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General Principle (RA 7160)

I. The Code: Policy and Application


a. Effectivty (SEC. 536)
Section 536. Effectivity Clause. - This Code shall take effect on January first, nineteen hundred ninety-
two, unless otherwise provided herein, after its complete publication in at least one (1) newspaper of
general circulation.

b. Declaration of Policy (Sec. 2 LGC)


Section 2. Declaration of Policy. -

(a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State
shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development
as self-reliant communities and make them more effective partners in the attainment of national goals.
Toward this end, the State shall provide for a more responsive and accountable local government
structure instituted through a system of decentralization whereby local government units shall be given
more powers, authority, responsibilities, and resources. The process of decentralization shall proceed
from the national government to the local government units.

(b) It is also the policy of the State to ensure the accountability of local government units through the
institution of effective mechanisms of recall, initiative and referendum.

(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic
consultations with appropriate local government units, nongovernmental and people's organizations,
and other concerned sectors of the community before any project or program is implemented in their
respective jurisdictions.1awphil.net

c. Operative and decentralization ( Sec 3. LGC)


Section 3. Operative Principles of Decentralization. - The formulation and implementation of policies and
measures on local autonomy shall be guided by the following operative principles:

(a) There shall be an effective allocation among the different local government units of their respective
powers, functions, responsibilities, and resources;

(b) There shall be established in every local government unit an accountable, efficient, and dynamic
organizational structure and operating mechanism that will meet the priority needs and service
requirements of its communities;
(c) Subject to civil service law, rules and regulations, local officials and employees paid wholly or mainly
from local funds shall be appointed or removed, according to merit and fitness, by the appropriate
appointing authority;

(d) The vesting of duty, responsibility, and accountability in local government units shall be accompanied
with provision for reasonably adequate resources to discharge their powers and effectively carry out
their functions: hence, they shall have the power to create and broaden their own sources of revenue
and the right to a just share in national taxes and an equitable share in the proceeds of the utilization
and development of the national wealth within their respective areas;

(e) 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;

(f) Local government units may group themselves, consolidate or coordinate their efforts, services, and
resources commonly beneficial to them;

(g) The capabilities of local government units, especially the municipalities and barangays, shall be
enhanced by providing them with opportunities to participate actively in the implementation of national
programs and projects;

(h) There shall be a continuing mechanism to enhance local autonomy not only by legislative enabling
acts but also by administrative and organizational reforms;

(i) Local government units shall share with the national government the responsibility in the
management and maintenance of ecological balance within their territorial jurisdiction, subject to the
provisions of this Code and national policies;

(j) Effective mechanisms for ensuring the accountability of local government units to their respective
constituents shall be strengthened in order to upgrade continually the quality of local leadership;

(k) The realization of local autonomy shall be facilitated through improved coordination of national
government policies and programs an extension of adequate technical and material assistance to less
developed and deserving local government units;

(l) The participation of the private sector in local governance, particularly in the delivery of basic
services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for
sustainable development; and

(m) The national government shall ensure that decentralization contributes to the continuing
improvement of the performance of local government units and the quality of community life.

CASES:
1. Pimentel v. Aguirre GR 132988 July 19, 2000

FACTS:
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,attaching thereto his Petition in Intervention
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.

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 merely directs 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."

HELD:

Validity of AO 372 Insofar as LGUs Are Concerned

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, 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:

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

Extent of Local Autonomy

2. Limbona Vs Mangelin 170 SCRA 786 1989


3. San Juan vs. Civil Service Commission GR 92299 April 19, 1991
4. Cordillera Board Coalition vs COA Gr. 79956
5. Ganzon vs. CA GR. 93252
6. De Leon vs. Esguerra August 3, 1987

Scope of the Application


7. Chiongbian vs Orbes June 22 1995
8. Badua v Cordillera Bodong Association February 14, 1991
9. Cordillera Board Coalition vs COA GR 79965
10.Abbas vs. Comelec Nov 10, 1989

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