MONDANO V SILVOSA

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-7708

May 30, 1955

JOSE MONDANO, petitioner,

vs.
FERNANDO SILVOSA, Provincial Governor of Surigao, JOSE ARREZA and OLIMPIO
EPIS, Members of the Provincial Board, respondents.
D. Avila and C. H. Lozada for petitioner.
Olimpio R. Epis in his own behalf and for his co-respondents.
PADILLA, J.:
The petitioner is the duly elected and qualified mayor of the municipality of Mainit, province
of Surigao. On 27 February 1954 Consolacion Vda. de Mosende filed a sworn complaint with
the Presidential Complaints and Action Committee accusing him of (1) rape committed on
her daughter Caridad Mosende; and (2) concubinage for cohabiting with her daughter in a
place other than the conjugal dwelling. On 6 March the Assistant Executive Secretary
indorsed the complaint to the respondent provincial governor for immediate investigation,
appropriate action and report. On 10 April the petitioner appeared before the provincial
governor in obedience to his summons and was served with a copy of the complaint filed by
the provincial governor with provincial board. On the same day, the provincial governor
issued Administrative Order No. 8 suspending the petitioner from office. Thereafter, the
Provincial Board proceeded to hear the charges preferred against the petitioner over his
objection.
The petitioner prays for a writ of prohibition with preliminary injunction to enjoin the
respondents from further proceeding with the hearing of the administrative case against him
and for a declaration that the order of suspension issued by the respondent provincial
governor is illegal and without legal effect.
On 4 May 1954 the writ of preliminary injunction prayed for was issued after filing and
approval of a bond for P500.
The answer of the respondents admits the facts alleged in the petition except those that are
inferences and conclusions of law and invokes the provisions of section 79 (c)of the Revised
Administrative Code which clothes the department head with "direct control, direction, and
supervision over all bureaus and offices under his jurisdiction . . ." and to that end "may order
the investigation of any act or conduct of any person in the service of any bureau or office
under his Department and in connection therewith may appoint a committee or designate an
official or person who shall conduct such investigations; . . ."and the rule in the case
of Villena vs. Secretary of Interior, 67 Phil. 452, which upheld "the power of the Secretary of
Interior to conduct at its own initiative investigation of charges against local elective

municipal officials and to suspend them preventively," on the board proposition "that under
the presidential type of government which we have adopted and considering the
departmental organization established and continued in force by paragraph 1, section 11,
Article VII, of our Constitution, all executive and administrative organizations are adjuncts of
the Executive Departments, the heads of the various executive departments are assistants
and agents of the Chief Executive."
The executive departments of the Government of the Philippines created and organized
before the approval of the Constitution continued to exist as "authorized by law until the
Congress shall provide otherwise."1 Section 10, paragraph 1, Article VII, of the Constitution
provides: "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." Under this constitutional provision the
President has been invested with the power of control of all the executive departments,
bureaus, or offices, but not of all local governments over which he has been granted only the
power of general supervision as may be provided by law. The Department head as agent of
the President has direct control and supervision over all bureaus and offices under his
jurisdiction as provided for in section 79 (c) of the Revised Administrative Code, but he does
not have the same control of local governments as that exercised by him over bureaus and
offices under his jurisdiction. Likewise, his authority to order the investigation of any act or
conduct of any person in the service of any bureau or office under his department is confined
to bureaus or offices under his jurisdiction and does not extend to local governments over
which, as already stated, the President exercises only general supervision as may be
provided by law. If the provisions of section 79 (c) of the Revised Administrative Code are to
be construed as conferring upon the corresponding department head direct control, direction,
and supervision over all local governments and that for the reason he may order the
investigation of an official of a local government for malfeasance in office, such interpretation
would be contrary to the provisions of paragraph 1, section 10, Article VII, of the Constitution.
If "general supervision over all local governments" is to be construedas the same power
granted to the Department Head in section 79 (c) of the Revised Administrative Code, then
there would no longer be a distinction or difference between the power of control and that of
supervision. In administrative law supervision means overseeing or the power or authority of
an officer to see that subordinate officers perform their duties. If the latter fail or neglect to
fulfill them the former may take such action or step as prescribed by law to make them
perform their duties. Control, on the other hand, means the power of an officer to alter or
modify or nullify or set aside what a subordinate officer had done in the performance of his
duties and to substitute the judgment of the former for that of the latter. Such is the import of
the provisions of section 79 (c) of the Revised Administrative Code and 37 of Act No. 4007.
The Congress has expressly and specifically lodged the provincial supervision over
municipal officials in the provincial governor who is authorized to "receive and investigate
complaints made under oath against municipal officers for neglect of duty, oppression,
corruption or other form of maladministration of office, and conviction by final judgment of
any crime involving moral turpitude."2 And if the charges are serious, "he shall submit written
charges touching the matter to the provincial board, furnishing a copy of such charges to the
accused either personally or by registered mail, and he may in such case suspend the officer
(not being the municipal treasurer) pending action by the board, if in his opinion the charge
be one affecting the official integrity of the officer in question." 3 Section 86 of the Revised
Administrative Code adds nothing to the power of supervision to be exercised by the
Department Head over the administration of . . . municipalities . . .. If it be construed that it
does and such additional power is the same authority as that vested in the Department Head
by section 79 (c) of the Revised Administrative Code, then such additional power must be
deemed to have been abrogated by section 10 (1), Article VII, of the Constitution.

In Lacson vs. Roque, 49 Off. Gaz. 93, this Court held that the power of the President to
remove officials from office as provided for in section 64 (b) of the Revised Administrative
Code must be done "conformably to law;" and only for disloyalty to the Republic of the
Philippines he "may at any time remove a person from any position of trust or authority under
the Government of the (Philippine Islands) Philippines." Again, this power of removal must be
exercised conformably to law.
In the indorsement to the provincial governor the Assistant Executive Secretary requested
immediate investigation, appropriate action and report on the complaint indorsed to him, and
called his attention to section 2193 of the Revised Administrative Code which provides for
the institution of judicial proceedings by the provincial fiscal upon direction of the provincial
governor. If the indorsement of the Assistant Executive Secretary be taken as a designation
of the provincial governor to investigate the petitioner, then he would only be acting as agent
of the Executive, but the investigation to be conducted by him would not be that which is
provided for in sections 2188, 2189 and 2190 of the Revised Administrative Code. The
charges preferred against the respondent are not malfeasances or any of those enumerated
or specified in section 2188 of the Revised Administrative Code, because rape and
concubinage have nothing to do with the performance of his duties as mayor nor do they
constitute or involve" neglect of duty, oppression, corruption or any other form of
maladministration of office." True, they may involve moral turpitude, but before the provincial
governor and board may act and proceed in accordance with the provisions of the Revised
Administrative Code referred to, a conviction by final judgment must precede the filing by the
provincial governor of charges and trial by the provincial board. Even the provincial fiscal
cannot file an information for rape without a sworn complaint of the offended party who is 28
years of age and the crime of concubinage cannot be prosecuted but upon sworn complaint
of the offended spouse.4 The charges preferred against the petitioner, municipal mayor of
Mainit, province of Surigao, not being those or any of those specified in section 2188 of the
Revised Administrative Code, the investigation of such charges by the provincial board is
unauthorized and illegal. The suspension of the petitioner as mayor of the municipality of
Mainit is, consequently, unlawful and without authority of law.
The writ of prohibition prayed for is granted, without pronouncement as to costs.
Pablo, Acting C.J., Bengzon, Montemayor, Reyes, A., Bautista Angelo, Labrador,
Concepcion and Reyes, J.B.L., JJ., concur.
PIMENTELVAGUIRRE

EN BANC

[G.R. No. 132988. July 19, 2000]

AQUILINO Q. PIMENTEL JR., petitioner, vs. Hon. ALEXANDER

AGUIRRE in his capacity as Executive Secretary, Hon.
EMILIA BONCODIN in her capacity as Secretary of the
Department of Budget and Management, respondents.
ROBERTO PAGDANGANAN, intervenor.
DECISION
PANGANIBAN, J.:

The Constitution vests the President with the power of supervision, not
control, over local government units (LGUs). Such power enables him to see to it
that LGUs and their officials execute their tasks in accordance with law. While he
may issue advisories and seek their cooperation in solving economic difficulties,
he cannot prevent them from performing their tasks and using available
resources to achieve their goals. He may not withhold or alter any authority or
power given them by the law. Thus, the withholding of a portion of internal
revenue allotments legally due them cannot be directed by administrative fiat.
The Case

Before us is an original Petition for Certiorari and Prohibition seeking (1) to

annul Section 1 of Administrative Order (AO) No. 372, insofar as it requires local
government units to reduce their expenditures by 25 percent of their authorized
regular appropriations for non-personal services; and (2) to enjoin respondents
from implementing Section 4 of the Order, which withholds a portion of their
internal revenue allotments.
On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C.
Agra, filed a Motion for Intervention/Motion to Admit Petition for Intervention,
[1]
attaching thereto his Petition in Intervention [2] joining petitioner in the reliefs
sought. At the time, intervenor was the provincial governor of Bulacan, national
president of the League of Provinces of the Philippines and chairman of the
League of Leagues of Local Governments. In a Resolution dated December 15,
1998, the Court noted said Motion and Petition.
The Facts and the Arguments

On December 27, 1997, the President of the Philippines issued AO 372. Its
full text, with emphasis on the assailed provisions, is as follows:

"ADMINISTRATIVE ORDER NO. 372

ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY

1998
WHEREAS, the current economic difficulties brought about by the peso
depreciation requires continued prudence in government fiscal
management to maintain economic stability and sustain the country's
growth momentum;
WHEREAS, it is imperative that all government agencies adopt cash
management measures to match expenditures with available resources;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the Constitution,
do hereby order and direct:
SECTION 1. All government departments and agencies, including
state universities and colleges, government-owned and controlled
corporations and local governments units will identify and
implement measures in FY 1998 that will reduce total expenditures
for the year by at least 25% of authorized regular appropriations
for non-personal services items, along the following suggested
areas:
1. Continued implementation of the streamlining policy on organization and
staffing by deferring action on the following:

a. Operationalization of new agencies;

b. Expansion of organizational units and/or creation of positions;
c. Filling of positions; and
d. Hiring of additional/new consultants, contractual and casual
personnel, regardless of funding source.
2. Suspension of the following activities:

a. Implementation of new capital/infrastructure projects, except

those which have already been contracted out;
b. Acquisition of new equipment and motor vehicles;

c. All foreign travels of government personnel, except those

associated with scholarships and trainings funded by
grants;
d. Attendance in conferences abroad where the cost is charged
to the government except those clearly essential to
Philippine commitments in the international field as may be
determined by the Cabinet;
e. Conduct of trainings/workshops/seminars, except those
conducted by government training institutions and agencies
in the performance of their regular functions and those that
are funded by grants;
f. Conduct of cultural and social celebrations and sports
activities, except those associated with the Philippine
Centennial celebration and those involving regular
competitions/events;
g. Grant of honoraria, except in cases where it constitutes the
only source of compensation from government received by
the person concerned;
h. Publications, media advertisements and related items, except
those required by law or those already being undertaken on
a regular basis;
i. Grant of new/additional benefits to employees, except those
expressly and specifically authorized by law; and
j. Donations, contributions, grants and gifts, except those given
by institutions to victims of calamities.
3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs
4. Reduction in the volume of consumption of fuel, water, office supplies,
electricity and other utilities
5. Deferment of projects that are encountering significant implementation
problems
6. Suspension of all realignment of funds and the use of savings and reserves

SECTION 2. Agencies are given the flexibility to identify the specific

sources of cost-savings, provided the 25% minimum savings under
Section 1 is complied with.
SECTION 3. A report on the estimated savings generated from these
measures shall be submitted to the Office of the President, through the
Department of Budget and Management, on a quarterly basis using the
attached format.
SECTION 4. Pending the assessment and evaluation by the Development
Budget Coordinating Committee of the emerging fiscal situation, the
amount equivalent to 10% of the internal revenue allotment to local
government units shall be withheld.
SECTION 5. The Development Budget Coordination Committee shall conduct a
monthly review of the fiscal position of the National Government and if
necessary, shall recommend to the President the imposition of additional
reserves or the lifting of previously imposed reserves.
SECTION 6. This Administrative Order shall take effect January 1, 1998 and
shall remain valid for the entire year unless otherwise lifted.

DONE in the City of Manila, this 27th day of December, in the year of our
Lord, nineteen hundred and ninety-seven."
Subsequently, on December 10, 1998, President Joseph E. Estrada issued
AO 43, amending Section 4 of AO 372, by reducing to five percent (5%) the
amount of internal revenue allotment (IRA) to be withheld from the LGUs.
Petitioner contends that the President, in issuing AO 372, was in effect
exercising the power of control over LGUs. The Constitution vests in the
President, however, only the power of general supervision over LGUs, consistent
with the principle of local autonomy. Petitioner further argues that the directive to
withhold ten percent (10%) of their IRA is in contravention of Section 286 of the
Local Government Code and of Section 6, Article X of the Constitution, providing
for the automatic release to each of these units its share in the national internal
revenue.
The solicitor general, on behalf of the respondents, claims on the other hand
that AO 372 was issued to alleviate the "economic difficulties brought about by
the peso devaluation" and constituted merely an exercise of the President's
power of supervision over LGUs. It allegedly does not violate local fiscal
autonomy, because it merelydirects local governments to identify measures that
will reduce their total expenditures for non-personal services by at least 25
percent. Likewise, the withholding of 10 percent of the LGUs IRA does not violate
the statutory prohibition on the imposition of any lien or holdback on their
revenue shares, because such withholding is "temporary in nature pending the

assessment and evaluation by the Development Coordination Committee of the

emerging fiscal situation."
The Issues

The Petition[3] submits the following issues for the Court's resolution:

"A. Whether or not the president committed grave abuse of discretion

[in] ordering all LGUS to adopt a 25% cost reduction program in
violation of the LGU[']S fiscal autonomy
"B. Whether or not the president committed grave abuse of discretion in
ordering the withholding of 10% of the LGU[']S IRA"
In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it
"directs" LGUs to reduce their expenditures by 25 percent; and (b) Section 4 of
the same issuance, which withholds 10 percent of their internal revenue
allotments, are valid exercises of the President's power of general supervision
over local governments.
Additionally, the Court deliberated on the question whether petitioner had
the locus standi to bring this suit, despite respondents' failure to raise the issue.
[4]
However, the intervention of Roberto Pagdanganan has rendered academic
any further discussion on this matter.
The Court's Ruling

The Petition is partly meritorious.

Main Issue:
Validity of AO 372
Insofar as LGUs Are Concerned

Before resolving the main issue, we deem it important and appropriate to

define certain crucial concepts: (1) the scope of the President's power of general
supervision over local governments and (2) the extent of the local governments'
autonomy.
Scope of President's Power of Supervision Over LGUs

Section 4 of Article X of the Constitution confines the President's power over

local governments to one of general supervision. It reads as follows:

"Sec. 4. The President of the Philippines shall exercise general

supervision over local governments. x x x"
This provision has been interpreted to exclude the power of
control. In Mondano v. Silvosa,[5] the Court contrasted the President's power of
supervision over local government officials with that of his power of control over
executive officials of the national government. It was emphasized that the two
terms -- supervision and control -- differed in meaning and extent. The Court
distinguished them as follows:

"x x x In administrative law, supervision means overseeing or the power

or authority of an officer to see that subordinate officers perform their
duties. If the latter fail or neglect to fulfill them, the former may take such
action or step as prescribed by law to make them perform their
duties. Control, on the other hand, means the power of an officer to alter
or modify or nullify or set aside what a subordinate officer ha[s] done in
the performance of his duties and to substitute the judgment of the
former for that of the latter."[6]
In Taule v. Santos,[7] we further stated that the Chief Executive wielded no
more authority than that of checking whether local governments or their officials
were performing their duties as provided by the fundamental law and by
statutes. He cannot interfere with local governments, so long as they act within
the scope of their authority. "Supervisory power, when contrasted with control, is
the power of mere oversight over an inferior body; it does not include any
restraining authority over such body," [8] we said.
In a more recent case, Drilon v. Lim,[9] the difference between control and
supervision was further delineated. Officers in control lay down the rules in the
performance or accomplishment of an act. If these rules are not followed, they
may, in their discretion, order the act undone or redone by their subordinates or
even decide to do it themselves. On the other hand, supervision does not cover
such authority. Supervising officials merely see to it that the rules are followed,
but they themselves do not lay down such rules, nor do they have the discretion
to modify or replace them. If the rules are not observed, they may order the work
done or redone, but only to conform to such rules. They may not prescribe their
own manner of execution of the act. They have no discretion on this matter
except to see to it that the rules are followed.
Under our present system of government, executive power is vested in the
President.[10] The members of the Cabinet and other executive officials are merely
alter egos. As such, they are subject to the power of control of the President, at
whose will and behest they can be removed from office; or their actions and
decisions changed, suspended or reversed. [11] In contrast, the heads of political
subdivisions are elected by the people. Their sovereign powers emanate from
the electorate, to whom they are directly accountable. By constitutional fiat, they

are subject to the Presidents supervision only, not control, so long as their acts
are exercised within the sphere of their legitimate powers. By the same token,
the President may not withhold or alter any authority or power given them by the
Constitution and the law.
Extent of Local Autonomy

Hand in hand with the constitutional restraint on the President's power over
local governments is the state policy of ensuring local autonomy.[12]
In Ganzon v. Court of Appeals,[13] we said that local autonomy signified "a
more responsive and accountable local government structure instituted through a
system of decentralization." The grant of autonomy is intended to "break up the
monopoly of the national government over the affairs of local governments, x x
x not x x x to end the relation of partnership and interdependence between the
central administration and local government units x x x." Paradoxically, local
governments are still subject to regulation, however limited, for the purpose of
enhancing self-government.[14]
Decentralization simply means the devolution of national administration, not
power, to local governments. Local officials remain accountable to the central
government as the law may provide. [15] The difference between decentralization of
administration and that of power was explained in detail in Limbona v.
Mangelin[16] as follows:

"Now, autonomy is either decentralization of administration or

decentralization of power. There is decentralization of administration
when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power
and in the process to make local governments 'more responsive and
accountable,'[17] and 'ensure their fullest development as self-reliant communities and make
them more effective partners in the pursuit of national development and social progress.' [18] 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'[19] over them,
but only to 'ensure that local affairs are administered according to law.' [20] He has no control over
their acts in the sense that he can substitute their judgments with his own. [21]

Decentralization of power, on the other hand, involves an abdication of

political power in the favor of local government units declared to be
autonomous. In that case, the autonomous government is free to chart
its own destiny and shape its future with minimum intervention from
central authorities. According to a constitutional author, decentralization
of power amounts to 'self-immolation,' since in that event, the
autonomous government becomes accountable not to the central
authorities but to its constituency."[22]

Under the Philippine concept of local autonomy, the national government has
not completely relinquished all its powers over local governments, including
autonomous regions. Only administrative powers over local affairs are delegated
to political subdivisions. The purpose of the delegation is to make governance
more directly responsive and effective at the local levels. In turn, economic,
political and social development at the smaller political units are expected to
propel social and economic growth and development. But to enable the country
to develop as a whole, the programs and policies effected locally must be
integrated and coordinated towards a common national goal. Thus, policy-setting
for the entire country still lies in the President and Congress. As we stated
in Magtajas v. Pryce Properties Corp., Inc., municipal governments are still
agents of the national government. [23]
The Nature of AO 372

Consistent with the foregoing jurisprudential precepts, let us now look into
the nature of AO 372. As its preambular clauses declare, the Order was a "cash
management measure" adopted by the government "to match expenditures with
available resources," which were presumably depleted at the time due to
"economic difficulties brought about by the peso depreciation." Because of a
looming financial crisis, the President deemed it necessary to "direct all
government agencies, state universities and colleges, government-owned and
controlled corporations as well as local governments to reduce their total
expenditures by at least 25 percent along suggested areas mentioned in AO 372.
Under existing law, local government units, in addition to having
administrative autonomy in the exercise of their functions, enjoy fiscal autonomy
as well. Fiscal autonomy means that local governments have the power to create
their own sources of revenue in addition to their equitable share in the national
taxes released by the national government, as well as the power to allocate their
resources in accordance with their own priorities. It extends to the preparation of
their budgets, and local officials in turn have to work within the constraints
thereof. They are not formulated at the national level and imposed on local
governments, whether they are relevant to local needs and resources or
not. Hence, the necessity of a balancing of viewpoints and the harmonization of
proposals from both local and national officials, [24] who in any case are partners in
the attainment of national goals.
Local fiscal autonomy does not however rule out any manner of national
government intervention by way of supervision, in order to ensure that local
programs, fiscal and otherwise, are consistent with national goals. Significantly,
the President, by constitutional fiat, is the head of the economic and planning
agency of the government,[25]primarily responsible for formulating and
implementing continuing, coordinated and integrated social and economic
policies, plans and programs[26] for the entire country.However, under the
Constitution, the formulation and the implementation of such policies and

programs are subject to "consultations with the appropriate public agencies,

various private sectors, and local government units." The President cannot do so
unilaterally.
Consequently, the Local Government Code provides:[27]

"x x x [I]n the event the national government incurs an unmanaged

public sector deficit, the President of the Philippines is hereby
authorized, upon the recommendation of [the] Secretary of Finance,
Secretary of the Interior and Local Government and Secretary of Budget
and Management, and subject to consultation with the presiding officers
of both Houses of Congress and the presidents of the liga, to make the
necessary adjustments in the internal revenue allotment of local
government units but in no case shall the allotment be less than thirty
percent (30%) of the collection of national internal revenue taxes of the
third fiscal year preceding the current fiscal year x x x."
There are therefore several requisites before the President may interfere in
local fiscal matters: (1) an unmanaged public sector deficit of the national
government; (2) consultations with the presiding officers of the Senate and the
House of Representatives and the presidents of the various local leagues; and
(3) the corresponding recommendation of the secretaries of the Department of
Finance,
Interior
and
Local
Government,
and
Budget
and
Management. Furthermore, any adjustment in the allotment shall in no case be
less than thirty percent (30%) of the collection of national internal revenue taxes
of the third fiscal year preceding the current one.
Petitioner points out that respondents failed to comply with these requisites
before the issuance and the implementation of AO 372. At the very least, they did
not even try to show that the national government was suffering from an
unmanageable public sector deficit. Neither did they claim having conducted
consultations with the different leagues of local governments. Without these
requisites, the President has no authority to adjust, much less to reduce,
unilaterally the LGU's internal revenue allotment.
The solicitor general insists, however, that AO 372 is merely directory and
has been issued by the President consistent with his power of supervision over
local governments. It is intended only to advise all government agencies and
instrumentalities to undertake cost-reduction measures that will help maintain
economic stability in the country, which is facing economic difficulties. Besides, it
does not contain any sanction in case of noncompliance. Being merely an
advisory, therefore, Section 1 of AO 372 is well within the powers of the
President. Since it is not a mandatory imposition, the directive cannot be
characterized as an exercise of the power of control.
While the wordings of Section 1 of AO 372 have a rather commanding tone,
and while we agree with petitioner that the requirements of Section 284 of the

Local Government Code have not been satisfied, we are prepared to accept the
solicitor general's assurance that the directive to "identify and implement
measures x x x that will reduce total expenditures x x x by at least 25% of
authorized regular appropriation" is merely advisory in character, and does not
constitute a mandatory or binding order that interferes with local autonomy. The
language used, while authoritative, does not amount to a command that
emanates from a boss to a subaltern.
Rather, the provision is merely an advisory to prevail upon local executives to
recognize the need for fiscal restraint in a period of economic difficulty. Indeed, all
concerned would do well to heed the President's call to unity, solidarity and
teamwork to help alleviate the crisis. It is understood, however, that no legal
sanction may be imposed upon LGUs and their officials who do not follow such
advice. It is in this light that we sustain the solicitor general's contention in regard
to Section 1.
Withholding a Part of LGUs' IRA

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. [28] The Local
Government Code[29] 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."[30] As a rule, the term "shall" is a word of
command that must be given a compulsory meaning. [31] 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." [32] 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 within the parameters of the Constitution and the
law. Verily, laudable purposes must be carried out by legal methods.

Refutation of Justice Kapunan's Dissent

Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds
that, allegedly, (1) the Petition is premature; (2) AO 372 falls within the powers of
the President as chief fiscal officer; and (3) the withholding of the LGUs IRA is
implied in the President's authority to adjust it in case of an unmanageable public
sector deficit.
First, on prematurity. According to the Dissent, when "the conduct has not yet
occurred and the challenged construction has not yet been adopted by the
agency charged with administering the administrative order, the determination of
the scope and constitutionality of the executive action in advance of its
immediate adverse effect involves too remote and abstract an inquiry for the
proper exercise of judicial function."
This is a rather novel theory -- that people should await the implementing evil
to befall on them before they can question acts that are illegal or
unconstitutional. Be it remembered that the real issue here is whether the
Constitution and the law are contravened by Section 4 of AO 372, not whether
they are violated by the acts implementing it. In the unanimous en banc case
Taada v. Angara,[33] this Court held that when an act of the legislative department
is seriously alleged to have infringed the Constitution, settling the controversy
becomes the duty of this Court. By the mere enactment of the questioned law or
the approval of the challenged action, the dispute is said to have ripened into a
judicial controversy even without any other overt act. Indeed, even a singular
violation of the Constitution and/or the law is enough to awaken judicial
duty. Said the Court:

"In seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously
alleged to have infringed the Constitution, it becomes not only the right
but in fact the duty of the judiciary to settle the dispute.'The question
thus posed is judicial rather than political. The duty (to adjudicate)
remains to assure that the supremacy of the Constitution is
upheld.'[34] Once a 'controversy as to the application or interpretation of a constitutional
provision is raised before this Court x x x , it becomes a legal issue which the Court is bound by
constitutional mandate to decide.'[35]

xxxxxxxxx

"As this Court has repeatedly and firmly emphasized in many cases,[36] it
will not shirk, digress from or abandon its sacred duty and authority to uphold the Constitution in
matters that involve grave abuse of discretion brought before it in appropriate cases, committed
by any officer, agency, instrumentality or department of the government."

In the same vein, the Court also held in Tatad v. Secretary of the Department
of Energy:[37]

"x x x Judicial power includes not only the duty of the courts to settle
actual controversies involving rights which are legally demandable and
enforceable, but also the duty to determine whether or not there has
been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of
government.The courts, as guardians of the Constitution, have the
inherent authority to determine whether a statute enacted by the
legislature transcends the limit imposed by the fundamental law. Where
the statute violates the Constitution, it is not only the right but the duty of
the judiciary to declare such act unconstitutional and void."
By the same token, when an act of the President, who in our constitutional
scheme is a coequal of Congress, is seriously alleged to have infringed the
Constitution and the laws, as in the present case, settling the dispute becomes
the duty and the responsibility of the courts.
Besides, the issue that the Petition is premature has not been raised by the
parties; hence it is deemed waived. Considerations of due process really
prevents its use against a party that has not been given sufficient notice of its
presentation, and thus has not been given the opportunity to refute it. [38]
Second, on the President's power as chief fiscal officer of the country. Justice
Kapunan posits that Section 4 of AO 372 conforms with the President's role as
chief fiscal officer, who allegedly "is clothed by law with certain powers to ensure
the observance of safeguards and auditing requirements, as well as the legal
prerequisites in the release and use of IRAs, taking into account the
constitutional and statutory mandates." [39] He cites instances when the President
may lawfully intervene in the fiscal affairs of LGUs.
Precisely, such powers referred to in the Dissent have specifically been
authorized by law and have not been challenged as violative of the
Constitution. On the other hand, Section 4 of AO 372, as explained earlier,
contravenes explicit provisions of the Local Government Code (LGC) and the
Constitution. In other words, the acts alluded to in the Dissent are indeed
authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any
legal or constitutional basis.
Third, on the President's authority to adjust the IRA of LGUs in case of an
unmanageable public sector deficit. It must be emphasized that in striking down
Section 4 of AO 372, this Court is not ruling out any form of reduction in the IRAs
of LGUs. Indeed, as the President may make necessary adjustments in case of
an unmanageable public sector deficit, as stated in the main part of this Decision,
and in line with Section 284 of the LGC, which Justice Kapunan cites. He,
however, merely glances over a specific requirement in the same provision -- that

such reduction is subject to consultation with the presiding officers of both

Houses of Congress and, more importantly, with the presidents of the leagues of
local governments.
Notably, Justice Kapunan recognizes the need for "interaction between the
national government and the LGUs at the planning level," in order to ensure that
"local development plans x x x hew to national policies and standards." The
problem is that no such interaction or consultation was ever held prior to the
issuance of AO 372.This is why the petitioner and the intervenor (who was a
provincial governor and at the same time president of the League of Provinces of
the Philippines and chairman of the League of Leagues of Local Governments)
have protested and instituted this action. Significantly, respondents do not deny
the lack of consultation.
In addition, Justice Kapunan cites Section 287 [40] of the LGC as impliedly
authorizing the President to withhold the IRA of an LGU, pending its compliance
with certain requirements. Even a cursory reading of the provision reveals that it
is totally inapplicable to the issue at bar. It directs LGUs to appropriate in their
annual budgets 20 percent of their respective IRAs for development projects. It
speaks of no positive power granted the President to priorly withhold any
amount. Not at all.
WHEREFORE, the Petition is GRANTED. Respondents and their successors
are hereby permanently PROHIBITED from implementing Administrative Order
Nos. 372 and 43, respectively dated December 27, 1997 and December 10,
1998, insofar as local government units are concerned.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Mendoza, Quisumbing, Pardo,
Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur.
Kapunan, J., see dissenting opinion.
Purisima, and Ynares-Santiago, JJ., join J. Kapunan in his dissenting
opinion.
DISSENTING OPINION

KAPUNAN, J.:

In striking down as unconstitutional and illegal Section 4 of Administrative

Order No. 372 ("AO No. 372"), the majority opinion posits that the President
exercised power of control over the local government units ("LGU), which he
does not have, and violated the provisions of Section 6, Article X of the
Constitution, which states:

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.
and Section 286(a) of the Local Government Code, which provides:

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.
The share of the LGUs in the national internal revenue taxes is defined in
Section 284 of the same Local Government Code, to wit:

SEC. 284. Allotment of Internal Revenue Taxes. - Local government

units shall have a share in the national internal revenue taxes based on
the collection of the third fiscal year preceding the current fiscal year as
follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five (35%) percent; and
(c) On the third year and thereafter, forty percent (40%).
Provided, That in the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines is
hereby authorized, upon the 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 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 personal services.

xxx
The majority opinion takes the view that the withholding of ten percent (10%)
of the internal revenue allotment ("IRA") to the LGUs pending the assessment
and evaluation by the Development Budget Coordinating Committee of the
emerging fiscal situation as called for in Section 4 of AO No. 372 transgresses
against the above-quoted provisions which mandate the "automatic" release of
the shares of the LGUs in the national internal revenue in consonance with local
fiscal autonomy. The pertinent portions of AO No. 372 are reproduced hereunder:
ADMINISTRATIVE ORDER NO. 372

ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY

1998
WHEREAS, the current economic difficulties brought about by the peso
depreciation requires continued prudence in government fiscal
management to maintain economic stability and sustain the countrys
growth momentum;
WHEREAS, it is imperative that all government agencies adopt cash
management measures to match expenditures with available resources;
NOW THEREFORE, I, FIDEL V. RAMOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the Constitution,
do hereby order and direct:
SECTION 1. All government departments and agencies, including x x x
local government units will identify and implement measures in FY 1998
that will reduce total appropriations for non-personal services items,
along the following suggested areas:
xxx

SECTION 4. Pending the assessment and evaluation by the

Development Budget Coordinating Committee of the emerging fiscal
situation the amount equivalent to 10% of the internal revenue allotment
to local government units shall be withheld.
xxx
Subsequently, on December 10, 1998, President Joseph E. Estrada issued
Administrative Order No. 43 (AO No. 43), amending Section 4 of AO No. 372, by
reducing to five percent (5%) the IRA to be withheld from the LGUs, thus:

ADMINISTRATIVE ORDER NO. 43

AMENDING ADMINISTRATIVE ORDER NO. 372 DATED 27

DECEMBER 1997 ENTITLED "ADOPTION OF ECONOMY
MEASURES IN GOVERNMENT FOR FY 1998"
WHEREAS, Administrative Order No. 372 dated 27 December 1997
entitled "Adoption of Economy Measures in Government for FY 1998"
was issued to address the economic difficulties brought about by the
peso devaluation in 1997;
WHEREAS, Section 4 of Administrative Order No. 372 provided that the
amount equivalent to 10% of the internal revenue allotment to local
government units shall be withheld; and,
WHEREAS, there is a need to release additional funds to local
government units for vital projects and expenditures.
NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of
the Republic of the Philippines, by virtue of the powers vested in me by
law, do hereby order the reduction of the withheld Internal Revenue
Allotment (IRA) of local government units from ten percent to five
percent.
The five percent reduction in the IRA withheld for 1998 shall be released
before 25 December 1998.
DONE in the City of Manila, this 10th day of December, in the year of
our Lord, nineteen hundred and ninety eight.
With all due respect, I beg to disagree with the majority opinion.
Section 4 of AO No. 372 does not present a case ripe for adjudication. The
language of Section 4 does not conclusively show that, on its face, the
constitutional provision on the automatic release of the IRA shares of the LGUs
has been violated. Section 4, as worded, expresses the idea that the withholding
is merely temporary which fact alone would not merit an outright conclusion of its
unconstitutionality, especially in light of the reasonable presumption that
administrative agencies act in conformity with the law and the Constitution.
Where the conduct has not yet occurred and the challenged construction has not
yet been adopted by the agency charged with administering the administrative
order, the determination of the scope and constitutionality of the executive action
in advance of its immediate adverse effect involves too remote and abstract an
inquiry for the proper exercise of judicial function. Petitioners have not shown that

the alleged 5% IRA share of LGUs that was temporarily withheld has not yet
been released, or that the Department of Budget and Management (DBM) has
refused and continues to refuse its release. In view thereof, the Court should not
decide as this case suggests an abstract proposition on constitutional issues.
The President is the chief fiscal officer of the country. He is ultimately
responsible for the collection and distribution of public money:
SECTION 3. Powers and Functions. - The Department of Budget and
Management shall assist the President in the preparation of a national resources
and expenditures budget, preparation, execution and control of the National
Budget, preparation and maintenance of accounting systems essential to the
budgetary process, achievement of more economy and efficiency in the
management of government operations, administration of compensation and
position classification systems, assessment of organizational effectiveness and
review and evaluation of legislative proposals having budgetary or organizational
implications.1
In a larger context, his role as chief fiscal officer is directed towards "the nation's
efforts at economic and social upliftment" 2 for which more specific economic
powers are delegated. Within statutory limits, the President can, thus, fix "tariff
rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development program of the
government,3 as he is also responsible for enlisting the country in international
economic agreements.4 More than this, to achieve "economy and efficiency in the
management of government operations," the President is empowered to create
appropriation reserves,5 suspend expenditure appropriations,6 and institute cost
reduction schemes.7
As chief fiscal officer of the country, the President supervises fiscal
development in the local government units and ensures that laws are faithfully
executed.8 For this reason, he can set aside tax ordinances if he finds them
contrary to the Local Government Code. 9 Ordinances cannot contravene statutes
and public policy as declared by the national govemment. 10 The goal of local
economy is not to "end the relation of partnership and inter-dependence between
the central administration and local government units," 11 but to make local
governments "more responsive and accountable" [to] "ensure their fullest
development as self-reliant communities and make them more effective partners
in the pursuit of national development and social progress." 12
The interaction between the national government and the local government
units is mandatory at the planning level. Local development plans must thus hew
to "national policies and standards 13 as these are integrated into the regional
development plans for submission to the National Economic Development
Authority. "14 Local budget plans and goals must also be harmonized, as far as
practicable, with "national development goals and strategies in order to optimize
the utilization of resources and to avoid duplication in the use of fiscal and
physical resources."15

Section 4 of AO No. 372 was issued in the exercise by the President not only
of his power of general supervision, but also in conformity with his role as chief
fiscal officer of the country in the discharge of which he is clothed by law with
certain powers to ensure the observance of safeguards and auditing
requirements, as well as the legal prerequisites in the release and use of IRAs,
taking into account the constitutional16 and statutory17 mandates.
However, the phrase "automatic release" of the LGUs' shares does not mean
that the release of the funds is mechanical, spontaneous, self-operating or reflex.
IRAs must first be determined, and the money for their payment collected. 18 In
this regard, administrative documentations are also undertaken to ascertain their
availability, limits and extent. The phrase, thus, should be used in the context of
the whole budgetary process and in relation to pertinent laws relating to audit and
accounting requirements. In the workings of the budget for the fiscal year,
appropriations for expenditures are supported by existing funds in the national
coffers and by proposals for revenue raising. The money, therefore, available for
IRA release may not be existing but merely inchoate, or a mere expectation. It is
not infrequent that the Executive Department's proposals for raising revenue in
the form of proposed legislation may not be passed by the legislature. As such,
the release of IRA should not mean release of absolute amounts based merely
on mathematical computations. There must be a prior determination of what
exact amount the local government units are actually entitled in light of the
economic factors which affect the fiscal situation in the country. Foremost of
these is where, due to an unmanageable public sector deficit, the President may
make the necessary adjustments in the IRA of LGUs. Thus, as expressly
provided in Article 284 of the Local Government Code:

x x x (I)n the event that the national government incurs an

unmanageable public sector deficit, the President of the
Philippines is hereby authorized, upon the 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 national internal
revenue taxes of the third fiscal year preceding the current fiscal
year. x x x.
Under the aforecited provision, if facts reveal that the economy has sustained
or will likely sustain such "unmanageable public sector deficit," then the LGUs
cannot assert absolute right of entitlement to the full amount of forty percent
(40%) share in the IRA, because the President is authorized to make an
adjustment and to reduce the amount to not less than thirty percent (30%). It is,
therefore, impractical to immediately release the full amount of the IRAs and

subsequently require the local government units to return at most ten percent
(10%) once the President has ascertained that there exists an unmanageable
public sector deficit.
By necessary implication, the power to make necessary adjustments
(including reduction) in the IRA in case of an unmanageable public sector deficit,
includes the discretion to withhold the IRAs temporarily until such time that the
determination of the actual fiscal situation is made. The test in determining
whether one power is necessarily included in a stated authority is: "The exercise
of a more absolute power necessarily includes the lesser power especially where
it is needed to make the first power effective." 19 If the discretion to suspend
temporarily the release of the IRA pending such examination is withheld from the
President, his authority to make the necessary IRA adjustments brought about by
the unmanageable public sector deficit would be emasculated in the midst of
serious economic crisis. In the situation conjured by the majority opinion, the
money would already have been gone even before it is determined that fiscal
crisis is indeed happening.
The majority opinion overstates the requirement in Section 286 of the Local
Government Code that the IRAs "shall not be subject to any lien or holdback that
may be imposed by the national government for whatever purpose" as proof that
no withholding of the release of the IRAs is allowed albeit temporary in nature.
It is worthy to note that this provision does not appear in the Constitution.
Section 6, Art X of the Constitution merely directs that LGUs "shall have a just
share" in the national taxes "as determined by law" and which share shall be
automatically released to them. This means that before the LGUs share is
released, there should be first a determination, which requires a process, of what
is the correct amount as dictated by existing laws. For one, the Implementing
Rules of the Local Government Code allows deductions from the IRAs, to wit:

Article 384. Automatic Release of IRA Shares of LGUs:

xxx

(c) The IRA share of LGUs shall not be subject to any lien or hold
back that may be imposed by the National Government for whatever
purpose unless otherwise provided in the Code or other applicable
laws and loan contract on project agreements arising from foreign
loans and international commitments, such as premium
contributions of LGUs to the Government Service Insurance System
and loans contracted by LGUs under foreign-assisted projects.
Apart from the above, other mandatory deductions are made from the IRAs
prior to their release, such as: (1) total actual cost of devolution and the cost of
city-funded
hospitals;20 and
(2)
compulsory
contributions 21 and
other
22
remittances. It follows, therefore, that the President can withhold portions of

IRAs in order to set-off or compensate legitimately incurred obligations and

remittances of LGUs.
Significantly, Section 286 of the Local Government Code does not make
mention of the exact amount that should be automatically released to the LGUs.
The provision does not mandate that the entire 40% share mentioned in Section
284 shall be released. It merely provides that the "share" of each LGU shall be
released and which "shall not be subject to any lien or holdback that may be
imposed by the national government for whatever purpose." The provision on
automatic release of IRA share should, thus, be read together with Section 284,
including the proviso on adjustment or reduction of IRAs, as well as other
relevant laws. It may happen that the share of the LGUs may amount to the full
forty percent (40%) or the reduced amount of thirty percent (30%) as adjusted
without any law being violated. In other words, all that Section 286 requires is the
automatic release of the amount that the LGUs are rightfully and legally
entitled to, which, as the same section provides, should not be less than thirty
percent (30%) of the collection of the national revenue taxes. So that even if five
percent (5%) or ten percent (10%) is either temporarily or permanently withheld,
but the minimum of thirty percent (30%) allotment for the LGUs is released
pursuant to the President's authority to make the necessary adjustment in the
LGUS' share, there is still full compliance with the requirements of the automatic
release of the LGUs' share.
Finally, the majority insists that the withholding of ten percent (10%) or five
percent (5%) of the IRAs could not have been done pursuant to the power of the
President to adjust or reduce such shares under Section 284 of the Local
Government Code because there was no showing of an unmanageable public
sector deficit by the national government, nor was there evidence that
consultations with the presiding officers of both Houses of Congress and the
presidents of the various leagues had taken place and the corresponding
recommendations of the Secretary of Finance, Secretary of Interior and Local
Government and the Budget Secretary were made.
I beg to differ. The power to determine whether there is an unmanageable
public sector deficit is lodged in the President. The President's determination, as
fiscal manager of the country, of the existence of economic difficulties which
could amount to "unmanageable public sector deficit" should be accorded
respect. In fact, the withholding of the ten percent (10%) of the LGUs' share was
further justified by the current economic difficulties brought about by the peso
depreciation as shown by one of the "WHEREASES" of AO No. 372.23 In the
absence of any showing to the contrary, it is presumed that the President had
made prior consultations with the officials thus mentioned and had acted upon
the recommendations of the Secretaries of Finance, Interior and Local
Government and Budget.24
Therefore, even assuming hypothetically that there was effectively a
deduction of five percent (5%) of the LGUs' share, which was in accordance with
the President's prerogative in view of the pronouncement of the existence of an

unmanageable public sector deficit, the deduction would still be valid in the
absence of any proof that the LGUs' allotment was less than the thirty percent
(30%) limit provided for in Section 284 of the Local Government Code.
In resume, the withholding of the amount equivalent to five percent (5%) of
the IRA to the LGUs was temporary pending determination by the Executive of
the actual share which the LGUs are rightfully entitled to on the basis of the
applicable laws, particularly Section 284 of the Local Government Code,
authorizing the President to make the necessary adjustments in the IRA of LGUs
in the event of an unmanageable public sector deficit. And assuming that the said
five percent (5%) of the IRA pertaining to the 1998 Fiscal Year has been
permanently withheld, there is no showing that the amount actually released to
the LGUs that same year was less than thirty percent (30%) of the national
internal revenue taxes collected, without even considering the proper deductions
allowed by law.
WHEREFORE, I vote to DISMISS the petition.

Executive Order No. 292, Book IV, Title XVII, Chapter 1.

Garcia v. Corona, G.R. No. 132451, December 17, 1999.
3
1987 CONSTITUTION, Article VI, Section 28 (2).
4
Taada v. Angara, 272 SCRA 18 (1997).
5
Executive Order No. 292, Book VI, Chapter 5, Section 37.
6
Id., at Section 38.
7
Id., at Section 48.
8
San Juan v. CSC, 196 SCRA 69 (1991).
9
Drilon v. Lim, 235 SCRA 135 (1994).
10
Magtajas v. Pryce Properties Corp., Inc. and PAGCOR, 234 SCRA 255 (1994).
11
Ganzon v. CA, 200 SCRA 271, 286 (1991).
12
Id., at 287.
13
Rules and Regulations Implementing the Local Government code of 1991, Rule XXIII, Article 182 (1)
(3).
14
Rules and Regulations Implementing the Local Government Code of 1991, Rule XXIII, Article 182 (j)
(1) (2).
2

15

Rules and Regulations Implementing the Local Government Code of 1991, Rule XXXIV, Article 405 (b).

16

1987 CONSTITUTION, Art. X, Section 6.

Republic Act No. 7160, Title III, Section 286.
18
Hector De Leon, PHILIPPINE CONSTITUTIONAL LAW: PRINCIPLES AND CASES, p. 505 (1991).
19
Separate Opinion of J. Esguerra in Aquino v. Enrile, 59 SCRA 183 (1974).
20
Republic Act No. 8760 (General Appropriations ACT for FY 2000).
21
See Eexecutive Order No. 190 (1999), Directing The Department of Budget And Management To Remit
directly The Contributions And Other Remittances Of Local Government Units To the Concerned National
Government Agencies (NGA), Government Financial Institutions (GFI), And Government Owned And/Or
Controlled Corporations (GOCC).
17

22

Republic Act No. 8760 (General Appropriations Act for FY 2000). Includes debt write-offs under Sec.
531 of the Local Government Code: Debt Relief for Local Government Units.-- xxx
(e) Recovery schemes for the national government.---xxx

The national government is hereby authorized to deduct from the quarterly share of each local government
unit in the internal revenue collections an amount to be determined on the basis of the amortization
schedule of the local unit concerned: Provided, That such amount shall not exceed five percent (5%) of the
monthly internal revenue allotment of the local government unit concerned.
23
WHEREAS, the current economic difficulties brought about by the peso depreciation requires continued
prudence in government fiscal management to maintain economic stability and sustain the countrys growth
momentum.
24

Section 3, Rule 131 of the RULES OF COURT provides:

SEC. 3 Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may
be contradicted and overcome by other evidence:
xxx
(m) That official duty has been regularly performed;
xxx.

[1]

Rollo, pp. 48-55.

[2]

Ibid., pp. 56-75.

[3]

This case was deemed submitted for decision on September 27, 1999, upon receipt by this Court of
respondents' 10-page Memorandum, which was signed by Asst. Sol. Gen. Mariano M. Martinez and Sol.
Ofelia B. Cajigal.Petitioner's Memorandum was filed earlier, on September 21, 1999. Intervenor failed,
despite due notice, to submit a memorandum within the alloted time; thus, he is deemed to have waived the
filing of one.
[4]
Issues of mootness and locus standi were not raised by the respondents. However, the intervention of
Roberto Pagdanganan, as explained in the main text, has stopped any further discussion of petitioner's
standing. On the other hand, by the failure of respondents to raise mootness as an issue, the Court thus
understands that the main issue is still justiciable. In any case, respondents are deemed to have waived this
defense or, at the very least, to have submitted the Petition for resolution on the merits, for the future
guidance of the government, the bench and the bar.
[5]

97 Phil. 143, May 30, 1955; per Padilla, J.

[6]

Ibid., pp. 147-148. Reiterated in Ganzon v. Kayanan, 104 Phil. 484 (1985); Ganzon v. Court of Appeals,
200 SCRA 271, August 5, 1991; Taule v. Santos, 200 SCRA 512, August 12, 1991.
[7]

Ibid.; citing Pelaez v. Auditor General, 15 SCRA 569, December 24, 1965; Hebron v. Reyes, 104 Phil.
175 (1958); and Mondano v. Silvosa, supra.
[8]

Ibid., p. 522; citing Hebron v. Reyes, ibid., per Concepcion, J.

[9]

235 SCRA 135, 142, August 4, 1994.

[10]

1, Art. VII of the Constitution.

[11]

Joaquin G. Bernas, SJ, The 1987 Constitution of the Republic of the Philippines: A Commentary, 1996
ed., p. 739.
[12]

The Constitution provides:

"Sec. 25[, Art. II]. The State shall ensure the autonomy of local governments."
"Sec. 2[, Art. X]. The territorial and political subdivisions shall enjoy local autonomy."
[13]

200 SCRA 271, 286, August 5, 1991, per Sarmiento, J.; citing 3, Art. X of the Constitution.

[14]

Ibid.

[15]

Ibid.

[16]

170 SCRA 786, 794-795, February 28, 1989, per Sarmiento, J.

[17]

Citing 3, Art. X, 1987 Const.

[18]

Citing 2, BP 337.

[19]

Citing 4, Art. X, 1987 Const.

[20]

Citing BP 337; and Hebron v. Reyes, supra.

[21]

Citing Hebron v. Reyes, supra.

[22]

Citing Bernas, "Brewing storm over autonomy," The Manila Chronicle, pp. 4-5.

[23]

234 SCRA 255, 272, July 20,1994.

[24]

San Juan v. Civil Service Commission, 196 SCRA 69, 79, April 19, 1991.

[25]

9, Art. XII of the Constitution.

[26]

3, Chapter 1, Subtitle C, Title II, Book V, EO 292 (Administrative Code of 1987).

[27]

284. See also Art. 379 of the Rules and Regulations Implementing the Local Government Code of 1991.

[28]

6 of Art. X of the Constitution reads:

"Local government units shall have a just share, as determined by law, in the national taxes which shall be
automatically released to them."
[29]

286 (a) provides:

"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 (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."
[30]

Emphasis supplied.

[31]

Ruben E. Agpalo, Statutory Construction, 1990 ed., p. 239.

[32]

Webster's Third New International Dictionary, 1993 ed.

[33]

272 SCRA 18, May 2, 1997, per Panganiban, J.

[34]

Citing Aquino Jr. v. Ponce Enrile, 59 SCRA 183, 196, September 17, 1974.

[35]

Citing Guingona Jr. v. Gonzales, 219 SCRA 326, 337, March 1, 1993.

[36]

Cf. Daza v. Singson, 180 SCRA 496, December 21, 1989.

[37]

281 SCRA 330, 347-48, November 5, 1997, per Puno, J.

[38]

See Philippine National Bank v. Sayo, Jr., 292 SCRA 202, July 9, 1998; Vinta Maritime Co., Inc. v.
NLRC, 284 SCRA 656, January 23, 1998.
[39]
[40]

Footnotes omitted.

"Sec. 287. Local Development Projects. -- Each local government unit shall appropriate in its annual
budget no less than twenty percent (20%) of its annual internal revenue allotment for development
projects. Copies of the development plans of local government units shall be furnished the Department of
Interior and Local Government."

GANZONVCOURTOFAPPEALS

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 93252 August 5, 1991
RODOLFO T. GANZON, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, respondents.
G.R. No. 93746 August 5,1991
MARY ANN RIVERA ARTIEDA, petitioner,
vs.
HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local
Government, NICANOR M. PATRICIO, in his capacity as Chief, Legal Service of the
Department of Local Government and SALVADOR CABALUNA JR., respondents.
G.R. No. 95245 August 5,1991
RODOLFO T. GANZON, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the
Secretary of the Department of Local Government, respondents.
Nicolas P. Sonalan for petitioner in 93252.
Romeo A. Gerochi for petitioner in 93746.
Eugenio Original for petitioner in 95245.

SARMIENTO, J.:p
The petitioners take common issue on the power of the President (acting through the
Secretary of Local Government), to suspend and/or remove local officials.
The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of
the Sangguniang Panglunsod thereof (G.R. No. 93746), respectively.
The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in
number, filed against him by various city officials sometime in 1988, on various charges,
among them, abuse of authority, oppression, grave misconduct, disgraceful and immoral
conduct, intimidation, culpable violation of the Constitution, and arbitrary detention. 1 The

personalities involved are Joceleehn Cabaluna, a clerk at the city health office; Salvador
Cabaluna, her husband; Dr. Felicidad Ortigoza, Assistant City Health Officer; Mansueto Malabor,
Vice-Mayor; Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong, and Eduardo Pefia
Redondo members of the Sangguniang Panglunsod; and Pancho Erbite, a barangay tanod. The
complaints against the Mayor are set forth in the opinion of the respondent Court of Appeals. 2 We
quote:

xxx xxx xxx

In her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the
City Health, Office of Iloilo City charged that due to political reasons, having
supported the rival candidate, Mrs. Rosa 0. Caram, the petitioner City Mayor,
using as an excuse the exigency of the service and the interest of the public,
pulled her out from rightful office where her qualifications are best suited and
assigned her to a work that should be the function of a non-career service
employee. To make matters worse, a utility worker in the office of the Public
Services, whose duties are alien to the complainant's duties and functions,
has been detailed to take her place. The petitioner's act are pure
harassments aimed at luring her away from her permanent position or force
her to resign.
In the case of Dra. Felicidad Ortigoza, she claims that the petitioner
handpicked her to perform task not befitting her position as Assistant City
Health Officer of Iloilo City; that her office was padlocked without any
explanation or justification; that her salary was withheld without cause since
April 1, 1988; that when she filed her vacation leave, she was given the runaround treatment in the approval of her leave in connivance with Dr. Rodolfo
Villegas and that she was the object of a well-engineered trumped-up charge
in an administrative complaint filed by Dr. Rodolfo Villegas (Annex B).
On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo
City and complainants Rolando Dabao, Dan Dalido, German Gonzales, Larry
Ong and Eduardo Pefia Pedondo are members of the Sangguniang
Panglunsod of the City of Iloilo. Their complaint arose out from the case
where Councilor Larry Ong, whose key to his office was unceremoniously
and without previous notice, taken by petitioner. Without an office, Councilor
Ong had to hold office at Plaza Libertad, The Vice-Mayor and the other
complainants sympathized with him and decided to do the same. However,
the petitioner, together with its fully-armed security men, forcefully drove
them away from Plaza Libertad. Councilor Ong denounced the petitioner's
actuations the following day in the radio station and decided to hold office at
the Freedom Grandstand at Iloilo City and there were so many people who
gathered to witness the incident. However, before the group could reach the
area, the petitioner, together with his security men, led the firemen using a
firetruck in dozing water to the people and the bystanders.
Another administrative case was filed by Pancho Erbite, a barangay tanod,
appointed by former mayor Rosa O. Caram. On March 13, 1988, without the
benefit of charges filed against him and no warrant of arrest was issued,
Erbite was arrested and detained at the City Jail of Iloilo City upon orders of
petitioner. In jail, he was allegedly mauled by other detainees thereby
causing injuries He was released only the following day. 3

The Mayor thereafter answered 4 and the cases were shortly set for hearing. The opinion of the
Court of Appeals also set forth the succeeding events:
xxx xxx xxx
The initial hearing in the Cabaluna and Ortigoza cases were set for hearing
on June 20-21, 1988 at the Regional Office of the Department of Local
Government in Iloilo City. Notices, through telegrams, were sent to the parties
(Annex L) and the parties received them, including the petitioner. The
petitioner asked for a postponement before the scheduled date of hearing
and was represented by counsel, Atty. Samuel Castro. The hearing officers,
Atty. Salvador Quebral and Atty. Marino Bermudez had to come all the way
from Manila for the two-day hearings but was actually held only on June
20,1988 in view of the inability and unpreparedness of petitioner's counsel.
The next hearings were re-set to July 25, 26, 27,1988 in the same venueIloilo City. Again, the petitioner attempted to delay the proceedings and
moved for a postponement under the excuse that he had just hired his
counsel. Nonetheless, the hearing officers denied the motion to postpone, in
view of the fact that the parties were notified by telegrams of the scheduled
hearings (Annex M).
In the said hearings, petitioner's counsel cross-examined the complainants
and their witnesses.
Finding probable grounds and reasons, the respondent issued a preventive
suspension order on August 11, 1988 to last until October 11,1988 for a
period of sixty (60) days.
Then the next investigation was set on September 21, 1988 and the
petitioner again asked for a postponement to September 26,1988. On
September 26, 1988, the complainants and petitioner were present, together
with their respective counsel. The petitioner sought for a postponement which
was denied. In these hearings which were held in Mala the petitioner testified
in Adm. Case No. C-10298 and 10299.
The investigation was continued regarding the Malabor case and the
complainants testified including their witnesses.
On October 10, 1988, petitioner's counsel, Atty. Original moved for a
postponement of the October 24, 1988 hearing to November 7 to 11, 1988
which was granted. However, the motion for change of venue as denied due
to lack of funds. At the hearing on November 7, 1988, the parties and counsel
were present. Petitioner reiterated his motion to change venue and moved for
postponement anew. The counsel discussed a proposal to take the
deposition of witnesses in Iloilo City so the hearing was indefinitely
postponed. However, the parties failed to come to terms and after the parties
were notified of the hearing, the investigation was set to December 13 to 15,
1988.
The petitioner sought for another postponement on the ground that his
witnesses were sick or cannot attend the investigation due to lack of

transportation. The motion was denied and the petitioner was given up to
December 14, 1988 to present his evidence.
On December 14,1988, petitioner's counsel insisted on his motion for
postponement and the hearing officers gave petitioner up to December 15,
1988 to present his evidence. On December 15, 1988, the petitioner failed to
present evidence and the cases were considered submitted for resolution.
In the meantime, a prima facie evidence was found to exist in the arbitrary
detention case filed by Pancho Erbite so the respondent ordered the
petitioner's second preventive suspension dated October 11, 1988 for
another sixty (60) days. The petitioner was able to obtain a restraining order
and a writ of preliminary injunction in the Regional Trial Court, Branch 33 of
Iloilo City. The second preventive suspension was not enforced. 5
Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition
against the respondent Secretary of Local Government (now, Interior) in the Regional Trial
Court, Iloilo City, where he succeeded in obtaining a writ of preliminary injunction. Presently,
he instituted CA-G.R. SP No. 16417, an action for prohibition, in the respondent Court of
Appeals.
Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively
suspending Mayor Ganzon for another sixty days, the third time in twenty months, and
designating meantime Vice-Mayor Mansueto Malabor as acting mayor. Undaunted, Mayor
Ganzon commenced CA-G.R. SP No. 20736 of the Court of Appeals, a petition for
prohibition, 6 (Malabor it is to be noted, is one of the complainants, and hence, he is interested in
seeing Mayor Ganzon ousted.)
On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No.
16417. On July 5, 1990, it likewise promulgated a decision, dismissing CA-G.R. SP No.
20736. In a Resolution dated January 24, 1990, it issued a Resolution certifying the petition
of Mary Ann Artieda, who had been similary charged by the respondent Secretary, to this
Court.
On June 26,1990, we issued a Temporary Restraining Order, barring the respondent
Secretary from implementing the suspension orders, and restraining the enforcement of the
Court of Appeals' two decisions.
In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions
of January 15, 1991, we gave due course thereto.
Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local
Government in hearing the ten cases against him, had denied him due process of law and
that the respondent Secretary had been "biased, prejudicial and hostile" towards him 7 arising
from his (Mayor Ganzon's) alleged refusal to join the Laban ng Demokratikong Pilipino party 8 and
the running political rivalry they maintained in the last congressional and local elections; 9and his
alleged refusal to operate a lottery in Iloilo City. 10 He also alleges that he requested the Secretary
to lift his suspension since it had come ninety days prior to an election (the barangay elections of
November 14, 1988), 11notwithstanding which, the latter proceeded with the hearing and meted
out two more suspension orders of the aforementioned cases. 12 He likewise contends that he
sought to bring the cases to Iloilo City (they were held in Manila) in order to reduce the costs of
proceeding, but the Secretary rejected his request. 13 He states that he asked for postponement

on "valid and justifiable" 14 grounds, among them, that he was suffering from a heart ailment which
required confinement; that his "vital" 15 witness was also hospitalized 16 but that the latter unduly
denied his request. 17

Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of
Local Government is devoid, in any event, of any authority to suspend and remove local
officials, an argument reiterated by the petitioner Mary Ann Rivera Artieda (G.R. No. 93746).
As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly
in what manner the Mayor might have been deprived of his rights by the respondent
Secretary. His claims that he and Secretary Luis-Santos were (are) political rivals and that
his "persecution" was politically motivated are pure speculation and although the latter does
not appear to have denied these contentions (as he, Mayor Ganzon, claims), we can not
take his word for it the way we would have under less political circumstances, considering
furthermore that "political feud" has often been a good excuse in contesting complaints.
The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had
attempted to seduce him to join the administration party and to operate a lottery in Iloilo City.
Again, although the Secretary failed to rebut his allegations, we can not accept them, at face
value, much more, as judicial admissions as he would have us accept them 18 for the same
reasons above-stated and furthermore, because his say so's were never corroborated by
independent testimonies. As a responsible public official, Secretary Santos, in pursuing an official
function, is presumed to be performing his duties regularly and in the absence of contrary
evidence, no ill motive can be ascribed to him.
As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer
the hearing on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337, the
Court finds the question to be moot and academic since we have in fact restrained the
Secretary from further hearing the complaints against the petitioners.19
As to his request, finally, for postponements, the Court is afraid that he has not given any
compelling reason why we should overturn the Court of Appeals, which found no convincing
reason to overrule Secretary Santos in denying his requests. Besides, postponements are a
matter of discretion on the part of the hearing officer, and based on Mayor Ganzon's above
story, we are not convinced that the Secretary has been guilty of a grave abuse of discretion.
The Court can not say, under these circumstances, that Secretary Santos' actuations
deprived Mayor Ganzon of due process of law.
We come to the core question: Whether or not the Secretary of Local Government, as the
President's alter ego, can suspend and/or remove local officials.
It is the petitioners' argument that the 1987 Constitution 20 no longer allows the President, as
the 1935 and 1973 Constitutions did, to exercise the power of suspension and/or removal over
local officials. According to both petitioners, the Constitution is meant, first, to strengthen self-rule
by local government units and second, by deleting the phrase 21 as may be provided by law to
strip the President of the power of control over local governments. It is a view, so they contend,
that finds support in the debates of the Constitutional Commission. The provision in question
reads as follows:
Sec. 4. The President of the Philippines shall exercise general supervision
over local governments. Provinces with respect to component cities and

municipalities, and cities and municipalities with respect to component

barangays shall ensure that the acts of their component units are within the
scope of their prescribed powers and functions. 22
It modifies a counterpart provision appearing in the 1935 Constitution, which we quote:
Sec. 10. 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. 23
The petitioners submit that the deletion (of "as may be provided by law") is significant, as
their argument goes, since: (1) the power of the President is "provided by law" and (2)
hence, no law may provide for it any longer.
It is to be noted that in meting out the suspensions under question, the Secretary of Local
Government acted in consonance with the specific legal provisions of Batas Blg. 337, the
Local Government Code, we quote:
Sec. 62. Notice of Hearing. Within seven days after the complaint is filed,
the Minister of local Government, or the sanggunian concerned, as the case
may be, shall require the respondent to submit his verified answer within
seven days from receipt of said complaint, and commence the hearing and
investigation of the case within ten days after receipt of such answer of the
respondent. No investigation shall be held within ninety days immediately
prior to an election, and no preventive suspension shall be imposed with the
said period. If preventive suspension has been imposed prior to the aforesaid
period, the preventive suspension shall be lifted. 24
Sec. 63. Preventive Suspension. (1) Preventive suspension may be
imposed by the Minister of Local Government if the respondent is a provincial
or city official, by the provincial governor if the respondent is an elective
municipal official, or by the city or municipal mayor if the respondent is an
elective barangay official.
(2) Preventive suspension may be imposed at any time after the issues are
joined, when there is reasonable ground to believe that the respondent has
committed the act or acts complained of, when the evidence of culpability is
strong, when the gravity of the offense so warrants, or when the continuance
in office of the respondent could influence the witnesses or pose a threat to
the safety and integrity of the records and other evidence. In all cases,
preventive suspension shall not extend beyond sixty days after the start of
said suspension.
(3) At the expiration of sixty days, the suspended official shall be deemed
reinstated in office without prejudice to the continuation of the proceedings
against him until its termination. However ' if the delay in the proceedings of
the case is due to his fault, neglect or request, the time of the delay shall not
be counted in computing the time of suspension. 25
The issue, as the Court understands it, consists of three questions: (1) Did the 1987
Constitution, in deleting the phrase "as may be provided by law" intend to divest the

President of the power to investigate, suspend, discipline, and/or remove local officials? (2)
Has the Constitution repealed Sections 62 and 63 of the Local Government Code? (3) What
is the significance of the change in the constitutional language?
It is the considered opinion of the Court that notwithstanding the change in the constitutional
language, the charter did not intend to divest the legislature of its right or the President of her
prerogative as conferred by existing legislation to provide administrative sanctions against
local officials. It is our opinion that the omission (of "as may be provided by law") signifies
nothing more than to underscore local governments' autonomy from congress and to break
Congress' "control" over local government affairs. The Constitution did not, however, intend,
for the sake of local autonomy, to deprive the legislature of all authority over municipal
corporations, in particular, concerning discipline.
Autonomy does not, after all, contemplate making mini-states out of local government units,
as in the federal governments of the United States of America (or Brazil or Germany),
although Jefferson is said to have compared municipal corporations euphemistically to "small
republics." 26 Autonomy, in the constitutional sense, is subject to the guiding star, though not
control, of the legislature, albeit the legislative responsibility under the Constitution and as the
"supervision clause" itself suggest-is to wean local government units from over-dependence on
the central government.
It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but
subject to, among other things, the passage of a local government code, 27 a local tax
law, 28 income distribution legislation, 29 and a national representation law, 30 and
measures 31 designed to realize autonomy at the local level. It is also noteworthy that in spite of
autonomy, the Constitution places the local government under the general supervision of the
Executive. It is noteworthy finally, that the Charter allows Congress to include in the local
government code provisions for removal of local officials, which suggest that Congress may
exercise removal powers, and as the existing Local Government Code has done, delegate its
exercise to the President. Thus:
Sec. 3. The Congress shall enact a local government code which shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization with effective mechanisms of
recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities and resources, and provide
for the qualifications, election, appointment and removal, term, salaries,
powers and functions and duties of local officials, and all other matters
relating to the organization and operation of the local units. 32
As hereinabove indicated, the deletion of "as may be provided by law" was meant to
stress, sub silencio, the objective of the framers to strengthen local autonomy by severing
congressional control of its affairs, as observed by the Court of Appeals, like the power of
local legislation. 33 The Constitution did nothing more, however, and insofar as existing legislation
authorizes the President (through the Secretary of Local Government) to proceed against local
officials administratively, the Constitution contains no prohibition.
The petitioners are under the impression that the Constitution has left the President mere
supervisory powers, which supposedly excludes the power of investigation, and denied her
control, which allegedly embraces disciplinary authority. It is a mistaken impression because
legally, "supervision" is not incompatible with disciplinary authority as this Court has
held, 34 thus:

xxx xxx xxx

It is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884,
this Court had occasion to discuss the scope and extent of the power of
supervision by the President over local government officials in contrast to the
power of control given to him over executive officials of our government
wherein it was emphasized that the two terms, control and supervision, are
two different things which differ one from the other in meaning and extent.
Thus in that case the Court has made the following digression: "In
administration law supervision means overseeing or the power or authority of
an officer to see that subordinate officers perform their duties. If the latter fail
or neglect to fulfill them the former may take such action or step as
prescribed by law to make them perform their duties. Control, on the other
hand, means the power of an officer to alter or modify or nullify of set aside
what a subordinate officer had done in the performance of his duties and to
substitute the judgment of the former for that of the latter." But from this
pronouncement it cannot be reasonably inferred that the power of
supervision of the President over local government officials does not include
the power of investigation when in his opinion the good of the public service
so requires, as postulated in Section 64(c) of the Revised Administrative
Code. ... 35
xxx xxx xxx

"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside
what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for test of the latter."36 "Supervision" on the other hand means
"overseeing or the power or authority of an officer to see that subordinate officers perform their
duties. 37 As we held, 38 however, "investigating" is not inconsistent with "overseeing", although it
is a lesser power than "altering". The impression is apparently exacerbated by the Court's
pronouncements in at least three cases,Lacson v. Roque, 39 Hebron v. Reyes, 40 and Mondano v.
Silvosa, 41 and possibly, a fourth one, Pelaez v. Auditor General.42 In Lacson, this Court said that
the President enjoyed no control powers but only supervision "as may be provided by law," 43 a
rule we reiterated in Hebron, and Mondano. In Pelaez, we stated that the President "may not . . .
suspend an elective official of a regular municipality or take any disciplinary action against him,
except on appeal from a decision of the corresponding provincial board." 44 However,
neither Lacson nor Hebron nor Mondano categorically banned the Chief Executive from
exercising acts of disciplinary authority because she did not exercise control powers, but because
no law allowed her to exercise disciplinary authority. Thus, according to Lacson:
The contention that the President has inherent power to remove or suspend
municipal officers is without doubt not well taken. Removal and suspension of
public officers are always controlled by the particular law applicable and its
proper construction subject to constitutional limitations. 45
In Hebron we stated:
Accordingly, when the procedure for the suspension of an officer is specified
by law, the same must be deemed mandatory and adhered to strictly, in the
absence of express or clear provision to the contrary-which does not et with
respect to municipal officers ... 46
In Mondano, the Court held:

... The Congress has expressly and specifically lodged the provincial
supervision over municipal officials in the provincial governor who is
authorized to "receive and investigate complaints made under oath against
municipal officers for neglect of duty, oppression, corruption or other form of
maladministration of office, and conviction by final judgment of any crime
involving moral turpitude." And if the charges are serious, "he shall submit
written charges touching the matter to the provincial board, furnishing a copy
of such charges to the accused either personally or by registered mail, and
he may in such case suspend the officer (not being the municipal treasurer)
pending action by the board, if in his opinion the charge by one affecting the
official integrity of the officer in question." Section 86 of the Revised
Administration Code adds nothing to the power of supervision to be
exercised by the Department Head over the administration of ...
municipalities ... . If it be construed that it does and such additional power is
the same authority as that vested in the Department Head by section 79(c) of
the Revised Administrative Code, then such additional power must be
deemed to have been abrogated by Section 110(l), Article VII of the
Constitution. 47
xxx xxx xxx
In Pelaez, we stated that the President can not impose disciplinary measures on local
officials except on appeal from the provincial board pursuant to the Administrative Code.

48

Thus, in those case that this Court denied the President the power (to suspend/remove) it
was not because we did not think that the President can not exercise it on account of his
limited power, but because the law lodged the power elsewhere. But in those cases ii which
the law gave him the power, the Court, as in Ganzon v. Kayanan, found little difficulty in
sustaining him. 49
The Court does not believe that the petitioners can rightfully point to the debates of the
Constitutional Commission to defeat the President's powers. The Court believes that the
deliberations are by themselves inconclusive, because although Commissioner Jose Nolledo
would exclude the power of removal from the President, 50 Commissioner Blas Ople would
not. 51
The Court is consequently reluctant to say that the new Constitution has repealed the Local
Government Code, Batas Blg. 37. As we said, "supervision" and "removal" are not
incompatible terms and one may stand with the other notwithstanding the stronger
expression of local autonomy under the new Charter. We have indeed held that in spite of
the approval of the Charter, Batas Blg. 337 is still in force and effect. 52
As the Constitution itself declares, local autonomy means "a more responsive and
accountable local government structure instituted through a system of
decentralization." 53 The Constitution as we observed, does nothing more than to break up the
monopoly of the national 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 inter-dependence between the
central administration and local government units, or otherwise, to user 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, 54 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
development as self-reliant communities and make them more effective
partners in the pursuit of national development and social progress." At the
same time, it relieves the central government of the burden of managing local
affairs and enables it to concentrate on national concerns. The President
exercises "general supervision" over them, but only to "ensure that local
affairs are administered according to law." He has no control over their acts in
the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of
political power in the favor of local governments units declared to be
autonomous, In that case, the autonomous government is free to chart its
own destiny and shape its future with minimum intervention from central
authorities. According to a constitutional author, decentralization of power
amounts to "self-immolation," since in that event, the autonomous
government becomes accountable not to the central authorities but to its
constituency. 55
The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another
matter. What bothers the Court, and what indeed looms very large, is the fact that since the
Mayor is facing ten administrative charges, the Mayor is in fact facing the possibility of 600
days of suspension, in the event that all ten cases yield prima faciefindings. The Court is not
of course tolerating misfeasance in public office (assuming that Mayor Ganzon is guilty of
misfeasance) but it is certainly another question to make him serve 600 days of suspension,
which is effectively, to suspend him out of office. As we held: 56
2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His
term of office does not expire until 1986. Were it not for this information and
the suspension decreed by the Sandiganbayan according to the Anti-Graft
and Corrupt Practices Act, he would have been all this while in the full
discharge of his functions as such municipal mayor. He was elected precisely
to do so. As of October 26, 1983, he has been unable to. it is a basic
assumption of the electoral process implicit in the right of suffrage that the
people are entitled to the services of elective officials of their choice. For
misfeasance or malfeasance, any of them could, of course, be proceeded
against administratively or, as in this instance, criminally. In either case, Ms
culpability must be established. Moreover, if there be a criminal action, he is
entitled to the constitutional presumption of innocence. A preventive
suspension may be justified. Its continuance, however, for an unreasonable
length of time raises a due process question. For even if thereafter he were
acquitted, in the meanwhile his right to hold office had been nullified. Clearly,
there would be in such a case an injustice suffered by him. Nor is he the only
victim. There is injustice inflicted likewise on the people of Lianga They were
deprived of the services of the man they had elected to serve as mayor. In
that sense, to paraphrase Justice Cardozo, the protracted continuance of this

preventive suspension had outrun the bounds of reason and resulted in

sheer oppression. A denial of due process is thus quite manifest. It is to avoid
such an unconstitutional application that the order of suspension should be
lifted. 57
The plain truth is that this Court has been ill at ease with suspensions, for the above
reasons, 58 and so also, because it is out of the ordinary to have a vacancy in local government.
The sole objective of a suspension, as we have held, 59 is simply "to prevent the accused from
hampering the normal cause of the investigation with his influence and authority over possible
witnesses" 60 or to keep him off "the records and other evidence. 61
It is a means, and no more, to assist prosecutors in firming up a case, if any, against an
erring local official. Under the Local Government Code, it can not exceed sixty days, 62 which
is to say that it need not be exactly sixty days long if a shorter period is otherwise sufficient, and
which is also to say that it ought to be lifted if prosecutors have achieved their purpose in a
shorter span.
Suspension is not a penalty and is not unlike preventive imprisonment in which the accused
is held to insure his presence at the trial. In both cases, the accused (the respondent) enjoys
a presumption of innocence unless and until found guilty.
Suspension finally is temporary and as the Local Government Code provides, it may be
imposed for no more than sixty days. As we held, 63 a longer suspension is unjust and
unreasonable, and we might add, nothing less than tyranny.
As we observed earlier, imposing 600 days of suspension which is not a remote possibility
Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term in
inactivity. It is also to make, to all intents and purposes, his suspension permanent.
It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not
been proven. Worse, any absolution will be for naught because needless to say, the length of
his suspension would have, by the time he is reinstated, wiped out his tenure considerably.
The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see
that justice is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon
successive suspensions when apparently, the respondent Secretary has had sufficient time
to gather the necessary evidence to build a case against the Mayor without suspending him
a day longer. What is intriguing is that the respondent Secretary has been cracking down, so
to speak, on the Mayor piecemeal apparently, to pin him down ten times the pain, when he,
the respondent Secretary, could have pursued a consolidated effort.
We reiterate that we are not precluding the President, through the Secretary of Interior from
exercising a legal power, yet we are of the opinion that the Secretary of Interior is exercising
that power oppressively, and needless to say, with a grave abuse of discretion.
The Court is aware that only the third suspension is under questions, and that any talk of
future suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has
been made to serve a total of 120 days of suspension and the possibility of sixty days more
is arguably around the corner (which amounts to a violation of the Local Government Code
which brings to light a pattern of suspensions intended to suspend the Mayor the rest of his
natural tenure. The Court is simply foreclosing what appears to us as a concerted effort of
the State to perpetuate an arbitrary act.

As we said, we can not tolerate such a state of affairs.

We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third
suspension and lifting, for the purpose, the Temporary Restraining Order earlier issued.
Insofar as the seven remaining charges are concerned, we are urging the Department of
Local Government, upon the finality of this Decision, to undertake steps to expedite the
same, subject to Mayor Ganzon's usual remedies of appeal, judicial or administrative, or
certiorari, if warranted, and meanwhile, we are precluding the Secretary from meting out
further suspensions based on those remaining complaints, notwithstanding findings of prima
facie evidence.
In resume the Court is laying down the following rules:
1. Local autonomy, under the Constitution, involves a mere decentralization of
administration, not of power, in which local officials remain accountable to the central
government in the manner the law may provide;
2. The new Constitution does not prescribe federalism;
3. The change in constitutional language (with respect to the supervision clause) was meant
but to deny legislative control over local governments; it did not exempt the latter from
legislative regulations provided regulation is consistent with the fundamental premise of
autonomy;
4. Since local governments remain accountable to the national authority, the latter may, by
law, and in the manner set forth therein, impose disciplinary action against local officials;
5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not
signify "control" (which the President does not have);
6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may
no longer be suspended for the offenses he was charged originally; provided:
a) that delays in the investigation of those charges "due to his
fault, neglect or request, (the time of the delay) shall not be
counted in computing the time of suspension. [Supra, sec.
63(3)]
b) that if during, or after the expiration of, his preventive
suspension, the petitioner commits another or other crimes
and abuses for which proper charges are filed against him by
the aggrieved party or parties, his previous suspension shall
not be a bar to his being preventively suspended again, if
warranted under subpar. (2), Section 63 of the Local
Government Code.
WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary
Restraining Order issued is LIFTED. The suspensions of the petitioners are AFFIRMED,
provided that the petitioner, Mayor Rodolfo Ganzon, may not be made to serve future
suspensions on account of any of the remaining administrative charges pending against him

for acts committed prior to August 11, 1988. The Secretary of Interior is ORDERED to
consolidate all such administrative cases pending against Mayor Ganzon.
The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED. No
costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ concur.

Footnotes
1 Rollo, G.R. No. 93252, 76; 77.
2 Hon. Bonifacio Cacdac, Jr., J.
3 Rollo, Id., 76-77.
4 Id., 77.
5 Id., 77-78.
6 Id., 78. The first suspension was on the Cabaluna and Ortigoza complaints.
CA-G.R. No. 16417 was on the Erbite complaint. CA-G.R. No. 20736 was a
challenge on the designation of Vice- Mayor Malabor.
7 Id., 21
8 Id.
9 Id., 27.
10 Id., 28.
11 Id., 30.
12 Id 31-32.
13 Id., 34-35.
14 Id., 36.
15 Id.
16 Id
17 Id., 38.

18 Id .
19 By virtue of the Temporary Restraining Order the Court issued on June
26,1990.
20 CONST., art. X, sec. 4.
21 CONST. (1935), art, X, sec. 10(l). The 1973 Constitution contained no
similar provision, but see art. VII, sec. 18.
22 CONST. (1987), supra.
23 CONST. (1935), supra.
24 Batas Blg. 337, sec. 62.
25 Supra, sec. 63.
26 CRUZ, PHILIPPINE POLITICAL LAW 64 (1987 ed.)
27 CONST., supra, art. X, sec. 3.
28 Supra, secs. 5, 6.
29 Supra, sec. 7.
30 Supra, sec. 9.
31 See supra, sec. 14, providing for regional development councils to be
organized by the President.
32 Supra, sec. 3.
33 G.R. No. 95245, Id., 53; see Mendoza, J., Concurring.
34 Ganzon v. Kayanan, 104 Phil. 484 (1985). In this concurrence (Id., 48-61),
Justice Mendoza cited this case.
35 Supra, 489-490.
36 Mondano v. Silvosa, 97 Phil. 143,148 (1955).
37 Supra, 147.
38 Ganzon v. Kayanan, supra.
39 92 Phil. 456 (1953).
40 104 Phil. 175 (1958).

41 Supra.
42 No. L-23825, December 24,1965,15 SCRA 569.
43 Lacson v. Roque, supra, 463.
44 Pelaez v. Auditor General, supra, 583.
45 Lacson v. Roque, supra, 462.
46 Hebron v. Reyes, supra, 185.
47 Mondano v. Silvosa, supra, 148.
48 Pelaez v. Auditor General, supra, 583.
49 G.R. No. 95245, Id., 50-51; see Mendoza, J., Concurring.
50 Id., 23.
51 Id., 53.
52 Bagabuyo v. Davide, G.R. No. 87233, September 21,1989.
53 CONST., supra, art. X, see. 3.
54 Limbona v. Mangelin G.R. No. 80391, February 28,1989,170 SCRA 786.
55 Supra, 794-795.
56 Layno, Sr. v. Sandiganbayan, No. 65848, May 24, 1985, 136 SCRA 536,
57 Supra, 541.
58 See supra.
59 Lacson v. Roque, supra.
60 Supra, 469.
61 Batas Blg. 337, sec. 63.
62 Supra.
63 Layno, Sr. v. Sandiganbayan, supra.