Manila. One of these basic services is traffic management which involves the regulation of the use of thoroughfares to insure the safety, convenience and welfare of the general public. It is alleged that the police power of MMDA was affirmed by [8] this Court in the consolidated cases of Sangalang v. Intermediate Appellate Court. From the premise that it has police power, it is now urged that [9] there is no need for the City of Makati to enact an ordinance opening Neptune street to the public. 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 wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the [10] 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 [11] and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general welfare. 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 [13] possessing legislative power. The National Legislature, however, may delegate this power to the President and administrative boards as well as
[12]

the lawmaking bodies of municipal corporations or local government units. [15] as are conferred on them by the national lawmaking body.

[14]

Once delegated, the agents can exercise only such legislative powers
[16]

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 [17] Local Government Code of 1991 defines a local government unit as a "body politic and corporate" -- one endowed with powers as a political [18] subdivision of the National Government and as a corporate entity representing the inhabitants of its territory. Local government units are the [19] [20] provinces, cities, municipalities and barangays. They are also the territorial and political subdivisions of the state. 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, viz: Chief "Sec. 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their [21] inhabitants." 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 thesangguniang 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 [22] corporate powers of the [province, city municipality] provided under the Code x x x." The same Code gives the sangguniang barangaythe power to "enact ordinances as may be necessary to discharge the responsibilities conferred upon it by law or ordinance and to promote the general [23] welfare of the inhabitants thereon." Metropolitan or Metro Manila is a body composed of several local government units - i.e., twelve (12) cities and five (5) municipalities, namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and the [24] municipalities of Malabon, , Navotas, , Pateros, San Juan and Taguig. With the passage of Republic Act (R. A.) No. 7924 in 1995, Metropolitan Manila was declared as a "special development and administrative region" and the Administration of "metro-wide" basic services affecting the [25] region placed under "a development authority" referred to as the MMDA. "Metro-wide services" are those "services which have metro-wide impact and transcend local political boundaries or entail huge expenditures such [26] that it would not be viable for said services to be provided by the individual local government units comprising Metro Manila." There are seven (7) basic metro-wide services and the scope of these services cover the following: (1) development planning; (2) transport and traffic management; (3) solid waste disposal and management; (4) flood control and sewerage management; (5) urban renewal, zoning and land use planning, and shelter services; (6) health and sanitation, urban protection and pollution control; and (7) public safety. The basic service of transport and traffic management includes the following: Lexjuris "(b) Transport and traffic management which include the formulation, coordination, and monitoring of policies, standards, programs and projects to rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares, and promotion of safe and convenient movement of persons and goods; provision for the mass transport system and the institution of a system to regulate road users; administration and implementation of all traffic enforcement operations, traffic engineering services and traffic education programs, including [27] the institution of a single ticketing system in Metropolitan Manila;" In the delivery of the seven (7) basic services, the MMDA has the following powers and functions: Esm "Sec. 5. Functions and powers of the Metro Manila Development Authority.The MMDA shall: (a) Formulate, coordinate and regulate the implementation of medium and long-term plans and programs for the delivery of metro-wide services, land use and physical development within Metropolitan Manila, consistent with national development objectives and priorities; (b) Prepare, coordinate and regulate the implementation of medium-term investment programs for metro-wide services which shall indicate sources and uses of funds for priority programs and projects, and which shall include the packaging of projects and presentation to funding institutions; Esmsc (c) Undertake and manage on its own metro-wide programs and projects for the delivery of specific services under its jurisdiction, subject to the approval of the Council. For this purpose, MMDA can create appropriate project management offices; (d) Coordinate and monitor the implementation of such plans, programs and projects in Metro Manila; identify bottlenecks and adopt solutions to problems of implementation; (e) The MMDA shall set the policies concerning traffic in Metro Manila, and shall coordinate and regulate the implementation of all programs and projects concerning traffic management, specifically pertaining to enforcement, engineering and education. Upon request, it shall be extended assistance and cooperation, including but not limited to, assignment of personnel, by all other government agencies and offices concerned; (f) Install and administer a single ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether moving or non-moving in nature, and confiscate and suspend or revoke drivers licenses in the enforcement of such traffic laws and regulations, the provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this purpose, the Authority shall impose all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local government units, duly licensed security guards, or members of non-governmental organizations to whom may be delegated certain authority, subject to such conditions and requirements as the Authority may impose; and (g) Perform other related functions required to achieve the objectives of the MMDA, including the undertaking of delivery of basic services to the local government units, when deemed necessary subject to prior coordination with and consent of the local government unit concerned." Jurismis The implementation of the MMDAs plans, programs and projects is undertaken by the local government units, national government agencies, accredited peoples organizations, non-governmental organizations, and the private sector as well as by the MMDA itself. For this purpose, the MMDA has the power to enter into contracts, memoranda of agreement and other cooperative arrangements with these bodies for the delivery of [28] the required services within Metro Manila.

The governing board of the MMDA is the Metro Manila Council. The Council is composed of the mayors of the component 12 cities and 5 [29] municipalities, the president of the Metro Manila Vice-Mayors League and the president of the Metro Manila Councilors League. The Council is headed by a Chairman who is appointed by the President and vested with the rank of cabinet member. As the policy-making body of the MMDA, the Metro Manila Council approves metro-wide plans, programs and projects, and issues the necessary rules and regulations for the implementation of said plans; it approves the annual budget of the MMDA and promulgates the rules and regulations for the delivery of basic services, collection of service and regulatory fees, fines and penalties. These functions are particularly enumerated as follows: LEX "Sec. 6. Functions of the Metro Manila Council. (a) The Council shall be the policy-making body of the MMDA; (b) It shall approve metro-wide plans, programs and projects and issue rules and regulations deemed necessary by the MMDA to carry out the purposes of this Act; (c) It may increase the rate of allowances and per diems of the members of the Council to be effective during the term of the succeeding Council. It shall fix the compensation of the officers and personnel of the MMDA, and approve the annual budget thereof for submission to the Department of Budget and Management (DBM); (d) It shall promulgate rules and regulations and set policies and standards for metro-wide application governing the delivery of basic services, prescribe and collect service and regulatory fees, and impose and collect fines and penalties." Jj sc Clearly, the scope of the MMDAs function is limited to the delivery of the seven (7) basic services. One of these is transpo rt and traffic management which includes the formulation and monitoring of policies, standards and projects to rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares and promotion of the safe movement of persons and goods. It also covers the mass transport system and the institution of a system of road regulation, the administration of all traffic enforcement operations, traffic engineering services and traffic education programs, including the institution of a single ticketing system in Metro Manila for traffic violations. Under this service, the MMDA is expressly authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation of all traffic management programs." In addition, the MMDA may "install and administer a single ticketing system," fix, impose and collect fines and penalties for all traffic violations. Ca-lrsc 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 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 [30] charter itself, a "development authority." It is an agency created for the purpose of laying down policies and coordinating with the various national government agencies, peoples organizations, non-governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan area. All its functions are administrative in nature and these are actually summed up in the charter itself, viz: "Sec. 2. Creation of the Metropolitan Manila Development Authority. -- x x x. The MMDA shall perform planning, monitoring and coordinative functions, and in the process exercise regulatory and supervisory authority over the delivery of metro-wide services within Metro Manila, without diminution of the autonomy of the local government units concerning purely [31] local matters." Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate Court where we upheld a zoning ordinance issued by the Metro Manila Commission (MMC), the predecessor of the MMDA, as an exercise of police power. The first Sangalang decision was on the merits of [33] the petition, while the second decision denied reconsideration of the first case and in addition discussed the case of Yabut v. Court of [34] Appeals. Sangalang v. IAC involved five (5) consolidated petitions filed by respondent BAVA and three residents of Bel-Air Village against other residents of the Village and the Ayala Corporation, formerly the Makati Development Corporation, as the developer of the subdivision. The petitioners sought to enforce certain restrictive easements in the deeds of sale over their respective lots in the subdivision. These were the prohibition on the setting up of commercial and advertising signs on the lots, and the condition that the lots be used only for residential purposes. Petitioners alleged that respondents, who were residents along Jupiter Street of the subdivision, converted their residences into commercial establishments in violation of the "deed restrictions," and that respondent Ayala Corporation ushered in the full commercialization" of Jupiter Street by tearing down the [35] perimeter wall that separated the commercial from the residential section of the village. The petitions were dismissed based on Ordinance No. 81 of the Municipal Council of Makati and Ordinance No. 81-01 of the Metro Manila Commission (MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential Zone, with its boundary in the south extending to the center line of Jupiter Street. The Municipal Ordinance was adopted by the MMC under the Comprehensive Zoning Ordinance for the National Capital Region and promulgated as MMC Ordinance No. 81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the block [36] adjacent thereto was classified as a High Intensity Commercial Zone. We ruled that since both Ordinances recognized Jupiter Street as the boundary between Bel-Air Village and the commercial district, Jupiter Street was not for the exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said street was constructed not to separate the residential from the commercial blocks but simply for security reasons, hence, in tearing down said wall, Ayala Corporation did not violate the "deed restrictions" in the deeds of sale. Scc-alr We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate exercise of police power. The power of the MMC and the Makati Municipal Council to enact zoning ordinances for the general welfare prevailed over the "deed restrictions". In the second Sangalang/Yabut decision, we held that the opening of Jupiter Street was warranted by the demands of the common good in terms of "traffic decongestion and public convenience." Jupiter was opened by the Municipal Mayor to alleviate traffic congestion along the public streets [38] adjacent to the Village. The same reason was given for the opening to public vehicular traffic of Orbit Street, a road inside the same village. The destruction of the gate in Orbit Street was also made under the police power of the municipal government. The gate, like the perimeter wall along Jupiter, was a public nuisance because it hindered and impaired the use of property, hence, its summary abatement by the mayor was proper and [39] legal. Contrary to petitioners claim, the two Sangalang cases do not apply to the case at bar. Firstly, both involved zoning ordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for the proposed opening of Neptune Street is contained in the notice of December 22, 1995 sent by petitioner to respondent BAVA, through its president. The notice does not cite any ordinance or law, either by the Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply
[37] [32]

relied on its authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons." Rationalizing the use of roads and thoroughfares is one of the acts that fall within the scope of transport and traffic management. By no stretch of the imagination, however, can this be interpreted as an express or implied grant of ordinance-making power, much less police power. Misjuris Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed greater powers which were not bestowed on the present MMDA. Jjlex Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No. 824. It comprised the Greater Manila Area composed of the contiguous four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon, Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela in the province of [40] Bulacan. Metropolitan Manila was created as a response to the finding that the rapid growth of population and the increase of social and economic requirements in these areas demand a call for simultaneous and unified development; that the public services rendered by the respective local governments could be administered more efficiently and economically if integrated under a system of central planning; and this coordination, "especially in the maintenance of peace and order and the eradication of social and economic ills that fanned the flames of rebellion [41] and discontent [were] part of reform measures under Martial Law essential to the safety and security of the State." Metropolitan Manila was established as a "public corporation" with the following powers: Calrs-pped "Section 1. Creation of the Metropolitan Manila.There is hereby created a public corporation, to be known as the Metropolitan Manila, vested with powers and attributes of a corporation including the power to make contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of property and such other powers as are necessary to carry out its purposes . The Corporation shall be administered by a [42] Commission created under this Decree." The administration of Metropolitan Manila was placed under the Metro Manila Commission (MMC) vested with the following powers: "Sec. 4. Powers and Functions of the Commission. - The Commission shall have the following powers and functions: 1. To act as a central government to establish and administer programs and provide services common to the area; 2. To levy and collect taxes and special assessments, borrow and expend money and issue bonds, revenue certificates, and other obligations of indebtedness. Existing tax measures should, however, continue to be operative until otherwise modified or repealed by the Commission; 3. To charge and collect fees for the use of public service facilities; 4. To appropriate money for the operation of the metropolitan government and review appropriations for the city and municipal units within its jurisdiction with authority to disapprove the same if found to be not in accordance with the established policies of the Commission, without prejudice to any contractual obligation of the local government units involved existing at the time of approval of this Decree; 5. To review, amend, revise or repeal all ordinances, resolutions and acts of cities and municipalities within Metropolitan Manila; 6. To enact or approve ordinances, resolutions and to fix penalties for any violation thereof which shall not exceed a fine of P10,000.00 or imprisonment of six years or both such fine and imprisonment for a single offense; 7. To perform general administrative, executive and policy-making functions; 8. To establish a fire control operation center, which shall direct the fire services of the city and municipal governments in the metropolitan area; 9. To establish a garbage disposal operation center, which shall direct garbage collection and disposal in the metropolitan area; 10. To establish and operate a transport and traffic center, which shall direct traffic activities; Jjjuris 11. To coordinate and monitor governmental and private activities pertaining to essential services such as transportation, flood control and drainage, water supply and sewerage, social, health and environmental services, housing, park development, and others; 12. To insure and monitor the undertaking of a comprehensive social, economic and physical planning and development of the area; 13. To study the feasibility of increasing barangay participation in the affairs of their respective local governments and to propose to the President of the Philippines definite programs and policies for implementation; 14. To submit within thirty (30) days after the close of each fiscal year an annual report to the President of the Philippines and to submit a periodic report whenever deemed necessary; and 15. To perform such other tasks as may be assigned or directed by the President of the Philippines." Sc jj The MMC was the "central government" of Metro Manila for the purpose of establishing and administering programs providing services common to the area. As a "central government" it had the power to levy and collect taxes and special assessments, the power to charge and collect fees; the power to appropriate money for its operation, and at the same time, review appropriations for the city and municipal units within its jurisdiction. It was bestowed the power to enact or approve ordinances, resolutions and fix penalties for violation of such ordinances and resolutions. It also had the power to review, amend, revise or repeal all ordinances, resolutions and acts of any of the four (4) cities and thirteen (13) municipalities comprising Metro Manila. P. D. No. 824 further provided: "Sec. 9. Until otherwise provided, the governments of the four cities and thirteen municipalities in the Metropolitan Manila shall continue to exist in their present form except as may be inconsistent with this Decree. The members of the existing city and municipal councils in Metropolitan Manila shall, upon promulgation of this Decree, and until December 31, 1975, become members of the Sangguniang Bayan which is hereby created for every city and municipality of Metropolitan Manila. In addition, the Sangguniang Bayan shall be composed of as many barangay captains as may be determined and chosen by the Commission, and such number of representatives from other sectors of the society as may be appointed by the President upon recommendation of the Commission. x x x. The Sangguniang Bayan may recommend to the Commission ordinances, resolutions or such measures as it may adopt; Provided, that no such ordinance, resolution or measure shall become effective, until after its approval by the Commission; and Provided further, that the power to

impose taxes and other levies, the power to appropriate money and the power to pass ordinances or resolutions with penal sanctions shall be vested exclusively in the Commission." The creation of the MMC also carried with it the creation of the Sangguniang Bayan. This was composed of the members of the component city and municipal councils, barangay captains chosen by the MMC and sectoral representatives appointed by the President. The Sangguniang Bayan had the power to recommend to the MMC the adoption of ordinances, resolutions or measures. It was the MMC itself, however, that possessed legislative powers. All ordinances, resolutions and measures recommended by theSangguniang Bayan were subject to the MMCs approval. Moreover, the power to impose taxes and other levies, the power to appropriate money, and the power to pass ordinances or resolutions with penal sanctions were vested exclusively in the MMC. Sce-dp Thus, Metropolitan Manila had a "central government," i.e., the MMC which fully possessed legislative and police powers. Whatever legislative powers the component cities and municipalities had were all subject to review and approval by the MMC. After President Corazon Aquino assumed power, there was a clamor to restore the autonomy of the local government units in Metro Manila. Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided: Sj cj "Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as herein provided. Section 2. The territorial and political subdivisions shall enjoy local autonomy." The Constitution, however, recognized the necessity of creating metropolitan regions not only in the existing National Capital Region but also in [43] potential equivalents in the Visayas and Mindanao. Section 11 of the same Article X thus provided: "Section 11. The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy and shall be entitled to their own local executives and legislative assemblies. The jurisdiction of the metropolitan authority that will thereby be created shall be limited to basic services requiring coordination." The Constitution itself expressly provides that Congress may, by law, create "special metropolitan political subdivisions" which shall be subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected; the jurisdiction of this subdivision shall be limited to basic services requiring coordination; and the cities and municipalities comprising this subdivision shall retain their basic autonomy and their own [44] local executive and legislative assemblies. Pending enactment of this law, the Transitory Provisions of the Constitution gave the President of the Philippines the power to constitute the Metropolitan Authority, viz: "Section 8. Until otherwise provided by Congress, the President may constitute the Metropolitan Authority to be composed of the heads of all local [45] government units comprising the Metropolitan Manila area." In 1990, President Aquino issued Executive Order (E. O.) No. 392 and constituted the Metropolitan Manila Authority (MMA). The powers and [46] functions of the MMC were devolved to the MMA. It ought to be stressed, however, that not all powers and functions of the MMC were passed to the MMA. The MMAs power was limited to the "delivery of basic urban services requiring coordination in Metropolita n [47] Manila." The MMAs governing body, the Metropolitan Manila Council, although composed of the mayors of the component cities and municipalities, was merely given the power of: (1) formulation of policies on the delivery of basic services requiring coordination and consolidation; and (2) promulgation of resolutions and other issuances, approval of a code of basic services and the exercise of its rule-making [48] power. Under the 1987 Constitution, the local government units became primarily responsible for the governance of their respective political subdivisions. The MMAs jurisdiction was limited to addressing common problems involving basic services that transcended local boundaries. It did not have legislative power. Its power was merely to provide the local government units technical assistance in the preparation of local development plans. Any semblance of legislative power it had was confined to a "review [of] legislation proposed by the local legislative assemblies to ensure consistency among local governments and with the comprehensive development plan of Metro Manila," and to "advise the local governments [49] accordingly." When R.A. No. 7924 took effect, Metropolitan Manila became a "special development and administrative region" and the MMDA a "special development authority" whose functions were "without prejudice to the autonomy of the affected local government units." The character of the MMDA was clearly defined in the legislative debates enacting its charter. R. A. No. 7924 originated as House Bill No. 14170/ 11116 and was introduced by several legislators led by Dante Tinga, Roilo Golez and Feliciano Belmonte. It was presented to the House of Representatives by the Committee on Local Governments chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee consultations with the local government units in the National Capital Region (NCR), with former Chairmen of [50] the MMC and MMA, and career officials of said agencies. When the bill was first taken up by the Committee on Local Governments, the following debate took place: "THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been debated a long time ago, you know. Its a special we can create a special metropolitan political subdivision. Supreme Actually, there are only six (6) political subdivisions provided for in the Constitution: barangay, municipality, city, province, and we have the Autonomous Region of Mindanao and we have the Cordillera. So we have 6. Now. HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the Autonomous Region, that is also specifically mandated by the Constitution. THE CHAIRMAN: Thats correct. But it is considered to be a political subdivision. What is the meaning of a political subdivision? Meaning to say, that it has its own government, it has its own political personality, it has the power to tax, and all governmental powers: police power and everything. All right. Authority is different; because it does not have its own government. It is only a council, it is an organization of political subdivision, powers, no, which is not imbued with any political power. Esmmis If you go over Section 6, where the powers and functions of the Metro Manila Development Authority, it is purely coordinative. And it provides here that the council is policy-making. All right. Under the Constitution is a Metropolitan Authority with coordinative power. Meaning to say, it coordinates all of the different basic services which have to be delivered to the constituency. All right. There is now a problem. Each local government unit is given its respective as a political subdivision. Kalookan has its powe rs, as provided for and protected and guaranteed by the Constitution. All right, the exercise. However, in the exercise of that power, it might be deleterious and disadvantageous to other local government units. So, we are forming an authority where all of these will be members and then set up a policy in order that the basic services can be effectively coordinated. All right. justice

Of course, we cannot deny that the MMDA has to survive. We have to provide some funds, resources. But it does not possess any political power. We do not elect the Governor. We do not have the power to tax. As a matter of fact, I was trying to intimate to the author that it must have the power to sue and be sued because it coordinates. All right. It coordinates practically all these basic services so that the flow and the distribution of the basic services will be continuous. Like traffic, we cannot deny that. Its before our eyes. Sewerage, flo od control, water system, peace and order, we cannot deny these. Its right on our face. We have to look for a solution. What would be the right solution? All right, we envision that there should be a coordinating agency and it is called an authority. All right, if you do not want to call it a n authority, its alright. We may call it a council or maybe a management agency. x x x."
[51]

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 MMDAs functions. There is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of the metropolis. This was explicitly stated in the last Committee deliberations prior to the bills presentation to Congress. Thus: Ed-p "THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think this was already approved before, but it was reconsidered in view of the proposals, set-up, to make the MMDA stronger. Okay, so if there is no objection to paragraph "f" And then next is paragraph "b," under Section 6. "It shall approve metro-wide plans, programs and projects and issue ordinances or resolutions deemed necessary by the MMDA to carry out the purposes of this Act." Do you have the powers? Does the MMDA because that takes the form of a local government unit, a political subdivision. HON. *Feliciano+ BELMONTE: Yes, I believe so, your Honor. When we say that it has the policies, its very c lear that those policies must be followed. Otherwise, whats the use of empowering it to come out with policies. Now, the policies may be in the form of a resolution or it may be in the form of a ordinance. The term "ordinance" in this case really gives it more teeth, your honor. Otherwise, we are going to see a situation where you have the power to adopt the policy but you cannot really make it stick as in the case now, and I think here is Chairman Bunye. I think he will agree that that is the case now. Youve got the power to set a policy, the body wants to follow your policy, then we say lets call it an ordinance and see if t hey will not follow it. THE CHAIRMAN: Thats very nice. I like that. However, there is a constitutional impediment. You are making this MMDA a political subdivision. The creation of the MMDA would be subject to a plebiscite. That is what Im trying to avoid. Ive been trying to avoid this k ind of predicament. Under the Constitution it states: if it is a political subdivision, once it is created it has to be subject to a plebiscite. Im trying to make this as administrative. Thats why we place the Chairman as a cabinet rank. HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . THE CHAIRMAN: In setting up ordinances, it is a political exercise. Believe me. HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and regulations. That would be it shall also be enforced. Jksm HON. BELMONTE: Okay, I will . HON. LOPEZ: And you can also say that violation of such rule, you impose a sanction. But you know, ordinance has a different legal connotation. HON. BELMONTE: All right. I defer to that opinion, your Honor. sc THE CHAIRMAN: So instead of ordinances, say rules and regulations. HON. BELMONTE: Or resolutions. Actually, they are actually considering resolutions now. THE CHAIRMAN: Rules and resolutions. HON. BELMONTE: Rules, regulations and resolutions."
[52]

The draft of H. B. No. 14170/ 11116 was presented by the Committee to the House of Representatives. The explanatory note to the bill stated that [53] the proposed MMDA is a "development authority" which is a "national agency, not a political government unit." The explanatory note was adopted as the sponsorship speech of the Committee on Local Governments. No interpellations or debates were made on the floor and no [54] amendments introduced. The bill was approved on second reading on the same day it was presented. When the bill was forwarded to the Senate, several amendments were made. These amendments, however, did not affect the nature of the MMDA [55] as originally conceived in the House of Representatives. 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 [56] 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 [57] to him by the President, whereas in local government units, the President merely exercises supervisory authority. This emphasizes the administrative characterof the MMDA. Newmiso 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. We desist from ruling on the other issues as they are unnecessary. Esmso We stress that this decision does not make light of the MMDAs noble efforts to solve the chaotic traffic condition in Metro Manila. Everyday, traffic jams and traffic bottlenecks plague the metropolis. Even our once sprawling boulevards and avenues are now crammed with cars while city streets are clogged with motorists and pedestrians. Traffic has become a social malaise affecting our peoples productivity a nd the efficient delivery of goods and services in the country. The MMDA was created to put some order in the metropolitan transportation system but unfortunately the powers granted by its charter are limited. Its good intentions cannot justify the opening for public use of a private street in a private subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the rule of law. Sdjad IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 39549 are affirmed.

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. The Province of Batangas, represented by its Governor, Hermilando I. Mandanas, filed the present petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court, as amended, to declare as unconstitutional and void certain provisos contained in the General Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly earmarked for each corresponding year the amount of five billion pesos (P5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) and imposed conditions for the release thereof. Named as respondents are Executive Secretary Alberto G. Romulo, in his capacity as Chairman of the Oversight Committee on Devolution, Secretary Emilia Boncodin of the Department of Budget and Management (DBM) and Secretary Jose Lina of the Department of Interior and Local Government (DILG). Background On December 7, 1998, then President Joseph Ejercito Estrada issued Executive Order (E.O.) No. 48 entitled ESTABLISHING A PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION. The program was established to facilitate the process of enhancing the capacities o f local government units (LGUs) in the discharge of the functions and services devolved to them by the National Government Agencies concerned [1] pursuant to the Local Government Code. The Oversight Committee (referred to as the Devolution Committee in E.O. No. 48) constituted under Section 533(b) of Republic Act No. 7160 (The Local Government Code of 1991) has been tasked to formulate and issue the appropriate rules and [2] regulations necessary for its effective implementation. Further, to address the funding shortfalls of functions and services devolved to the LGUs [3] and other funding requirements of the program, the Devolution Adjustment and Equalization Fund was created. For 1998, the DBM was directed to set aside an amount to be determined by the Oversight Committee based on the devolution status appraisal surveys undertaken by the [4] [5] DILG. The initial fund was to be sourced from the available savings of the national government for CY 1998. For 1999 and the succeeding years, [6] the corresponding amount required to sustain the program was to be incorporated in the annual GAA. The Oversight Committee has been [7] authorized to issue the implementing rules and regulations governing the equitable allocation and distribution of said fund to the LGUs. The LGSEF in the GAA of 1999 In Republic Act No. 8745, otherwise known as the GAA of 1999, the program was renamed as the LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF). Under said appropriations law, the amount of P96,780,000,000 was allotted as the share of the LGUs in the internal revenue taxes. Item No. 1, Special Provisions, Title XXXVI A. Internal Revenue Allotment of Rep. Act No. 8745 contained the following proviso: ... PROVIDED, That the amount of FIVE BILLION PESOS (P5,000,000,000) shall be earmarked for the Local Government Service Equalization Fund for the funding requirements of projects and activities arising from the full and efficient implementation of devolved functions and services of local government units pursuant to R.A. No. 7160, otherwise known as the Local Government Code of 1991: PROVIDED, FURTHER, That such amount shall be released to the local government units subject to the implementing rules and regulations, including such mechanisms and guidelines for the equitable allocations and distribution of said fund among local government units subject to the guidelines that may be prescribed by the Oversight Committee on Devolution as constituted pursuant to Book IV, Title III, Section 533(b) of R.A. No. 7160. The Internal Revenue Allotment shall be released directly by the Department of Budget and Management to the Local Government Units concerned. On July 28, 1999, the Oversight Committee (with then Executive Secretary Ronaldo B. Zamora as Chairman) passed Resolution Nos. OCD-99-003, OCD-99-005 and OCD-99-006 entitled as follows: OCD-99-005 RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5 BILLION CY 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) AND REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE SAID ALLOCATION SCHEME. OCD-99-006 RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0 BILLION OF THE 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND AND ITS CONCOMITANT GENERAL FRAMEWORK, IMPLEMENTING GUIDELINES AND MECHANICS FOR ITS IMPLEMENTATION AND RELEASE, AS PROMULGATED BY THE OVERSIGHT COMMITTEE ON DEVOLUTION. OCD-99-003 RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE THE REQUEST OF THE OVERSIGHT COMMITTEE ON DEVOLUTION TO SET ASIDE TWENTY PERCENT (20%) OF THE LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) FOR LOCAL AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY INITIATIVES FOR LGUs INSTITUTIONAL AND CAPABILITY BUILDING IN ACCORDANCE WITH THE IMPLEMENTING GUIDELINES AND MECHANICS AS PROMULGATED BY THE COMMITTEE. These OCD resolutions were approved by then President Estrada on October 6, 1999. Under the allocation scheme adopted pursuant to Resolution No. OCD-99-005, the five billion pesos LGSEF was to be allocated as follows: 1. The PhP4 Billion of the LGSEF shall be allocated in accordance with the allocation scheme and implementing guidelines and mechanics promulgated and adopted by the OCD. To wit: a. The first PhP2 Billion of the LGSEF shall be allocated in accordance with the codal formula sharing scheme as prescribed under the 1991 Local Government Code; b. The second PhP2 Billion of the LGSEF shall be allocated in accordance with a modified 1992 cost of devolution fund (CODEF) sharing scheme, as recommended by the respective leagues of provinces, cities and municipalities to the OCD. The modified CODEF sharing formula is as follows: Province Cities : : 40% 20% : 40%

Municipalities

This is applied to the P2 Billion after the approved amounts granted to individual provinces, cities and municipalities as assistance to cover decrease in 1999 IRA share due to reduction in land area have been taken out.

2. The remaining PhP1 Billion of the LGSEF shall be earmarked to support local affirmative action projects and other priority initiatives submitted by LGUs to the Oversight Committee on Devolution for approval in accordance with its prescribed guidelines as promulgated and adopted by the OCD. In Resolution No. OCD-99-003, the Oversight Committee set aside the one billion pesos or 20% of the LGSEF to support Local Affirmative Action Projects (LAAPs) of LGUs. This remaining amount was intended to respond to the urgent need for additional f unds assistance, otherwise not available within the parameters of other existing fund sources. For LGUs to be eligible for funding under the one-billion-peso portion of the LGSEF, the OCD promulgated the following: III. CRITERIA FOR ELIGIBILITY:

1. LGUs (province, city, municipality, or barangay), individually or by group or multi-LGUs or leagues of LGUs, especially those belonging to the th th 5 and 6 class, may access the fund to support any projects or activities that satisfy any of the aforecited purposes. A barangay may also access this fund directly or through their respective municipality or city. 2. The proposed project/activity should be need-based, a local priority, with high development impact and are congruent with the socio-cultural, economic and development agenda of the Estrada Administration, such as food security, poverty alleviation, electrification, and peace and order, among others. 3. Eligible for funding under this fund are projects arising from, but not limited to, the following areas of concern: a. delivery of local health and sanitation services, hospital services and other tertiary services; b. delivery of social welfare services; c. provision of socio-cultural services and facilities for youth and community development; d. provision of agricultural and on-site related research; e. improvement of community-based forestry projects and other local projects on environment and natural resources protection and conservation; f. improvement of tourism facilities and promotion of tourism; g. peace and order and public safety; h. construction, repair and maintenance of public works and infrastructure, including public buildings and facilities for public use, especially those destroyed or damaged by man-made or natural calamities and disaster as well as facilities for water supply, flood control and river dikes; i. provision of local electrification facilities; j. livelihood and food production services, facilities and equipment; k. other projects that may be authorized by the OCD consistent with the aforementioned objectives and guidelines; 4. Except on extremely meritorious cases, as may be determined by the Oversight Committee on Devolution, this portion of the LGSEF shall not be used in expenditures for personal costs or benefits under existing laws applicable to governments. Generally, this fund shall cover the following objects of expenditures for programs, projects and activities arising from the implementation of devolved and regular functions and services: a. acquisition/procurement of supplies and materials critical to the full and effective implementation of devolved programs, projects and activities; b. repair and/or improvement of facilities; c. repair and/or upgrading of equipment; d. acquisition of basic equipment; e. construction of additional or new facilities; f. counterpart contribution to joint arrangements or collective projects among groups of municipalities, cities and/or provinces related to devolution and delivery of basic services. 5. To be eligible for funding, an LGU or group of LGU shall submit to the Oversight Committee on Devolution through the Department of Interior and Local Governments, within the prescribed schedule and timeframe, a Letter Request for Funding Support from the Affirmative Action Program under the LGSEF, duly signed by the concerned LGU(s) and endorsed by cooperators and/or beneficiaries, as well as the duly signed Resolution of Endorsement by the respective Sanggunian(s) of the LGUs concerned. The LGU-proponent shall also be required to submit the Project Request (PR), using OCD Project Request Form No. 99-02, that details the following: (a) general description or brief of the project; (b) objectives and justifications for undertaking the project, which should highlight the benefits to the locality and the expected impact to the local program/project arising from the full and efficient implementation of social services and facilities, at the local levels; (c) target outputs or key result areas; (d) schedule of activities and details of requirements; (e) total cost requirement of the project; (f) proponents counterpart funding share, if any, and identified source(s) of counterpart funds for the full implementation of t he project; (g) requested amount of project cost to be covered by the LGSEF. Further, under the guidelines formulated by the Oversight Committee as contained in Attachment - Resolution No. OCD-99-003, the LGUs were required to identify the projects eligible for funding under the one-billion-peso portion of the LGSEF and submit the project proposals thereof and other documentary requirements to the DILG for appraisal. The project proposals that passed the DILGs appraisal would then be submitted to the Oversight Committee for review, evaluation and approval. Upon its approval, the Oversight Committee would then serve notice to the DBM for the preparation of the Special Allotment Release Order (SARO) and Notice of Cash Allocation (NCA) to effect the release of funds to the said LGUs. The LGSEF in the GAA of 2000

Under Rep. Act No. 8760, otherwise known as the GAA of 2000, the amount of P111,778,000,000 was allotted as the share of the LGUs in the internal revenue taxes. As in the GAA of 1999, the GAA of 2000 contained a proviso earmarking five billion pesos of the IRA for the LGSEF. This proviso, found in Item No. 1, Special Provisions, Title XXXVII A. Internal Revenue Allotment, was similarly worded as that contained in the GAA of 1999. The Oversight Committee, in its Resolution No. OCD-2000-023 dated June 22, 2000, adopted the following allocation scheme governing the five billion pesos LGSEF for 2000: 1. The PhP3.5 Billion of the CY 2000 LGSEF shall be allocated to and shared by the four levels of LGUs, i.e., provinces, cities, municipalities, and barangays, using the following percentage-sharing formula agreed upon and jointly endorsed by the various Leagues of LGUs: For Provinces For Cities 23% or 805,000,000 For Municipalities 35% or 1,225,000,000 For Barangays 16% or 560,000,000 26% or P 910,000,000

Provided that the respective Leagues representing the provinces, cities, municipalities and barangays shall draw up and adopt the horizontal distribution/sharing schemes among the member LGUs whereby the Leagues concerned may opt to adopt direct financial assistance or projectbased arrangement, such that the LGSEF allocation for individual LGU shall be released directly to the LGU concerned; Provided further that the individual LGSEF shares to LGUs are used in accordance with the general purposes and guidelines promulgated by the OCD for the implementation of the LGSEF at the local levels pursuant to Res. No. OCD-99-006 dated October 7, 1999 and pursuant to the Leagues guidelines and mechanism as approved by the OCD; Provided further that each of the Leagues shall submit to the OCD for its approval their respective allocation scheme, the list of LGUs with the corresponding LGSEF shares and the corresponding project categories if project-based; Provided further that upon approval by the OCD, the lists of LGUs shall be endorsed to the DBM as the basis for the preparation of the corresponding NCAs, SAROs, and related budget/release documents. 2. The remaining P1,500,000,000 of the CY 2000 LGSEF shall be earmarked to support the following initiatives and local affirmative action projects, to be endorsed to and approved by the Oversight Committee on Devolution in accordance with the OCD agreements, guidelines, procedures and documentary requirements: On July 5, 2000, then President Estrada issued a Memorandum authorizing then Executive Secretary Zamora and the DBM to implement and release the 2.5 billion pesos LGSEF for 2000 in accordance with Resolution No. OCD-2000-023. Thereafter, the Oversight Committee, now under the administration of President Gloria Macapagal-Arroyo, promulgated Resolution No. OCD-200129 entitled ADOPTING RESOLUTION NO. OCD-2000-023 IN THE ALLOCATION, IMPLEMENTATION AND RELEASE OF THE REMAINING P2.5 BILLION LGSEF FOR CY 2000. Under this resolution, the amount of one billion pesos of the LGSEF was to be released in accordance with paragraph 1 of Resolution No. OCD-2000-23, to complete the 3.5 billion pesos allocated to the LGUs, while the amount of 1.5 billion pesos was allocated for the LAAP. However, out of the latter amount, P400,000,000 was to be allocated and released as follows: P50,000,000 as financial assistance to the LAAPs of LGUs; P275,360,227 as financial assistance to cover the decrease in the IRA of LGUs concerned due to reduction in land area; andP74,639,773 for the LGSEF Capability-Building Fund. The LGSEF in the GAA of 2001 In view of the failure of Congress to enact the general appropriations law for 2001, the GAA of 2000 was deemed re-enacted, together with the IRA of the LGUs therein and the proviso earmarking five billion pesos thereof for the LGSEF. On January 9, 2002, the Oversight Committee adopted Resolution No. OCD-2002-001 allocating the five billion pesos LGSEF for 2001 as follows: Modified Codal Formula Priority Projects Capability Building Fund P 5.000 billion RESOLVED FURTHER, that the P3.0 B of the CY 2001 LGSEF which is to be allocated according to the modified codal formula shall be released to the four levels of LGUs, i.e., provinces, cities, municipalities and barangays, as follows: P 3.000 billion 1.900 billion .100 billion

LGUs Provinces Cities

Percentage 25 25 35 15

Amount P 0.750 billion 0.750 1.050

Municipalities Barangays

0.450

100 P 3.000 billion RESOLVED FURTHER, that the P1.9 B earmarked for priority projects shall be distributed according to the following criteria: 1.0 For projects of the 4 , 5 and 6 class LGUs; or
th th th

2.0 Projects in consonance with the Presidents State of the Nation Address (SONA)/summit commitments. RESOLVED FURTHER, that the remaining P100 million LGSEF capability building fund shall be distributed in accordance with the recommendation of the Leagues of Provinces, Cities, Municipalities and Barangays, and approved by the OCD.

Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the individual members of the Oversight Committee seeking the reconsideration of Resolution No. OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo urging her to disapprove said resolution as it violates the Constitution and the Local Government Code of 1991. On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-2002-001. The Petitioners Case The petitioner now comes to this Court assailing as unconstitutional and void the provisos in the GAAs of 1999, 2000 and 2001, relating to the LGSEF. Similarly assailed are the Oversight Committees Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-2002-001 issued pursuant thereto. The petitioner submits that the assailed provisos in the GAAs and the OCD resolutions, insofar as they earmarked the amount of five billion pesos of the IRA of the LGUs for 1999, 2000 and 2001 for the LGSEF and imposed conditions for the release thereof, violate the Constitution and the Local Government Code of 1991. Section 6, Article X of the Constitution is invoked as it mandates that the just share of the LGUs shall be automatically released to them. Sections 18 and 286 of the Local Government Code of 1991, which enjoin that the just share of the LGUs shall be automatically and directly released to them without need of further action are, likewise, cited. The petitioner posits that to subject the distribution and release of the five-billion-peso portion of the IRA, classified as the LGSEF, to compliance by the LGUs with the implementing rules and regulations, including the mechanisms and guidelines prescribed by the Oversight Committee, contravenes the explicit directive of the Constitution that the LGUs share in the national taxes shall be automatically released to them. The petitioner maintains that the use of the word shall must be given a compulsory meaning. To further buttress this argument, the petitioner contends that to vest the Oversight Committee with the authority to determine the distribution and release of the LGSEF, which is a part of the IRA of the LGUs, is an anathema to the principle of local autonomy as embodied in the Constitution and the Local Government Code of 1991. The petitioner cites as an example the experience in 2001 when the release of the LGSEF was long delayed because the Oversight Committee was not able to convene that year and no guidelines were issued therefor. Further, the possible disapproval by the Oversight Committee of the project proposals of the LGUs would result in the diminution of the latters share in the IRA. Another infringement alleged to be occasioned by the assailed OCD resolutions is the improper amendment to Section 285 of the Local Government Code of 1991 on the percentage sharing of the IRA among the LGUs. Said provision allocates the IRA as follows: Provinces 23%; [8] Cities 23%; Municipalities 34%; and Barangays 20%. This formula has been improperly amended or modified, with respect to the five-billionpeso portion of the IRA allotted for the LGSEF, by the assailed OCD resolutions as they invariably provided for a different sharing scheme. The modifications allegedly constitute an illegal amendment by the executive branch of a substantive law. Moreover, the petitioner mentions that in the Letter dated December 5, 2001 of respondent Executive Secretary Romulo addressed to respondent Secretary Boncodin, the former endorsed to the latter the release of funds to certain LGUs from the LGSEF in accordance with the handwritten instructions of President Arroyo. Thus, the LGUs are at a loss as to how a portion of the LGSEF is actually allocated. Further, there are still portions of the LGSEF that, to date, have not been received by the petitioner; hence, resulting in damage and injury to the petitioner. The petitioner prays that the Court declare as unconstitutional and void the assailed provisos relating to the LGSEF in the GAAs of 1999, 2000 and 2001 and the assailed OCD resolutions (Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-2002001) issued by the Oversight Committee pursuant thereto. The petitioner, likewise, prays that the Court direct the respondents to rectify the unlawful and illegal distribution and releases of the LGSEF for the aforementioned years and release the same in accordance with the sharing formula under Section 285 of the Local Government Code of 1991. Finally, the petitioner urges the Court to declare that the entire IRA should be released automatically without further action by the LGUs as required by the Constitution and the Local Government Code of 1991. The Respondents Arguments The respondents, through the Office of the Solicitor General, urge the Court to dismiss the petition on procedural and substantive grounds. On the latter, the respondents contend that the assailed provisos in the GAAs of 1999, 2000 and 2001 and the assailed resolutions issued by the Oversight Committee are not constitutionally infirm. The respondents advance the view that Section 6, Article X of the Constitution does not specify that the just share of the LGUs shall be determined solely by the Local Government Code of 1991. Moreover, the phrase as determined by law in the same constitutional provision means that there exists no limitation on the power of Congress to determine what is the just share of the LGUs in the national taxes. In other words, Congress is the arbiter of what should be the just share of the LGUs in the national taxes. The respondents further theorize that Section 285 of the Local Government Code of 1991, which provides for the percentage sharing of the IRA among the LGUs, was not intended to be a fixed determination of their just share in the national taxes. Congress may enact other laws, including appropriations laws such as the GAAs of 1999, 2000 and 2001, providing for a different sharing formula. Section 285 of the Local Government Code of 1991 was merely intended to be the default share of the LGUs to do away with the need to determine annually by law their just share. However, the LGUs have no vested right in a permanent or fixed percentage as Congress may increase or decrease the just share of the LGUs in accordance with what it believes is appropriate for their operation. There is nothing in the Constitution which prohibits Congress from making such determination through the appropriations laws. If the provisions of a particular statute, the GAA in this case, are within the constitutional power of the legislature to enact, they should be sustained whether the courts agree or not in the wisdom of their enactment. On procedural grounds, the respondents urge the Court to dismiss the petition outright as the same is defective. The petition allegedly raises factual issues which should be properly threshed out in the lower courts, not this Court, not being a trier of facts. Specifically, the petitioners allegation that there are portions of the LGSEF that it has not, to date, received, thereby causing it (the petitioner) injury and damage, is subject to proof and must be substantiated in the proper venue, i.e., the lower courts. Further, according to the respondents, the petition has already been rendered moot and academic as it no longer presents a justiciable controversy. The IRAs for the years 1999, 2000 and 2001, have already been released and the government is now operating under the 2003 budget. In support of this, the respondents submitted certifications issued by officers of the DBM attesting to the release of the allocation or shares of the petitioner in the LGSEF for 1999, 2000 and 2001. There is, therefore, nothing more to prohibit. Finally, the petitioner allegedly has no legal standing to bring the suit because it has not suffered any injury. In fact, the petitioners just share has even increased. Pursuant to Section 285 of the Local Government Code of 1991, the share of the provinces is 23%. OCD Nos. 99-005, 99-006 and 99-003 gave the provinces 40% of P2 billion of the LGSEF. OCD Nos. 2000-023 and 2001-029 apportioned 26% of P3.5 billion to the provinces. On the other hand, OCD No. 2001-001 allocated 25% of P3 billion to the provinces. Thus, the petitioner has not suffered any injury in the implementation of the assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions. The Ruling of the Court Procedural Issues

Before resolving the petition on its merits, the Court shall first rule on the following procedural issues raised by the respondents: (1) whether the petitioner has legal standing orlocus standi to file the present suit; (2) whether the petition involves factual questions that are properly cognizable by the lower courts; and (3) whether the issue had been rendered moot and academic. The petitioner has locus standi to maintain the present suit 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 [9] 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, 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 [10] some burdens or penalties by reason of the statute or act complained of. The Court holds that the petitioner possesses the requisite standing to maintain the present suit. The petitioner, a local government unit, seeks relief in order to protect or vindicate an interest of its own, and of the other LGUs. This interest pertains to the LGUs share in the national taxes or the IRA. The petitioners 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. The petition involves a significant legal issue The crux of the instant controversy is whether the assailed provisos contained in the GAAs of 1999, 2000 and 2001, and the OCD resolutions infringe the Constitution and the Local Government Code of 1991. This is undoubtedly a legal question. On the other hand, the following facts are not disputed: 1. The earmarking of five billion pesos of the IRA for the LGSEF in the assailed provisos in the GAAs of 1999, 2000 and re-enacted budget for 2001; 2. The promulgation of the assailed OCD resolutions providing for the allocation schemes covering the said five billion pesos and the implementing rules and regulations therefor; and 3. The release of the LGSEF to the LGUs only upon their compliance with the implementing rules and regulations, including the guidelines and mechanisms, prescribed by the Oversight Committee. 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 [11] 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 [12] circumstances justify availment of a remedy within and calling for the exercise of this Courts 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. The substantive issue needs to be resolved notwithstanding the supervening events 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 [13] or accidental, cannot prevent the Court from rendering a decision if there is a grave violation of the Constitution. Even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling [14] 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 [15] 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. Substantive Issue As earlier intimated, the resolution of the substantive legal issue in this case calls for the application of a most important constitutional policy and [16] principle, that of local autonomy. In Article II of the Constitution, the State has expressly adopted as a policy that: Section 25. The State shall ensure the autonomy of local governments. An entire article (Article X) of the Constitution has been devoted to guaranteeing and promoting the autonomy of LGUs. Section 2 thereof reiterates the State policy in this wise: Section 2. The territorial and political subdivisions shall enjoy local autonomy. Consistent with the principle of local autonomy, the Constitution confines the Presidents power over the LGUs to one of gene ral [17] supervision. This provision has been interpreted to exclude the power of control. The distinction between the two powers was enunciated [18] 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 re-done by his subordinate or he may even decide to do it himself. Supervision does not cover such authority. The supervisor or superintendent merely sees

to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them. If the rules are not observed, he may order the work done or re-done but only to conform to the prescribed rules. He may not prescribe his own manner [19] for doing the act. He has no judgment on this matter except to see to it that the rules are followed. The Local Government Code of 1991 amplified in Section 2 thereof:
[20]

was enacted to flesh out the mandate of the Constitution.

[21]

The State policy on local autonomy is

Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the National Government to the local government units. Guided by these precepts, the Court shall now determine whether the assailed provisos in the GAAs of 1999, 2000 and 2001, earmarking for each corresponding year the amount of five billion pesos of the IRA for the LGSEF and the OCD resolutions promulgated pursuant thereto, transgress the Constitution and the Local Government Code of 1991. The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions violate the constitutional precept on local autonomy Section 6, Article X of the Constitution reads: Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. When parsed, it would be readily seen that this provision mandates that (1) the LGUs shall have a just share in the national taxes; (2) the just share shall be determined by law; and (3) the just share shall be automatically released to the LGUs. The Local Government Code of 1991, among its salient provisions, underscores the automatic release of the LGUs just share in this wise: Sec. 18. Power to Generate and Apply Resources. Local government units shall have the power and authority to establish an organization that shall be responsible for the efficient and effective implementation of their development plans, program objectives and priorities; to create their own sources of revenue and to levy taxes, fees, and charges which shall accrue exclusively for their use and disposition and which shall be retained by them; to have a just share in national taxes which shall be automatically and directly released to them without need of further action; ... Sec. 286. Automatic Release of Shares. (a) The share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose. (b) Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws. Websters 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 f urther [22] action. Construing Section 286 of the LGC, we held in Pimentel, Jr. v. Aguirre, viz: 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 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. 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. In sum, 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 w ithin the parameters of [23] the Constitution and the law. Verily, laudable purposes must be carried out by legal methods. The just share of the LGUs is incorporated as the IRA in the appropriations law or GAA enacted by Congress annually. Under the assailed provisos in the GAAs of 1999, 2000 and 2001, a portion of the IRA in the amount of five billion pesos was earmarked for the LGSEF, and these provisos imposed the condition that such amount shall be released to the local government units subject to the implementing rules and regulations, including such mechanisms and guidelines for the equitable allocations and distribution of said fund among local government units subject to the guidelines that may be prescribed by the Oversight Committee on Devolution. Pursuant thereto, the Oversight Committee, throu gh the assailed OCD resolutions, apportioned the five billion pesos LGSEF such that: For 1999 P2 billion - allocated according to Sec. 285 LGC P2 billion - Modified Sharing Formula (Provinces 40%; Cities 20%; Municipalities 40%) P1 billion projects (LAAP) approved by OCD. For 2000
[24]

P3.5 billion Modified Sharing Formula (Provinces 26%; Cities 23%; Municipalities 35%; Barangays 16%); P1.5 billion projects (LAAP) approved by the OCD. For 2001 P3 billion Modified Sharing Formula (Provinces 25%; Cities 25%; Municipalities 35%; Barangays 15%) P1.9 billion priority projects P100 million capability building fund.
[26] [25]

Significantly, the LGSEF could not be released to the LGUs without the Oversight Committees prior approval. Further, with respect to the portion of the LGSEF allocated for various projects of the LGUs (P1 billion for 1999; P1.5 billion for 2000 and P2 billion for 2001), the Oversight Committee, through the assailed OCD resolutions, laid down guidelines and mechanisms that the LGUs had to comply with before they could avail of funds from this portion of the LGSEF. The guidelines required (a) the LGUs to identify the projects eligible for funding based on the criteria laid down by the Oversight Committee; (b) the LGUs to submit their project proposals to the DILG for appraisal; (c) the project proposals that passed the appraisal of the DILG to be submitted to the Oversight Committee for review, evaluation and approval. It was only upon approval thereof that the Oversight Committee would direct the DBM to release the funds for the projects. To the Courts 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 ar e, 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 [27] 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 [28] order. Its use in a statute denotes an imperative obligation and is inconsistent with the idea of discretion. 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 basis at all as the Oversight Committee was created merely to formulate the rules and regulations for the efficient and effective implementation of the Local [29] 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 Committees work was supposed to be done a year from the approval [30] of the Code, or on October 10, 1992. The Oversight Committees 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. That the automatic release of the IRA was precisely intended to guarantee and promote local autonomy can be gleaned from the discussion below between Messrs. Jose N. Nolledo and Regalado M. Maambong, then members of the 1986 Constitutional Commission, to wit: MR. MAAMBONG. Unfortunately, under Section 198 of the Local Government Code, the existence of subprovinces is still acknowledged by the law, but the statement of the Gentleman on this point will have to be taken up probably by the Committee on Legislation. A second point, Mr. Presiding Officer, is that under Article 2, Section 10 of the 1973 Constitution, we have a provision which states: The State shall guarantee and promote the autonomy of local government units, especially the barrio, to insure their fullest development as selfreliant communities. This provision no longer appears in the present configuration; does this mean that the concept of giving local autonomy to local governments is no longer adopted as far as this Article is concerned? MR. NOLLEDO. No. In the report of the Committee on Preamble, National Territory, and Declaration of Principles, that concept is included and widened upon the initiative of Commissioner Bennagen. MR. MAAMBONG. Thank you for that. With regard to Section 6, sources of revenue, the creation of sources as provided by previous law was subject to limitations as may be provided by law, but now, we are using the term subject to such guidelines as may be fixed by law. In Section 7, mention is made about the unique, distinct and exclusive charges and contributions, and in Section 8, we talk about exclusivity of local taxes and the share in the na tional wealth. Incidentally, I was one of the authors of this provision, and I am very thankful. Does this indicate local autonomy, or was the wording of [31] the law changed to give more autonomy to the local government units? MR. NOLLEDO. Yes. In effect, those words indicate also decentralization because local political units can collect taxes, fe es and charges subject merely to guidelines, as recommended by the league of governors and city mayors, with whom I had a dialogue for almost two hours. They told me that limitations may be questionable in the sense that Congress may limit and in effect deny the right later on. MR. MAAMBONG. Also, this provision on automatic release of national tax share points to more local autonomy. Is this the intention? MR. NOLLEDO. Yes, the Commissioner is perfectly right.
[32] [33]

The concept of local autonomy was explained in Ganzon v. Court of Appeals

in this wise:

As the Constitution itself declares, local autonomy means a more responsive and accountable local government structure instituted through a system of decentralization. The Constitution, as we observed, does nothing more than to break up the monopoly of the nationa l government over the affairs of local governments and as put by political adherents, to liberate the local governments from the imperialism of Manila. Autonomy, however, is not meant to end the relation of partnership and interdependence between the central administration and local government units, or otherwise, to usher in a regime of federalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are subject to regulation, however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self-government.

As we observed in one case, decentralization means devolution of national administration but not power to the local levels. Thus: 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 developme nt 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 [sic] 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. According to a constitutional author, decentralization of power amounts to self -immolation, since in that event, the [34] autonomous government becomes accountable not to the central authorities but to its constituency. Local autonomy includes both administrative and fiscal autonomy. The fairly recent case of Pimentel v. Aguirre is particularly instructive. The Court declared therein that local fiscal autonomy includes the power of the LGUs to, inter alia, allocate their resources in accordance with their own priorities: 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 [36] formulated at the national level and imposed on local governments, whether they are relevant to local needs and resources or not ... Further, a basic feature of local fiscal autonomy is the constitutionally mandated automatic release of the shares of LGUs in the national internal [37] revenue. Following this ratiocination, the Court in Pimentel struck down as unconstitutional Section 4 of Administrative Order (A.O.) No. 372 which ordered the withholding, effective January 1, 1998, of ten percent of the LGUs IRA pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation. 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 autonomy enjoyed by the LGUs and must be struck down. They cannot, therefore, be upheld. The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD resolutions cannot amend Section 285 of the Local Government Code of 1991 Section 284 of the Local Government Code provides that, beginning the third year of its effectivity, the LGUs share in the national internal revenue taxes shall be 40%. This percentage is fixed and may not be reduced except in the event the national government incurs an unmanageable public sector deficit" and only upon compliance with stringent requirements set forth in the same section: Sec. 284. ...
[38] [35]

Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon recommendation of Secretary of Finance, Secretary of 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 the national internal revenue taxes of the third fiscal year preceding the current fiscal year; Provided, further That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be entitled to receive the amount equivalent to the cost of devolved personnel services. Thus, from the above provision, the only possible exception to the mandatory automatic release of the L GUs 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. Section 285 then specifies how the IRA shall be allocated among the LGUs: Sec. 285. Allocation to Local Government Units. The share of local government units in the internal revenue allotment shall be allocated in the following manner: (a) (b) (c) (d) Provinces Twenty-three (23%) Cities Twenty-three percent (23%); Municipalities Thirty-four (34%); and Barangays Twenty percent (20%).

However, this percentage sharing is not followed with respect to the five billion pesos LGSEF as the assailed OCD resolutions, implementing the assailed provisos in the GAAs of 1999, 2000 and 2001, provided for a different sharing scheme. For example, for 1999, P2 billion of the LGSEF was [39] allocated as follows: Provinces 40%; Cities 20%; Municipalities 40%. For 2000, P3.5 billion of the LGSEF was allocated in this manner: [40] Provinces 26%; Cities 23%; Municipalities 35%; Barangays 26%. For 2001, P3 billion of the LGSEF was allocated, thus: Provinces 25%; [41] Cities 25%; Municipalities 35%; Barangays 15%. 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 [42] appropriation 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 [43] 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 [44] 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. It is relevant to point out at this juncture that, unlike those of 1999, 2000 and 2001, the GAAs of 2002 and 2003 do not contain provisos similar to the herein assailed provisos. In other words, the GAAs of 2002 and 2003 have not earmarked any amount of the IRA for the LGSEF. Congress had perhaps seen fit to discontinue the practice as it recognizes its infirmity. Nonetheless, as earlier mentioned, this Court has deemed it necessary to make a definitive ruling on the matter in order to prevent its recurrence in future appropriations laws and that the principles enunciated herein would serve to guide the bench, bar and public. Conclusion 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 governmen ts 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 [45] 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 supervisio n ... as may be [46] provided by law. Subsequently, the 1973 Constitution explicitly stated that *t+he State shall guarantee and promote the autonomy of local [47] 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. 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 peoples reach; they teach men how to u se and enjoy it. A [49] 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 [50] upon which these provisions are based. WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD Resolutions, are declared UNCONSTITUTIONAL. SULTAN OSOP B. CAMID, petitioner, vs. THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AUTONOMOUS REGION IN MUSLIM MINDANAO, DEPARTMENT of FINANCE, DEPARTMENT of BUDGET AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES (HOUSE of REPRESENTATIVES AND SENATE),respondents. DECISION TINGA, J.: This Petition for Certiorari presents this Court with the prospect of our own Brigadoon the municipality of Andong, Lanao del Surwhich like its counterpart in filmdom, is a town that is not supposed to exist yet is anyway insisted by some as actually alive and thriving. Yet unlike in the movies, there is nothing mystical, ghostly or anything even remotely charming about the purported existence of Andong. The creation of the putative municipality was declared void ab initio by this Court four decades ago, but the present petition insists that in spite of this insurmountable obstacle Andong thrives on, and hence, its legal personality should be given judicial affirmation. We disagree. The factual antecedents derive from the promulgation of our ruling in Pelaez v. Auditor General in 1965. As discussed therein, then President [3] Diosdado Macapagal issued several Executive Orders creating thirty-three (33) municipalities in Mindanao. Among them was Andong in Lanao del [4] Sur which was created by virtue of Executive Order No. 107. These executive orders were issued after legislative bills for the creation of municipalities involved in that case had failed to pass Congress. President Diosdado Macapagal justified the creation of these municipalities citing his powers under Section 68 of the Revised Administrative Code. Then Vice-President Emmanuel Pelaez filed a special civil action for a writ of prohibition, alleging in main that the Executive Orders were null and [6] [7] void, Section 68 having been repealed by Republic Act No. 2370, and said orders constituting an undue delegation of legislative power. After due deliberation, the Court unanimously held that the challenged Executive Orders were null and void. A majority of five justices, led by the ponente, Justice (later Chief Justice) Roberto Concepcion, ruled that Section 68 of the Revised Administrative Code did not meet the well[8] settled requirements for a valid delegation of legislative power to the executive branch, while three justices opined that the nullity of the issuances was the consequence of the enactment of the 1935 Constitution, which reduced the power of the Chief Executive over local [9] governments. Pelaez was disposed in this wise: WHEREFORE, the Executive Orders in question are declared null and void ab initio and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to. It is [10] so ordered. Among the Executive Orders annulled was Executive Order No. 107 which created the Municipality of Andong. Nevertheless, the core issue presented in the present petition is the continued efficacy of the judicial annulment of the Municipality of Andong.
[5] [2] [1] [48]

Petitioner Sultan Osop B. Camid (Camid) represents himself as a current resident of Andong, suing as a private citizen and taxpayer whose locus [12] standi is of public and paramount interest especially to the people of the Municipality of Andong, Province of Lanao del Sur. He alleges that Andong has metamorphosed into a full-blown municipality with a complete set of officials appointed to handle essential services for the [13] municipality and its constituents, even though he concedes that since 1968, no person has been appointed, elected or qualified to serve any of [14] the elective local government positions of Andong. Nonetheless, the municipality of Andong has its own high school, Bureau of Posts, a [15] Department of Education, Culture and Sports office, and at least seventeen (17) barangay units with their own respective chairmen. From 1964 until 1972, according to Camid, the public officials of Andong have been serving their constituents through the minimal means and resources with least (sic) honorarium and recognition from the Office of the then former President Diosdado Macapagal. Since the time of Martial Law in 1972, Andong has allegedly been getting by despite the absence of public funds, with the Interim Officials serving their constituents i n their own [16] little ways and means. In support of his claim that Andong remains in existence, Camid presents to this Court a Certification issued by the Office of the Community Environment and Natural Resources (CENRO) of the Department of Environment and Natural Resources (DENR) certifying the total land area of the [17] Municipality of Andong, created under Executive Order No. 107 issued *last+ October 1, 1964. He also submits a Certification issued by the Provincial Statistics Office of Marawi City concerning the population of Andong, which is pegged at fourteen thousand fifty nine (14,059) strong. Camid also enumerates a list of governmental agencies and private groups that allegedly recognize Andong, and notes that other municipalities have recommended to the Speaker of the Regional Legislative Assembly for the immediate implementation of the revival or re-establishment of [18] Andong. The petition assails a Certification dated 21 November 2003, issued by the Bureau of Local Government Supervision of the Department of Interior [19] and Local Government (DILG). The Certification enumerates eighteen (18) municipalities certified as existing, per DILG records. Notably, these eighteen (18) municipalities are among the thirty-three (33), along with Andong, whose creations were voided by this Court in Pelaez. These municipalities are Midaslip, Pitogo, Naga, and Bayog in Zamboanga del Sur; Siayan and Pres. Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New Corella in Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur; Gloria in Oriental Mindoro; Maasim in Sarangani; [20] Kalilangan and Lantapan in Bukidnon; and Maco in Compostela Valley. Camid imputes grave abuse of discretion on the part of the DILG in not classifying *Andong+ as a regular existing municipality and in not including [21] said municipality in its records and official database as *an+ existing regular municipality. He characterizes such non-classification as unequal treatment to the detriment of Andong, especially in light of the current recognition given to the eighteen (18) municipalities similarly annulled by reason of Pelaez. As appropriate relief, Camid prays that the Court annul the DILG Certificationdated 21 November 2003; direct the DILG to classify Andong as a regular existing municipality; all public respondents, to extend full recognition and support to Andong; the Department of Finance and the Department of Budget and Management, to immediately release the internal revenue allotments of Andong; and the public respondents, [22] particularly the DILG, to recognize the Interim Local Officials of Andong. Moreover, Camid insists on the continuing validity of Executive Order No. 107. He argues that Pelaez has already been modified by supervening [23] events consisting of subsequent laws and jurisprudence. Particularly cited is our Decision in Municipality of San Narciso v. Hon. Mendez , wherein [24] the Court affirmed the unique status of the municipality of San Andres in Quezon as a de facto municipal corporation. Similar to Andong, the municipality of San Andres was created by way of executive order, precisely the manner which the Court in Pelaez had declared as unconstitutional. Moreover, San Narciso cited, as Camid does, Section 442(d) of the Local Government Code of 1991 as basis for the current recognition of the impugned municipality. The provision reads: Section 442. Requisites for Creation. - xxx (d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at [25] the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities. There are several reasons why the petition must be dismissed. These can be better discerned upon examination of the proper scope and application of Section 442(d), which does not sanction the recognition of just any municipality. This point shall be further explained further on. Notably, as pointed out by the public respondents, through the Office of the Solicitor General (OSG), the case is not a fit subject for the special civil actions of certiorari and mandamus, as it pertains to the de novo appreciation of factual questions. There is indeed no way to confirm several of Camids astonishing factual allegations pertaining to the purported continuing operation of Andong in the de cades since it was annulled by this Court. No trial court has had the opportunity to ascertain the validity of these factual claims, the appreciation of which is beyond the function of this Court since it is not a trier of facts. The importance of proper factual ascertainment cannot be gainsaid, especially in light of the legal principles governing the recognition of de facto municipal corporations. It has been opined that municipal corporations may exist by prescription where it is shown that the community has claimed and exercised corporate functions, with the knowledge and acquiescence of the legislature, and without interruption or objection for [26] period long enough to afford title by prescription. These municipal corporations have exercised their powers for a long period without objection on the part of the government that although no charter is in existence, it is presumed that they were duly incorporated in the first place and that [27] their charters had been lost. They are especially common in England, which, as well-worth noting, has existed as a state for over a thousand years. The reason for the development of that rule in England is understandable, since that country was settled long before the Roman conquest by nomadic Celtic tribes, which could have hardly been expected to obtain a municipal charter in the absence of a national legal authority. In the United States, municipal corporations by prescription are less common, but it has been held that when no charter or act of incorporation of a town can be found, it may be shown to have claimed and exercised the powers of a town with the knowledge and assent of the legislature, and [28] without objection or interruption for so long a period as to furnish evidence of a prescriptive right. What is clearly essential is a factual demonstration of the continuous exercise by the municipal corporation of its corporate powers, as well as the acquiescence thereto by the other instrumentalities of the state. Camid does not have the opportunity to make an initial factual demonstration of those circumstances before this Court. Indeed, the factual deficiencies aside, Camids plaint should have undergone the usual administrative gauntlet and, once that was done, should have been filed first with the Court of Appeals, which at least would have had the power to make the necessary factual determinations. Camids seeming ignorance of the principles of exhaustion of administrative remedies and hi erarchy of courts, as well as the concomitant prematurity of the present petition, cannot be countenanced. It is also difficult to capture the sense and viability of Camids present action. The assailed issuance is the Certification issued by the DILG. But such Certification does not pretend to bear the authority to create or revalidate a municipality. Certainly, the annulment of the Certification will the recognition of Andong. Neither does the Certification even expressly refute the claim that Andong still exists, as there is nothing in the document that comments on the present status of Andong. Perhaps the Certification is assailed before this Court if only to present an actual issuance, rather than a long-standing habit or pattern of action that can be annulled through the special civil action of certiorari. Still, the relation of the Certification to Camids central argument is forlornly strained.

[11]

These disquisitions aside, the central issue remains whether a municipality whose creation by executive fiat was previously voided by this Court may attain recognition in the absence of any curative or reimplementing statute. Apparently, the question has never been decided before, San Narciso and its kindred cases pertaining as they did to municipalities whose bases of creation were dubious yet were never judicially nullified. The effect of Section 442(d) of the Local Government Code on municipalities such as Andong warrants explanation. Besides, the residents of Andong who belabor under the impression that their town still exists, much less those who may comport themselves as the municipalitys Interim Government, would be well served by a rude awakening. The Court can employ a simplistic approach in resolving the substantive aspect of the petition, merely by pointing out that the Municipality of [29] Andong never existed. Executive Order No. 107, which established Andong, was declared null and void ab initio in 1965 by this Court in Pelaez, [30] [31] along with thirty-three (33) other executive orders. The phrase ab initio means from the beginning, at first, from the [32] inception. Pelaez was never reversed by this Court but rather it was expressly affirmed in the cases of Municipality of San Joaquin v. [33] [34] [35] Siva, Municipality of Malabang v. Benito, and Municipality of Kapalong v. Moya. No subsequent ruling by this Court declared Pelaez as overturned or inoperative. No subsequent legislation has been passed since 1965 creating a Municipality of Andong. Given these facts, there is hardly any reason to elaborate why Andong does not exist as a duly constituted municipality. This ratiocination does not admit to patent legal errors and has the additional virtue of blessed austerity. Still, its sweeping adoption may not be advisedly appropriate in light of Section 442(d) of the Local Government Code and our ruling in Municipality of San Narciso, both of which admit to the possibility of de facto municipal corporations. To understand the applicability of Municipality of San Narciso and Section 442(b) of the Local Government Code to the situation of Andong, it is necessary again to consider the ramifications of our decision in Pelaez. The eminent legal doctrine enunciated in Pelaez was that the President was then, and still is, not empowered to create municipalities through executive issuances. The Court therein recognized that the President has, for ma ny years, issued executive orders creating municipal corporations, [36] and that the same have been organized and in actual operation . . . . However, the Court ultimately nullified only those thirty-three (33) municipalities, including Andong, created during the period from 4 September to 29 October 1964 whose existence petitioner Vice-President Pelaez had specifically assailed before this Court. No pronouncement was made as to the other municipalities which had been previously created by the President in the exercise of power the Court deemed unlawful. Two years after Pelaez was decided, the issue again came to fore in Municipality of San Joaquin v. Siva. The Municipality of Lawigan was created by virtue of Executive Order No. 436 in 1961. Lawigan was not one of the municipalities ordered annulled in Pelaez. A petition for prohibition was filed contesting the legality of the executive order, again on the ground that Section 68 of the Revised Administrative Code was unconstitutional. The trial court dismissed the petition, but the Supreme Court reversed the ruling and entered a new decision declaring Executive Order No. 436 void ab initio. The Court reasoned without elaboration that the issue had already been squarely taken up and settled in Pelaez which agreed with [38] the argument posed by the challengers to Lawigans validity. In the 1969 case of Municipality of Malabang v. Benito, what was challenged is the validity of the constitution of the Municipality of Balabagan in [40] Lanao del Sur, also created by an executive order, and which, similar to Lawigan, was not one of the municipalities annulled in Pelaez. This time, the officials of Balabagan invoked de facto status as a municipal corporation in order to dissuade the Court from nullifying action. They alleged that its status as a de facto corporation cannot be collaterally attacked but should be inquired into directly in an action for quo warranto at the instance of the State, and not by a private individual as it was in that case. In response, the Court conceded that an inquiry into the legal existence of a [41] municipality is reserved to the State in a proceeding for quo warranto, but only if the municipal corporation is a de facto corporation. Ultimately, the Court refused to acknowledge Balabagan as a de facto corporation, even though it had been organized prior to the Courts decision in Pelaez. The Court declared void the executive order creating Balabagan and restrained its municipal officials from performing their official duties [42] and functions. It cited conflicting American authorities on whether a de facto corporation can exist where the statute or charter creating it is [43] unconstitutional. But the Courts final conclusion was unequivocal that Balabagan was not a de facto corporation. In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of authority to its [44] creation. The Court did clarify in Malabang that the previous acts done by the municipality in the exercise of its corporate powers were not necessarily a [45] [46] nullity. Camid devotes several pages of his petition in citing this point, yet the relevance of the citation is unclear considering that Camid does not assert the validity of any corporate act of Andong prior to its judicial dissolution. Notwithstanding, the Court in Malabang retained an emphatic attitude as to the unconstitutionality of the power of the President to create municipal corporations by way of presidential promulgations, as authorized under Section 68 of the Revised Administrative Code. This principle was most recently affirmed in 1988, in Municipality of Kapalong v. Moya. The municipality of Santo Tomas, created by President Carlos P. Garcia, filed a complaint against another municipality, who challenged Santo Tomass legal personality to institute suit. Again, Santo Tomas had not been expressly nullified by prior judicial action, yet the Court refused to recognize its legal existence. The blunt but simple ruling: Now then, as ruled in the Pelaez case supra, the President has no power to create a municipality. Since [Santo Tomas] has no legal personality, it [48] can not be a party to any civil action. Nevertheless, when the Court decided Municipality of San Narciso in 1995, it indicated a shift in the jurisprudential treatment of municipalities created through presidential issuances. The questioned municipality of San Andres, Quezon was created on 20 August 1959 by Executive Order No. 353 issued by President Carlos P. Garcia. Executive Order No. 353 was not one of the thirty-three issuances annulled by Pelaez in 1965. The legal status of the Municipality of San Andres was first challenged only in 1989, through a petition for quo warranto filed with the Regional Trial Court of [50] Gumaca, Quezon, which did cite Pelaez as authority. The RTC dismissed the petition for lack of cause of action, and the petitioners therein elevated the matter to this Court. In dismissing the petition, the Court delved in the merits of the petition, if only to resolve further doubt on the legal status of San Andres. It noted a circumstance which is not present in the case at barthat San Andres was in existence for nearly thirty (30) years before its legality was challenged. The Court did not declare the executive order creating San Andres null and void. Still, acting on the premise that the said executive order was a complete nullity, the Court noted peculiar circumstances that led to the conclusion that San Andres had attained the unique status of [51] a de facto municipal corporation. It noted that Pelaez limited its nullificatory effect only to those executive orders specifically challenged [52] therein, despite the fact that the Court then could have very well extended the decision to invalidate San Andres as well. This statement squarely contradicts Camids reading ofSan Narciso that the creation of San Andres, just like Andong, had been declared a complete nullity on the [53] same ground of unconstitutional delegation of legislative power found inPelaez.
[49] [47] [39] [37]

The Court also considered the applicability of Section 442(d) as follows:

[54]

of the Local Government Code of 1991. It clarified the implication of the provision

Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." No pretension of unconstitutionality per se of Section 442(d) of the Local Government Code is preferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have been complied [55] with," are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights. (Emphasis supplied) The holding in San Narciso was subsequently affirmed in Municipality of Candijay v. Court of Appeals and Municipality of Jimenez v. [57] Baz In Candijay, the juridical personality of the Municipality of Alicia, created in a 1949 executive order, was attacked only beginning in 1984. Pelaez was again invoked in support of the challenge, but the Court refused to invalidate the municipality, citing San Narciso at length. The Court noted that the situation of the Municipality of Alicia was strikingly similar to that in San Narciso; hence, the town should likewise benefit [58] from the effects of Section 442(d) of the Local Government Code, and should [be] considered as a regular, de jure municipality. The valid existence of Municipality of Sinacaban, created in a 1949 executive order, was among the issues raised in Jimenez. The Court, through Justice Mendoza, provided an expert summation of the evolution of the rule. The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the ruling in Pelaez v. Auditor General that the creation of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order the Municipality of Sinacaban. The ruling in this case has been reiterated in a number of cases later decided. However, we have since held that where a municipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. In Municipality of San Narciso, Quezon v. Mendez, Sr., this Court considered the following factors as having validated the creation of a municipal corporation, which, like the Municipality of Sinacaban, was created by executive order of the President before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30 years the validity of the creation of the municipality had never been challenged; (2) the fact that following the ruling in Pelaez no quo warranto suit was filed to question the validity of the executive order creating such municipality; and (3) the fact that the municipality was later classified as a fifth class municipality, organized as part of a municipal circuit court and considered part of a legislative district in the Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the Local Government Code of 1991 (R. A. No. 7160), 442(d) of which provides that "municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities." Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in existence for sixteen years when Pelaez v. Auditor General was decided on December 24, 1965. Yet the validity of E.O. No. 258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned and only because it had laid claim to an area that apparently is desired for its revenue. This fact must be underscored because under Rule 66, 16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter must be commenced within five (5) years from the time the act complained of was done or committed. On the contrary, the State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate existence. Under Administrative Order No. 33 dated June 13, 1978 of this Court, as reiterated by 31 of the Judiciary Reorganization Act of 1980 (B. P. Blg. 129), Sinacaban is constituted part of a municipal circuit for purposes of the establishment of Municipal Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an agreement with it regarding their common boundary. The agreement was embodied in Resolution No. 77 of the Provincial Board of Misamis Occidental. Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution, apportioning legislative districts throughout the country, which considered Sinacaban part of the Second District of Misamis Occidental. Moreover, following the ruling in Municipality of San Narciso, Quezon v. Mendez, Sr., 442(d) of the Local Government Code of 1991 must be deemed to have cured any defect in [59] the creation of Sinacaban. From this survey of relevant jurisprudence, we can gather the applicable rules. Pelaez and its offspring cases ruled that the President has no power to create municipalities, yet limited its nullificatory effects to the particular municipalities challenged in actual cases before this Court. However, with the promulgation of the Local Government Code in 1991, the legal cloud was lifted over the municipalities similarly created by executive order but not judicially annulled. The de facto status of such municipalities as San Andres, Alicia and Sinacaban was recognized by this Court, and Section 442(b) of the Local Government Code deemed curative whatever legal defects to title these municipalities had labored under. Is Andong similarly entitled to recognition as a de facto municipal corporation? It is not. There are eminent differences between Andong and municipalities such as San Andres, Alicia and Sinacaban. Most prominent is the fact that the executive order creating Andong was expressly annulled by order of this Court in 1965. If we were to affirm Andongs de facto status by reason of its alleged continued existence despite its nullification, we would in effect be condoning defiance of a valid order of this Court. Court decisions cannot obviously lose their efficacy due to the sheer defiance by the parties aggrieved. It bears noting that based on Camids own admissions, Andong does not meet the requisites set forth by Section 442(d) of the Local Government Code. Section 442(d) requires that in order that the municipality created by executive order may receive recognition, they must have their respective set of elective municipal officials holding office at the time of the effectivity of *the Local Government+ Code. Camid admits that [60] Andong has never elected its municipal officers at all. This incapacity ties in with the fact that Andong was judicially annulled in 1965. Out of obeisance to our ruling in Pelaez, the national government ceased to recognize the existence of Andong, depriving it of its share of the public funds, and refusing to conduct municipal elections for the void municipality. The failure to appropriate funds for Andong and the absence of elections in the municipality in the last four decades are eloquent indicia of the non-recognition by the State of the existence of the town. The certifications relied upon by Camid, issued by the DENR-CENRO and the National Statistics Office, can hardly serve the purpose of attesting to Ando ngs legal efficacy. In fact, both these certifications qualify that they were issued [61] upon the request of Camid, to support the restoration or re-operation of the Municipality of Andong, Lanao del Sur, thus obviously conceding that the municipality is at present inoperative. We may likewise pay attention to the Ordinance appended to the 1987 Constitution, which had also been relied upon in Jimenez and San Narciso. This Ordinance, which apportioned the seats of the House of Representatives to the different legislative districts in the Philippines, enumerates the various municipalities that are encompassed by the various legislative districts. Andong is not listed therein as among the municipalities of Lanao [62] del Sur, or of any other province for that matter. On the other hand, the municipalities of San Andres, Alicia and Sinacaban are mentioned in the [63] [64] [65] Ordinance as part of Quezon, Bohol, and Misamis Occidental respectively.
[56]

How about the eighteen (18) municipalities similarly nullified in Pelaez but certified as existing in the DILG Certification presented by Camid? The [66] petition fails to mention that subsequent to the ruling in Pelaez, legislation was enacted to reconstitute these municipalities. It is thus not surprising that the DILG certified the existence of these eighteen (18) municipalities, or that these towns are among the municipalities enumerated in the Ordinance appended to the Constitution. Andong has not been similarly reestablished through statute. Clearly then, the fact that there are valid organic statutes passed by legislation recreating these eighteen (18) municipalities is sufficient legal basis to accord a different legal treatment to Andong as against these eighteen (18) other municipalities. We thus assert the proper purview to Section 442(d) of the Local Government Code that it does not serve to affirm or reconstitute the judicially dissolved municipalities such as Andong, which had been previously created by presidential issuances or executive orders. The provision affirms the legal personalities only of those municipalities such as San Narciso, Alicia, and Sinacaban, which may have been created using the same infirm legal basis, yet were fortunate enough not to have been judicially annulled. On the other hand, the municipalities judicially dissolved in cases such as Pelaez, San Joaquin, and Malabang, remain inexistent, unless recreated through specific legislative enactments, as done with the eighteen (18) municipalities certified by the DILG. Those municipalities derive their legal personality not from the presidential issuances or executive orders which originally created them or from Section 442(d), but from the respective legislative statutes which were enacted to revive them. And what now of Andong and its residents? Certainly, neither Pelaez or this decision has obliterated Andong into a hole on the ground. The legal effect of the nullification of Andong in Pelaez was to revert the constituent barrios of the voided town back into their original municipalities, [67] [68] namely the municipalities of Lumbatan, Butig and Tubaran. These three municipalities subsist to this day as part of Lanao del Sur, and presumably continue to exercise corporate powers over the barrios which once belonged to Andong. If there is truly a strong impulse calling for the reconstitution of Andong, the solution is through the legislature and not judicial confirmation of void title. If indeed the residents of Andong have, all these years, been governed not by their proper municipal governments but by a ragtag Interim Government, then an expedient political and legislative solution is perhaps necessary. Yet we can hardly sanction the retention of Andongs legal personality solely on the basis of collective amnesia that may have allowed Andong to somehow pretend itself into existence despite its judicial dissolution. Maybe those who insist Andong still exists prefer to remain unperturbed in their blissful ignorance, like the inhabitants of the cave in Platos famed allegory. But the time has come for the light to seep in, and for the petitioner and like-minded persons to awaken to legal reality. WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner. LEAGUE OF CITIES OF THE PHILIPPINES (LCP), represented by LCP National President Jerry P. Treas; CITY OF CALBAYOG, represented by Mayor Mel Senen S. Sarmiento; and JERRY P. TREAS, in his personal capacity as Taxpayer, Petitioners,

- versus -

COMMISSION ON ELECTIONS; MUNICIPALITY OF BAYBAY, PROVINCE OF LEYTE; MUNICIPALITY OF BOGO, PROVINCE OF CEBU; MUNICIPALITY OF CATBALOGAN, PROVINCE OF WESTERN SAMAR; MUNICIPALITY OF TANDAG, PROVINCE OF SURIGAO DEL SUR; MUNICIPALITY OF BORONGAN, PROVINCE OF EASTERN SAMAR; AND MUNICIPALITY OF TAYABAS, PROVINCE OF QUEZON, RESOLUTION

BERSAMIN, J.:

We consider and resolve the Ad Cautelam Motion for Reconsideration filed by the petitioners vis--vis the Resolution promulgated on February 15, 2011.

To recall, the Resolution promulgated on February 15, 2011 granted the Motion for Reconsideration of the respondents presented against the Resolution dated August 24, 2010, reversed the Resolution dated August 24, 2010, and declared the 16 Cityhood Laws Republic Acts Nos. 9389, 9390, 9391, 9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491 constitutional.

Now, the petitioners anchor their Ad Cautelam Motion for Reconsideration upon the primordial ground that the Court could no longer modify, alter, or amend its judgment declaring the Cityhood Laws unconstitutional due to such judgment having long become final and executory. They submit that the Cityhood Laws violated Section 6 and Section 10 of Article X of the Constitution, as well as the Equal Protection Clause.

The petitioners specifically ascribe to the Court the following errors in its promulgation of the assailed February 15, 2011 Resolution, to wit:

I. THE HONORABLE COURT HAS NO JURISDICTION TO PROMULGATE THE RESOLUTION OF 15 FEBRUARY 2011 BECAUSE THERE IS NO LONGER ANY ACTUAL CASE OR CONTROVERSY TO SETTLE. II. THE RESOLUTION CONTRAVENES THE 1997 RULES OF CIVIL PROCEDURE AND RELEVANT SUPREME COURT ISSUANCES.

III. THE RESOLUTION UNDERMINES THE JUDICIAL SYSTEM IN ITS DISREGARD OF THE PRINCIPLES OF RES JUDICATA AND THE DOCTRINE OF IMMUTABILITY OF FINAL JUDGMENTS.

IV. THE RESOLUTION ERRONEOUSLY RULED THAT THE SIXTEEN (16) CITYHOOD BILLS DO NOT VIOLATE ARTICLE X, SECTIONS 6 AND 10 OF THE 1987 CONSTITUTION.

V. THE SIXTEEN (16) CITYHOOD LAWS VIOLATE THE EQUAL PROTECTION CLAUSE OF THE CONSTITUTION AND THE RIGHT OF LOCAL GOVERNMENTS TO A JUST SHARE IN THE NATIONAL TAXES.

Ruling

Upon thorough consideration, we deny the Ad Cautelam Motion for Reconsideration for its lack of merit.

I. Procedural Issues

With respect to the first, second, and third assignments of errors, supra, it appears that the petitioners assail the jurisdiction of the Court in promulgating theFebruary 15, 2011 Resolution, claiming that the decision herein had long become final and executory. They state that the Court thereby violated rules of procedure, and the principles of res judicata and immutability of final judgments.

The petitioners posit that the controversy on the Cityhood Laws ended with the April 28, 2009 Resolution denying the respondents second motion for reconsideration vis--vis the November 18, 2008 Decision for being a prohibited pleading, and in view of the issuance of the entry of judgment on May 21, 2009.

The Court disagrees with the petitioners.

In the April 28, 2009 Resolution, the Court ruled:

By a vote of 6-6, the Motion for Reconsideration of the Resolution of 31 March 2009 is DENIED for lack of merit. The motion is denied since there is no majority that voted to overturn the Resolution of 31 March 2009.

The Second Motion for Reconsideration of the Decision of 18 November 2008 is DENIED for being a prohibited pleading, and the Motion for Leave to Admit Attached Petition in Intervention dated 20 April 2009 and the Petition in Intervention dated 20 April 2009 filed by counsel for Ludivina T. Mas, et al. are also DENIED in view of the denial of the second motion for reconsideration. No further pleadings shall be entertained. Let entry of judgment be made in due course.

Justice Presbitero J. Velasco, Jr. wrote a Dissenting Opinion, joined by Justices Consuelo Ynares-Santiago, Renato C. Corona, Minita ChicoNazario, Teresita Leonardo-De Castro, and Lucas P. Bersamin. Chief Justice Reynato S. Puno and Justice Antonio Eduardo B. Nachura took [1] no part. Justice Leonardo A. Quisumbing is on leave.

Within 15 days from receipt of the April 28, 2009 Resolution, the respondents filed a Motion To Amend Resolution Of April 28, 2009 By Declaring Instead That Respondents Motion for Reconsideration Of the Resolution Of March 31, 2009 And Motion For Leave To File, And To Admit Attached Second Motion For Reconsideration Of The Decision Dated November 18, 2008 Remain Unresolved And To Conduct Further Proceedings Thereon, arguing therein that a determination of the issue of constitutionality of the 16 Cityhood Laws upon a motion for reconsideration by an equally divided vote was not binding on the Court as a valid precedent, citing the separate opinion of then Chief Justice Reynato S. Puno in Lambino [2] v. Commission on Elections.

Thus, in its June 2, 2009 Resolution, the Court issued the following clarification of the April 28, 2009 Resolution, viz:

As a rule, a second motion for reconsideration is a prohibited pleading pursuant to Section 2, Rule 52 of the Rules of Civil Procedure which provides that: No second motion for reconsideration of a judgment or final resolution by the same party shall be entertained. Thus, a decision becomes final and executory after 15 days from receipt of the denial of the first motion for reconsideration.

However, when a motion for leave to file and admit a second motion for reconsideration is granted by the Court, the Court therefore allows the filing of the second motion for reconsideration. In such a case, the second motion for reconsideration is no longer a prohibited pleading.

In the present case, the Court voted on the second motion for reconsideration filed by respondent cities. In effect, the Court allowed the filing of the second motion for reconsideration. Thus, the second motion for reconsideration was no longer a prohibited

pleading. However, for lack of the required number of votes to overturn the 18 November 2008 Decision and 31 March 2009 [3] Resolution, the Court denied the second motion for reconsideration in its 28 April 2009 Resolution.

As the result of the aforecited clarification, the Court resolved to expunge from the records several pleadings and documents, including respondents Motion To Amend Resolution Of April 28, 2009 etc.

The respondents thus filed their Motion for Reconsideration of the Resolution of June 2, 2009, asseverating that their Motion To Amend Resolution Of April 28, 2009 etc. was not another motion for reconsideration of the November 18, 2008 Decision, because it assailed the April 28, 2009 Resolution with respect to the tie-vote on the respondents Second Motion For Reconsideration. They pointed out that the Motion To Amend Resolution Of April 28, 2009 etc. was filed on May 14, 2009, which was within the 15-day period from their receipt of the April 28, 2009 Resolution; thus, the entry of judgment had been prematurely made. They reiterated their arguments with respect to a tie-vote upon an issue of constitutionality.

In the September 29, 2009 Resolution, the Court required the petitioners to comment on the Motion for Reconsideration of the Resolution of June 2, 2009within 10 days from receipt.

[4]

As directed, the petitioners filed their Comment Ad Cautelam With Motion to Expunge.

The respondents filed their Motion for Leave to File and to Admit Attached Reply to Petitioners Comment Ad Cautelam With Motion to Expunge, together with the Reply.

On November 17, 2009, the Court resolved to note the petitioners Comment Ad Cautelam With Motion to Expunge, to grant the respondents Motion for Leave to File and Admit Reply to Petitioners Comment Ad Cautelam with Motion to Expunge, and to note the respondents Reply to Petitioners Comment Ad Cautelam with Motion to Expunge.

On December 21, 2009, the Court, resolving the Motion To Amend Resolution Of April 28, 2009 etc. and voting anew on the Second Motion For Reconsideration in order to reach a concurrence of a majority, promulgated its Decision granting the motion and declaring the Cityhood Laws as [5] constitutional, disposing thus:

WHEREFORE, respondent LGUs Motion for Reconsideration dated June 2, 2009, their Motion to Amend the Resolution of April 28, 2009 by Declaring Instead that Respondents Motion for Reconsideration of the Resolution of March 31, 2009 and Motion for Leave to File and to Admit Attached Second Motion for Reconsideration of the Decision Dated November 18, 2008 Remain Unresolved and to Conduct Further Proceedings, dated May 14, 2009, and their second Motion for Reconsi deration of the Decision dated November 18, 2008 areGRANTED. The June 2, 2009, the March 31, 2009, and April 31, 2009 Resolutions are REVERSED and SET ASIDE. The entry of judgment made on May 21, 2009 must accordingly beRECALLED.

The instant consolidated petitions and petitions-in-intervention are DISMISSED. The cityhood laws, namely Republic Act Nos. 9389, 9390, 9391, 9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491 are declared VALID and CONSTITUTIONAL.

SO ORDERED.

On January 5, 2010, the petitioners filed an Ad Cautelam Motion for Reconsideration against the December 21, 2009 Decision. [7] the petitioners also filed a Motion to Annul Decision of 21 December 2009.

[6]

On the same date,

On January 12, 2010, the Court directed the respondents to comment on the motions of the petitioners.

[8]

On February 4, 2010, petitioner-intervenors City of Santiago, City of Legazpi, and City of Iriga filed their separate Manifestations with Supplemental [9] Ad Cautelam Motions for Reconsideration. Similar manifestations with supplemental motions for reconsideration were filed by other petitioner[10] [11] intervenors, specifically: City of Cadiz on February 15, 2010; City of Batangas on February 17, 2010; and City of Oroquieta on February 24, [12] [13] 2010. The Court required the adverse parties to comment on the motions. As directed, the respondents complied.

On August 24, 2010, the Court issued its Resolution reinstating the November 18, 2008 Decision.

[14]

On September 14, 2010, the respondents timely filed a Motion for Reconsideration of the Resolution Dated August 24, 2010. They followed this by filing on September 20, 2010 a Motion to Set Motion for Reconsideration of the Resolution dated August 24, 2010 for [16] Hearing. On November 19, 2010, the petitioners sent in their Opposition [To the Motion for Reconsideration of Resolution dated August 24, [17] [18] 2010]. On November 30, 2010, the Court noted, among others, the petitioners Opposition.

[15]

On January 18, 2011, for Hearing.

[19]

the Court denied the respondents Motion to Set Motion for Reconsideration of the Resolution dated August 24, 2010

Thereafter, on February 15, 2011, the Court issued the Resolution being now challenged.

It can be gleaned from the foregoing that, as the June 2, 2009 Resolution clarified, the respondents Second Motion For Reconsideration was not a prohibited pleading in view of the Courts voting and acting on it having the effect of allowing the Second Motion For Reconsideration; and that when the respondents filed theirMotion for Reconsideration of the Resolution of June 2, 2009 questioning the expunging of their Motion To Amend Resolution Of April 28, 2009 etc. (which had been filed within the 15-day period from receipt of the April 28, 2009 Resolution), the Court opted to act on the Motion for Reconsideration of the Resolution of June 2, 2009 by directing the adverse parties through its September 29, 2009 Resolution to comment. The same permitting effect occurred when the Court, by its November 17, 2009 Resolution, granted the respondents Motion for Leave to File and Admit Reply to Petitioners Comment Ad Cautelam with Motion to Expunge , and noted the attached Reply.

Moreover, by issuing the Resolutions dated September 29, 2009 and November 17, 2009, the Court: ( a) rendered ineffective the tie-vote under the Resolution of April 28, 2009 and the ensuing denial of the Motion for Reconsideration of the Resolution of March 31, 2009 for lack of a majority to overturn; (b), re-opened the Decision of November 18, 2008 for a second look under reconsideration; and ( c) lifted the directive that no further pleadings would be entertained. The Court in fact entertained and acted on the respondents Motion for Reconsideration of the Resolution of June 2, 2009. Thereafter, the Court proceeded to deliberate anew on the respondents Second Motion for Reconsideration and ended up with the promulgation of the December 21, 2009 Decision (declaring the Cityhood Laws valid and constitutional).

It is also inaccurate for the petitioners to insist that the December 21, 2009 Decision overturned the November 18, 2008 Decision on the basis of the mereReflections of the Members of the Court. To be sure, the Reflections were the legal opinions of the Members and formed part of the deliberations of the Court. The reference in the December 21, 2009 Decision to the Reflections pointed out that there was still a pending incident [20] [21] after the April 28, 2009 Resolution that had been timely filed within 15 days from its receipt, pursuant to Section 10, Rule 51, in relation to [22] Section 1, Rule 52, of the Rules of Court. Again, the Court did act and deliberate upon this pending incident, leading to the issuance of the December 21, 2009 Decision (declaring the Cityhood Laws free from constitutional infirmity). It was thereafter that the Court rendered its August 24, 2010 Resolution (reinstating the November 18, 2008 Decision), to correct which the respondents Motion for Reconsideration of the Resolution Dated August 24, 2010 was filed. And, finally, the Court issued its February 15, 2011 Resolution, reversing and setting aside the August 24, 2010 Resolution.

It is worth repeating that the actions taken herein were made by the Court en banc strictly in accordance with the Rules of Court and its internal procedures. There has been no irregularity attending or tainting the proceedings.

It also relevant to state that the Court has frequently disencumbered itself under extraordinary circumstances from the shackles of [23] technicality in order to render just and equitable relief.

On whether the principle of immutability of judgments and bar by res judicata apply herein, suffice it to state that the succession of the events recounted herein indicates that the controversy about the 16 Cityhood Laws has not yet been resolved with finality. As such, the operation of the principle of immutability of judgments did not yet come into play. For the same reason is an adherence to the doctrine of res judicata not yet warranted, especially considering that the precedential ruling for this case needed to be revisited and set with certainty and finality.

II. Substantive Issues

The petitioners reiterate their position that the Cityhood Laws violate Section 6 and Section 10 of Article X of the Constitution, the Equal Protection Clause, and the right of local governments to a just share in the national taxes.

The Court differs.

Congress clearly intended that the local government units covered by the Cityhood Laws be exempted from the coverage of R.A. No. 9009. The apprehensions of the then Senate President with respect to the considerable disparity between the income requirement of P20 million under the Local Government Code (LGC) prior to its amendment, and the P100 million under the amendment introduced by R.A. No. 9009 were definitively articulated in his interpellation of Senator Pimentel during the deliberations on Senate Bill No. 2157. The then Senate President was cognizant of the fact that there were municipalities that then had pending conversion bills during the 11 Congress prior to the adoption of Senate Bill No. 2157 as R.A. No. 9009, including the municipalities covered by the Cityhood th Laws. It is worthy of mention that the pertinent deliberations on Senate Bill No. 2157 occurred on October 5, 2000 while the 11 Congress was in session, and the conversion bills were then pending in the Senate. Thus, the responses of Senator Pimentel made it obvious that R.A. No. 9009 th would not apply to the conversion bills then pending deliberation in the Senate during the 11 Congress.
th [24]

R.A. No. 9009 took effect on June 30, 2001, when the 12 Congress was incipient. By reason of the clear legislative intent to exempt the th municipalities covered by the conversion bills pending during the 11 Congress, the House of Representatives adopted Joint Resolution No. 29, entitled Joint Resolution to Exempt Certain Municipalities Embodied in Bills Filed in Congress before June 30, 2001 from the coverage of Republic Act No. 9009 . However, the Senate failed to act on Joint Resolution No. 29. Even so, the House of Representatives readopted Joint Resolution No. 29 as Joint Resolution No. 1 during the 12 Congress, approve Joint Resolution No. 1.
th [25]

th

and forwarded Joint Resolution No. 1 to the Senate for approval. Again, the Senate failed to

At this juncture, it is worthwhile to consider the manifestation of Senator Pimentel with respect to Joint Resolution No. 1, to wit:

MANIFESTATION OF SENATOR PIMENTEL

House Joint Resolution No. 1 seeks to exempt certain municipalities seeking conversion into cities from the requirement that they must have at least P100 million in income of locally generated revenue, exclusive of the internal revenue share that they received from the central government as required under Republic Act No. 9009.

The procedure followed by the House is questionable, to say the least. The House wants the Senate to do away with the income requirement of P100 million so that, en masse, the municipalities they want exempted could now file bills specifically converting them into cities. The reason they want the Senate to do it first is that Cong. Dodo Macias, chair of the House Committee on Local Governments, I am told, will not entertain any bill for the conversion of municipalities into cities unless the issue of income requirement is first hurdled. The House leadership therefore wants to shift the burden of exempting certain municipalities from the income requirement to the Senate rather than do it itself.

That is most unusual because, in effect, the House wants the Senate to pass a blanket resolution that would qualify the municipalities concerned for conversion into cities on the matter of income alone. Then, at a later date, the House would pass specific bills converting the municipalities into cities. However, income is not only the requirement for municipalities to become cities. There are also the requirements on population and land area.

In effect, the House wants the Senate to tackle the qualification of the municipalities they want converted into cities piecemeal and separately, first is the income under the joint resolution, then the other requirements when the bills are file to convert specific municipalities into cities. To repeat, this is a most unusual manner of creating cities.

My respectful suggestion is for the Senate to request the House to do what they want to do regarding the applications of certain municipalities to become cities pursuant to the requirements of the Local Government Code. If the House wants to exempt certain municipalities from the requirements of the Local Government Code to become cities, by all means, let them do their thing. Specifically, they should act on specific bills to create cities and cite the reasons why the municipalities concerned are qualified to become cities. Only after the House shall have completed what they are expected to do under the law would it be proper for the Senate to act on specific bills creating cities.

In other words, the House should be requested to finish everything that needs to be done in the matter of converting municipalities into cities and not do it piecemeal as they are now trying to do under the joint resolution.

In my long years in the Senate, this is the first time that a resort to this subterfuge is being undertaken to favor the creation of certain cities. I am not saying that they are not qualified. All I am saying is, if the House wants to pass and create cities out of certain municipalities, by all means let them do that. But they should do it following the requirements of the Local Government Code and, if they want to make certain exceptions, they can also do that too. But they should not use the Senate as a ploy to get things done which they themselves should do.

Incidentally, I have recommended this mode of action verbally to some leaders of the House. Had they followed the recommendation, for all I know, the municipalities they had envisioned to be covered by House Joint Resolution No. 1 would, by now if not all, at least some have been converted into cities. House Joint Resolution No. 1, the House, in effect, caused the delay in the approval in the applications for cityhood of the municipalities concerned.

Lastly, I do not have an amendment to House Joint Resolution No. 1. What I am suggesting is for the Senate to request the House to follow the procedure outlined in the Local Government Code which has been respected all through the years. By doing so, we uphold the rule of law and minimize the possibilities of power play in the approval of bills converting municipalities into cities.
[26]

Thereafter, the conversion bills of filed in the House of Representatives, and were all unanimously and

the

respondents

were

individually

favorably voted upon by the Members of the House of Representatives. The bills, when forwarded to the Senate, were likewise unanimously [28] approved by the Senate. The acts of both Chambers of Congress show that the exemption clauses ultimately incorporated in the Cityhood Laws are but the express articulations of the clear legislative intent to exempt the respondents, without exception, from the coverage of R.A. No. 9009. Thereby, R.A. No. 9009, and, by necessity, the LGC, were amended, not by repeal but by way of the express exemptions being embodied in the exemption clauses.

[27]

The petitioners further contend that the new income requirement of P100 million from locally generated sources is not arbitrary because it is not difficult to comply with; that there are several municipalities that have already complied with the requirement and have, in fact, been converted into cities, such as Sta. Rosa in Laguna (R.A. No 9264), Navotas (R.A. No. 9387) and San Juan (R.A. No. 9388) in Metro Manila, Dasmarias in Cavite (R.A. No. 9723), and Bian in Laguna (R.A. No. 9740); and that several other municipalities have supposedly reached the income of P100 million from locally generated sources, such as Bauan in Batangas, Mabalacat in Pampanga, and Bacoor in Cavite.

The contention of the petitioners does not persuade.

As indicated in the Resolution of February 15, 2011, fifty-nine (59) existing cities had failed as of 2006 to post an average annual income of P100 million based on the figures contained in the certification dated December 5, 2008 by the Bureau of Local Government. The large number of existing cities, virtually 50% of them, still unable to comply with the P100 million threshold income five years after R.A. No. 9009 took effect renders it fallacious and probably unwarranted for the petitioners to claim that the P100 million income requirement is not difficult to comply with.

In this regard, the deliberations on Senate Bill No. 2157 may prove enlightening, thus:

Senator Osmea III. And could the gentleman help clarify why a municipality would want to be converted into a city?

Senator Pimentel. There is only one reason, Mr. President, and it is not hidden. It is the fact that once converted into a city, the municipality will have roughly more than three times the share that it would be receiving over the internal revenue allotment than it would have if it were to remain a municipality. So more or less three times or more.

Senator Osmea III. Is it the additional funding that they will be able to enjoy from a larger share from the internal revenue allocations?

Senator Pimentel. Yes, Mr. President.

Senator Osmea III. Now, could the gentleman clarify, Mr. President, why in the original Republic Act No. 7160, known as the Local Government Code of 1991, such a wide gap was made between a municipalitywhat a municipality would earnand a city? Because essentially, to a persons mind, even with this new requirement, if approved by Congress, if a municipality is earning P100 m illion and has a population of more than 150,000 inhabitants but has less than 100 square kilometers, it would not qualify as a city.

Senator Pimentel. Yes.

Senator Osmea III. Now would that not be quite arbitrary on the part of the municipality?

Senator Pimentel. In fact, Mr. President, the House version restores the or. So, this is a matter that we can very well take up as a policy issue. The chair of the committee does not say that we should, as we know, not listen to arguments for the restoration of the word or in the population or territorial requirement.

Senator Osmea III. Mr. President, my point is that, I agree with the gentlemans and, but perhaps we should bring down the area. There are certainly very crowded places in this country that are less than 10,000 hectares 100 square kilometers is 10,000 hectares. There might only be 9,000 hectares or 8,000 hectares. And it would be unfair if these municipalities already earning P100,000,000 in locally generated funds and have a population of over 150,000 would not be qualified because of the simple fact that the physical area does not cover 10,000 hectares.

Senator Pimentel. Mr. President, in fact, in Metro Manila there are any number of municipalities. San Juan is a specific example which, if we apply the present requirements, would not qualify: 100 square kilometers and a population of not less than 150,000.

But my reply to that, Mr. President, is that they do not have to become a city?

Senator Osmea III. Because of the income.

Senator Pimentel. But they are already earning a lot, as the gentleman said. Otherwise, the danger here, if we become lax in the requirements, is the metropolis-located local governments would have more priority in terms of funding because they would have more qualifications to become a city compared to far-flung areas in Mindanao or in the Cordilleras, or whatever.

Therefore, I think we should not probably ease up on the requirements. Maybe we can restore the word or so that if they do not have the 100 square kilometers of territory, then if they qualify in terms of population and income, that would be all right, Mr. President.

Senator Osmea III. Mr. President, I will not belabor the point at this time. I know that the distinguished gentleman is considering several amendments to the Local Government Code. Perhaps this is something that could be further refined at a later time, with his permission.

So I would like to thank the gentleman for his graciousness in answering our questions.

Senator Pimentel. I also thank the gentleman, Mr. President.

[29]

The Court takes note of the fact that the municipalities cited by the petitioners as having generated the threshold income of P100 million from local sources, including those already converted into cities, are either in Metro Manila or in provinces close to Metro Manila. In comparison, the municipalities covered by the Cityhood Laws are spread out in the different provinces of the Philippines, including the Cordillera and Mindanao regions, and are considerably very distant from Metro Manila. This reality underscores the danger the enactment of R.A. No. 9009 sought to prevent, i.e., that the metropolis-located local governments would have more priority in terms of funding because they would have more qualifications to become a city compared to the far-flung areas in Mindanao or in the Cordilleras, or whatever, actually resulting from the abrupt increase in the income requirement. Verily, this result is antithetical to what the Constitution and LGC have nobly envisioned in favor of countryside development and national growth. Besides, this result should be arrested early, to avoid the unwanted divisive effect on the entire country due to the local government units closer to the National Capital Region being afforded easier access to the bigger share in the national coffers than other local government units.

There should also be no question that the local government units covered by the Cityhood Laws belong to a class of their own. They have proven themselves viable and capable to become component cities of their respective provinces. They are and have been centers of trade and commerce, points of convergence of transportation, rich havens of agricultural, mineral, and other natural resources, and flourishing tourism spots. [30] In his speech delivered on the floor of the Senate to sponsor House Joint Resolution No. 1, Senator Lim recognized such unique traits, viz:

It must be noted that except for Tandag and Lamitan, which are both second-class municipalities in terms of income, all the rest are categorized by the Department of Finance as first-class municipalities with gross income of at least P70 million as per Commission of Audit Report for 2005. Moreover, Tandag and Lamitan, together with Borongan, Catbalogan, and Tabuk, are all provincial capitals.

The more recent income figures of the 12 municipalities, which would have increased further by this time, indicate their readiness to take on the responsibilities of cityhood.

Moreover, the municipalities under consideration are leading localities in their respective provinces. Borongan, Catbalogan, Tandag, Batac and Tabuk are ranked number one in terms of income among all the municipalities in their respective provinces; Baybay and Bayugan are number two; Bogo and Lamitan are number three; Carcar, number four; and Tayabas, number seven. Not only are they pacesetters in their respective provinces, they are also among the frontrunners in their regions Baybay, Bayugan and Tabuk are number two income-earners in Regions VIII, XIII, and CAR, respectively; Catbalogan and Batac are number three in Regions VIII and I, respectively; Bogo, number five in Region VII; Borongan and Carcar are both number six in Regions VIII and VII, respectively. This simply shows that these municipalities are viable.

Petitioner League of Cities argues that there exists no issue with respect to the cityhood of its member cities, considering that they became cities in full compliance with the criteria for conversion at the time of their creation.

The Court considers the argument too sweeping. What we pointed out was that the previous income requirement of P20 million was definitely not insufficient to provide the essential government facilities, services, and special functions vis--vis the population of a component city. We also stressed that the increased income requirement of P100 million was not the only conclusive indicator for any municipality to survive and remain viable as a component city. These observations were unerringly reflected in the respective incomes of the fifty-nine (59) members of the League of Cities that have still failed, remarkably enough, to be compliant with the new requirement of the P100 million threshold income five years after R.A. No. 9009 became law.

Undoubtedly, the imposition of the income requirement of P100 million from local sources under R.A. No. 9009 was arbitrary. When the sponsor of the law chose the specific figure of P100 million, no research or empirical data buttressed the figure. Nor was there proof that the proposal took into account the after-effects that were likely to arise. As already mentioned, even the danger the passage of R.A. No. 9009 sought to

prevent might soon become a reality. While the Constitution mandates that the creation of local government units must comply with the criteria laid down in the LGC, it cannot be justified to insist that the Constitution must have to yield to every amendment to the LGC despite such amendment imminently producing effects contrary to the original thrusts of the LGC to promote autonomy, decentralization, countryside development, and the concomitant national growth.

Moreover, if we were now to adopt the stringent interpretation of the Constitution the petitioners are espousing, we may have to apply the same restrictive yardstick against the recently converted cities cited by the petitioners, and find two of them whose conversion laws have also to [31] [32] be struck down for being unconstitutional. The two laws are R.A. No. 9387 and R.A. No. 9388, respectively converting the municipalities of San Juan and Navotas into highly urbanized cities. A cursory reading of the laws indicates that there is no indication of compliance with the requirements imposed by the LGC, for, although the two local government units concerned presumably complied with the income requirement of P50 million under Section 452 of the LGC and the income requirement of P100 million under the amended Section 450 of the LGC, they obviously did not meet the requirements set forth under Section 453 of the LGC, to wit:

Section 453. Duty to Declare Highly Urbanized Status.It shall be the duty of the President to declare a city as highly urbanized within thirty (30) days after it shall have met the minimum requirements prescribed in the immediately preceding Section, upon proper application therefor and ratification in a plebiscite by the qualified voters therein.

Indeed, R.A. No. 9387 and R.A. No. 9388 evidently show that the President had not classified San Juan and Navotas as highly urbanized cities upon proper application and ratification in a plebiscite by the qualified voters therein. A further perusal of R.A. No. 9387 reveals that San Juan did not qualify as a highly urbanized city because it had a population of only 125,558, contravening the required minimum population of 200,000 under Section 452 of the LGC. Such non-qualification as a component city was conceded even by Senator Pimentel during the deliberations on Senate Bill No. 2157.

The petitioners contention that the Cityhood Laws violated their right to a just share in the national taxes is not acceptab le.

In this regard, it suffices to state that the share of local government units is a matter of percentage under Section 285 of the LGC, not a specific amount. Specifically, the share of the cities is 23%, determined on the basis of population (50%), land area (25%), and equal sharing (25%). This share is also dependent on the number of existing cities, such that when the number of cities increases, then more will divide and share the allocation for cities. However, we have to note that the allocation by the National Government is not a constant, and can either increase or decrease. With every newly converted city becoming entitled to share the allocation for cities, the percentage of internal revenue allotment (IRA) entitlement of each city will decrease, although the actual amount received may be more than that received in the preceding year. That is a necessary consequence of Section 285 and Section 286 of the LGC.

As elaborated here and in the assailed February 15, 2011 Resolution, the Cityhood Laws were not violative of the Constitution and the LGC. The respondents are thus also entitled to their just share in the IRA allocation for cities. They have demonstrated their viability as component cities of their respective provinces and are developing continuously, albeit slowly, because they had previously to share the IRA with about 1,500 municipalities. With their conversion into component cities, they will have to share with only around 120 cities.

Local government units do not subsist only on locally generated income, but also depend on the IRA to support their development. They can spur their own developments and thereby realize their great potential of encouraging trade and commerce in the far-flung regions of the country. Yet their potential will effectively be stunted if those already earning more will still receive a bigger share from the national coffers, and if commercial activity will be more or less concentrated only in and near Metro Manila.

III. Conclusion

We should not ever lose sight of the fact that the 16 cities covered by the Cityhood Laws not only had conversion bills pending during the th 11 Congress, but have also complied with the requirements of the LGC prescribed prior to its amendment by R.A. No. 9009. Congress undeniably gave these cities all the considerations that justice and fair play demanded. Hence, this Court should do no less by stamping its imprimatur to the clear and unmistakable legislative intent and by duly recognizing the certain collective wisdom of Congress.

WHEREFORE, the Ad Cautelam Motion for Reconsideration (of the Decision dated 15 February 2011) is denied with finality. PATRICIO TAN, FELIX FERRER, JUAN M. HAGAD, SERGIO HILADO, VIRGILIO GASTON, CONCHITA MINAYA, TERESITA ESTACIO, DESIDERIO DEFERIA, ROMEO GAMBOA, ALBERTO LACSON, FE HOFILENA, EMILY JISON, NIEVES LOPEZ AND CECILIA MAGSAYSAY, petitioners, vs. THE COMMISSION ON ELECTIONS and THE PROVINCIAL TREASURER OF NEGROS OCCIDENTAL, respondents. Gamboa & Hofilea Law Office for petitioners.

ALAMPAY, J.:

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, which took effect on December 3, 1985, Petitioners herein, who are residents of the Province of Negros Occidental, in the various cities and municipalities therein, on December 23, 1985, filed with this Court a case for Prohibition for the purpose of stopping respondents Commission on Elections from conducting the plebiscite which, pursuant to and in implementation of the aforesaid law, was scheduled for January 3, 1986. Said law provides: SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of Calatrava, Taboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador Benedicto, all in the northern portion of the Island of Negros, are hereby separated from the province to be known as the Province of Negros del Norte. SEC. 2. The boundaries of the new province shall be the southern limits of the City of Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south and the territorial limits of the northern portion to the Island of Negros on the west, north and east, comprising a territory of 4,019.95 square kilometers more or less. SEC. 3. The seat of government of the new province shall be the City of Cadiz. SEC. 4. A plebiscite shall be conducted in the proposed new province which are the areas affected within a period of one hundred and twenty days from the approval of this Act. After the ratification of the creation of the Province of Negros del Norte by a majority of the votes cast in such plebiscite, the President of the Philippines shall appoint the first officials of the province. SEC. 5. The Commission on Elections shall conduct and supervise the plebiscite herein provided, the expenses for which shall be charged to local funds. SEC. 6. This Act shall takeeffect upon its approval.(Rollo, pp. 23-24) Petitioners contend that Batas Pambansa Blg. 885 is unconstitutional and it is not in complete accord with the Local Government Code as in Article XI, Section 3 of our Constitution, it is expressly mandated that See. 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. Section 197 of the Local Government Code enumerates the conditions which must exist to provide the legal basis for the creation of a provincial unit and these requisites are: SEC. 197. Requisites for Creation. A province may be created if it has a territory of at least three thousand five hundred square kilometers, a population of at least five hundred thousand persons, an average estimated annual income, as certified by the Ministry of Finance, of not less than ten million pesos for the last three consecutive years, and its creation shall not reduce the population and income of the mother province or provinces at the time of said creation to less than the minimum requirements under this section. The territory need not be contiguous if it comprises two or more islands. The average estimated annual income shall include the income alloted for both the general and infrastructural funds, exclusive of trust funds, transfers and nonrecurring income. (Rollo, p. 6) Due to the constraints brought about by the supervening Christmas holidays during which the Court was in recess and unable to timely consider the petition, a supplemental pleading was filed by petitioners on January 4, 1986, averring therein that the plebiscite sought to be restrained by them was held on January 3, 1986 as scheduled but that there are still serious issues raised in the instant case affecting the legality, constitutionality and validity of such exercise which should properly be passed upon and resolved by this Court. The plebiscite was confined only to the inhabitants of the territory of Negros del Nrte, namely: the Cities of Silay, Cadiz, and San Carlos, and the municipalities of Calatrava, Taboso, Escalante, Sagay, Manapla, Victorias, E.B. Magalona and Don Salvador Benedicto. Because of the exclusions of the voters from the rest of the province of Negros Occidental, petitioners found need to change the prayer of their petition "to the end that the constitutional issues which they have raised in the action will be ventilated and given final resolution.'"At the same time, they asked that the effects of the plebiscite which they sought to stop be suspended until the Supreme Court shall have rendered its decision on the very fundamental and far-reaching questions that petitioners have brought out. Acknowledging in their supplemental petition that supervening events rendered moot the prayer in their initial petition that the plebiscite scheduled for January 3, 1986, be enjoined, petitioners plead, nevertheless, that... a writ of Prohibition be issued, directed to Respondent Commission on Elections to desist from issuing official proclamation of the results of the plebiscite held on January 3, 1986. Finding that the exclusion and non-participation of the voters of the Province of Negros Occidental other than those living within the territory of the new province of Negros del Norte to be not in accordance with the Constitution, that a writ of mandamus be issued, directed to the respondent Commission on Elections, to schedule the holding of another plebiscite at which all the qualified voters of the entire Province of Negros Occidental as now existing shall participate, at the same time making pronouncement that the plebiscite held on January 3, 1986 has no legal effect, being a patent legal nullity; And that a similar writ of Prohibition be issued, directed to the respondent Provincial Treasurer, to desist from ordering the release of any local funds to answer for expenses incurred in the holding of such plebiscite until ordered by the Court. (Rollo pp. 9-10). Petitioners further prayed that the respondent COMELEC hold in abeyance the issuance of any official proclamation of the results of the aforestated plebiscite. During the pendency of this case, a motion that he be allowed to appear as amicus curiae in this case (dated December 27, 1985 and filed with the Court on January 2, 1986) was submitted by former Senator Ambrosio Padilla. Said motion was granted in Our resolution of January 2, 1986. Acting on the petition, as well as on the supplemental petition for prohibition with preliminary injunction with prayer for restraining order, the Court, on January 7, 1986 resolved, without giving due course to the same, to require respondents to comment, not to file a motion to dismiss. Complying with said resolution, public respondents, represented by the Office of the Solicitor General, on January 14, 1986, filed their Comment, arguing therein that the challenged statute.-Batas Pambansa 885, should be accorded the presumption of legality. They submit that the said law is not void on its face and that the petition does not show a clear, categorical and undeniable demonstration of the supposed infringement of the Constitution. Respondents state that the powers of the Batasang-Pambansa to enact the assailed law is beyond question. They claim that Batas Pambansa Big. 885 does not infringe the Constitution because the requisites of the Local Government Code have been complied with. Furthermore, they submit that this case has now become moot and academic with the proclamation of the new Province of Negros del Norte.

Respondents argue that the remaining cities and municipalities of the Province of Negros Occidental not included in the area of the new Province of Negros del Norte, de not fall within the meaning and scope of the term "unit or units affected", as referred to in Section 3 of Art. XI of our Constitution. On this reasoning, respondents maintain that Batas Pambansa Blg. 885 does not violate the Constitution, invoking and citing the case of Governor Zosimo Paredes versus the Honorable Executive Secretary to the President, et al. (G.R. No. 55628, March 2, 1984 (128 SCRA 61), particularly the pronouncements therein, hereunder quoted: 1. Admittedly,this is one of those cases where the discretion of the Court is allowed considerable leeway. There is indeed an element of ambiguity in the use of the expression 'unit or units affected'. It is plausible to assert as petitioners do that when certain Barangays are separated from a parent municipality to form a new one, all the voters therein are affected. It is much more persuasive, however, to contend as respondents do that the acceptable construction is for those voters, who are not from the barangays to be separated, should be excluded in the plebiscite. 2. For one thing, it is in accordance with the settled doctrine that between two possible constructions, one avoiding a finding of unconstitutionality and the other yielding such a result, the former is to be preferred. That which will save, not that which will destroy, commends itself for acceptance. After all, the basic presumption all these years is one of validity. ... 3. ... Adherence to such philosophy compels the conclusion that when there are indications that the inhabitants of several barangays are inclined to separate from a parent municipality they should be allowed to do so. What is more logical than to ascertain their will in a plebiscite called for that purpose. It is they, and they alone, who shall constitute the new unit. New responsibilities will be assumed. New burdens will be imposed. A new municipal corporation will come into existence. Its birth will be a matter of choice-their choice. They should be left alone then to decide for themselves. To allow other voters to participate will not yield a true expression of their will. They may even frustrate it, That certainly will be so if they vote against it for selfish reasons, and they constitute the majority. That is not to abide by the fundamental principle of the Constitution to promote local autonomy, the preference being for smaller units. To rule as this Tribunal does is to follow an accepted principle of constitutional construction, that in ascertaining the meaning of a particular provision that may give rise to doubts, the intent of the framers and of the people may be gleaned from provisions in pari materia. Respondents submit that said ruling in the aforecited case applies equally with force in the case at bar. Respondents also maintain that the requisites under the Local Government Code (P.D. 337) for the creation of the new province of Negros del Norte have all been duly complied with, Respondents discredit petitioners' allegations that the requisite area of 3,500 square kilometers as so prescribed in the Local Government Code for a new province to be created has not been satisfied. Petitioners insist that the area which would comprise the new province of Negros del Norte, would only be about 2,856.56 square kilometers and which evidently would be lesser than the minimum area prescribed by the governing statute. Respondents, in this regard, point out and stress that Section 2 of Batas Pambansa Blg. 885 creating said new province plainly declares that the territorial boundaries of Negros del Norte comprise an area of 4,019.95 square kilometers, more or less. As a final argument, respondents insist that instant petition has been rendered moot and academic considering that a plebiscite has been already conducted on January 3, 1986; that as a result thereof, the corresponding certificate of canvass indicated that out of 195,134 total votes cast in said plebiscite, 164,734 were in favor of the creation of Negros del Norte and 30,400 were against it; and because "the affirmative votes cast represented a majority of the total votes cast in said plebiscite, the Chairman of the Board of Canvassers proclaimed the new province which shall be known as "Negros del Norte". Thus, respondents stress the fact that following the proclamation of Negros del Norte province, the appointments of the officials of said province created were announced. On these considerations, respondents urge that this case should be dismissed for having been rendered moot and academic as the creation of the new province is now a "fait accompli." In resolving this case, it will be useful to note and emphasize the facts which appear to be agreed to by the parties herein or stand unchallenged. Firstly, there is no disagreement that the Provincial Treasurer of the Province of Negros Occidental has not disbursed, nor was required to disburse any public funds in connection with the plebiscite held on January 3, 1986 as so disclosed in the Comment to the Petition filed by the respondent Provincial Treasurer of Negros Occidental dated January 20, 1986 (Rollo, pp. 36-37). Thus, the prayer of the petitioners that said Provincial Treasurer be directed by this Court to desist from ordering the release of any public funds on account of such plebiscite should not longer deserve further consideration. Secondly, in Parliamentary Bill No. 3644 which led to the enactment of Batas Pambansa Blg. 885 and the creation of the new Province of Negros del Norte, it expressly declared in Sec. 2 of the aforementioned Parliamentary Bill, the following: SEC. 2. The boundaries of the new province shall be the southern limits of the City of Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the South and the natural boundaries of the northern portion of the Island of Negros on the West, North and East, containing an area of 285,656 hectares more or less. (Emphasis supplied). However, when said Parliamentary Bill No. 3644 was very quickly enacted into Batas Pambansa Blg. 885, the boundaries of the new Province of Negros del Norte were defined therein and its boundaries then stated to be as follows: SECTION 1. The Cities of Silay, Cadiz, and San Carlos and the municipalities of Calatrava, Toboso, Escalante, Sagay, Manapla, Victorias, E.R. Magalona; and Salvador Benedicto, all in the northern portion of the Island of Negros, are hereby separated from the Province of Negros Occidental and constituted into a new province to be known as the Province of Negros del Norte. SEC. 1. The boundaries of the new province shall be the southern limits of the City of Silay, the Municipality of Salvador Benedicto and the City of San Carlos on the south and the territorial limits of the northern portion of the Island of Negros on the West, North and East, comprising a territory of 4,019.95 square kilometers more or less. Equally accepted by the parties is the fact that under the certification issued by Provincial Treasurer Julian L. Ramirez of the Province of Negros Occidental, dated July 16, 1985, it was therein certified as follows: xxx xxx xxx This is to certify that the following cities and municipalities of Negros Occidental have the land area as indicated hereunder based on the Special Report No. 3, Philippines 1980, Population, Land Area and Density: 1970, 1975 and 1980 by the National Census and Statistics Office, Manila. Land Area (Sq. Km.) 1. Silay City ...................................................................214.8 2. E.B. Magalona............................................................113.3 3. Victorias.....................................................................133.9

4. Manapla......................................................................112.9 5. Cadiz City ..................................................................516.5 6. Sagay .........................................................................389.6 7. Escalante ....................................................................124.0 8. Toboso.......................................................................123.4 9. Calatrava.....................................................................504.5 10. San Carlos City...........................................................451.3 11. Don Salvador Benedicto.................................... (not available) This certification is issued upon the request of Dr. Patricio Y. Tan for whatever purpose it may serve him. (SGD.) JULIAN L. RAMIREZ Provincial Treasurer (Exh. "C" of Petition, Rollo, p. 90). Although in the above certification it is stated that the land area of the relatively new municipality of Don Salvador Benedicto is not available, it is an uncontradicted fact that the area comprising Don Salvador municipality, one of the component units of the new province, was derived from the City of San Carlos and from the Municipality of Calatrava, Negros Occidental, and added thereto was a portion of about one-fourth the land area of the town of Murcia, Negros Occidental. It is significant to note the uncontroverted submission of petitioners that the total land area of the entire municipality of Murcia, Negros Occidental is only 322.9 square kilometers (Exh. "D", Rollo, p. 91). One-fourth of this total land area of Murcia that was added to the portions derived from the land area of Calatrava, Negros Occidental and San Carlos City (Negros Occidental) would constitute, therefore, only 80.2 square kilometers. This area of 80.2 square kilometers if then added to 2,685.2 square kilometers, representing the total land area of the Cities of Silay, San Carlos and Cadiz and the Municipalities of E.R. Magalona, Victorias, Manapla, Sagay, Escalante, Taboso and Calatrava, will result in approximately an area of only 2,765.4 square kilometers using as basis the Special Report, Philippines 1980, Population, Land Area and Density: 1970, 1975 and 1980 of the National Census and Statistics Office, Manila (see Exhibit "C", Rollo, p. 90). No controversion has been made by respondent with respect to the allegations of petitioners that the original provision in the draft legislation, Parliamentary Bill No. 3644, reads: SEC. 4. A plebiscite shall be conducted in the areas affected within a period of one hundred and twenty days from the approval of this Act. After the ratification of the creation of the Province of Negros del Norte by a majority of the votes cast in such plebiscite, the President shall appoint the first officials of the new province. However, when Batas Pambansa Blg. 885 was enacted, there was a significant change in the above provision. The statute, as modified, provides that the requisite plebiscite "shall be conducted in the proposed new province which are the areas affected." It is this legislative determination limiting the plebiscite exclusively to the cities and towns which would comprise the new province that is assailed by the petitioners as violative of the provisions of our Constitution. Petitioners submit that Sec. 3, ART XI thereof, contemplates a plebiscite that would be held in the unit or units affected by the creation of the new province as a result of the consequent division of and substantial alteration of the boundaries of the existing province. In this instance, the voters in the remaining areas of the province of Negros Occidental should have been allowed to participate in the questioned plebiscite. Considering that the legality of the plebiscite itself is challenged for non-compliance with constitutional requisites, the fact that such plebiscite had been held and a new province proclaimed and its officials appointed, the case before Us cannot truly be viewed as already moot and academic. Continuation of the existence of this newly proclaimed province which petitioners strongly profess to have been illegally born, deserves to be inquired into by this Tribunal so that, if indeed, illegality attaches to its creation, the commission of that error should not provide the very excuse for perpetuation of such wrong. For this Court to yield to the respondents' urging that, as there has been fait accompli then this Court should passively accept and accede to the prevailing situation is an unacceptable suggestion. Dismissal of the instant petition, as respondents so propose is a proposition fraught with mischief. Respondents' submission will create a dangerous precedent. Should this Court decline now to perform its duty of interpreting and indicating what the law is and should be, this might tempt again those who strut about in the corridors of power to recklessly and with ulterior motives, create, merge, divide and/or alter the boundaries of political subdivisions, either brazenly or stealthily, confident that this Court will abstain from entertaining future challenges to their acts if they manage to bring about a fait accompli. In the light of the facts and circumstances alluded to by petitioners as attending to the unusually rapid creation of the instant province of Negros del Norte after a swiftly scheduled plebiscite, this Tribunal has the duty to repudiate and discourage the commission of acts which run counter to the mandate of our fundamental law, done by whatever branch of our government. This Court gives notice that it will not look with favor upon those who may be hereafter inclined to ram through all sorts of legislative measures and then implement the same with indecent haste, even if such acts would violate the Constitution and the prevailing statutes of our land. It is illogical to ask that this Tribunal be blind and deaf to protests on the ground that what is already done is done. To such untenable argument the reply would be that, be this so, the Court, nevertheless, still has the duty and right to correct and rectify the wrong brought to its attention. On the merits of the case. Aside from the simpler factual issue relative to the land area of the new province of Negros del Norte, the more significant and pivotal issue in the present case revolves around in the interpretation and application in the case at bar of Article XI, Section 3 of the Constitution, which being brief and for convenience, We again quote: 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. It can be plainly seen that the aforecited constitutional provision makes it imperative that there be first obtained "the approval of a majority of votes in the plebiscite in the unit or units affected" whenever a province is created, divided or merged and there is substantial alteration of the boundaries. It is thus inescapable to conclude that the boundaries of the existing province of Negros Occidental would necessarily be substantially altered by the division of its existing boundaries in order that there can be created the proposed new province of Negros del Norte. Plain and simple logic will demonstrate than 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.

We find no way to reconcile the holding of a plebiscite that should conform to said constitutional requirement but eliminates the participation of either of these two component political units. No amount of rhetorical flourishes can justify exclusion of the parent province in the plebiscite because of an alleged intent on the part of the authors and implementors of the challenged statute to carry out what is claimed to be a mandate to guarantee and promote autonomy of local government units. The alleged good intentions cannot prevail and overrule the cardinal precept that what our Constitution categorically directs to be done or imposes as a requirement must first be observed, respected and complied with. No one should be allowed to pay homage to a supposed fundamental policy intended to guarantee and promote autonomy of local government units but at the same time transgress, ignore and disregard what the Constitution commands in Article XI Section 3 thereof. Respondents would be no different from one who hurries to pray at the temple but then spits at the Idol therein. We find no merit in the submission of the respondents that the petition should be dismissed because the motive and wisdom in enacting the law may not be challenged by petitioners. The principal point raised by the petitioners is not the wisdom and motive in enacting the law but the infringement of the Constitution which is a proper subject of judicial inquiry. Petitioners' discussion regarding the motives behind the enactment of B.P. Blg. 885 to say the least, are most enlightening and provoking but are factual issues the Court cannot properly pass upon in this case. Mention by petitioners of the unexplained changes or differences in the proposed Parliamentary Bill No. 3644 and the enacted Batas Pambansa Blg. 885; the swift and surreptitious manner of passage and approval of said law; the abrupt scheduling of the plebiscite; the reference to news articles regarding the questionable conduct of the said plebiscite held on January 3, 1986; all serve as interesting reading but are not the decisive matters which should be reckoned in the resolution of this case. What the Court considers the only significant submissions lending a little support to respondents' case is their reliance on the rulings and pronouncements made by this Court in the case of Governor Zosimo Paredes versus The Honorable Executive Secretary to the President, et al., G.R. No. 55628, March 2, 1984 (128 SCRA 6). In said case relating to a plebiscite held to ratify the creation of a new municipality from existing barangays, this Court upheld the legality of the plebiscite which was participated in exclusively by the people of the barangay that would constitute the new municipality. This Court is not unmindful of this solitary case alluded to by respondents. What is, however, highly significant are the prefatory statements therein stating that said case is "one of those cases where the discretion of the Court is allowed considerable leeway" and that "there is indeed an element of ambiguity in the use of the expression unit or units affected." The ruling rendered in said case was based on a claimed prerogative of the Court then to exercise its discretion on the matter. It did not resolve the question of how the pertinent provision of the Constitution should be correctly interpreted. The ruling in the aforestated case of Paredes vs. The Honorable Executive Secretary, et al. (supra) should not be taken as a doctrinal or compelling precedent when it is acknowledged therein that "it is plausible to assert, as petitioners do, that when certain Barangays are separated from a parent municipality to form a new one, all the voters therein are affected." It is relevant and most proper to mention that in the aforecited case of Paredes vs. Executive Secretary, invoked by respondents, We find very lucidly expressed the strong dissenting view of Justice Vicente Abad Santos, a distinguished member of this Court, as he therein voiced his opinion, which We hereunder quote: 2. ... 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 an of the people of two or more municipalities if there be a merger. I see no ambiguity in the Constitutional provision. This dissenting opinion of Justice Vicente Abad Santos is the forerunner of the ruling which We now consider applicable to the case at bar, In the analogous case of Emilio C. Lopez, Jr., versus the Honorable Commission on Elections, L-56022, May 31, 1985, 136 SCRA 633, this dissent was reiterated by Justice Abad Santos as he therein assailed as suffering from a constitutional infirmity a referendum which did not include all the people of Bulacan and Rizal, when such referendum was intended to ascertain if the people of said provinces were willing to give up some of their towns to Metropolitan Manila. His dissenting opinion served as a useful guideline in the instant case. Opportunity to re-examine the views formerly held in said cases is now afforded the present Court. The reasons in the mentioned cases invoked by respondents herein were formerly considered acceptable because of the views then taken that local autonomy would be better promoted However, even this consideration no longer retains persuasive value. The environmental facts in the case before Us readily disclose that the subject matter under consideration is of greater magnitude with concomitant multifarious complicated problems. In the earlier case, what was involved was a division of a barangay which is the smallest political unit in the Local Government Code. Understandably, few and lesser problems are involved. In the case at bar, creation of a new province relates to the largest political unit contemplated in Section 3, Art. XI of the Constitution. To form the new province of Negros del Norte no less than three cities and eight municipalities will be subtracted from the parent province of Negros Occidental. This will result in the removal of approximately 2,768.4 square kilometers from the land area of an existing province whose boundaries will be consequently substantially altered. It becomes easy to realize that the consequent effects cf the division of the parent province necessarily will affect all the people living in the separate areas of Negros Occidental and the proposed province of Negros del Norte. The economy of the parent province as well as that of the new province will be inevitably affected, either for the better or for the worse. Whatever be the case, either or both of these political groups will be affected and they are, therefore, the unit or units referred to in Section 3 of Article XI of the Constitution which must be included in the plebiscite contemplated therein. It is a well accepted rule that "in ascertaining the meaning of a particular provision that may give rise to doubts, the intent of the framers and of the people, may be gleaned from the provisions in pari materia." Parliamentary Bill No. 3644 which proposed the creation of the new province of Negros del Norte recites in Sec. 4 thereof that "the plebiscite shall be conducted in the areas affected within a period of one hundred and twenty days from the approval of this Act." As this draft legislation speaks of "areas," what was contemplated evidently are plurality of areas to participate in the plebiscite. Logically, those to be included in such plebiscite would be the people living in the area of the proposed new province and those living in the parent province. This assumption will be consistent with the requirements set forth in the Constitution. We fail to find any legal basis for the unexplained change made when Parliamentary Bill No. 3644 was enacted into Batas Pambansa Blg. 885 so that it is now provided in said enabling law that the plebiscite "shall be conducted in the proposed new province which are the areas affected." We are not disposed to agree that by mere legislative fiat the unit or units affected referred in the fundamental law can be diminished or restricted by the Batasang Pambansa to cities and municipalities comprising the new province, thereby ignoring the evident reality that there are other people necessarily affected. In the mind of the Court, the change made by those responsible for the enactment of Batas Pambansa Blg. 885 betrays their own misgivings. They must have entertained apprehensions that by holding the plebiscite only in the areas of the new proposed province, this tactic will be tainted with illegality. In anticipation of a possible strong challenge to the legality of such a plebiscite there was, therefore, deliberately added in the enacted statute a self-serving phrase that the new province constitutes the area affected. Such additional statement serves no useful purpose for the same is misleading, erroneous and far from truth. 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 other adverse economic effects it might suffer, eloquently argue the points raised by the petitioners. Petitioners have averred without contradiction that after the creation of Negros del Norte, the province of Negros Occidental would be deprived of the long established Cities of Silay, Cadiz, and San Carlos, as well as the municipality of Victorias. No controversion has been made regarding petitioners' assertion that the areas of the Province of Negros Occidental will be diminished by about 285,656 hectares and it will lose seven of the fifteen sugar mills which contribute to the economy of the whole province. In the language of petitioners, "to create Negros del Norte, the existing territory and political subdivision known as Negros Occidental has to be partitioned and dismembered. What was involved was no 'birth' but "amputation." We agree with the petitioners that in the case of Negros what was involved was a division, a separation; and consequently, as Sec. 3 of Article XI of the Constitution anticipates, a substantial alteration of boundary. As contended by petitioners, Indeed, the terms 'created', 'divided', 'merged', 'abolished' as used in the constitutional provision do not contemplate distinct situation isolated from the mutually exclusive to each other. A Province maybe created where an existing province is divided or two provinces merged. Such cases necessarily will involve existing unit or units abolished and definitely the boundary being substantially altered. It would thus be inaccurate to state that where an existing political unit is divided or its boundary substantially altered, as the Constitution provides, only some and not all the voters in the whole unit which suffers dismemberment or substantial alteration of its boundary are affected. Rather, the contrary is true. It is also Our considered view that even hypothetically assuming that the merits of this case can depend on the mere discretion that this Court may exercise, nevertheless, it is the petitioners' case that deserve to be favored. It is now time for this Court to set aside the equivocations and the indecisive pronouncements in the adverted case of Paredes vs. the Honorable Executive Secretary, et al. (supra). For the reasons already here express, We now state that the ruling in the two mentioned cases sanctioning the exclusion of the voters belonging to an existing political unit from which the new political unit will be derived, from participating in the plebiscite conducted for the purpose of determining the formation of another new political unit, is hereby abandoned. In their supplemental petition, dated January 4, 1986, it is prayed for by petitioners that a writ of mandamus be issued, directing the respondent Commission on Elections, to schedule the holding of another plebiscite at which all the qualified voters of the entire province of Negros Occidental as now existing shall participate and that this Court make a pronouncement that the plebiscite held on January 3, 1986 has no legal effect for being a patent nullity. The Court is prepared to declare the said plebiscite held on January 3, 1986 as null and void and violative of the provisions of Sec. 3, Article XI of the Constitution. The Court is not, however, disposed to direct the conduct of a new plebiscite, because We find no legal basis to do so. With constitutional infirmity attaching to the subject Batas Pambansa Big. 885 and also because the creation of the new province of Negros del Norte is not in accordance with the criteria established in the Local Government Code, the factual and legal basis for the creation of such new province which should justify the holding of another plebiscite does not exist. Whatever claim it has to validity and whatever recognition has been gained by the new province of Negros del Norte because of the appointment of the officials thereof, must now be erased. That Negros del Norte is but a legal fiction should be announced. Its existence should be put to an end as quickly as possible, if only to settle the complications currently attending to its creation. As has been manifested, the parent province of Negros del Norte has been impleaded as the defendant in a suit filed by the new Province of Negros del Norte, before the Regional Trial Court of Negros (del Norte), docketed as Civil Case No. 169-C, for the immediate allocation, distribution and transfer of funds by the parent province to the new province, in an amount claimed to be at least P10,000,000.00. The final nail that puts to rest whatever pretension there is to the legality of the province of Negros del Norte is the significant fact that this created province does not even satisfy the area requirement prescribed in Section 197 of the Local Government Code, as earlier discussed. It is of course claimed by the respondents in their Comment to the exhibits submitted by the petitioners (Exhs. C and D, Rollo, pp. 19 and 91), that the new province has a territory of 4,019.95 square kilometers, more or less. This assertion is made to negate the proofs submitted, disclosing that the land area of the new province cannot be more than 3,500 square kilometers because its land area would, at most, be only about 2,856 square kilometers, taking into account government statistics relative to the total area of the cities and municipalities constituting Negros del Norte. Respondents insist that when Section 197 of the Local Government Code speaks of the territory of the province to be created and requires that such territory be at least 3,500 square kilometers, what is contemplated is not only the land area but also the land and water over which the said province has jurisdiction and control. It is even the submission of the respondents that in this regard the marginal sea within the three mile limit should be considered in determining the extent of the territory of the new province. Such an interpretation is strained, incorrect, and fallacious. The last sentence of the first paragraph of Section 197 is most revealing. As so stated therein the "territory need not be contiguous if it comprises two or more islands." The use of the word territory in this particular provision of the Local Government Code and in the very last sentence thereof, clearly reflects that "territory" as therein used, has reference only to the mass of land area and excludes the waters over which the political unit exercises control. Said sentence states that the "territory need not be contiguous." Contiguous means (a) in physical contact; (b) touching along all or most of one side; (c) near, text, or adjacent (Webster's New World Dictionary, 1972 Ed., p. 307). "Contiguous", when employed as an adjective, as in the above sentence, is only used when it describes physical contact, or a touching of sides of two solid masses of matter. The meaning of particular terms in a statute may be ascertained by reference to words associated with or related to them in the statute (Animal Rescue League vs. Assessors, 138 A.L.R. p. 110). Therefore, in the context of the sentence above, what need not be "contiguous" is the "territory" the physical mass of land area. There would arise no need for the legislators to use the word contiguous if they had intended that the term "territory" embrace not only land area but also territorial waters. It can be safely concluded that the word territory in the first paragraph of Section 197 is meant to be synonymous with "land area" only. The words and phrases used in a statute should be given the meaning intended by the legislature (82 C.J.S., p. 636). The sense in which the words are used furnished the rule of construction (In re Winton Lumber Co., 63 p. 2d., p. 664). The distinction between "territory" and "land area" which respondents make is an artificial or strained construction of the disputed provision whereby the words of the statute are arrested from their plain and obvious meaning and made to bear an entirely different meaning to justify an absurd or unjust result. The plain meaning in the language in a statute is the safest guide to follow in construing the statute. A construction based on a forced or artificial meaning of its words and out of harmony of the statutory scheme is not to be favored (Helvering vs. Hutchings, 85 L. Ed., p. 909). It would be rather preposterous to maintain that a province with a small land area but which has a long, narrow, extended coast line, (such as La Union province) can be said to have a larger territory than a land-locked province (such as Ifugao or Benguet) whose land area manifestly exceeds the province first mentioned.

Allegations have been made that the enactment of the questioned state was marred by "dirty tricks", in the introduction and passing of Parliamentary Bill No. 3644 "in secret haste" pursuant to sinister designs to achieve "pure and simple gerrymandering; "that recent happenings more than amply demonstrate that far from guaranteeing its autonomy it (Negros del Norte) has become the fiefdom of a local strongman" (Rollo, p. 43; emphasis supplied). It is not for this Court to affirm or reject such matters not only because the merits of this case can be resolved without need of ascertaining the real motives and wisdom in the making of the questioned law. No proper challenge on those grounds can also be made by petitioners in this proceeding. Neither may this Court venture to guess the motives or wisdom in the exercise of legislative powers. Repudiation of improper or unwise actions taken by tools of a political machinery rests ultimately, as recent events have shown, on the electorate and the power of a vigilant people. Petitioners herein deserve and should receive the gratitude of the people of the Province of Negros Occidental and even by our Nation. Commendable is the patriotism displayed by them in daring to institute this case in order to preserve the continued existence of their historic province. They were inspired undoubtedly by their faithful commitment to our Constitution which they wish to be respected and obeyed. Despite the setbacks and the hardships which petitioners aver confronted them, they valiantly and unfalteringly pursued a worthy cause. A happy destiny for our Nation is assured as long as among our people there would be exemplary citizens such as the petitioners herein. WHEREFORE, Batas Pambansa Blg. 885 is hereby declared unconstitutional. The proclamation of the new province of Negros del Norte, as well as the appointment of the officials thereof are also declared null and void. HON. ROY A. PADILLA, JR., In his capacity as Governor of the Province of Camarines Norte, petitioner, vs. COMMISSION ON ELECTIONS, respondent. RESOLUTION

ROMERO, J.: Pursuant to Republic Act No. 7155, the Commission on Elections promulgated on November 13, 1991, Resolution No. 2312 which reads as follows: WHEREAS, Republic Act No. 7155 approved on September 6, 1991 creates the Municipality of Tulay-Na-Lupa in the Province of Camarines Norte to be composed of Barangays Tulay-Na-Lupa, Lugui, San Antonio, Mabilo I, Napaod, Benit, Bayan-Bayan, Matanlang, Pag-Asa, Maot, and Calabasa, all in the Municipality of Labo, same province. WHEREAS under Section 10, Article X of the 1987 Constitution the creation of a municipality shall be subject to approval by a majority of votes cast in a plebiscite in the political units directly affected, and pursuant to Section 134 of the Local Government Code (Batas Pambansa Blg. 2 337) said plebiscite shall be conducted by the Commission on Elections; WHEREAS, Section 6 of said Republic Act No. 7155 provides that the expenses in holding the plebiscite shall be take out of the Contingent Fund under the current fiscal year appropriations; NOW, THEREFORE, BE IT RESOLVED, as the Commission hereby resolves, to promulgated ( sic) the following guidelines to govern the conduct of said plebiscite: 1. The plebiscite shall be held on December 15, 1991, in the areas or units affected, namely the barangays comprising he proposed Municipality of Tulay-Na-Lupa and the remaining areas of the mother Municipality of Labor, Camarines Norte (Tan vs. COMELEC, G.R. No. 73155, July 11, 1986). xxx xxx xxx In the plebiscite held on December 15, 1991 throughout the Municipality of Labo, only 2,890 votes favored its creation while 3,439 voters voted against the creation of the Municipality of Tulay-Na-Lupa. Consequently, the day after the political exercise, the Plebiscite Board of Canvassers 3 declared the rejection and disapproval of the independent Municipality of Tulay-Na-Lupa by a majority of votes. Thus, in this special civil action of certiorari, petitioner as Governor of Camarines Norte, seeks to set aside the plebiscite conducted on December 15, 1991 throughout the Municipality of Labo and prays that a new plebiscite be undertaken as provided by RA 7155. It is the contention of petitioner that the plebiscite was a complete failure and that the results obtained were invalid and illegal because the plebiscite, as mandated by COMELEC Resolution No. 2312 should have been conducted only in the political unit or units affected, i.e. the 12 barangays comprising the new Municipality of Tulay-Na-Lupa namely Tulay-Na-Lupa, Lugui, San Antonio, Mabilo I, Napaod, Benit, Bayan-Bayan, Matanlang, Pag-Asa, Maot, and Calabasa. Petitioner stresses that the plebiscite should not have included the remaining area of the mother unit of the Municipality of Labo, 4 Camarines Norte. In support of his stand, petitioner argues that with the approval and ratification of the 1987 Constitution, particularly Article X, Section 10, the 5 ruling set forth in Tan v. COMELEC relied upon by respondent COMELEC is now passe, thus reinstating the case of Paredes v. Executive 6 Secretary which held that where a local unit is to be segregated from a parent unit, only the voters of the unit to be segrated should be included 7 in the plebiscite. Accordingly, the issue in this case is whether or not respondent COMELEC committed grave abuse of discretion in promulgating Resolution No. 2312 and, consequently, whether or not the plebiscite conducted in the areas comprising the proposed Municipality of Tulay-Na-Lupa and the remaining areas of the mother Municipality of Labo is valid. We rule that respondent COMELEC did not commit grave abuse in promulgating Resolution No. 2312 and that the plebiscite, which rejected the creation of the proposed Municipality of Tulay-Na-Lupa, is valid. Petitioner's contention that our ruling in Tan vs. COMELEC has been superseded with the ratification of the 1987 Constitution, thus reinstating our earlier ruling in Paredes vs. COMELEC is untenable. Petitioner opines that sinceTan vs. COMELEC was based on Section 3 of Article XI of the 1973 Constitution our ruling in said case is no longer applicable under Section 10 of Article X of the 1987 Constitution, 8 especially since the latter provision deleted the words "unit or." We do not agree. The deletion of the phrase "unit or" in Section 10, Article X of the 1987 Constitution from its precursor, Section 3 of Article XI of the 1973 Constitution not affected our ruling in Tan vs. Comelec as explained by then CONCOM Commissioner, now my distinguished colleague, Associate Justice Hilario Davide, during the debates in the 1986 Constitutional Commission, to wit:
1

Mr. Maambong: While we have already approved the deletion of "unit or," I would like to inform the Committee that under the formulation in the present Local Government Code, the words used are actually "political unit or units." However, I do not know the implication of the use of these words. Maybe there will be no substantial difference, but I just want to inform the Committee about this. Mr. Nolledo: Can we not adhere to the original "unit or units"? Will there be no objection on the part of the two Gentlemen from the floor? Mr. Davide: I would object. I precisely asked for the deletion of the words "unit or" because in the plebiscite to be conducted, it must involve all the 9 units affected. If it is the creation of a barangay plebiscite because it is affected. It would mean a loss of a territory. (Emphasis supplied) 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 phase "political units directly affected," is the plurality of political units which would participate in the 10 plebiscite. Logically, those to be included in such political areas are the inhabitants of the 12 barangays of the proposed Municipality of Tulay-NaLupa as well as those living in the parent Municipality of Labo, Camarines Norte. Thus, we conclude that respondent COMELEC did not commit grave abuse of discretion in promulgating Resolution No. 2312. WHEREFORE, the instant petition is hereby DISMISSED. Case Digest - Election Law, Local Government Grio vs. COMELEC G.R. No. 105120 September 2, 1992 FACTS: Grio and his LDP political party filed a certiorari case against COMELEC in relation to the May 11, 1992 election. Grio is a candidate for Governor of Iloilo where the sub-province of Guimaras is located. LGC of 1991 took effect requiring the conversion of existing sub-provinces into regular provinces, and Guimaras is one such sub-provinces, upon approval by majority of votes cast in a plebiscite. The plebiscite favored the conversion of Guimaras into a regular province but petitioner questioned the COMELEC that ballots should have contained spaces to allow voting for Gov, Vice Gov and members of the Sanggunian of Iloilo. ISSUE: Whether or not there was a complete failure of election in Guimaras. HELD: The court held that COMELEC was under mistaken presumption that under the LGC of 1991, whether or not the conversion of Guimaras into a regular province is ratified by the people in plebiscite, the President will appoint provincial officials. However, the voters favored for the conversion of Guimaras into a regular province so there was need to undo what COMELEC has done in plebiscite. There ballots in Guimaras should have contained spaces for Gov and Vice Gov. etc. but SC has now considered the case moot and academic since majority voted in the affirmative for the conversion of Guimaras. G.R. No. L-56022 May 31, 1985 GEMILIANO C. LOPEZ, JR., for himself and all other interested parties similarly situated in Metropolitan Manila, petitioner, vs. THE HONORABLE COMMISSION ON ELECTIONS, respondent. G.R. No. L-56124 May 31, 1985 GEMILIANO C. LOPEZ, JR. and REYNALDO B. ARALAR, for themselves and all other interested parties similarly situated as themselves in Metropolitan Manila, petitioners, vs. THE HONORABLE METROPOLITAN MANILA COMMISSION, respondent. Reynaldo B. Aralar for and in his own behalf. Jacinto D. Jimenez for petitioner G. Lopez, Jr.

FERNANDO, C.J.: Presidential Decree No. 824 was a response to a felt need for a "central government to establish and administer program and provide services 2 common to" the cities of Manila, Quezon, Pasay, and Caloocan as well as thirteen municipalities in the surrounding area. It is worth noting that such a problem was by no means unique and confined to the Philippines. Recent decades have witnessed a growing erosion in public confidence in the ability of local government units as traditionally organized to fulfill their responsibilities and discharge their functions effectively, efficiently, 3 and satisfactorily. The growth in population in Manila, the three other cities, and the adjacent municipalities has been unchecked since the end of World War II. There was of course the bright promise of a better fife especially so with the proliferation of commercial firms and the establishment of industries. The lure has thus proved irresistible. The result has been the ever increasing inability of the separate local governments to cope with the ensuing serious problems. A public corporation was thus created "to be known as the Metropolitan Manila, vested with powers and attributes of a corporation including the power to make contracts, sue and be sued, acquire, purchase, expropriate, hold, transfer and dispose of property 4 5 and such other powers as are necessary to carry out its purposes." It is administered by a Commission. Petitioners in the second of the above cases assail the constitutionality of Presidential Decree No. 824. They rely on this provision: "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 cast in a plebiscite in the unit or units 8 9 affected." The Local Government Code was not enacted until 1983. For reasons to be set forth, it will be made apparent that such a challenge is far from formidable. It does not suffice to call for a declaration of unconstitutionality. Moreover, the last vestige of doubt has been removed by the present constitutional provision adopted in the plebiscite on January 27, 1984. Thus in the Article on Batasang Pambansa it is expressly provided: "The Batasang Pambansa which shall be composed of not more than 200 Members unless otherwise provided by law, shall include representatives elected from the different provinces with their component cities, highly urbanized cities as may be declared by or pursuant to law, and districts in Metropolitan Manila, those elected or selected
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from the various sectors as may be provided by law, and those chosen by the President from Members of the Cabinet. Each district in Metropolitan Manila shall comprise, as far as practicable, contiguous, compact and adjacent territory. The elective representatives shall be apportioned by law among the provinces with their component cities, highly urbanized cities, and the districts of Metropolitan Manila in accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratio, but the provinces with component cities and highly urbanized cities shall have at least one representative each. The provinces and cities shall have at least the same total number of representatives as under the 10 1935 Constitution." The recognition of the existence to Metropolitan Manila cannot be expressed any clearer. There can be no legal justification then for a declaration of unconstitutionality. Presidential Decree No. 824 is not tainted with constitutional infirmity. 1. In Presidential Decree No 824 reference was made to "the referendum held on February 27, 1975 [wherein] the residents of the Greater Manila Area authorized the President to restructure the local governments of the four cities and 13 municipalities thereof into an integrated unit of the 11 manager or commission form of government," with the terms and conditions being left to the discretion of the President. It was then pointed out that "the rapid growth of population and the corresponding increase of social and economic requirements in the contiguous communities referred 12 to above has brought into being a large area that calls for [development both] simultaneous and unified." For "many public services [then] rendered by local governments separately for themselves [ought to] be ad. ministered more efficiently and more economically, to the common benefit of the cities and municipalities in the area, if they are integrated and harmonized, under a system of central planning [treating as a common 13 problem the] separate municipal needs." It "is Vital to the survival and growth of the aforementioned Greater Manila Area that a workable and effective system be established for the coordination, integration and unified management of such local government services or 14 functions" therein, There is necessity for "the unified metropolitan services or functions [to] be planned, administered, and operated [based on] 15 the highest professional technical standards." The foregoing constitutes the justification for and the objective of such Presidential Decree. 2. There is relevance to this opening paragraph in the recent case of Paredes v. Executive Secretary: "The constitutional question raised in this declaratory relief proceeding treated as a special civil action for prohibition, one of first impression, arose from the issuance of a proclamation by the President, directing that a plebiscite be conducted in certain barangays, all within the municipality of Mayoyao, Province of Ifugao, segregated under a Batas Pambansa, "to determine whether the said barangays shall become a new municipality be known as the Municipality of Aguinaldo, Province of Ifugao." In such proclamation, respondent Commission on Elections was charged with the duty of supervising the conduct of such plebiscite and empowered to promulgate the necessary rules and regulations to implement the proclamation. It is alleged that Batas Pambansa Blg. 86 is unconstitutional for being violative of Article XI, Section 3 of the Constitution. The basis for such contention is that the statute excluded from 17 the plebiscite the voters from the poblacion and other barangays of the Municipality of Mayoyao except those mentioned in the Act." The proclamation was issued on November 11, 1980, at least three years before the enactment of the local government code. The petition based on Article XI, Section 3 of the Constitution, the very same provision relied upon in this case, was dismissed. There were twelve (12) votes in favor of 18 such dismissal, two of the Justices voting to dismiss the petition on the ground that it had become moot and academic, the plebiscite having been duly held and the certificate of canvass and proclamation disclosing that out of the 2,409 total votes being cast in the plebiscite, 2,368 were 19 cast in favor of the creation of the new municipality. Justice Abad Santos dissented on the ground that the people in the barangay of the municipality of Aguinaldo should likewise have voted in the plebiscite, not only those of the barangays that constituted the new municipality. The Court did take note of the plausibility of such an approach but came to the conclusion that the constitutional provision on the need for a majority of the votes cast in the plebiscite in the unit or units affected would be satisfied even if "those voters who are not from the barangay to be 20 separated [were] excluded in the plebiscite." It cannot be argued therefore that the plebiscite held in the areas affected to constitute Metropolitan Manila, having manifested their will, the constitutional provision relied upon by petitioners has been satisfied. It is to be noted likewise that at the time of such plebiscite in February, 1975, there was no Local Government Code. 3. Nor is there any question as to the Presidential authority to issue Presidential Decree No. 824 creating Metropolitan Manila in 1975. There was at the time no interim Batasang Pambansa. It was the President who was then entrusted with such responsibility. So it was held in Aquino, Jr. v. 21 Commission on Elections, decided in January of 1975. The ponencia of Justice Makasiar dispelled "all doubts as to the legality of such law-making 22 authority by the President during the period of Martial Law, * * *." As the opinion went on to state: "The entire paragraph of Section 3(2) is not a grant of authority to legislate, but a recognition of such power as already existing in favor of the incumbent President during the period of Martial 23 Law." 4. The sole petitioner in the other case is likewise now Assemblyman Gemiliano C Lopez, Jr, of Metropolitan Manila. It is a mandamus petition to require respondent Commission on Elections to order the elections for members of the Sangguniang Panglungsod and Sangguniang Bayan in the four cities and thirteen towns of Metropolitan Manila. As was ,stated in the Memorandum of the Solicitor General Estelito P. Mendoza, the fact 25 that it is a suit for mandamus is an admission of the validity of Presidential Decree No. 824. Nor would mandamus lie, it being provided therein that "the Sangguniang Bayan shall be composed of as many barangay captains as may be determined and chosen by the Commission, and such number of representatives from other sectors of the society as may be appointed by the President upon recommendation of the 26 Commission." The Solicitor General can, therefore plausibly assert: "This demonstrates that the petition's charge, that there is no duly constituted Sangguniang Bayan, in Metro Manila Area is untrue, and that the citizenry therein do have a voice in decision-making, through the 27 respective Sangguniang Bayans of each of the political units therein." The Decree itself thus supplies the refutation to the contention of petitioner. 5. The point has been raised, however, that unless Presidential Decree No. 824 be construed in such a way that along with the rest of the other cities and municipalities, there should be elections for the Sangguniang Bayan, then there is a denial of the equal protection provision of the 28 Constitution. The point is not well-taken. In a recent decision, this Court reiterated the concept of equal protection in these words: "The applicable standard to avoid the charge that there is a denial of this constitutional mandate whether the assailed act is in the exercise of the police power or the power of eminent domain is to demonstrate "that the government act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason. It suffices then that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the priveleges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances, which, if not Identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest." That same formulation applies as well to taxation measures. The equal protection clause is, of course, inspired by the noble concept of approximating the Ideal of the law's benefits being available to all and the affairs of men being by the serene and impartial uniformity, which is of the very essence of the Idea of law. There is, however, wisdom, as well as realism, in these words of Justice Frankfurther: "The equality at which the "equal protection" clause aims is not a disembodied equality. The Fourteenth Amendment enjoins "the equal protection of the laws, and the laws are not abstract propositions. They do not relate to abstract units A, B and C, but are expressions of policy arising out of specific difficulties, addressed to the attainment of specific ends by the use of specific remedies. The Constitution does not 29 require things which are different in fact or opinion to be treated in law as though they were the same." It is clear that under the equal 30 protection clause, classification is not forbidden. As was so well put by Justice Laurel as ponente in the leading case People v. Vera: "Class legislation discriminating against some and favoring others is prohibited. But classification on a reasonable basis, and not made arbitrarily or capriciously is permitted. * * * The classification, however, to be reasonable must be based on substantial distinction which make real differences;
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it must be germane to the purposes of the law; it must not be limited to existing conditions only, and must apply equally to each member of the 31 class." All such elements are present. There is no need to set forth anew the compelling reasons that called for the creation of Metropolitan Manila. It is quite obvious that under the conditions then existing still present and, with the continued growth of population, attended with more complexity what was done a response to a great public need. The government was called upon to act. Presidential Decree No. 824 was the result. It is not a condition for the validity of the Sangguniang Bayans provided for in the four cities and the thirteen municipalities that the membership be Identical with those of other cities or municipalities. There is ample justification for such a distinction. It does not by any means 32 come under the category of what Professor Gunther calls suspect classification. There is thus no warrant for the view that the equal protection guarantee was violated. 6 Reference was made earlier to Article VIII, Section 2 of the Constitution where there is express recognition of the juridical entity known as Metropolitan Manila. Such express constutional affirmation of its existence in the fundamental law calls, as earlier noted, for the dismissal of these petitions, there being no legal justification for the declaration of unconstitutionality of Presidential Decree No. 824. Nor was it the first time that there has been acknowledgment in law of the creation of Manila. Thus according to the Election Code of 1978, "there shall be 160 regional representatives to the interim Batasang Pambansa apportioned among the thirteen regions of the nation in accordance with the number of their respective inhabitants and on the basis of a uniform and progressive ratio" with Region IV. with 19 representatives comprising "Metro Manila as follows: Cities of Manila, Quezon, Caloocan, and Pasay; and the municipalities of Valenzuela, Malabon, Navotas, Makati, Paranaque, Las Pinas, 33 Mandaluyong, San Juan, Pasig, Muntinlupa, Marikina, Pateros, and Taguig." Then there is this provision found in Presidential Decree No. 1396 creating the Ministry of Human Settlements" "SEC. 3. Establishment of the National Capital Region In view of the critical importance of the Metropolitan Manila Region in human settlement development. it is hereby declared and established as the National Capital Region of the Republic of the Philippines, and its administration as such is hereby vested in the Secretary of Human Settlements. The pertinent provisions of Presidential 34 Decree No. 824, creating the Metropolitan Manila Commission, are hereby accordingly amended." The fact of such regional representation was once again made clear in the April 7, 1981 amendments to the Constitution. Thus: "SEC. 2. The Batasang Pambansa which shall be composed of not more than 200 members unless provided by law, shall include representatives elected from the regions of the Philippines, those elected or selected from various sectors as may be provided by law, and those chosen by the President from the members of the Cabinet. Regional representatives shall be apportioned among the regions in accordance with the number of their respective inhabitants and on the basis of a uniform and 35 progressive ration." Lastly, in addition to Article VIII, Section 2 of the Constitution as approved on January 27, 1984, its accompanying ordinance reads as follows: "SECTION 1. For purposes of the election of Members of the regular Batasang Pambansa on the second Monday of May 1984 and subsequent elections and until otherwise provided by law, the Members of the Batasang Pambansa, other than the sectoral representatives and those chosen by the President from the Cabinet, shall be apportioned to the different provinces with their component cities, highly urbanized cities and the representatives districts of Metropolitan Manila as follows: "National Capital Region: Manila six (6) Quezon City, four (4); Caloocan, two (2); Pasay, one (1); Makati, one (1); Malabon, one (1); Navotas and Valenzuela, two (2); San Juan and Mandaluyong, one (1); Taguig, Pateros and 36 Muntinlupa, one (1)." It would be, therefore, as contended by respondent Commission to show lack of the fidelity to the Constitution if the prayer for the abolition of the Metropolitan Manila, which is expressly authorized and recognized by the fundamental law, be granted. 7 One last point. It is undeniable, therefore, that the creation of the Metropolitan Manila Commission is free from any constitutional objection. There is, however, a question that may arise in connection with the powers of the President over the Commission. According to Presidential Decree No. 824: "The Commission, the General Manager and any official of the Commission shall be under the direct supervision and control of the President. Notwithstanding any provision in this Decree, the President shall the power to revoke, amend or modify any ordinance, resolution or act 37 of the Commission, the General and the Commissioners." It may give rise to doubts as to its validity insofar as it confers the power of control on 38 the President. That control he certainly exercises under the present Constitution over the ministries. His power over local governments does not 39 go that far. It extends no further than general supervision. These doubts, however, do not suffice to nullify such a provision. They can be set at 40 rest. Yu Cong Eng v. Trinidad shows the way. After reiterating the classic doctrine of the presumption being always in favor of constitutionality, 41 Justice Malcolm, as ponente, categorically declared: "To doubt is to sustain." In this case, the validity of Republic Act No. 2972 of the Philippine Legislature, popularly known as the Chinese Bookkeeping Law, was questioned. According to the opinion of Justice Malcolm: "A literal application of the law would make it unlawful for any Chinese merchant to keep his account books in any language other than English, Spanish, or oral dialect. 42 The petitioner say the law is susceptible of that interpretation might, and probably would, cause us to hold the law unconstitutional." The construction adopted to which the Court considered permissible is "that the law only intended to require the keeping of such books as were 43 necessary in order to facilitate governmental inspection for tax purposes" Such a conclusion was reached by the invocation of "an elementary, a fundamental, and a universal rule of construction, applied when considering constitutional questions, that when a law is susceptible of two constructions one of which will maintain and the other constructions one of which will maintain and the other destroy it, the courts will always 44 adopt the former." Succinctly put, that construction that would save is to be preferred as against one that will destroy. As phrased by Chief 45 Justices Hughes in Crowell v. Bengson, "if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain 46 whether a construction of the statute is fairly possible by which the question may be avoided." Nr does it argue against the authoritative 47 character of Justice Malcom's ponencia in Yu Cong Eng that it was reversed in appeal to the United States Supreme Court. During the period of American sovereignty, such jurisdiction validly be exercised. Its decision then nullifying the Chinese Bookkeeping Law is the law of the case. it does not follow, however, that the reasoning on which the Philippine decisions was based is bereft of any legal significance. It does not admit of doubt that Justice Malcolm and his brethren considered fully the precise problem presented and the need for such a measure to assure that the taxes to which the Philippine government was entitled would be fully paid. It cannot be said that the American Supreme Court in this as in other cases of Philippine origin was as well-informed. It did not possess it could not possess full awareness of the conditions then existing in this country. After July 4, 1946, when the Philippine declared its independence, therefore, it is not only understandable but also proper that there be less reliance on American Supreme Court decisions. What is undeniable as shown by the foregoing citations of case both Philippine and American is that approach followed by Justice Malcom in the interpretation of statutes to avoid any doubt as to its validity remains a fundamental canon. 8 To show fidelity to his basic principle of construction is to lend substance to the equally basic doctrine that the constitution enters into and forms 48 part of every statute. Accordingly, the presidential power of control over acts of the Metro Manila Commission is limited to those that may be considered national in character. There can be no valid objection to such exercise of authority. It is undisputed that by virtue of the 1981 amendments to the Constitution, once again, "there is one purpose which is crystal-clear and is the establishment of a single, not plural, 49 50 Executive." So it was affirmed in Free Telephone Workers Union v. Minister of Labor. There is significance to the fact that the Local Government 51 Code does not include the Metro Manila Commission. That is clear recognition that some of its attributes are those of a national character. Where, however, the acts of the Metro Manila Commission may be considered as properly appertaining to local government functions, the power of the President is confined to general supervision. As thus construed, Section 13 clearly appears to be free from any constitutional infirmity. WHEREFORE, the petition in G.R. No. 56022 entitled Gemiliano C. Lopez, Jr. v. Commission on Elections, and the petition in G.R. No. 56124 entitled Gemiliano C. Lopez, Jr. and Reynaldo B. Aralar v. Metropolitan Manila Commission , are dismissed. No costs. 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.

G.R. No. 118627 March 7, 1995 JOHN R. OSMEA, petitioner, vs. THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.

PUNO, J.: At bench are two (2) petitions assailing certain provisions of Republic Act No. 7854 as unconstitutional. R.A. No. 7854 as unconstitutional. R.A. No. 1 7854 is entitled, "An Act Converting the Municipality of Makati Into a Highly Urbanized City to be known as the City of Makati." G.R. No. 118577 involves a petition for prohibition and declaratory relief. It was 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 as unconstitutional sections 2, 51, and 52 of R.A. No. 7854 on the following grounds: 1. Section 2 of R.A. No. 7854 did not properly identify the land area or territorial jurisdiction of Makati by metes and bounds, with technical descriptions, in violation of Section 10, Article X of the Constitution, in relation to Sections 7 and 450 of the Local Government Code; 2. Section 51 of R.A. No. 7854 attempts to alter or restart the "three consecutive term" limit for local elective officials, in violation of Section 8, Article X and Section 7, Article VI of the Constitution. 3. Section 52 of R.A. No. 7854 is unconstitutional for: (a) it increased the legislative district of Makati only by special law (the Charter in violation of the constitutional provision requiring a general reapportionment law to be passed by Congress within three (3) years following the return of every census; (b) the increase in legislative district was not expressed in the title of the bill; and (c) the addition of another legislative district in Makati is not in accord with Section 5 (3), Article VI of the Constitution for as of the latest survey (1990 census), the population of Makati stands at only 450,000. G.R. No. 118627 was filed by the petitioner John H. Osmea as senator, taxpayer, and concerned citizen. Petitioner assails section 52 of R.A. No. 7854 as unconstitutional on the same grounds as aforestated. We find no merit in the petitions. I Section 2, Article I of R.A. No. 7854 delineated the land areas of the proposed city of Makati, thus: Sec. 2. The City of Makati. The Municipality of Makati shall be converted into a highly urbanized city to be known as the City of Makati, hereinafter referred to as the City, which shall comprise the present territory of the Municipality of Makati in Metropolitan Manila Area over which it has jurisdiction bounded on the northeast by Pasig River and beyond by the City of Mandaluyong and the Municipality of Pasig; on the southeast by the municipalities of Pateros and Taguig; on the southwest by the City of Pasay and the Municipality of Taguig; and, on the northwest, by the City of Manila. The foregoing provision shall be without prejudice to the resolution by the appropriate agency or forum of existing boundary disputes or cases involving questions of territorial jurisdiction between the City of Makati and the adjoining local government units. (Emphasis supplied) In G.R. No. 118577, petitioners claim that this delineation violates sections 7 and 450 of the Local Government Code which require that the area of 2 a local government unit should be made by metes and bounds with technical descriptions. 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, 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 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. 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." 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 co-equal department of government, 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 3 technical descriptions. We take judicial notice of the fact that Congress has also refrained from using the metes and bounds description of land 4 areas of other local government units with unsettled boundary disputes. 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. We sustain the submission of the Solicitor General in this regard, viz.: Going now to Sections 7 and 450 of the Local Government Code, it is beyond cavil that the requirement stated therein, viz.: "the territorial jurisdiction of newly created or converted cities should be described by meted and bounds, with technical descriptions" was made in order to provide a means by which the area of said cities may be reasonably ascertained. In other words, the requirement on metes and bounds was meant merely as tool in the establishment of local government units. It is not an end in itself. Ergo, so long as the territorial jurisdiction of a city may be

reasonably ascertained, i.e., by referring to common boundaries with neighboring municipalities, as in this case, then, it may be concluded that the legislative intent behind the law has been sufficiently served. Certainly, Congress did not intends that laws creating new cities must contain therein detailed technical descriptions similar to those appearing in Torrens titles, as petitioners seem to imply. To require such description in the law as a condition sine qua non for its validity would be to defeat the very purpose which the Local Government Code to seeks to serve. The manifest intent of the Code is to empower local government units and to give them their rightful due. It seeks to make local governments more responsive to the needs of their constituents while at the same time serving as a vital cog in national development. To invalidate R.A. No. 7854 on the mere ground that no cadastral type of description was used in the law would serve the letter but defeat the spirit of the Code. It then becomes a case of the master serving the slave, instead of the other way around. This could not be the intendment of the law. Too well settled is the rule that laws must be enforced when ascertained, although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of the statute when to do so would depart from the true intent of the legislature or would otherwise yield conclusions inconsistent with the general purpose of the act. (Torres v. Limjap, 56 Phil., 141; Taada v. Cuenco, 103 Phil. 1051; Hidalgo v. Hidalgo, 33 SCRA 1105). Legislation is an active instrument of government, which, for purposes of interpretation, means that laws have ends to achieve, and statutes should be so construed as not to defeat but to carry out such ends and purposes (Bocolbo v. Estanislao, 72 SCRA 520). The same rule must indubitably apply to the case at bar. II Petitioners in G.R. No. 118577 also assail the constitutionality of section 51, Article X of R.A. No. 7854. Section 51 states: Sec. 51. Officials of the City of Makati. The represent elective officials of the Municipality of Makati shall continue as the officials of the City of Makati and shall exercise their powers and functions until such time that a new election is held and the duly elected officials shall have already qualified and assume their offices: Provided, The new city will acquire a new corporate existence. The appointive officials and employees of the City shall likewise continues exercising their functions and duties and they shall be automatically absorbed by the city government of the City of Makati. They contend that this section collides with section 8, Article X and section 7, Article VI of the Constitution which provide: Sec. 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. xxx xxx xxx Sec. 7. The Members of the House of Representatives shall be elected for a term of three years which shall begin, unless otherwise provided by law, at noon on the thirtieth day of June next following their election. No Member of the House of Representatives shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. Petitioners stress that under these provisions, elective local officials, including Members of the House of Representative, have a term of three (3) years and are prohibited from serving for more than three (3) consecutive terms. They argue that by providing that the new city shall acquire a new corporate existence, section 51 of R.A. No. 7854 restarts the term of the present municipal elective officials of Makati and disregards the terms previously served by them. In particular, petitioners point that section 51 favors the incumbent Makati Mayor, respondent Jejomar Binay, who has already served for two (2) consecutive terms. They further argue that should Mayor Binay decide to run and eventually win as city mayor in the coming elections, he can still run for the same position in 1998 and seek another three-year consecutive term since his previous threeyear consecutive term as municipal mayor would not be counted. Thus, petitioners conclude that said section 51 has been conveniently crafted to suit the political ambitions of respondent Mayor Binay. 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 5 be necessary to the determination of the case itself. 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 parties to raise this abstract issue. Worse, they hoist this futuristic issue in a petition for declaratory relief over which this Court has no jurisdiction. III Finally, petitioners in the two (2) cases at bench assail the constitutionality of section 52, Article X of R.A. No. 7854. Section 52 of the Charter provides: Sec. 52. Legislative Districts. Upon its conversion into a highly-urbanized city, Makati shall thereafter have at least two (2) legislative districts that shall initially correspond to the two (2) existing districts created under Section 3(a) of Republic Act. No. 7166 as implemented by the Commission on Elections to commence at the next national elections to be held after the effectivity of this Act. Henceforth, barangays Magallanes, Dasmarias and Forbes shall be with the first district, in lieu of Barangay Guadalupe-Viejo which shall form part of the second district. (emphasis supplied) They contend. that the addition of another legislative district in Makati is unconstitutional for: (1) reapportionment cannot made by a special law, 7 (2) the addition of a legislative district is not expressed in the title of the bill and (3) Makati's population, as per the 1990 census, stands at only four hundred fifty thousand (450,000). 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 9 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 of the law. This is its 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 10 situation where a new city or province created by Congress will be denied legislative representation for an indeterminate period of time. The 11 intolerable situations 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.
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Petitioners cannot insist that the addition of another legislative district in Makati is not in accord with section 5(3), Article VI of the Constitution 13 for as of the latest survey (1990 census), the population of Makati stands at only four hundred fifty thousand (450,000). Said section provides, inter alia, that a city with a population of at least two hundred fifty thousand (250,000) shall have at least one representative. Even granting that the population of Makati as of the 1990 census stood at four hundred fifty thousand (450,000), its legislative district may still be increased since it has met the minimum population requirement of two hundred fifty thousand (250,000). In fact, section 3 of the Ordinance appended to the Constitution provides that a city whose population has increased to more than two hundred fifty thousand (250,000) shall be 14 entitled to at least one congressional representative. 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, with 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." WHEREFORE, the petitions are hereby DISMISSED for lack of merit No costs. THE MUNICIPALITY OF MALABANG, LANAO DEL SUR, and AMER MACAORAO BALINDONG, petitioners, vs. PANGANDAPUN BENITO, HADJI NOPODIN MACAPUNUNG, HADJI HASAN MACARAMPAD, FREDERICK V. DUJERTE MONDACO ONTAL, MARONSONG ANDOY, MACALABA INDAR LAO. respondents. L. Amores and R. Gonzales for petitioners. Jose W. Diokno for respondents. CASTRO, J.: The petitioner Amer Macaorao Balindong is the mayor of Malabang, Lanao del Sur, while the respondent Pangandapun Bonito is the mayor, and the rest of the respondents are the councilors, of the municipality of Balabagan of the same province. Balabagan was formerly a part of the municipality of Malabang, having been created on March 15, 1960, by Executive Order 386 of the then President Carlos P. Garcia, out of barrios 1 and sitios of the latter municipality. The petitioners brought this action for prohibition to nullify Executive Order 386 and to restrain the respondent municipal officials from 2 performing the functions of their respective office relying on the ruling of this Court in Pelaez v. Auditor General and Municipality of San Joaquin v. 3 Siva. In Pelaez this Court, through Mr. Justice (now Chief Justice) Concepcion, ruled: (1) that section 23 of Republic Act 2370 [Barrio Charter Act, approved January 1, 1960], by vesting the power to create barrios in the provincial board, is a "statutory denial of the presidential authority to create a new barrio [and] implies a negation of the bigger power to create municipalities," and (2) that section 68 of the Administrative Code, insofar as it gives the President the power to create municipalities, is unconstitutional (a) because it constitutes an undue delegation of legislative power and (b) because it offends against section 10 (1) of article VII of the Constitution, which limits the President's power over local governments to mere supervision. As this Court summed up its discussion: "In short, even if it did not entail an undue delegation of legislative powers, as it certainly does, said section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent with said statutory enactment." On the other hand, the respondents, while admitting the facts alleged in the petition, nevertheless argue that the rule announced in Pelaez can have no application in this case because unlike the municipalities involved in Pelaez, the municipality of Balabagan is at least a de facto corporation, having been organized under color of a statute before this was declared unconstitutional, its officers having been either elected or appointed, and the municipality itself having discharged its corporate functions for the past five years preceding the institution of this action. It is contended that as a de facto corporation, its existence cannot be collaterally attacked, although it may be inquired into directly in an action for quo warranto at the instance of the State and not of an individual like the petitioner Balindong. It is indeed true that, generally, an inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo 4 warranto or other direct proceeding, and that only in a few exceptions may a private person exercise this function of government. But the rule 5 disallowing collateral attacks applies only where the municipal corporation is at least a de facto corporations. For where it is neither a corporation de jure nor de facto, but a nullity, the rule is that its existence may be, questioned collaterally or directly in any action or proceeding by any one whose rights or interests ate affected thereby, including the citizens of the territory incorporated unless they are estopped by their 6 conduct from doing so. And so the threshold question is whether the municipality of Balabagan is a de facto corporation. As earlier stated, the claim that it is rests 7 on the fact that it was organized before the promulgation of this Court's decision inPelaez. Accordingly, we address ourselves to the question whether a statute can lend color of validity to an attempted organization of a municipality despite the fact that such statute is subsequently declared unconstitutional.lawphi1.et This has been a litigiously prolific question, sharply dividing courts in the United States. Thus, some hold that a de facto corporation cannot exist where the statute or charter creating it is unconstitutional because there can be no de facto corporation where there can be no de 8 9 jure one, while others hold otherwise on the theory that a statute is binding until it is condemned as unconstitutional. An early article in the Yale Law Journal offers the following analysis: It appears that the true basis for denying to the corporation a de facto status lay in the absence of any legislative act to give vitality to its creation. An examination of the cases holding, some of them unreservedly, that a de facto office or municipal corporation can exist under color of an unconstitutional statute will reveal that in no instance did the invalid act give life to the corporation, but that either in other valid acts or in the constitution itself the office or the corporation was potentially created.... The principle that color of title under an unconstitutional statute can exist only where there is some other valid law under which the organization may be effected, or at least an authority in potentia by the state constitution, has its counterpart in the negative propositions that there can be no color of authority in an unconstitutional statute that plainly so appears on its face or that attempts to authorize the ousting of a de jure or de facto municipal corporation upon the same territory; in the one case the fact would imply the imputation of bad faith, in the other the new organization must be regarded as a mere usurper.... As a result of this analysis of the cases the following principles may be deduced which seem to reconcile the apparently conflicting decisions: I. The color of authority requisite to the organization of a de facto municipal corporation may be:

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1. A valid law enacted by the legislature. 2. An unconstitutional law, valid on its face, which has either (a) been upheld for a time by the courts or (b) not yet been declared void; provided that a warrant for its creation can be found in some other valid law or in the recognition of its potential existence by the general laws or constitution of the state. II. There can be no de facto municipal corporation unless either directly or potentially, such a de jurecorporation is authorized by some legislative fiat. III. There can be no color of authority in an unconstitutional statute alone, the invalidity of which is apparent on its face. IV. There can be no de facto corporation created to take the place of an existing de jure corporation, as such organization would clearly be a 10 usurper. In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of 11 authority to its creation. Indeed, in Municipality of San Joaquin v. Siva, this Court granted a similar petition for prohibition and nullified an executive order creating the municipality of Lawigan in Iloilo on the basis of the Pelaez ruling, despite the fact that the municipality was created in 1961, before section 68 of the Administrative Code, under which the President had acted, was invalidated. 'Of course the issue of de factomunicipal corporation did not arise in that case. In Norton v. Shelby Count, Mr. Justice Field said: "An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed." Accordingly, he held that bonds issued by a board of commissioners created under an invalid statute were unenforceable. Executive Order 386 "created no office." This is not to say, however, that the acts done by the municipality of Balabagan in the exercise of its corporate powers are a nullity because the executive order "is, in legal contemplation, as inoperative as though it had never been passed." For the existence of Executive, Order 386 is "an operative fact which cannot justly be ignored." As Chief Justice Hughes explained in Chicot County Drainage 13 District v. Baxter State Bank: The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, I. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects with respect to particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested, of status of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. There is then no basis for the respondents' apprehension that the invalidation of the executive order creating Balabagan would have the 14 effect of unsettling many an act done in reliance upon the validity of the creation of that municipality. ACCORDINGLY, the petition is granted, Executive Order 386 is declared void, and the respondents are hereby permanently restrained from performing the duties and functions of their respective offices. No pronouncement as to costs. EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL, respondent. Zulueta, Gonzales, Paculdo and Associates for petitioner. Office of the Solicitor General for respondent. CONCEPCION, J.: During the period from September 4 to October 29, 1964 the President of the Philippines, purporting to act pursuant to Section 68 of the Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities enumerated in the 1 margin. Soon after the date last mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present special civil action, for a writ of prohibition with preliminary injunction, against the Auditor General, to restrain him, as well as his representatives and agents, from passing in audit any expenditure of public funds in implementation of said executive orders and/or any disbursement by said municipalities. Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has been impliedly repealed by Republic Act No. 2370 and constitutes an undue delegation of legislative power. Respondent maintains the contrary view and avers that the present action is premature and that not all proper parties referring to the officials of the new political subdivisions in question have been impleaded. Subsequently, the mayors of several municipalities adversely affected by the aforementioned executive orders because the latter have taken away from the former the barrios composing the new political subdivisions intervened in the case. Moreover, Attorneys Enrique M. Fernando and Emma Quisumbing-Fernando were allowed to and did appear asamici curiae. The third paragraph of Section 3 of Republic Act No. 2370, reads: Barrios shall not be created or their boundaries altered nor their names changed except under the provisions of this Act or by Act of Congress. Pursuant to the first two (2) paragraphs of the same Section 3: All barrios existing at the time of the passage of this Act shall come under the provisions hereof. Upon petition of a majority of the voters in the areas affected, a new barrio may be created or the name of an existing one may be changed by the provincial board of the province, upon recommendation of the council of the municipality or municipalities in which the proposed barrio is stipulated. The recommendation of the municipal council shall be embodied in a resolution approved by at least two-thirds of the entire membership of the said council: Provided, however, That no new barrio may be created if its population is less than five hundred persons.
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Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be created or their boundaries altered nor their names changed" except by Act of Congress or of the corresponding provincial board "upon petition of a majority of the voters in the areas affected" and the "recommendation of the council of the municipality or municipalities in which the proposed barrio is situated." Petitioner argues, accordingly: "If the President, under this new law, cannot even create a barrio, can he create a municipality which is composed of several barrios, since barrios are units of municipalities?" Respondent answers in the affirmative, upon the theory that a new municipality can be created without creating new barrios, such as, by placing old barrios under the jurisdiction of the new municipality. This theory overlooks, however, the main import of the petitioner's argument, which is that the statutory denial of the presidential authority to create a new barrio implies a negation of the bigger power to create municipalities, each of which consists of several barrios. The cogency and force of this argument is too obvious to be denied or even questioned. Founded upon logic and experience, it cannot be offset except by a clear manifestation of the intent of Congress to the contrary, and no such manifestation, subsequent to the passage of Republic Act No. 2379, has been brought to our attention. Moreover, section 68 of the Revised Administrative Code, upon which the disputed executive orders are based, provides: The (Governor-General) President of the Philippines may by executive order define the boundary, or boundaries, of any province, subprovince, municipality, [township] municipal district, or other political subdivision, and increase or diminish the territory comprised therein, may divide any province into one or more subprovinces, separate any political division other than a province, into such portions as may be required, merge any of such subdivisions or portions with another, name any new subdivision so created, and may change the seat of government within any subdivision to such place therein as the public welfare may require: Provided, That the authorization of the (Philippine Legislature) Congress of the Philippines shall first be obtained whenever the boundary of any province or subprovince is to be defined or any province is to be divided into one or more subprovinces. When action by the (Governor-General) President of the Philippines in accordance herewith makes necessary a change of the territory under the jurisdiction of any administrative officer or any judicial officer, the (Governor-General) President of the Philippines, with the recommendation and advice of the head of the Department having executive control of such officer, shall redistrict the territory of the several officers affected and assign such officers to the new districts so formed. Upon the changing of the limits of political divisions in pursuance of the foregoing authority, an equitable distribution of the funds and obligations of the divisions thereby affected shall be made in such manner as may be recommended by the (Insular Auditor) Auditor General and approved by the (Governor-General) President of the Philippines. Respondent alleges that the power of the President to create municipalities under this section does not amount to an undue delegation of legislative power, relying upon Municipality of Cardona vs. Municipality of Binagonan (36 Phil. 547), which, he claims, has settled it. Such claim is untenable, for said case involved, not the creation of a new municipality, but a mere transfer of territory from an already existing municipality (Cardona) to another municipality (Binagonan), likewise, existing at the time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of Cardona vs. Municipality, of Binagonan [34 Phil. 518, 519-5201) in consequence of the fixing and definition, pursuant to Act No. 1748, of the common boundaries of two municipalities. It is obvious, however, that, whereas the power to fix such common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of an administrative nature involving, as it does, the adoption of means and ways to carry into effect the law creating said municipalities the authority to create municipal corporations is essentially legislative in nature. In the language of other courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and exclusively the exercise oflegislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the Supreme Court of Washington has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the creatures of statutes." Although Congress may delegate to another branch of the Government the power to fill in the details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it 2 must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) fix a standard the limits of which are 2a sufficiently determinate or determinable to which the delegate must conform in the performance of his functions. Indeed, without a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the essence of every law; and, without the aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the 2b scope of his authority. Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our Republican system. Section 68 of the Revised Administrative Code does not meet these well settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. In this connection, we do not overlook the fact that, under the last clause of the first sentence of Section 68, the President: ... may change the seat of the government within any subdivision to such place therein as the public welfare may require. It is apparent, however, from the language of this clause, that the phrase "as the public welfare may require" qualified, not the clauses preceding the one just quoted, but only the place to which the seat of the government may be transferred. This fact becomes more apparent when we 3 consider that said Section 68 was originally Section 1 of Act No. 1748, which provided that, "whenever in the judgment of the Governor-General the public welfare requires, he may, by executive order," effect the changes enumerated therein (as in said section 68), including the change of the seat of the government "to such place ... as the public interest requires." The opening statement of said Section 1 of Act No. 1748 which was not included in Section 68 of the Revised Administrative Code governed the time at which, or the conditions under which, the powers therein conferred could be exercised; whereas the last part of the first sentence of said section referred exclusively to the place to which the seat of the government was to be transferred. At any rate, the conclusion would be the same, insofar as the case at bar is concerned, even if we assumed that the phrase "as the public welfare may require," in said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs. Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and "public interest," respectively, as sufficient standards for a valid delegation of the authority to execute the law. But, the doctrine laid down in these cases as all judicial pronouncements must be construed in relation to the specific facts 4 and issues involved therein, outside of which they do not constitute precedents and have no binding effect. The law construed in the Calalang case conferred upon the Director of Public Works, with the approval of the Secretary of Public Works and Communications, the power to issue rules and regulations topromote safe transit upon national roads and streets. Upon the other hand, the Rosenthal case referred to the authority of the Insular Treasurer, under Act No. 2581, to issue and cancel certificates or permits for the sale ofspeculative securities. Both cases involved grants to administrative officers of powers related to the exercise of their administrative functions, calling for the determination of questions of fact. Such is not the nature of the powers dealt with in section 68. As above indicated, the creation of municipalities, is not an administrative function, but one which is essentially and eminently legislative in character. The question of whether or not "public interest" demands the exercise of such
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power is not one of fact. it is "purely a legislativequestion "(Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or apolitical question (Udall vs. Severn, 79 P. 2d. 347-349). As the Supreme Court of Wisconsin has aptly characterized it, "the question as to whether incorporation is for the best interest of the community in any case is emphatically a question of public policy and statecraft" (In re Village of North Milwaukee, 67 N.W. 1033, 1035-1037). For this reason, courts of justice have annulled, as constituting undue delegation of legislative powers, state laws granting the judicial department, the power to determine whether certain territories should be annexed to a particular municipality (Udall vs. Severn, supra, 258-359); or vesting in a Commission the right to determine the plan and frame of government of proposed villages and what functions shall be exercised by the same, although the powers and functions of the village are specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308); or conferring upon courts the authority to declare a given town or village incorporated, and designate its metes and bounds, upon petition of a majority of the taxable inhabitants thereof, setting forth the area desired to be included in such village (Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or authorizing the territory of a town, containing a given area and population, to be incorporated as a town, on certain steps being taken by the inhabitants thereof and on certain determination by a court and subsequent vote of the inhabitants in favor thereof, insofar as the court is allowed to determine whether the lands embraced in the petition "ought justly" to be included in the village, and whether the interest of the inhabitants will be promoted by such incorporation, and to enlarge and diminish the boundaries of the proposed village "as justice may require" (In re Villages of North Milwaukee, 67 N.W. 1035-1037); or creating a Municipal Board of Control which shall determine whether or not the laying out, construction or operation of a toll road is in the "public interest" and whether the requirements of the law had been complied with, in which case the board shall enter an order creating a municipal corporation and fixing the name of the same (Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d. 310). Insofar as the validity of a delegation of power by Congress to the President is concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is quite relevant to the one at bar. The Schechter case involved the constitutionality of Section 3 of the National Industrial Recovery Act authorizing the President of the United States to approve "codes of fair competition" submitted to him by one or more trade or industrial associations or corporations which "impose no inequitable restrictions on admission to membership therein and are truly representative," provided that such codes are not designed "to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy" of said Act. The Federal Supreme Court held: To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without precedent. It supplies no standards for any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of codes to prescribe them. For that legislative undertaking, Sec. 3 sets up no standards, aside from the statement of the general aims of rehabilitation, correction and expansion described in Sec. 1. In view of the scope of that broad declaration, and of the nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. We think that the code making authority thus conferred is an unconstitutional delegation of legislative power. If the term "unfair competition" is so broad as to vest in the President a discretion that is "virtually unfettered." and, consequently, tantamount to a delegation of legislative power, it is obvious that "public welfare," which has even a broader connotation, leads to the same result. In fact, if the validity of the delegation of powers made in Section 68 were upheld, there would no longer be any legal impediment to a statutory grant of authority to the President to do anything which, in his opinion, may be required by public welfare or public interest. Such grant of authority would be a virtual abdication of the powers of Congress in favor of the Executive, and would bring about a total collapse of the democratic system established by our Constitution, which it is the special duty and privilege of this Court to uphold. It may not be amiss to note that the executive orders in question were issued after the legislative bills for the creation of the municipalities involved in this case had failed to pass Congress. A better proof of the fact that the issuance of said executive orders entails the exercise of purely legislative functions can hardly be given. Again, Section 10 (1) of Article VII of our fundamental law ordains: The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed. The power of control under this provision implies the right of the President to interfere in the exercise of such discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of the national government, as well as to act in lieu of such officers. This power is denied by the Constitution to the Executive, insofar as local governments are concerned. With respect to the latter, the fundamental law permits him to wield no more authority than that of checking whether said local governments or the officers thereof perform their duties as provided by statutory enactments. Hence, the President cannot interfere with local governments, so long as the same or its officers act Within the scope of their authority. He may not enact an ordinance which the municipal council has failed or refused to pass, even if it had thereby violated a duty imposed thereto by law, although he may see to it that the corresponding provincial officials take appropriate disciplinary action therefor. Neither may he vote, set aside or annul an ordinance passed by said council within the scope of its jurisdiction, no matter how patently unwise it may be. He may not even suspend an elective official of a regular municipality or take any disciplinary action against him, except on appeal from a decision 5 of the corresponding provincial board. Upon the other hand if the President could create a municipality, he could, in effect, remove any of its officials, by creating a new municipality and 6 including therein the barrio in which the official concerned resides, for his office would thereby become vacant. Thus, by merely brandishing the power to create a new municipality (if he had it), without actually creating it, he could compel local officials to submit to his dictation, thereby, in effect, exercising over them the power of control denied to him by the Constitution. Then, also, the power of control of the President over executive departments, bureaus or offices implies no morethan the authority to assume directly the functions thereof or to interfere in the exercise of discretion by its officials. Manifestly, such control does not include the authority either to abolish an executive department or bureau, or to create a new one. As a consequence, the alleged power of the President to create municipal corporations would necessarily connote the exercise by him of an authority even greater than that of control which he has over the executive departments, bureaus or offices. In other words, Section 68 of the Revised Administrative Code does not merely fail to comply with the constitutional mandate above quoted. Instead of giving the President less power over local governments than that vested in him over the executive departments, bureaus or offices, it reverses the process and does the exact opposite, by conferring upon him more power over municipal corporations than that which he has over said executive departments, bureaus or offices. In short, even if it did entail an undue delegation of legislative powers, as it certainly does, said Section 68, as part of the Revised Administrative Code, approved on March 10, 1917, must be deemed repealed by the subsequent adoption of the Constitution, in 1935, which is utterly 7 incompatible and inconsistent with said statutory enactment. There are only two (2) other points left for consideration, namely, respondent's claim (a) that "not all the proper parties" referring to the officers of the newly created municipalities "have been impleaded in this case," and (b) that "the present petition is premature."

As regards the first point, suffice it to say that the records do not show, and the parties do not claim, that the officers of any of said municipalities have been appointed or elected and assumed office. At any rate, the Solicitor General, who has appeared on behalf of respondent Auditor General, is the officer authorized by law "to act and represent the Government of the Philippines, its offices and agents, in any official investigation, proceeding or matter requiring the services of a lawyer" (Section 1661, Revised Administrative Code), and, in connection with the creation of the aforementioned municipalities, which involves a political, not proprietary, function, said local officials, if any, are mere agents or representatives of 8 the national government. Their interest in the case at bar has, accordingly, been, in effect, duly represented. With respect to the second point, respondent alleges that he has not as yet acted on any of the executive order & in question and has not intimated how he would act in connection therewith. It is, however, a matter of common, public knowledge, subject to judicial cognizance, that the President has, for many years, issued executive orders creating municipal corporations and that the same have been organized and in actual operation, thus indicating, without peradventure of doubt, that the expenditures incidental thereto have been sanctioned, approved or passed in audit by the General Auditing Office and its officials. There is no reason to believe, therefore, that respondent would adopt a different policy as regards the new municipalities involved in this case, in the absence of an allegation to such effect, and none has been made by him. WHEREFORE, the Executive Orders in question are hereby declared null and void ab initio and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to. It is so ordered.