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University of Santo Tomas, Faculty of Civil Law

The Law on PUBLIC


CORPORATION
Based from the lecture of Atty. Enrique V. dela Cruz, Jr.

James Christian S. Ballecer


2014
I. Basic Principles/ General Powers and Attributes

(First Meeting)

LOCAL AUTONOMY, DEVOLUTION, &


DECENTRALIZATION
Q: Can the Congress postpone the ARMM
Q: Can the President subject to certain elections?
conditions the release of the IRA of LGUs?
A: (Datu Abas Kida v. Senate, Oct. 18, 2011)
A: No. (Province of Batangas v. Romulo, G.R.
YES. R.A. No. 10153 did not amend the Organic
No. 152774, May 27, 2004)
Act (R.A. No. 9054) - which only provides for the
Art X, Sec. 6. Local Government units shall have schedule of the first ARMM elections and does
a just share, as determined by law, in the not fix the date of the regular elections.
national taxes which shall be automatically
A need therefore existed for Congress to fix the
released to them.
date of subsequent ARMM regular elections
Q: Can the Congress take back what it has
already devolved to the Autonomous Region of R.A. 10153 merely filled in a gap in R.A. No.
Muslim Mindanao (ARMM)? 9054 or supplemented the law by providing the
date of regular elections.
A: (Disomangcop v. Daatumanong, 444 SCRA
Q: Who has the authority to create municipal
203)
corporations? How is a public corporation
In this case, R.A. No. 8999 was enacted by created?
Congress establishing an engineering district of
A: A Local Government Unit may be created,
the DPWH in Lanao del Sur
divided, merged, abolished or its boundaries
The Court upheld the petitioners. In so doing, it substantially altered either by:
came up with certain observations about
regional autonomy and the idea of 1. Law enacted by Congress in case of
decentralization, as well as the significance of province, city, municipality, or any other
political subdivision; or
Organic Acts.
2. An ordinance passed by the
Congress cannot take back by law (R.A. 8999) Sangguniang Panlalawigan or
what has already been devolved by another Sangguniang Panlungsod concerned in
law, if there is any amendment, it must pass the case of a barangay located within
through a plebiscite. its territorial jurisdiction, subject to such
limitations and powers described in the
Section 16, Article X of the 1987 Constitution LGC. (Sec . 6, R.A.7160)
limits the power of the President over
autonomous regions. In essence, the provision Q: What are the requisites or limitations
al. the Power of Congress over autonomous imposed on the creation or conversion of
regions. municipal corporations?

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A: Plebiscite requirement must be approved CREATION or CONVERSION of LGUS
by majority of the votes cast in a plebiscite
called for such purpose ion the political unit or I. Income Requirement must be
units affected. sufficient on acceptable standards
to provide for all essential
Q: May Congress validly delegate to the government facilities and services
ARMM Regional Assembly the power to create and special functions
provinces, cities, and municipalities with the commensurate with the size of its
ARMM, pursuant to Congress plenary population, as expected of the local
legislative powers? government unit concerned.

A: NO. There is no provision in the Constitution Average annual income for the last two (2)
that conflicts with the delegation to regional consecutive years should be at least:
legislative bodies of the power to create
municipalities and barangays. City P100M (as amended by R.A. 9009)
Highly Urbanized City P50M
However, the creation of provinces and cities is Province P20M
another matter. Only Congress can create Municipality P2.5M
provinces and cities because the creation of the
same necessarily includes the creation of Q: At the end of the 11th Congress existence,
legislative districts, a power only Congress can several bills aiming to convert certain
exercise under Section 5, Art. VI of the 1987 municipalities into cities were pending; the
Constitution and Section 3 of the Ordinance same were not entered into law.
appended to it. (Bai Sandra S.A. Sama v.
COMELEC, et al. G.R. No. 178628, July 18, 2008) The 12th Congress enacted R.A. No. 9009,
amending the Local Government Code (LGC) by
Q: Considering the legislative power validly increasing the income requirement for the
delegated to the ARMM Regional Assembly, conversion of municipalities mentioned earlier
what is the limitation of such that prevents the from the new income requirement. However,
same to create legislative districts? no concrete action came out of such
deliberations.
A: The ARMM Regional Assembly cannot enact
a law creating a national office like the office of The municipalities filed through their
a district representative of Congress because respective sponsors, individual cityhood bills
the legislative powers of the ARMM Regional containing a common proviso exempting them
Assembly operate only within its territorial from the new income requirement. The
jurisdiction, as provided in Section 20, Art. X of Congress approved the same. Concerned
the 1987 Constitution. (Bai Sandra S.A. Sama v. parties protested such laws allowing a
COMELEC, et al. G.R. No. 178628, July 18, 2008) wholesale conversion of municipalities as
being unconstitutional. Decide.

Are the cityhood laws valid?

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A: The challenged cities claim that it was the bills pending during the 11th Congress,
intent of Congress anyway to grant them but have also complied with the
exemption from the income requirement, as requirements of the LGC prescribed
per the deliberations of the 11th Congress. What prior to its amendment by R.A. No.
became of the cityhood bills and their 9009. Congress undeniably gave these
deliberations that were pending at the cities all the considerations that justice
adjournment of the 11th Congress? and fair play demanded.

League of Cities v. COMELEC Hence, this Court should do no less by stamping


its imprimatur to the clear and unmistakeable
On November 18, 2008, then SC ruled the legislative intent and by duly recognizing the
cityhood laws unconstitutional. certain collective wisdom of Congress. (League
The COMELEC filed the first motion for of Cities of the Philippines (LCP) v. COMELEC,
reconsideration, which was denied on March G.R. No. 176951, April 12, 2011)
31, 2009. 2. Notwithstanding that both the 11th and
On April 28, 2009 the SC en banc, by a split 12th Congress ask upon the pending
vote, denied a second motion for cityhood bills, both the letter and intent
reconsideration of Section 45 of the LGC, as amended
by R.A. No. 9009, were carried on until
The decision then becomes final and the 13th Congress, when the Cityhood
executory. Laws were enacted.

However, on Dec. 21, 2009, the SC ruled on 3rd The exemption clauses found in the individual
MR and reversed its own judgement. Cityhood Laws are the express articulation of
that intent to exempt respondent municipality
The 16 cities were allowed to hold election in
from the coverage of R.A. No. 9009 (League of
2010.
Cities of the Philippines (LCP) v. COMELEC, G.R.
Then again, on a 4th MR the SC in a decision No. 176951, February 15, 2012)
dated August 24, 2010, reversed its decision
II. Population requirement - to be
and ruled that the 16 cityhood laws were
determined as the total number of
unconstitutional. The decision then became
inhabitants within the territorial
final and executory (again).
jurisdiction of the local government
Surprisingly, on a 5th MR, last April 12, 2011 the unit concerned. The required
SC again reversed itself and upheld the populations shall be:
constitutionality of the creation of the 16 new Barangay 2K
cities. But 5K in:
-Metro Manila
ANSWER:
- Highly urbanized cities
1. Yes, The 16 cities covered by the Municipality 25K
City- 150K
Cityhood laws not only had conversion
Province 250K

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Q: Congress enacted a law creating the A: No. Section 5(3), Article VI of the 1987
legislative district of Malolos based on a Constitution, which requires 250,000 minimum
certification of the demographic projection population requirement apply only for a city to
from NSO stating that by 2010, Malolos is be entitled to a representative but not for a
expected to reach the population of 250, 000, province.
hence entitling it to one legislative district. Is
the law valid? The provision draws a plain and clear distinction
between the entitlements of a city to a district
A: No. Congress cannot establish a new on the other. For while a province is entitled to
legislative district based on a projected at least a representative, with nothing
population requirement of the Constitution in mentioned about population, a city must first
the reappointment of legislative districts. meet a population minimum of 250,000 in
order to be similarly situated. (Aquino and
A city that has attained a population of 250,000 Robredo v. Comelec, G.R. No. 189793, April 7,
is entitled to a legislative district only in the
2010)
immediately following election. In short, a city
must first attain 250,000 population, and Q: Congress passed a law providing for the
thereafter, in the immediately following apportionment of a new legislative district in
election, such city shall have a district CDO City. The COMELEC subsequently issued a
representative. There is no showing in the resolution implementing the law. B now assails
present case that City of Malolos has attained the resolution, contending that rules for the
or will attain the 250,000 population, whether conduct of a plebiscite must first be laid down,
actual or projected, before May 10, 2010 as part of the requirements under the
elections. Thus, the City if Malolos is not Constitution. According to B, the
qualified to have a legislative district of its own apportionment is a conversion and division of
Section 5 (3), Article VI of the 1987 Constitution CDO City, falling under Section 10, Art. X of the
and Section 3 of the Ordinance appended to the Constitution, which provides for the rule on
1987 Constitution (Aldaba v. Comelec, G.R. creation, division, merger, and abolition of
188078, Jan. 25, 2010) LGU. Decide.

Q: Congress enacted a law reapportioning the A: There is no need for a plebiscite. CDO City
composition of the Province of Camarines Sur politically remains a single unit and its
and created legislative districts thereon, administration is not divided along territorial
Aquino challenged the law because it runs lines. Its territory remains whole and intact.
afoul to the constitutional requirement that Thus, Section 10, Art. X of the 1987
there must be 250,000 population to create Constitution does not come into play. (Rogelio
legislative districts. Z. Bagabuyo v. COMELEC, G.R. No. 17690, Dec.
8, 2008)
Comelec argued that the mentioned
requirement does not apply to provinces. Is the III. Land requirement must be
250,000 population standard an indispensible contiguous, unless it comprises two
requirement for the creation of a legislative or more islands or is separated by a
district in provinces? local government unit; properly

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identified by metes and bounds and (Second Meeting)
sufficient to provide for such basic
services and facilities. POLICE POWER, CORPORATE POWERS and
GENERAL WELFARE CLAUSE
Area requirements are:
Q: In creating an LGU, is it necessary that
Province 2, 000 sq.km. the territorial boundaries be expressed in
City 100 sq.km. meets and bounds?
Municipality 50 sq.km.
A: No.
- The territory need not be contiguous if - The Constitution does not provide for a
it comprises of two (2) or more islands; description by metes and bounds as a
- The land area requirement shall not condition sine qua non for the creation
apply where the proposed province is of a local government unit or its
composed of one (1) or more islands. conversion from one level to another.
(Navarro v. Executive Secretary) - Section 450 of R.A. No. 7160 only
applies to the conversion of a
- When the Dinagat Island was municipality or a cluster of barangays
proclaimed a new province on into a competent city, not a highly
December 3, 2006, it had an urbanized city.
approximate land area of 802.12 sq.km. - At the time of the consideration of R.A.
- The law requires at least 2,000 sq.km. No. 7854, the territorial dispute
in land area between the municipalities of Makati
- Petitioners argued that the province and Taguig over Fort Bonifacio was
which was composed of more than one under court litigation. Out of a
island is exempted from the land area becoming sense of respect to a co-equal
requirement based on the provision in department of government, the
paragraph 2, Article IX of the IRR of LGC. legislations felt that the dispute should
- On 12 May 2010, the SC held that be left to the courts to decide.
paragraph 2 of Article IX of the IRR of - They did not want to foreclose the
LGC is null and void, because the dispute by making legislative finding of
exemption is not found in Section 461 fact which could decide the issue. This
of the LGC. would have ensued if they defined the
- The exemption should pertain to the land area of the proposed city by its
requirement of territorial contiguity and exact metes and bounds, with technical
not on land area. descriptions.
- However, in a decision dated 20 May
2011, the SC reversed itself and ruled (Mariano v. COMELEC, 242 SCRA 211 -
that the creation of the Dinagat Island 1995)
Province is constitutional. Q: Can the creation of an additional
congressional seat be included in the same
law converting the municipality into a city?

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A: YES. - Respondent provincial governor is not
endowed with the power to call upon
- Petitioners contend that the addition of the armed forces, the police, and his
another legislative district in Makati is own Civilian Emergency Force.
unconstitutional for:
- The calling-out powers contemplated
1. Reapportionment cannot under the Constitution is EXCLUSIVE to
made by a special law; the President. An exercise by another
2. The addition of a legislative official, even if he is the local chief
district is not expressed in executive, is ultra vires, and may not be
the title of the bill 7; and justified by the invocation of Section
3. Makatis population, as per
465 of the Local Government Code.
the 1990 census, stands at
only four hundred fifty (Jamar M. Kulayan, et al. v. Gov. Abdusakur
thousand (450,000) M. Tan, et al., GR No. 187298, July 3, 2012)
- Reapportionment of legislative districts
may be made through a special law, Q: Can the Mayor be compelled by writ of
such as in the charter of a new city. The Mandamus to issue a business permit?
Constitution clearly provides that A: NO.
Congress shall be composed of not
more than two hundred fifty (250) - A Mayor cannot be compelled by
members, unless otherwise fixed by Mandamus to issue business permit
law. since the exercise of the same is a
- As thus worded, the Constitution did delegated police power, hence
not preclude Congress from increasing discretionary in nature.
its membership by passing a law, other - Section 443 (b) (3) (iv) of the Local
than a general reapportionment law. Government Code of 1991, whereby
- Otherwise, if Makati is made to wait for the power of the respondent mayor is
a general apportionment law, it would circumscribed, is a manifestation of the
create an inadequate situation where a delegated police power of municipal
new city created by Congress will be corporation.
denied legislative representation for an - Necessarily, the exercise thereof cannot
indeterminate period of time. be deemed ministerial. As to the
question whether power is validly
(Mariano v. COMELEC, 242 SCRA 211 - exercised, the matter is within the
1995) province of a writ of certiorari, but
Q: Can the Governor declare a State of certainly, not of mandamus.
Emergency and call out the Armed Forces (Rimando v. Naguilan Emission Testing
and the Police? Center, Inc., G.R. No. 198860, July 23, 2012)
A: NO. Q: Can an LGU, pursuant to its police
power, require private cinemas in the city

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to give 50% discount to minors for their accepted exercise of police power in
admission tickets? the promotion of the common good.
- There is no violation of the equal
A: NO. protection clause in classifying paupers
- To invoke the exercise of police power, as subject of legislation. Paupers may
not only must it appear that the be reasonably classified. Different
interest of the public generally groups may receive varying treatment.
requires an interference with private (Binay v. Domingo, 201 SCRA 508 -
rights, but the means adopted must be 1991)
reasonably necessary for the Q: Can an LGU be held liable for torts
accomplishment of the purpose and
committed by its personnel?
not unduly oppressive upon
individuals. A: It depends.
- The legislature may not, under the guise
- Municipal Corporations are suable
of protecting the public interest,
arbitrarily interfere with private because their charters grant them the
business, or impose unusual and competence to sue and be sued.
unnecessary restrictions upon unlawful - Nevertheless, they are generally not
occupations. liable for torts committed by them in
- In other words, the determination as to the discharge of governmental
what is a proper exercise of its police functions and can be held answerable
power is not final or conclusive, but is only if it can be shown that they were
subject to supervision of courts. acting in proprietary capacity.
- The municipality cannot be held liable
(Balacuit v. CFI of Agusan del Norte, 163 for the torts committed by its regular
SCRA 182 - 1998) employee, who was then engaged in
the discharge of governmental
Q: Can an LGU, pursuant to its police functions.
power, allot funds for a Burial Assistance
- Hence, the death of the passenger
Program where bereaved families are tragic and deplorable though it may be
given P500 each? imposed on the municipality, no duty to
A: YES. pay monetary compensation.
(Municipality of San Fernando v. Firme,
- COA is not attuned to the changing of GR No. 52179, April 8, 1991)
the times. Public purpose is not
unconstitutional merely because Q: May an LGU alter the zoning
incidentally benefits a limited number classification of a portion of its territory
of persons. and order the transfer of businesses
- The care for the poor is generally located therein?
recognized as a public duty. The A: YES.
support for the poor has long been an

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- The power to establish zones for - That these motels and clubs are used as
industrial, commercial, and residential venues for prostitution is of no
uses is derived from the protection and moment. Sexual immorality may take
benefit of the residents of a locality. place in the most innocent of places.

(Social Justice Society v. Atienza, Jr., 517 (City of Manila v. Laguio, Jr., 455 SCRA 308 -
SCRA 92 - 2008) 2005)

Q: May an LGU prescribe a central terminal Q: May an LGU regulate the short-time
for public utility vehicles within its periods and wash free of motels, to protect
territory? public morals?

A: NO. A: NO.

- Since the compulsory use of the - Individual rights may be adversely


terminal would subject the users affected only to the extent that may
thereof to fees, rentals and charges, fairly be required by the legitimate
such measure us unduly oppressive. demands of public interest or public
welfare.
(Lucena Grand Central Terminal, Inc. v. JAC - However well-intentioned the
Liner, Inc., 452 SCRA 174 - 2005) Ordinance may be, it is in effect an
Q: May an LGU regulate the subscriber arbitrary and whimsical intrusion into
rates charged by CATV operators within its the rights of the establishment as well
territorial jurisdiction? as their patrons.
- The Ordinance needlessly restraints the
A: NO. operation of the petitioners as well as
restricting the rights of their patrons
- Regulation of CATV Subscriber Rates is
without sufficient justification.
lodged in the NTC, not LGUs.
- The Ordinance rashly equates wash
- LGUs, likewise, have no authority to
rates and renting out a room more than
grant franchises for such undertakings.
twice a day with immorality without
(Batangas CATV Inc. v. CA, 493 SCRA 326 - accommodating innocuous intentions.
2004)
(White Light Corporation v. City of Manila,
Q: May an LGU enact an ordinance to 576 SCRA 416 - 2009)
phase out motels, night clubs, and other
EMINENT DOMAIN
establishments to protect public morals?
1. An expropriation suit is incapable of
A: NO.
pecuniary estimation. Barangay San
- Business may only be regulated but Roque v. Heirs of Pastor, 334 SCRA 127
cannot be altogether be prohibited. 2000
- Simply because there are no pure 2. Section 19 of the LGC requires an
places where there are impure men. ordinance, not a resolution, for the

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exercise of eminent domain. Suguitan expropriate a property merely for the
v. City of Mandaluyong, 328 SCRA 137 - purpose of providing a sports and
2000 recreational facility to a small group of
3. A valid and definite offer to acquire persons, such as those belonging to
the property is necessary prior to the homeowners association.
exercise of the power of eminent
domain. The offer must not be - Where the taking by the State of private
accepted. Jesus is Lord Christian School property is done for the benefit of a
Foundation, Inc. v. Municipality of small community which seeks to have
Pasig, GR No. 152230, August 9, 2005 its own sports and recreational facility,
notwithstanding that there is such
Procedure of Eminent Domain: recreational facility only a short
- The land must be a private property distance away, such taking cannot be
- It must be for a public purpose considered to be for public use. Its
- There must be genuine necessity; expropriation is NOT VALID.
- There must be previous valid and
(Masikip v. City of Pasig, 479 SCRA 391 - 2006)
definite offer to buy the private
property in WRITING. It shall specify
the property sought to be acquired, the
reasons for the acquisition, and the Q: May an LGU expropriate property to provide
price offered. a right-of-way to a specific community?
- The offer is DENIED or REJECTED (Barangay Sindalan, San Fernando, Pampanga v.
- If the owner rejects the offer, the LGU Court of Appeals, 518 SCRA 649 - 2007)
can then file a complaint for
expropriation in the RTC In this case, a barangay sought to expropriate
- The LGU must then deposit the amount private lands to secure a right-of-way for
equivalent to 15% of the fair market residents of a subdivision.
value of the property to be
The SC declared that the failure of the
expropriated based on its current tax
subdivision owner to provide an access road
declaration
does not shift the burden to the barangay itself.
- The LGU may then enter the property
- The COURT will determine the amount To deprive the private persons of their property
of just compensation for the property instead of compelling the subdivision owner to
expropriated comply with its obligation under the law is an
abuse of the power of eminent domain and is
Q: May an LGU expropriate a property for the
patently illegal, which misuse of public funds for
benefit of a specific homeowners association?
a private purpose could amount to a possible
A: NO. case of malversation.

- A local government unit cannot use the


power of eminent domain to

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TAXATION thereof to the Secretary of Justice who shall
render a decision within sixty (60) days
Q: What are the requisites for a valid tax from the date of receipt of the appeal.
ordinance? Provided, however, that such appeal shall
A: not have the effect of suspending the
effectivity of the ordinance and the accrual
1. The procedure applicable to local and payment of the tax, fee, or charge
government ordinances, in general, levied therein.
should be observed. (Sec. 187, LGC)
2. Public hearings are required before any Provided, finally, that within the sixty-day
local tax ordinance is enacted. (Sec. period without the Secretary of Justice
187, LGC) acting upon the appeal, the aggrieved party
3. Within 10 days after their approval, may file appropriate proceedings with a
PUBLICATION in FULL for 3 consecutive court of competent jurisdiction (RTC).
days in a newspaper of general
(Sec. 187, LGC)
circulation. In the absence of such
newspaper in the province, city, or Q: Can a dissatisfied tax payer go directly
municipality, then the ordinance may to court to question a tax ordinance?
be posted in at least two conspicuous
and publicly accessible places. (Secs. A: NO.
188 and 189, LGC) - The law requires that the dissatisfied
Q: What is the effect if the tax ordinance was taxpayer who questions the validity or
not published in full (only excerpts/summary)? legality of a tax ordinance must file his
appeal to the Secretary of Justice,
A: The requirement of publication in full for 3 within 30 days from effectivity thereof.
consecutive days is MANDATORY for a tax - In case the Secretary of Justice decides
ordinance to be VALID. the appeal, a period also of 30 days is
allowed for an aggrieved party to go to
- The tax ordinance will be null and void court. But if the Secretary of Justice
if it fails to comply with such publication does not act thereon, after the lapse of
requirement. (Coca-Cola v. City of 60days, a party could already proceed
Manila, GR No. 161893 June 27, 2006) to seek relief in court.
Q: Who determines the legality or propriety of - These three separate periods are clearly
a local tax ordinance or revenue measure? given for compliance as a prerequisite
before seeking redress in a competent
A: It is the SECRETARY OF JUSTICE who shall court. Such statutory periods are set to
determine questions on the legality and prevent delays as well as enhance the
constitutionality or revenue measures. (Weird orderly and speedy discharge of judicial
accdg. to Atty. Dela Cruz but thats it) functions.

Such questions shall be raised on appeal


within thirty (30) days from the effectivity

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- For this reason, the courts construe that imposes a local franchise tax on all
the three above-mentioned provisions telecommunication companies
of statutes as MANDATORY. operating within the province.
- The tax is 50% of 1% of the gross annual
Q: Does the LGU has the power to impose
receipts of the preceding calendar year
Franchise Tax? based on the incoming receipts, or
(Smart Communications, Inc. v. City of Davao, receipts realized, within its territorial
565 SCRA 237 - 2008) jurisdiction.

- In this case, Smart contends that its Q: Is the ordinance valid? Are PLDT, Smart,
telecenter in Davao City is exempt from and Globe liable to pay franchise taxes to
payment of franchise tax to the City, the Province of Zamboanga?
because its franchise by virtue of a A: YES.
charter (R.A. No. 7294 - 1992) includes
the clause in lieu of all taxes - The ordinance is VALID. The LGC
- Smart alleges that the in lieu of all explicitly authorizes provincial
taxes clause in its franchise exempts it governments, notwithstanding any law
from all taxes both local and national. or other special law, to impose a tax on
- The Local Government Code, which business enjoynh a franchise at the
allowed the imposition of franchise tax ratge of 50% of 1% based on the gross
by LGUs, took effect 2 months ahead of annual receipts during the preceding
Smarts franchise year within the province. (Section 137,
- The SC ruled that the In lieu of all LGC)
taxes clause applies only to National - PLDT is liable to the franchise tac levied
Interest Revenue taxes and NOT TO by the province of Zamboanga del
LOCAL TAXES. Norte. The tax exemption privileges on
franchises granted before the passage
of the Local Government Code are
*The LGC took effect on January 1, 1992. PLDTs
effectively repealed by the latter law.
legislative franchise was granted sometime
before 1992. Its franchise provides that PLDT (PLDT v. City of Davao, GR No. 143867
will pay only 3% franchise tax to BIR in lieu of all August 22, 2002)
taxes.
A: While Smart and Globes franchises were
*The legislative franchise of Smart and Globe enacted after the enactment of LGC, still,
Telecoms were granted in 1998. Their legislative Smart and Globe are also liable to pay
franchises state that they will pay only 5% franchise tax to the province.
franchise tax to the BIR in lieu of all taxes.
The SC ruled that the in lieu of all taxes
Sample Problem: clause applies only to national internal
revenue taxes and not to local taxes.
- The province of Zamboanga del Norte
passed an ordinance in 1997 that

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The in lieu of all taxes clause in a 2. Fees and charges on business and
legislative franchise should categorically occupation (Sec. 147, LGC)
state that the exemption applies to both 3. Fees for sealing and licensing weights
local and national taxes; otherwise, the and measures (Sec. 148, LGC)
exemption claimed should be strictly 4. Fishery rentals, fees and charges (Sec.
construed against the taxpayer liberally in 149, LGC)
favour of the taxing authority. (Smart
Communications, Inc. v. The City of Davao, Q: (Sample Problem)
GR No. 155491 - July 21, 2009) Mr. Fermin, a resident of Bulacan, is a Certified
Q: Does the LGU have the power to adjust local Public Accountant-Lawyer engaged in the
tax rates? practice of his two professions.

A: YES. Provided that the adjustment of the tax He has his main office in Makati City and
rates be prescribed in an ordinance but should maintains a branch office in Pasig City.
not be oftener than once every five (5) years, Mr. Fermin pays his professional tax as a CPA
and in no case shall adjustment exceed ten in Makati City and his professional tax as a
percent (10%) of the rates fixed under the LGC. Lawyer in Pasig.
(Sec. 191, LGC)
Q: May Makati City, where he has his main
Q: What are the taxes, fees, and charges which office, require him to pay his professional tax
a province or a city mayor may levy? as lawyer?
A: A: NO. Makati City where Mrf. Fermikn has his
1. Tax on transfer of real property main office may not require him to pay his
ownership (Sec. 135, LGC) professional tax as a lawyer.
2. Tax on business of printing and Mr. Fermin has the option of paying his
publication (Sec. 136, LGC) professional tax as lawyer in Pasig City where he
3. Franchise Tax (Sec. 137, LGC) practices law or in Makati City where he
4. Tax on sand, gravel, and other quarry maintains his principal office (Sec. 139[b], LGC)
resources (Sec. 138, LGC)
5. Professional Tax (Sec. 139, LGC) Q: May the Province of Bulacan, where he has
6. Amusement Tax (Sec. 140, LGC) his residence, and where he also practices his
7. Annual fixed tax for every delivery two professions, go after him for the payment
truck or van of manufacturer or of his professional tax as a CPA and lawyer?
producers, wholesalers of, dealers, or
A: NO.
retailer in certain products (Sec. 141,
LGC) The situs of the professional tax is the city
where the professional practices his profession
Q: What are the taxes that a municipality may
or where he maintains his principal office in
impose under the LGC?
case he practices his profession in several
1. Tax on business (Sec. 143, LGC) places.

11 jcsb
The Province of Bulacan has no right to collect A: NO.
professional tax from Mr. Fermin as the place of
residence of the taxpayer is NOT THE PROPER - Professional basketball games are
SITUS in the collection of the professional tax. within the ambit of national taxation,
as it is presently being taxed under the
(Sec. 139 [b], LGC)
provisions of the NIRC.
Q: Does the province has the authority to - Furthermore, the income from cession
impose taxes on sand, gravel and other quarry of streamers and advertising spaces is
resources extracted on private lands? subject to amusement taxes under the
NIRC because the definition under the
A: NO. Tax Code is broad enough to include the
- A province is not expressly authorized cession of streamers and advertising
to do so. Such tax is a tax upon the spaces as the same includes all the
performance, carrying on, or exercise of receipts of the proprietor, lessee or
an activity. Hence, an excise tax upon operator of the amusement place.
an activity already being taxed under (Philippine Basketball Association v. CA, GR
the NIRC. No. 119122 August 8, 2000)
(Province of Bulacan, et.al., v. CA, GR No. Q: What are the common revenue raising
126232 November 27, 1998) powers of LGUs?
Q: What are the amusement places upon
A:
which provinces or cities cannot impose
amusement taxes? 1. Fees, service or user charges LGUs
may impose and collect such
A: reasonable fees and charges for
1. Cockpits services rendered. (Sec. 153, LGC)
2. Cabarets 2. Public Utility Charges may fix the
3. Night or day clubs rates for the operation of public utilities
4. Boxing exhibitions owned, operated and maintained by
5. Professional Basketball games them within their jurisdiction. (Sec. 154,
6. Jai-Alai LGC)
7. Racetracks 3. Toll fees or charges The sanggunian
concerned may prescribe the terms and
Note: There can be no imposition of conditions and fix the rates and fix the
amusement taxes on the above-mentioned rates for the imposition of toll fees or
amusement places since the NIRC already charges for the use of any public road,
imposes amusement taxes on them under pier, or wharf, waterway, bridge, ferry,
Section 125 thereof. or telecommunication system funded
and constructed by the LGU concerned.
Q: May LGUs collect amusement taxes on
(Sec. 155, LGC)
admission tickets to the Philippine Basketball
Association (PBA) games held in the LGU?

12 jcsb
Q: What are the common limitations on Q: Are condominium corporations liable to pay
the taxing powers of the LGUs? business taxes under the Local Government
Code?
A: The exercise of the taxing power of
provinces, cities, municipalities, and A: NO.
barangays shall not extend to the levy of
- As a rule, a city or municipality is
the following:
authorized to impose a tax on business,
1. Taxes which are levied under the NIRC, which is defined under the LGC as
unless otherwise provided by LGC. trade or commercial activity regularly
2. Taxes, fees, and charges which are engaged as a means of livelihood or
imposed under the Tariffs and Customs with view of profit.
Code. - By its very nature, a condominium
3. Taxes, fees, and charges where the corporation is not engaged in business,
imposition of which contravenes and any profit it derives is merely
existing governmental policies or which incidental, hence, it may not be the
are violative of the fundamental subject of business taxes.
principles of taxation.
4. Taxes, fees and charges imposed under (Yamane, etc., v. BA Lepanto Condominium
Corporation, GR No. 154993, October 25,
special laws.
2005)
Q: What should be the basis of business tax
gross receipt or gross revenue? Q: What are the penalties for unpaid taxes,
fees or charges?
A: GROSS RECEIPTS, as the law is clear.
A:
- Gross receipts include money or its
equivalent actually or constructively 1. Surcharge of 25% on taxes, fees or
received in consideration of services charges not paid on time; and
rendered or articles, sold, exchanged or 2. Interest not exceeding 2% per month of
leased, whether actual or constructive. the unpaid taxes, fees or charges
- To tax on gross revenue rather than including surcharges, until the amount
gross receipts will amount to double is fully paid. In no case shall the total
taxation inasmuch as the revenue or interest exceed 36 months. (Sec. 168,
income for a taxable year includes gross LGC)
receipts already reported during the Q: What is the period of assessment of local
previous year for which local business taxes?
taxes had already been paid.
A: GR Local taxes, fees or charges shall be
(Ericsson Telecommunications, Inc. ,v. City of assessed within five (5) years from the date
Pasig, etc., et. Al., GR No. 176667 November they became due. No action for the collection
22, 2007) of such taxes, fees or charges, whether

13 jcsb
administrative or judicial, shall be instituted Internal Rules of Procedure
after the expiration of such period.
- The task of drafting the internal rules
XPN: In case of fraud or intent to evade the may be delegated to a committee;
payment of taxes, fees or charges, the same - The proposed IRP can then be adopted
may be assessed within ten (10) years from by the sanggunian in a regular session;
discovery of the fraud or intent to evade (Article 103, IRR-LGC)
payment. (Sec. 184 [a] and [b], LGC)
Sanggunian Committees
Q: What is the period of collection of local
taxes? - The manner of selecting the Chairman
and Members of various committess is
A: Local taxes, fees or charges may be collected through election. (Sec. 50, LGC)
within five (5) years from the date of - The majority can prepare a list and the
assessment by administrative or judicial sanggunian can vote to approve it,
action. (Sec. 194(c), LGC) provided this is indicated in the IRP.
- DILG Opinion No. 1122-98 (09-07-1998)
Q: When is the running of the prescriptive
period be suspended? Ex-Officio members and the selection of
committee chairs
A: The running of the periods of prescription
for the collection of local taxes shall be - SK Chairmen and Punnong Barangay s
suspended for the time during which: are non-partisan.
- Thus, they cannot participate in the
1. The treasurer is legally prevented from election of officers (minority and
making the assessment of collection; majority leaders and deputies
2. The taxpayer requests for a because this is mainly dependent on
reinvestigation and executes a waiver in the majority and minority party
writing before expiration of the period affiliation in the sangguinian.
within which to assess or collect; and - However, these ex-officio members are
3. The taxpayer is out of the country or assured of the chairmanship of the
otherwise cannot be located. (Sec. 195 corresponding sectors that they are
[d],LGC) representing in the sanggunian, that is,
Sessions and Quorum the youth and barangay affairs,
respectively. They may also chair other
First Day of Session regular committees.
- An ex-officio member, president of the
- On the first day of session following the
liga ng mga barangay affairs and may
election of its members and within 90
chair another committee.
days thereafter, the sangguian
- The creation of the committee on
concerned shall adopt or update its
barangay affairs is mandatory.
existing rules of procedure; (Article 103,
- The youth and sports development
IRR-LGC)
committee is a mandatory committee

14 jcsb
similar to those other committee (DILG Opinion No. 28-2000, dated 17 April 2000;
enumerated in the LGC. La Carlota City vs. Atty. Rex Rojo, G.R. No.
181367, April 24, 2012)
Q: Can the vice mayor chair a committee?
Determining Quorum
A: NO.
- 19 members = 19/2 = 9.5 + 1 = 10.5
- The vice mayor may chair a special - The quorum for a sanggunian with 19
committee created for a special members is therefore 10
purpose (DILG Opinions, Nos 243-1992; - 11 members = 11/2 = 5.5 +1 = 6.5
156-1994) but cannot head a regular - The quorum for a sanggunian with 11
committee.( DILG Opinions, Nos 243-
members is therefore 6
1992; 156-1994)
Vote required in Sessions
Q: What is Quorum?
- Ordinary measures shall be decide by
A: A majority of all the members of the simple majority of the members
sanggunian who have been elected and presents at any meeting there being a
qualified shall constitute a quorum to transact quorum.
official business. (Section 5t3, LGC)
(DILG Opinions Nos. 26-1996; 183-1994)
Q: What is meant by majority?
Two-thirds (2/3) Vote Required
A: 50% plus one of the entire membership of
the sanggunian. - Extending Loans or entering into
contracts;
- The closest number to more than one- - Issuance of bonds or securities;
half of the total membership of the - Authorizing the lessee of public
sanggunian; property;
(La Carlota City vs. Atty. Rex Rojo, G.R. No. - Grant of franchise
181367, April 24, 2012) - Creation of LGU liability or
indebtedness;
Q: Is the vice mayor include in the - Over-ride veto of the Mayor;
determination of quorum? - Grant of Tax exemptions
- Levy of Taxes
A: YES.
- Discipline/suspend a member of the
- The Vice Mayor is a member of the sanggunian;
Sanggunian - Opening or closing of roads;
- He will thus be include in the total - Selection and transfer of government
number of sanggunian members for site or offices
purposes of determining the quorum. - Concurrence in the appointment of
personnel;

15 jcsb
(DILG Opinion No. 107-2003, dated 15 from among themselves a temporary
August 2003) presiding officer.
- He shall certify within 10 days from the
Vice Mayor as Presiding Officer passage of ordinances/resolutions
- Being the presiding officer of the adopted by the sanggunian in the
council, a vice mayor is considered a session over which he temporary
regular member of the local legislative presided. (Article 102 IRR, LGC)
council concerned. (DILG Opinion Nos.
Permanent Vacancy: Presiding Officer
138, 342 1992; 81-1995)
- But a vice mayor acting as mayor - In case of permanent vacancy in the
cannot preside over the council until position of vice mayor, the highest
the mayor reassumes his/her position ranking sanggunian member will
since this will violate the local succeed as vice mayor/presiding
separation of powers. (Gamboa v. officer.
Aguirre) - The vacancy shall be filled by the other
- In such situation, the senior councillor members of the sanggunian in
may preside. (DILG Opinions Nos. 142, accordance to their ranking. (Section
174-1994) 44, LGC)
- In case the permanent vacancy was
Presiding Officer as member caused by a member who belongs to a
- As presiding officer, he can only vote to political party, the party will appoint
break a tie; the replacement;
- As a member, he may participate in the - If he does not belong to any political
deliberations, vote, sponsor or co- party, the other members of the
author a bill or chair a special sangguian will nominate, and the
committee. president will appoint the
- He/She may temporarily relinquish replacement. (Section 45, LGC)
his/her chair as presding officerto
Sanggunian Secretary
the majority floor leader or to any
sanggunian member. (DILG Opinion No. - The secretary to the sanggunian is a
65-1995) career public official with rank and
- If he will participate in the session as a salary equal to a head of a department.
member, he may choose the (DILG Opinions Nos. 91, 253, 286
temporary presiding officer. (DILG 1992; 78-1995)
Opinions Nos. 29, 132-1993) - A sanggunian secretary shall
automatically continue in office despite
Temporary Presiding Officer the lapse of 3-year terms of elective
- In case of temporary absence of the officials unless otherwise removed for
presiding officer, the members present cause. (DILG Opinion No. 176-1992)
and constituting a quorum shall elect Appointment of Sanggunian Secretary

16 jcsb
- It is the vice mayor, not the mayor, - Administer oaths (DILG Opinion No.
who is authorized to appoint the 136-1994)
secretary to the sanggunian (CSC En - The power to approve or disapprove
Banc Resolution Nos. 94-7153, ordinances and resolutions enacted by
December 29, 1994, 92-111, August 20, the council (DILG Opinion No. 149-
1992; DILG Opinions Nos. 348-1992; 7, 1993)
155, 236, 245-1993; 85-1995) with the - Preside over council sessions (DILG
concurrence of the sanggunian Opinions Nos. 270-1992; 142, 174-
concerned. (DILG Opinion No. 8-1995) 1994)
- Appoint, suspend or dismiss employees
Temporary Vacancy: Mayor within 30 days except when the cause
- A mayor may designate in writing an of the temporary incapacity of the
officer-in-charge (e.g. councilor, any mayor is suspension for more than 30
appointive official or employee) to days.
assume the office but only for three (3) Q: Is the signature of the vice mayor on an
days. enacted ordinance necessary?
- On the 4th day, the vice mayor assumes
the post regardless of the nature of the A: NO.
absence of the mayor. (DILG Opinions
- Section 469 (c)(3) of the LGC provides
Nos. 22, 30, 87-A 1993; 52, 53-1994)
that enacted ordinances must be
- Henceforth, the designation of the
certified by the presiding officer before
officer-in-charge ceases. (DILG Opinion
they are submitted to the mayor for his
No. 87-A- 1993)
approval.
Powers: Acting Mayor - An acting mayor can exercise the
power to appoint and to discipline only
- A vice mayor acting as mayor possesses after lapse of 30 working days from the
the powers incidental to the office, time the mayor is temporarily
including the authority to solemnize incapacitated. (CSC En Banc Resolution
marriages, during the period of Nos. 94-0959, February 15, 1994; 94-
temporary incapacity. (DILG Opinion 6892, December 20, 1994)
No. 25-1994)
- An acting mayor can exercise the Q: May an ordinance become valid even
power to appoint and to discipline only without the signature of the mayor?
after lapse of 30 working days from the
A: YES.
time the mayor is temporarily
incapacitated. (CSC En Banc Resolution - If he fails to act on an ordinance
Nos. 94-0959, February 15, 1994; 94- submitted to him for his review within
6892, December 20, 1994) 10 days from his receipt thereof;
- When the sanggunian overrides the
Acting Mayor CANNOT:
veto of the mayor by 2/3 vote.

17 jcsb
(DILG Opinion No. 22-2003, date February consistent with law and city or municipal
27, 2003) ordinances.

Legislative Oversight (b) If the sanghuniang panlungsod or


sangguniang bayan, as the case may be, fails to
Sec. 56. Review of Ordinances by the take action on barangay ordinances within
Sangguniang Panlalawaigan (a) Within three thirty (30) days from receipt thereof, the same
(3) days after approval the secretary to the shall be deemed approved.
sanggunian panlungsod or sangguniang bayan
shall forward to the sangguniang panlalawigan (c) I f the sangguniang panlungsod or
for review, copies of approved ordinances and sangguniang bayan, as the case may be, finds
the resolutions approving the local the barangay ordinances inconsistent with law
development plans and public investment or city or municipal ordinances, the sanggunian
programs formulated by the local development concerned shall, within thirty (30) days from
council. receipt thereof, return the same with its
comments and recommendations to the
(b) Within thirty (30) days after receipt of sangguniang barangay concerned for
copies of such ordinances and resolutions, the adjustment, amendment, or modification; in
sangguniang panlalawigan shall examine the which case, the effectivity of the barangay
documents or transmit them to the provincial ordinance is suspended until such time as the
attorney, or if there be none, to the provincial revision called for is effected.
prosecutor for prompt examination.
Q: May the Sanggunian declare a local
(c) If the sangguniang panlalawigan finds that ordinance under review as void and illegal?
such an ordinance or resolution is beyond the
power conferred upon the sangguniang A: NO.
panlungsod or sangguniang bayan concerned, it - The only ground upon which a
shall declare such ordinance or resolution provincial board may declare any
invalid in whole or in part. The sanggunian municipal resolution, ordinance, or
panlalawigan shall enter its action in the order invalid is when such resolution,
minutes and shall advise the corresponding city ordinance, or order is beyond the
or municipal authorities of the action it has powers conferred upon the sanggunian
taken. making the same.
- Absolutely no other ground is
(d) If no action has been taken by the recognized by the law.
sangguniang panlalawigan within thirty (30)
days after submission of such an ordinance or (Moday v. CA, Feb. 20, 1997; DILG Opinion
resolution, the same shall be presumed NO. 3-2005 {January 21, 2005})
consistent with law and therefore valid.
Q: May the Sanggunian exceed the 30-day
Sec. 57. Review of Ordinances by the period of review because of time spent in
Sangguiang Panlungsod or Bayan. (a) Within referral to its committee or legal office?
ten (10) days after its enactment, the
sangguniang barangay shall furnish copies of all A: NO.
barangay ordinances to the sangguniang - The sanggunian is required to take
panlungsod or sangguniang bayan concerned action on the ordinance on review
for review as to whether the ordinance is within thirty (30) days after its
submission

18 jcsb
- The phrase take action should be (b) Within the 60-day period, the sangguniang
construed as either approval or panlungsod or the sangguniang bayan
disapproval of the ordinance and not concerned shall return the barangay budget to
just any other action of the reviewing the punong barangay with the advice of action
sanggunian, such as referral to a thereon for proper adjustments, in which event,
committee. the barangay shall operate on the ordinance
- After the lapse of such period, and no authorizing annual appropriations of the
official and/or formal document, such preceding fiscal year until such time that the
as a resolution, was issued by the new ordinance authorizing annual
Sanggunian, it can be validly stated that appropriations shall have met the objections
the Sanggunian failed to act within raised.
thirty (30) days and the ordinance or
resolution under review can be Upon receipt of such advice, the barangay
presumed consistent with law and treasurer or the city or municipal treasurer
therefore valid. (DILG Opinion No. 19- who has custody of the funds shall not make
2009, April 28, 2009; DILG Opinion No. further disbursement from any item of
62-2012, Nov. 7, 2012) appropriation declared inoperative,
disallowed, or reduced.
Review of Appropriation Ordinances
Q: Who prepares the budget?
Sec. 327. Review of Appropriation Ordinances
of Competent Cities and Municipalities. A:
- The Local Development Council (LDC)
The sangguniang panlalawigan shall within the prepares the Local Development Plan
same 90-day period advise the sangguniang (LDP) [Sec. 109, LGC]
bayan concerned through the local chief
excecutive of any action on the ordinance under - The sanggunian will then approve or
review. disapprove the LDP thru a Resolution
[Sec. 114, LGC]
Upon receipt of such advise, the municipal - The LDP will then be submitted to the
treasurer concerned shall not make further mayor, who may approve or veto the
disbursements of funds from any of the items same [Sec. 55, LGC]
of appropriate declared inoperative, - The approved LDP will then be
disallowed or reduced. submitted to the Local Finance
Committee (LFC) for budget preparation
Sec. 333. Review of the Barangay Budget - (a) [Art. 410, IRR, LGC]
Within ten (10) days from its approval, copies - The proposed budget will be submitted
of the barangay budget shall be furnished the by the local chief executive to the
sangguniang panlungsod or the sangguniang sanggunian for enactment into an
bayan, as the case may be. ordinance. [Sec. 316, LGC; DILG Opinion
No. 137-2003]
If within sixty (60) days after the receipt of the
ordinance, the sanggunian concerned takes no Q: Can the Sanggunian reduce the proposed
action thereon, the same shall continue to be in budget?
full force and effect.
A:
- Article 415 of the IRR states that: the
local sanggunian may not increase the

19 jcsb
proposed amount in the executive enacted and disbursement of funds
budget nor include new items except to shall be in accordance therewith.
provide for statutory and contractual
obligations but in no case shall it exceed Effectivity of Budget
the total appropriations in the
executive budget. Section 320 of the LGC provides that:
- Considering that the only prohibition is
against any increase, the sanggunian - The ordinance enacting the annual
may reduce the executive budget budget shall take effect on the ensuing
proposed by the LCE, provided, calendar year.
however, that the requirements as well - An ordinance enacting a supplemental
as the general limitations in the use of budget, however, shall take effect upon
government funds provided for under its approval or on the date fixed
Sections 324 and 325 of the Code are therein.
complied with. - The review of the budget by the
sangguniang panlalawigan is not a
Q: Is there any penalty for an LCE who fails to requisite for validity or effectivity.
prepare and submit the annual budget on
time? (DILG Opinion No. 90-2000, dated August
21, 2000)
A: YES. Pursuant to Sec. 318 of R.A. No. 7160, an
LCE who fails to submit the budget on or before
October 16 of the current year shall be subject Supplemental Budget
to such criminal and administrative penalties as
may be provided by the Local Government Code - No ordinance providing for a
and other applicable laws. supplemental budget shall be enacted,
except:
Q: What is the period for enactment of the - (a) when supported by funds actually
annual budget (Re-enacted Budget) available as certified by the local
- Under Section 323 of the LGC, if the treasurer, which shall refer to the
sanggunian fails to enact the annual amount of money actually collected
budget after ninety (90) days from the during a given fiscal year that is over
beginning of the fiscal year, the and above the realized estimated
ordinance authorizing the income of that year; or
appropriations of the preceding year - (b) in times of public calamity by way of
shall be deemed re-enacted and shall budgetary realignment to set aside
remain in force and effect until the appropriations for the purchase of
ordinance authorizing the proposed supplies and materials or the payment
appropriations is passed by the of services, which are exceptionally
sanggunian concerned. urgent or absolutely indispensible to
- However, only the annual prevent imminent danger to, or loss of
appropriations for salaries and wages of life or property, in the jurisdiction of the
existing positions, statutory and LGU or in other areas declared in a state
contractual obligations, and essential of calamity by the President. (Art. 417,
operating expenses authorized in the IRR)
annual and supplemental budgets for
the preceding year shall be deemed re- Intelligence Fund

20 jcsb
- Section 325 (h) of R.A. 7160 provides regular sources realized in the next
that: annual appropriations for preceding fiscal year.
discretionary purposes of the local chief
executive shall not exceed two percent - The appropriations for salaries, wages,
(2%) of the actual receipts derived from representation, and transportation
the basic real property tax in the next allowances of officials and employees of
preceding calendar year. the public utilities and economic
- Pursuant to DILG Memorandum Circular enterprises owned, operated, and
No. 99-65 to determine the amount to maintained by the local government
be utilized for intelligence and unit concerned shall not be included in
confidential purposes, it shall be based the annual budget or in the
on the: (a) 30% of the peace and order computation of the maximum amount
allocation, or (b) 3% of the annual of personal services.
appropriations, whichever is lower.
Q: What are the grounds or questions that the
Q: May the Sanggunian modify or reduce a reviewing Sanggunian can use to assail a local
local budget ordinance under review? budget under review?

A: YES. A: Sec. 325, LGC


- Expressly included in the sanggunians - No official or employee shall be entitled
power to review the local budget to a salary with higher than the
ordinance of a lower LGU is the clipping maximum fixed for the position or other
power to disallow or reduce positions of equivalent rank by
accordingly and even declare the applicable laws or rules and regulations
ordinance inoperative in part or in its issued thereunder.
entirety if the appropriations are found - The creation of new positions and
to be excess of the amounts prescribed salary increases or adjustments shall in
or if it does not comply with budgetary no case be made retroactive and
requirements and limitations under the - The annual appropriations for
law. discretionary purposes of the local
chief executive shall not exceed two
(DILG Opinion No. 101-1995, dated August percent (2%) of the actual receipts
31, 1995) derived from the basic real property
tax in the next preceding calendar
Q: What are the grounds or questions that the year.
reviewing Sanggunian can use to assail a local
budget under review? Q: What are the grounds or questions that the
reviewing Sanggunian can use to assail a local
A: Sec. 325, LGC budget under review?
- The total appropriations, whether
annual or supplemental, for personal A: Sec. 324, LGC
services of a local government unit for
one (1) fiscal year shall not exceed - The aggregate amount appropriated
forty-five percent (45%) in the case of shall not exceed the estimates of
first to third class provinces, cities, and income.
municipalities, and fifty-five percent
(55%) in the case of fourth class or - Full provision shall be made for all
lower, of the total annual income from statutory and contractual obligations of

21 jcsb
the local government unit concerned. appropriations from one item to
Provided, however, that the amount of another.
appropriations for debt servicing shall
not exceed twenty percent (20%) of - However, the local chief executive or
the regular income of the local the presiding officer of the sanggunian
government unit concerned. concerned may, by ordinance, be
authorized to augment any item in the
- Five percent (5%) of the estimated approved annual budget for their
revenue from regular sources shall be respective offices from savings in other
set aside as an annual lump items within the same expense class of
appropriation for unforeseen their respective appropriations.
expenditures arising from the
occurrence of calamities.
Q: How can the Sanggunian monitor that the
funds are properly disbursed?
Q: What are the restrictions on disbursement
of Funds? A: Sec. 346. Disbursement of the Local Funds
and Statement of Accounts. Disbursements
A: Sec. 344. Certification on, and Approval of shall be made in accordance with the ordinance
Vouchers No money shall be disbursed unless authorizing the annual or supplemental
the local budget officer certifies to the appropriations without the prior approval of
existence of appropriation that has been the sanggunian concerned.
legally made for the purpose, the local
accountant has obliged said appropriation, and - Within thirty (30) days after the close
the local treasurer certifies to the availability of each month, the local accountant
of funds for the purpose. shall furnish the sanggunian with such
financial statements as may be
- Vouchers and payrolls shall be certified prescribed by the Commission on Audit.
to and approved by the head of the In the case of the year-end statement of
department or office who has accounts, the period shall be sixty (60)
administrative control of the fund days after the thirty-first (31st) of
concerned, as to validity, propriety, and December.
legality of the claim involved.
Q: Who will be held liable for improper
disbursement of funds?
Q: Can the local chief executive declare savings
and transfer it to augment other expenses A: Sec. 340. Persons accountable for Local
(DAP)? Government Funds. Any officers of the local
government unit whose duty permits or
requires the possession or custody of the local
A: NO. government funds shall be accountable and
- Sec. 336. Use of Approriated Funds and responsible for the safekeeping thereof in
Savings. Funds shall be available conformity with the provisions of this Title.
exclusively for the specific purpose for
which they have been appropriated. - Other local officers who, though not
accountable by the nature of their
- No ordinance shall be passed duties, may likewise be similarly held
authorizing any transfer of accountable and responsible for local

22 jcsb
government funds through their QUALIFICATIONS
participation in the use or application
thereof. (emphasis supplied) Q: What are the qualifications of elective
government official?
Sec. 342. Liability for Acts Done Upon Direction
of Superior Officer, or Upon Participation of - Must be as resident therein for at least 1 year
Other Department Heads or Officers of immediately preceding the day of the election;
Equivalent Rank. -
- Able to read and write Filipino/any other local
- Unless he registers his objection in language or dialect
writing, the local treasurer, accountant,
budget officer, or other accountable - Age requirement (Sec. 39, LGC):
officer shall not be relieved of liability
for illegal or improper use or 23 y/o governor, vice-governor, mayor, vice-
application or deposit of government mayor, councillor (Highly urbanized cities)
funds or property by reason of his
having acted upon the direction of a 21 y/o mayor, vice-mayor (component
superior officer, elective or appointive, cities/municipalities)
or upon participation of other
department heads or officers of 18 y/o sanggunian members and punong
equivalent rank. barangay

- The superior office directing, or the Q: When should the citizenship requirement be
department head participating in such possessed?
illegal or improper use or application
or deposit of government funds or A: The citizenship requirement in the LGC is to
property, shall be jointly and severally be possessed by the elective official, at the
liable with the local treasurer, latest, as of the time he is proclaimed and at the
accountant, budget officer, or other start of the term of office to which he has been
accountable officer for the sum or elected.
property so illegally or improperly - The LGC does not specify any particular
used, applied or deposited. date or time when the candidate must
possess citizenship, unlike the
requirements for residence and age.
Repatriation under P.D. 825 is valid and
effective and retroacts to the date of
the application.

(Frivaldo v. Comelec, G.R. No. 120295, June


28, 1996)

Q: X was a natural-born Filipino who went to


the USA to work and subsequently became a
naturalized American citizen.

However, prior to the filing of his Certificate of


Candidacy for the Office of Mayor of the
Municipality of General McArthur, Eastern

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Samar, on 28 March 2007, he applied for (Japzon v. COMELEC, G.R. No. 180088,
reacquisition of his Philippine Citizenship. Jan. 19, 2009)

Such application was subsequently granted. Y


filed a petition to disqualify X on the ground of
failure to comply with the 1-year residency Q: Imelda Marcos indicated in her COC that
requirement. her residence in Leyte is 7months. The
Constitution 1 year residence. Is he qualified to
Y argues that reacquisition of Philippine run?
citizenship, by itself, does not automatically
result in making X a resident of the locality. A: YES. The principle of animus revertendi was
used to show that she has an intention to
Is Y correct? return to the place where she seeks to be
elected.
A: YES. Xs reacquisition of his Philippine
citizenship under R.A. 9225 had no automatic - The SC held that the term residence is
impact or effect on his residence/domicile. VAGUE. It ruled that domicile and
residence are synonymous.
- He could still retain his domicile in the
USA, and he did not necessarily regain (Marcos v. COMELEC, G.R. No. 119976,
his domicile in the Municipality of September 18, 1995)
General McArthur, Eastern Samar,
Philippines.
- X merely had the option to again Q: Butz Aquino was a Senator residing in Tarlac
establish his domicile in the when he filed a COC for Congressman of
Municipality of General McArthur, Makati City. He bought a condo unit in Makati
Eastern Samar, Philippines, said place to City 1 year before the election. Is he qualified?
have become his new domicile of
choice. The length of his residence A: NO. The term residence, as used in the law,
therein shall be determined from the is CLEAR.
time he made it his domicile of choice, - It imports not only an intention to
and it shall not retroact to the time of reside in a fixed place, but also a
his birth. It is the fact of residence that personal presence in that place,
is the decisive factor in determining coupled with conduct indicative of such
whether or not an individual has intention.
satisfied the residency qualification
requirement. (Aquino v. COMELEC, 1995)

- However, even if Ys argument is *Comment of Atty. Buko: Weird Supreme


correct, this does not mean that X Court.
should be automatically disqualified as
well, since there is proof that aside Q:What is RESIDENCE for election purposes?
from reacquisition of his Philippine
Citizenship, there are other subsequent A: It implies the factual relationship of an
acts executed by X which shows his individual to a certain place. It is the physical
intent to make General McArthur, presence of a person in a given area,
Eastern Samar his domicile. Thus, community, or country. For election purposes,
making him qualified to run for Mayor.

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the concepts of residence and domicile are one in the place where he seeks to run in order
dictated by the peculiar criteria of political laws. to qualify for a congressional seat in that other
- As these concepts have evolved in our district.
election law, what has clearly and - Neither do we see the fact that
unequivocally emerged is the fact that Fernandez was only leasing in Sta. Rosa
residence for election purposes is used at the time of his candidacy as a barrier
synonymously with domicile. for him to run in that district. Certainly,
the Constitution does not require a
(Marcos v. COMELEC, G.R. No. 119976, congressional candidate to be a
September 18, 1995) property owner in a district where he
seeks to run but only that he resides in
Q: What is the effect of transfer of residence? that district for at least one year prior
to the Election Day.
A: Any person who transfers residence solely by
reason of his occupation, profession, or - To use ownership of property in the
employment in private or public service, district as the determinative indicium of
education, etc., shall not be deemed to have permanence of domicile or residence
lost his original residence. implies that only the landed can
establish compliance with the residency
(Astio v. Aguirre, G.R. No. 191124, April 27, requirement.
2010)
- This Court would be in effect imposing a
Q: Dan Fernandez ran for congressman of the property requirement to the right to
First District of Laguna. In his COC, he indicated hold public office, which property
that his complete/exact address is in Sta. Rosa requirement would be unconstitutional.
City Laguna.

Vicente sought the cancellation of the COC of (Fernandez v. HRET, G.R. No. 187478, Dec. 29,
Dan Fernandez and his disqualification as a 2009)
candidate on the ground of an alleged material
misrepresentation in his COC regarding his
place of residence, because during past
elections, he had declared Pagsanjan, Laguna
as his address, and Pagsanjan was located in
the Fourth District of Laguna, and that Dan
Fernandez is merely leasing a property in his
alleged residence in Sta. Rosa.

Does the Constitution require that a candidate


be a property owner in the district where he
intends to run?

A: NO. Although it is true that the latest


acquired abode is not necessarily the domicile
of choice of a candidate, there is nothing in the
Constitution or our election laws which require
a congressional candidate to sell a previously
acquired home in one district and buy a new

25 jcsb