JAMES ANDREW L.

PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

PELAEZ vs AUDITOR GENERAL

15 SCRA 569 (1965)

FACTS:

The President of the Philippines, purporting to act pursuant to Section 68 of the Revised
Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating
thirty-three (33) municipalities.
Petitioner Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer, instituted the
present special civil action, for a writ of prohibition with preliminary injunction, against the
Auditor General, to restrain him, as well as his representatives and agents, from passing in audit
any expenditure of public funds in implementation of said executive orders and/or any
disbursement by said municipalities.
Petitioner alleges that said executive orders are null and void, upon the ground that said Section
68 has been impliedly repealed by Republic Act No. 2370 effective January 1, 1960 and
constitutes an undue delegation of legislative power. The third paragraph of Section 3 of
Republic Act No. 2370, reads: “Barrios shall not be created or their boundaries altered nor their
names changed except under the provisions of this Act or by Act of Congress.”
ISSUE/S:
Whether or not the power to create barrios has been duly delegated by Congress to the President
of the Philippines

RULINGS:
No. Although Congress may delegate to another branch of the Government the power to fill in
the details in the execution, enforcement or administration of a law, it is essential, to forestall a
violation of the principle of separation of powers, that said law: (a) be complete in itself — it
must set forth therein the policy to be executed, carried out or implemented by the delegate —
and (b) fix a standard — the limits of which are sufficiently determinate or determinable — to
which the delegate must conform in the performance of his functions.

Section 68 of the Revised Administrative Code does not meet these well settled requirements for
a valid delegation of the power to fix the details in the enforcement of a law. It does not
enunciate any policy to be carried out or implemented by the President. Neither does it give a
standard sufficiently precise to avoid the evil effects above referred to. Wherefore, the Executive
Orders in question are hereby declared null and void ab initio and the respondent permanently
restrained from passing in audit any expenditure of public funds in implementation of said
Executive Orders or any disbursement by the municipalities referred to.

Thus, the Executive Orders declared Null and Void ab initio.

DOCTRINE:
The authority to create municipal corporations is essentially legislative in nature. It is strictly a
legislative function or solely and exclusively the exercise of legislative power.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Sultan Osop B. Camid, petitioner, Vs. The Office Of The President, Department Of The
Interior And Local Government, Autonomous Region In Muslim Mindanao, Department
Of Finance, Department Of Budget And Management, Commission On Audit, And The
Congress Of The Philippines (House Of Representatives And Senate)
G.R. No. 161414 January 17, 2005

FACTS:

In 1965, an Executive Order issued by Pres. Macapagal creating the Municipality of Andong,
Lanao del Sur was declared by the Supreme Court as void as promulgated in its Pelaez v.
Auditor General ruling.

Camid alleges that although no person has been appointed, elected or qualified to serve any of
the elective local government positions in Andong, has metamorphosed into a full-blown
municipality with a complete set of officials appointed to handle essential services for the
municipality and its constituents. It has a high school, post office, DECS office and 17 “barangay
units” with respective chairmen.

Furthermore, its land area was recognized by the CENRO to have been created through the
voided EO 107 as well included in the as a municipality by the Provincial Statistics Office of
Marawi City. In Nov. 23, 2003, the DILG issued a certification which enumerates 18
municipalities as as “existing” municipalities” even though its creation were voided in the same
ruling that voided Andong’s creation as a municipality.

Camid as as a current resident of Andong, suing as a private citizen and taxpayer, alleges that
said certification results in an unequal treatment to the detriment of Andong as similarly situated
municipalities were recognized by DILG. He further alleges that Andong is already a “de facto
municipal corporation” similar to Municipality of San Andress in the case of Municipality of San
Narciso v. Hon. Mendez. Furthermore, he alleges that Andong is covered by Section 442(d) of
the LGC of 1991 which states that “Existing municipal districts organized pursuant to
presidential issuances or executive orders and which have their respective sets of elective
municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be
considered as regular municipalities.”

ISSUE/S:
1. Whether or not Andong is already a “de facto municipal corporation”
2. Whether a municipality whose creation by executive fiat was previously voided by this Court
may attain recognition in the absence of any curative or reimplementing statute.

RULING:

1. The Supreme Court did not rule on this issue as Camid failed to make a factual demonstration
of the continuous exercise by the municipal corporation of its corporate powers, as well as the
acquiescence thereto by the other instrumentalities of the state. Proper factual ascertainment is
important in the determination if a municipality is a de facto municipal corporation. It has been
opined that municipal corporations may exist by prescription where it is shown that the
community has claimed and exercised corporate functions, with the knowledge and acquiescence
of the legislature, and without interruption or objection for period long enough to afford title by
prescription. These municipal corporations have exercised their powers for a long period without
objection on the part of the government that although no charter is in existence, it is presumed
that they were duly incorporated in the first place and that their charters had been lost.

2. No. The power to create political subdivisions is a function of the legislature. It can legislate
curative laws, which in essence are retrospective, and aimed at giving "validity to acts done that
would have been invalid under existing laws, as if existing laws have been complied with," are
validly accepted in this jurisdiction, subject to the usual qualification against impairment of
vested rights. Thus, Pelaez and its offspring cases ruled that the President has no power to create

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

municipalities, yet limited its nullificatory effects to the particular municipalities challenged in
actual cases before this Court. However, with the promulgation of the Local Government Code
in 1991, the legal cloud was lifted over the municipalities similarly created by executive order
but not judicially annulled. The de facto status of such municipalities as San Andres, Alicia and
Sinacaban was recognized by this Court, and Section 442(b) of the Local Government Code
deemed curative whatever legal defects to title these municipalities had labored under.

DOCTRINE:
The President has no power to create municipalities.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Municipality of Jimenez vs Baz, Jr,

GR No. 105746, 02 December 1996

FACTS:

In 1949, pursuant to Executive Order (E.O) 258 of the President Quirino, the Municipality of
Sinacaban was created. Said order provided a technical description1 of Sinacaban’s metes and
bounds, according to which the Municipality would cut into the southern portion of the
Municipality of Jimenez.

In 1988, Pursuant to said technical description, Sinacaban laid with the Provincial Board a claim
to a portion of particular barrios. However, the Municipality of Jimenez, while conceding that
under E.O. 258 the disputed area is part of Sinacaban, asserted jurisdiction over the same areas
on the basis of an agreement it had entered into with the Sinacaban. Said agreement was
approved by the Provincial Board of Misamis Occidental, in its Resolution No. 77 which
provided that barrios Macabayao, Sitio Adorable and site as part of Jimenez.

The Provincial Board declared the disputed area part of Sinacaban. The resolution approving the
agreement between the municipalities was void because the Board had no power to alter the
boundaries as fixed in E.O. 258.

Jimenez files a petitioner for certiorari, mandamus, and prohibition with the RTC. Following the
Pelaez v. Auditor General doctrine, Jimenez contends that “the power to create municipalities is
essentially legislative, and consequently, Sinacaban, which was created by an executive order,
had no legal personality and no right to assert a territorial claim. RTC ruled in Sinacban’s favor.
That Sinacaban is a de facto corporation since it had completely organized itself even
prior to the Pelaez case and exercised corporate powers for forty years before the
existence was questioned;
That Jimenez did not have the legal standing to question the existence of Sinacaban, the
same being reversed to the State in quo warranto proceedings;
That Jimenez was estopped from questioning the legal existence of Sinacaban after
having entered into an agreement with it;
That any question as to Sinacaban’s legal existence has been cured by Sec 442(d) of the
LGC, which provides: Municipalities existing as of the date of the effectivity of this Code
shall continue to exist and operate as such

ISSUE/S:
1. WoN Sinacaban legally exists
2. WoN Sec. 442(d) of the LGC is invalid in failing to conform to the constitutional and statutory
requirement of plebiscite in the creation of new municipalities.
3. WoN the RTC erred in ordering a relocation survey of the boundary of Sinacaba.

RULING:

1. Yes, as a de facto corporations. Though, as ruled in Pelaez v. Auditor General, the creation
of municipal corporations is essentially a legislative matter and cannot be created by the
executive, the court has since held that where a municipality created as such by executive order
is later impliedly recognized, its creation can no longer be questioned.

In the case of Municipality of San Narciso, Quezon v. Mendez, Sr, the Supreme Court took
into consideration the following factors:
1. The fact that for nearly 30 years the validity of the creation of the municipality had
never been challenged;
2. The fact that following the ruling in Pelaez no quo warranto suit was filed to question
the validity of the executive order creating such municipality;
3. The fact that the municipality was later classified as a fifth class municipality in the
Constitution apportioning the seats in the House of Representatives.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

4. That the Sec. 442(d) of the LGC was curative.

The same factors exist to confer on Sinacaban the status of at least a de facto municipal
corporation. It must be kept in mind that Sinacaban was created in 1949, and it has therefore
been in existence for already 40 years before it was questioned. This is emphasized given that
Rule 66(16), on quo warranto suits against a corporation, must be commenced within 5 years
from the time the act complained of was done. On the contrary, the State and Jimenez itself has
recognized Sinacaban’s existence.

Judiciary Reorganization Act of 1980: Sinacaban is constituted as part of the municipal circuit
for purposes of the establishment of Municipal Circuit Trial Courts. Jimenez-Sinacaban
Agreement- Speaks for itself. Ordinance appended to the 1987 Constitution: Apportioning
legislative districts throughout the country, which considered Sinacaban part of the Second
District. Moreover, indeed, Sec. 442(d) of the LGC is deemed to have cured whatever doubts
there may have been to Sinacaban.

2. No. First of all, the requirement only applies to new municipalities created under the 1987
Constitution. Secondly, Sinacaban had attained de facto status at the time the 1987 Constitution
took effect. Thirdly, the requirement of plebiscite was first introduced in the 1973 Constitution
which took effect on January 17, 1973. It cannot, therefore, be applied to municipal corporations
created before, such as the municipality of Sinacaban (1949).

3. The barrios enumerated in E.O. 258 are not necessarily exclusive. “Sinacaban contains…”
may include others. Whether or not the agreement entered into by Jimenez and Sinacaban is
valid will be determined by the result of the survey. Pelaez v. Auditor General: Power of
provincial boards to settle boundary disputes is "of an administrative nature.” Thus it is limited
to implementing the law, and not amending it. If any alterations of boundaries were made,
Resolution 77 cannot be said to be merely administrative, nor valid. In gist, if Resolution 77 is
contrary to the technical description of the territory of Sinacaban, it cannot be used by Jimenez
as basis for opposing the claim.

DOCTRINE:
Creation of municipal corporations is essentially a legislative matter and cannot be created by the
executive.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

League of Cities vs COMELEC

G.R. No. 176951, November 18, 2008

Facts:

During the 11th Congress, Congress enacted into law 33 bills converting 33 municipalities into
cities. However, Congress did not act on bills converting 24 other municipalities into cities.
During the 12th Congress, Congress enacted into law Republic Act No. 9009 which took effect
on June 30, 2001. RA 9009 amended Section 450 of the Local Government Code by increasing
the annual income requirement for conversion of a municipality into a city from P20 million to
P100 million. After the effectivity of RA 9009, the House of Representatives of the 12th
Congress adopted Joint Resolution No. 29, which sought to exempt from the P100 million
income requirements in RA 9009 the 24 municipalities whose cityhood bills were not approved
in the 11th Congress. However, the 12th Congress ended without the Senate approving Joint
Resolution No. 29. During the 13th Congress, the House of Representatives re-adopted Joint
Resolution No. 29 as Joint Resolution No. 1 and forwarded it to the Senate for approval.
However, the Senate again failed to approve the Joint Resolution. Following the advice of
Senator Aquilino Pimentel, 16 municipalities filed, through their respective sponsors, individual
cityhood bills. The 16 cityhood bills contained a common provision exempting all the 16
municipalities from the P100 million income requirements in RA 9009. On December 22, 2006,
the House of Representatives approved the cityhood bills. The Senate also approved the cityhood
bills in February 2007, except that of Naga, Cebu which was passed on June 7, 2007. The
cityhood bills lapsed into law (Cityhood Laws) on various dates from March to July 2007
without the President's signature. The Cityhood Laws direct the COMELEC to hold plebiscites
to determine whether the voters in each respondent municipality approve of the conversion of
their municipality into a city. Petitioners filed the present petitions to declare the Cityhood Laws
unconstitutional for violation of Section 10, Article X of the Constitution, as well as for violation
of the equal protection clause. Petitioners also lament that the wholesale conversion of
municipalities into cities will reduce the share of existing cities in the Internal Revenue
Allotment because more cities will share the same amount of internal revenue set aside for all
cities under Section 285 of the Local Government Code.

ISSUES:
1. Whether the Cityhood Laws violate Section 10, Article X of the Constitution; and
2. Whether or not the Cityhood Laws violate the equal protection clause.

RULING:

1. The Cityhood Laws violate Sections 6 and 10, Article X of the Constitution, and are thus
unconstitutional.

2. Yes. There is no substantial distinction between municipalities with pending cityhood bills in
the 11th Congress and municipalities that did not have pending bills. The mere pendency of a
cityhood bill in the 11th Congress is not a material difference to distinguish one municipality
from another for the purpose of the income requirement. The pendency of a cityhood bill in the
11th Congress does not affect or determine the level of income of a municipality. Municipalities
with pending cityhood bills in the 11th Congress might even have lower annual income than
municipalities that did not have pending cityhood bills. In short, the classification criterion −
mere pendency of a cityhood bill in the 11th Congress − is not rationally related to the purpose of
the law which is to prevent fiscally non-viable municipalities from converting into cities.

During the 11th Congress, 57 bills seeking the conversion of municipalities into component
cities were filed before the House of Representatives. However, Congress acted only on 33 bills.
It did not act on bills converting 24 other municipalities into cities. During the 12th Congress,
R.A. No. 9009 became effective revising Section 450 of the Local Government Code. It
increased the income requirement to qualify for conversion into a city from P20 million annual

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

income to P100 million locally-generated income. In the 13th Congress, 16 of the 24

municipalities filed, through their respective sponsors, individual cityhood bills. Each of the
cityhood bills contained a common provision exempting the particular municipality from the 100
million income requirement imposed by R.A. No. 9009. Are the cityhood laws converting 16
municipalities into cities constitutional?

November 18, 2008 Ruling

No.
The SC (voting 6-5) ruled that the exemptions in the City Laws is unconstitutional because sec.
10, Art. X of the Constitution requires that such exemption must be written into the LGC and not
into any other laws. “The Cityhood Laws violate sec. 6, Art. X of the Constitution because they
prevent a fair and just distribution of the national taxes to local government units.” “The criteria,
as prescribed in sec. 450 of the LGC, must be strictly followed because such criteria prescribed
by law, are material in determining the “just share” of local government units (LGUs) in national
taxes.” (League of Cities of the Philippines v. Comelec GR No. 176951, November 18, 2008)

March 31, 2009 Ruling

No. The SC denied the first Motion for Reconsideration. 7-5 vote.

April 28, 2009 Ruling

No. The SC En Banc, by a split vote (6-6), denied a second motion for reconsideration.

December 21, 2009 Ruling

Yes. The SC (voting 6-4) reversed its November 18, 2008 decision and declared as constitutional
the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities into cities. It said that
based on Congress’ deliberations and clear legislative intent was that the then pending cityhood
bills would be outside the pale of the minimum income requirement of PhP100 million that
Senate Bill No. 2159 proposes; and RA 9009 would not have any retroactive effect insofar as the
cityhood bills are concerned. The conversion of a municipality into a city will only affect its
status as a political unit, but not its property as such, it added. The Court held that the favorable
treatment accorded the sixteen municipalities by the cityhood laws rests on substantial
distinction.
The Court stressed that respondent LGUs were qualified cityhood applicants before the
enactment of RA 9009. To impose on them the much higher income requirement after what they
have gone through would appear to be indeed unfair. “Thus, the imperatives of fairness dictate
that they should be given a legal remedy by which they should be allowed to prove that they
have all the necessary qualifications for city status using the criteria set forth under the LGC of
1991 prior to its amendment by RA 9009. (GR No. 176951, League of Cities of the Philippines v.
COMELEC; GR No. 177499, League of Cities of the Philippines v. COMELEC; GR No. 178056,
League of Cities of the Philippines v. COMELEC, December 21, 2009) NOTE: The November
18, 2008 ruling already became final and executory and was recorded in the SC’s Book of
Entries of Judgments on May 21, 2009.)

August 24, 2010 Ruling

No. The SC (voting 7-6) granted the motions for reconsideration of the League of Cities of the
Philippines (LCP), et al. and reinstated its November 18, 2008 decision declaring
unconstitutional the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities into
cities. “Undeniably, the 6-6 vote did not overrule the prior majority en banc Decision of 18
November 2008, as well as the prior majority en banc Resolution of 31 March 2009 denying
reconsideration. The tie-vote on the second motion for reconsideration is not the same as a tie-
vote on the main decision where there is no prior decision,” the Court said. In the latest
resolution, the Court reiterated its November 18, 2008 ruling that the Cityhood Laws violate sec.
10, Art. X of the Constitution which expressly provides that “no city…shall be created…except
in accordance with the criteria established in the local government code.” It stressed that while
all the criteria for the creation of cities must be embodied exclusively in the Local Government
Code, the assailed Cityhood Laws provided an exemption from the increased income
requirement for the creation of cities under sec. 450

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

of the LGC. “The unconstitutionality of the Cityhood Laws lies in the fact that Congress
provided an exemption contrary to the express language of the Constitutio. Congress exceeded
and abused its law-making power, rendering the challenged Cityhood Laws void for being
violative of the Constitution,” the Court held.

The Court further held that “limiting the exemption only to the 16 municipalities violates the
requirement that the classification must apply to all similarly situated. Municipalities with the
same income as the 16 respondent municipalities cannot convert into cities, while the 16
respondent municipalities can. Clearly, as worded the exemption provision found in the Cityhood
Laws, even if it were written in Section 450 of the Local Government Code, would still be
unconstitutional for violation of the equal protection clause.” (GR No. 176951, League of Cities
of the Philippines v. Comelec; GR No. 177499, League of Cities of the Philippines v. Comelec;
GR No. 178056, League of Cities of the Philippines v. Comelec, August 24, 2010)

February 15, 2011 Ruling

Yes, the laws are constitutional. The February 15, 2011 resolution is the fourth ruling since the
High Court first resolved the Cityhood case in 2008.

April 12, 2011Ruling

Yes! It’s final. The 16 Cityhood Laws are constitutional. “We should not ever lose sight of the
fact that the 16 cities covered by the Cityhood Laws not only had conversion bills pending
during the 11th Congress, but have also complied with the requirements of the [Local
Government Code] LGC prescribed prior to its amendment by RA No. 9009. Congress
undeniably gave these cities all the considerations that justice and fair play demanded. Hence,
this Court should do no less by stamping its imprimatur to the clear and unmistakable legislative
intent and by duly recognizing the certain collective wisdom of Congress,” the SC said.
The Court stressed that Congress clearly intended that the local government units covered by the
Cityhood Laws be exempted from the coverage of RA 9009, which imposes a higher income
requirement of PhP100 million for the creation of cities.
“The Court reiterated that while RA 9009 was being deliberated upon, the Congress was well
aware of the pendency of conversion bills of several municipalities, including those covered by
the Cityhood Laws. It pointed out that RA 9009 took effect on June 30, 2001, when the 12th
Congress was incipient. By reason of the clear legislative intent to exempt the municipalities
covered by the conversion bills pending during the 11th Congress, the House of Representatives
adopted Joint Resolution No. 29 entitled Joint Resolution to Exempt Certain Municipalities
Embodied in Bills Filed in Congress before June 30, 2001 from the coverage of Republic Act
No. 9009. However, the Senate failed to act on the said Joint Resolution. Even so, the House
readopted Joint Resolution No. 29 as Joint Resolution No. 1 during the 12th Congress, and
forwarded the same for approval to the Senate, which again failed to prove it. Eventually, the
conversion bills of respondents were individually filed in the Lower House and
fellesters.blogspot.com were all unanimously and favorably voted upon. When forwarded to the
Senate, the bills were also unanimously approved. The acts of both Chambers of Congress show
that the exemption clauses ultimately incorporated in the Cityhood Laws are but the express
articulations of the clear legislative intent to exempt the respondents, without exception, from the
coverage of RA No. 9009. Thereby, RA 9009, and, by necessity, the LCG, were amended, not by
repeal but by way of the express exemptions being embodied in the exemption clauses.”
The Court held that the imposition of the income requirement of P100 million from local sources
under RA 9009 was arbitrary. “While the Constitution mandates that the creation of local
government units must comply with the criteria laid down in the LGC, it cannot be justified to
insist that the Constitution must have to yield to every amendment to the LGC despite such
amendment imminently producing effects contrary to the original thrusts of the LGC to promote
autonomy, decentralization, countryside development, and the concomitant national growth.”
(GR No. 176951, League of City of the Philippines v. COMELEC; GR No. 177499, League of
City of the Philippines v. COMELEC: GR No. 178056, League of City of the Philippines v.
COMELEC, April 12, 2011)

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Alvarez vs. Guingona

31 JANUARY 1996

FACTS:

The petitioners, led by Sen. Heherson Alvarez, seek to question the constitutionality of
R.A. 7720, which was an act converting the municipality of Santiago to an Independent
Component City, because:
1. The Act allegedly did not originate exclusively in the House of Representatives,
as mandated by Article 6, Sec. 24 of the Constitution;
2. The Municipality of Santiago has not met the minimum average income
required under Sec. 450 of the LGC to be converted into a component city.

R.A. 7720 became such after the following processes:

1. On 18 April 1993, House Bill 8817, principally authored by
Cong. Abaya, was filed in the HRep.
2. On 5 May, 1993, the bill was referred to the House Committee on Local
Governments and House Committee on Appropriations.
3. Three public hearings were subsequently held by the
committee and by 9 December 1993, the committee submitted a favourable
report.
4. On 13 December, the bill was passed on second reading,
and on 17 December, was approved on third reading.
5. On 28 January 1994, the bill was transmitted to the Senate.
6. Concurrently with the HRep, a Senate Bill was also filed in the Senate on 19 May
1993, by Sen. Vicente Sotto III. This was introduced shortly after the first reading of the
House
bill.
7. On 23 February 1994, the Senate conducted public hearings on the Senate Bill.
On March 1, the committee submitted a favourable report saying that House Bill 8817
was the same with the Senate bill anyway. Sen. Alvarez was one of those who approved
the report as member of the Committee of Local Governments.
8. On 3 March 1994, the senate bill was passed on second reading, and on 14 March,
was approved on third reading. After this, the HRep approved the amendments made by
the Senate.
9. On 12 April 1994, the enrolled bill was submitted to the President, and was signed
by the Chief Executive on 5 May1994 as R.A. 7720.
10. On 13 July 1994, a plebiscite was held and a great majority of the registered voters
of Santiago voted in favour of the conversion of Santiago into a city.

ISSUE/S:
The issues as to the validity of R.A. 7720 are:
1. Are the Internal Revenue Allotments (IRA) to be included in the computation of the
average annual income of a municipality for purposes of converting it into an independent
component city?

2. Considering that the Senate passed its own version of the House Bill, can RA 7720 be
considered to have originated from the House?

RULING:

1. The annual income of an LGU includes the IRA.

2. RA 7720 was compliant with Art. 6, Sec. 24 of the
Constitution.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Petitioners contend that Santiago could not qualify as a component city because its
average annual income for the last 2 consecutive years based on the 1991 constant prices, fall
below the required annual income of P20M to be converted into a city.
They computed Santiago’s average annual income by adding the total income of Santiago for
1991 and 1992, deducting the IRA for both years, and then dividing the result by two to get the
average of the two years. The computation resulted with P13M. This is below the requirement
for component cities.

Petitioners contend that the DOF’s certification saying that Santiago’s income is P21M is
allegedly not accurate because in their computation, the IRAs were not excluded. (Note: The
income must be duly certified by the DOF)

Petitioners insist that IRAs are not income but are transfers and/or budgetary aid from the
national government and that they fluctuate, increase or decrease, depending on factors such as
population, land and equal sharing.

The petitioners are wrong. IRAs are part of an LGU’s income.

To resolve this, the SC defined IRAs vis-à-vis the notion of income of an LGU and the principles
of autonomy and decentralization underlying the institutionalization and intensified
empowerment of the local government system.

An LGU is a political subdivision of the State. It is constituted by law, and possessed of

substantial control over its own affairs. It remains to be an intra-sovereign subdivision of one
sovereign nation, but it is not intended to be an imperium in imperio.

An LGU is autonomous in the sense that it is given more powers, authority, responsibilities and
resources. Power is deconcentrated, enabling peripheral LGUs to develop not only at their own
pace and discretion, but also with their own resources and assets.

At the practical side of a decentralized local government system is matters of financial

resources. With more power and responsibility, an LGU operates on a wider scale, and thus,
more expenses are entailed. Thus, more resources are needed for it to discharge its function. To
avail such resources, an LGU is vested with:
1. The right to create and broaden its own source of revenue
2. The right to be allocated with a just share in national taxes (the share being the
IRA)
3. The right to be given its equitable share in the proceeds
of the utilization and development of national wealth, if any, within its territorial
boundaries.

Funds from local taxes, IRAs and national wealth proceeds accrue to the general fund of the
local government and are used to finance its operations subject to specified modes of spending as
specified in the LGC and its IRR. For example, not less than 20% of the IRA must be set aside
for local development projects.

With all these in mind, for purposes of budget preparation, IRAs and the share in national wealth
proceeds are considered items of income. Besides, income is defined in the LGC as “all revenues
and receipts collected or received forming the gross accretions of funds of the LGU.”

IRAs are items of income because they form part of the gross accretion of funds of the LGU.
IRAs regularly and automatically accrue to the local treasury without need of any further
action on the part of the LGU. They thus constitute income with the LGU can rely upon for
funds. The DOF included the IRA in their computation of the LGU’s average annual income
and it was right.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Futhermore, Sec. 450(c) of the LGC provides that the average annual income shall include
the income accruing to the general fund, exclusive of special funds, transfers and non-recurring
income. IRAs are regular and recurring. It is not a special fund. It has its own meaning in the
LGC (“funding support from the national government, its instrumentalities and GOCCs”)
making it distinct from special funds or transfers.
Therefore, the DOF Order certifying the income of Santiago by including the IRAs, and
excluding non-recurring receipts such as national aids, grants, financial assistance, loan
proceeds, sale of fixed assets, etc is correct. The order must be accorded with great weight.

As to how RA 7220 was passed, it was compliant with the Constitution

The House bill was filed first than the Senate Bill. The House Bill initiated the legislative
process, so there was violation of Sec. 24, Article 6. Besides, when the Senate Bill was
dependent on the House Bill. The Senate held in abeyance any action on the Senate Bill until it
received the House Bill.

Filing a substitute bill in the Senate in anticipation of the receipt of the bill from the house does
not contravene the constitutional requirement that a bill of local application should originate
from the House, for as long as the Senate does not act upon it until it receives a House bill.

This issue was already addressed in Tolentino vs Secretary of Finance, which involved the E-
VAT Law which originated as a revenue bill which must come from the House. In the case, the
court emphasized that the bill from the House may undergo extensive changes in the Senate such
that an entirely new bill may be produced. To insist that the statute should be substantially the
same as the House bill is to deny the Senate's power not only to concur with amendments but to
propose amendments.

What the Constitution simply means is that the initiative for filing bills of local application must
come from the House on the theory that members of the House can be expected to be more
sensitive to local needs and problems, since they are elected from districts. Senators, on the other
hand, are expected to approach the problem from a national perspective.

Besides, every law has in its favour the presumption of constitutionality. For RA 7220
to be nullified, there must be an unequivocal breach of the Constitution. Its
unconstitutionality must be clearly established. In this case, petitioners failed to overcome
the presumption.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Mariano v COMELEC
G.R. No. 118577 March 7, 1995, 242 SCRA 211

FACTS:

This is a petition for prohibition and declaratory relief filed by petitioners Juanito Mariano, Jr.,
Ligaya S. Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo Pascual, Teresita
Abang, Valentina Pitalvero, Rufino Caldoza, Florante Alba, and Perfecto Alba. Of the
petitioners, only Mariano, Jr., is a resident of Makati. The others are residents of Ibayo Ususan,
Taguig, Metro Manila. Suing as taxpayers, they assail sections 2, 51, and 52 of Republic Act No.
7854 as unconstitutional.

ISSUE/S:
Whether or not there is an actual case or controversy to challenge the constitutionality of one of
the questioned sections of R.A. No. 7854.

RULINGS:
The requirements before a litigant can challenge the constitutionality of a law are well
delineated. They are: 1) there must be an actual case or controversy; (2) the question of
constitutionality must be raised by the proper party; (3) the constitutional question must be raised
at the earliest possible opportunity; and (4) the decision on the constitutional question must be
necessary to the determination of the case itself.

Petitioners have far from complied with these requirements. The petition is premised on the
occurrence of many contingent events, i.e., that Mayor Binay will run again in this coming
mayoralty elections; that he would be re-elected in said elections; and that he would seek re-
election for the same position in the 1998 elections. Considering that these contingencies may or
may not happen, petitioners merely pose a hypothetical issue which has yet to ripen to an actual
case or controversy. Petitioners who are residents of Taguig (except Mariano) are not also the
proper partiesto raise this abstract issue. Worse, they hoist this futuristic issue in a petition for
declaratory relief over which this Court has no jurisdiction.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Cawaling vs COMELEC
G.R. No. 146319, October 26, 2001
FACTS:

Aug 16, 2000: Pres. Estrada signed into law RA 8806: An Act Creating the City of Sorsogon by
Merging the Municipalities of Bacon and Sorsogon in the Province of Sorsogon…16 Dec 2000:
COMELEC conducted a plebiscite in the municipalities 17 Dec 2000: Plebiscite City Board of
Canvassers proclaimed the creation of the City of Sorsogon

Cawaling filed this petition for certiorari, which challenged the law on the ff grounds:
1. The plebiscite was conducted beyond the 120-day period from the approval of RA
8806, violating Sec. 54 of the LGC;
2. It violates Sec. 450 (a) of the LGC which requires that only “a municipality or a
cluster of barangays may be converted into a component city;”
3. It contains two subjects: Creation of the City of Sorsogon and the abolition of the
two municipalities.

ISSUE:
WON RA 8806 violated the Constitution and the LGC.

RULINGS:

NO. RA 8806 is Constitutional.

The phrase “A municipality or a cluster…” is not a criterion but just one of the modes by which
a city may be created. Sec. 10 Art. X of the Constitution allows the merger of LGUs to create a
province, city, municipality, or barangay in accordance with LGC standards.

The creation of an entirely new LGU through a division or a merger of existing LGUs is
recognized under the Consti so long as it complies with the standards set by the LGC. In
response to Cawaling’s argument that there is no “compelling reason” merge the two
municipalities, the Court stated that it could not pass upon the wisdom of RA 8806; The word
“approval” in Sec. 54 of RA 8806, which should be read together with Sec. 65 thereof, could
only mean “effectivity” as used and contemplated in Sec. 10 of the Code.

The law was first published in 25 Aug 2000 issue of TODAY. The publication of the law was
completed on 1 Sept 2000, which should be the reckoning point in determining the 120-day
period within which to conduct the plebiscite.

COMELEC: Since publication is indispensable for the effectivity of a law, it could only schedule
the plebiscite after the Act took effect.

As to the failure of the COMELEC to conduct an intensive info campaign, the Court said
that no proof was presented by the petitioner to substantiate his claim. There is the presumption
that COMELEC regularly performed its duty under the law in conducting the plebiscite.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Cagas vs COMELEC
G.R. No. 209185, October 25, 2013

FACTS:

Cagas, while he was representative of the first legislative district of Davao del Sur, filed with
Hon. Franklin Bautista, then representative of the second legislative district of the same
province, House Bill No. 4451 (H.B. No. 4451), a bill creating the province of Davao
Occidental. H.B. No. 4451 was signed into law as Republic Act No. 10360 (R.A. No. 10360), the
Charter of the Province of Davao Occidental. Section 46 of R.A. No. 10360 provides for the date
of the holding of a plebiscite. Sec. 46. Plebiscite. The Province of Davao Occidental shall be
created, as provided for in this Charter, upon approval by the majority of the votes cast by the
voters of the affected areas in a plebiscite to be conducted and supervised by the Commission on
Elections (COMELEC) within sixty (60) days from the date of the effectivity of this Charter. As
early as 27 November 2012, prior to the effectivity of R.A. No. 10360, the COMELEC
suspended the conduct of all plebiscites as a matter of policy and in view of the preparations for
the 13 May 2013 National and Local Elections. During a meeting held on 31 July 2013, the
COMELEC decided to hold the plebiscite for the creation of Davao Occidental simultaneously
with the 28 October 2013 Barangay Elections to save on expenses. Cagas filed a petition for
prohibition, contending that the COMELEC is without authority to amend or modify section 46
of RA 10360 by mere resolution because it is only Congress who can do so thus, COMELEC's
act of suspending the plebiscite is unconstitutional.

ISSUE:

Whether or not the COMELEC act without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction when it resolved to hold the plebiscite for
the creation of the Province of Davao Occidental on 28 October 2013, simultaneous with the
Barangay Elections?

RULINGS:

No. The petition is dismissed for lack of merit.

The COMELEC’s power to administer elections includes the power to conduct a plebiscite
beyond the schedule prescribed by law. The conduct of a plebiscite is necessary for the creation
of a province. Sections 10 and 11 of Article X of the Constitution provide that:

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance with the criteria established
in the local government code and subject to approval by a majority of the votes cast in a
plebiscite in the political units directly affected.

Sec. 11. The Congress may, by law, create special metropolitan political subdivisions, subject toa
plebiscite as set forth in Section 10 hereof. The component cities and municipalities shall
retaintheir basic autonomy and shall be entitled to their own local executive and legislative
assemblies.The jurisdiction of the metropolitan authority that will thereby be created shall be
limited to basic services requiring coordination.

Section 10, Article X of the Constitution emphasizes the direct exercise by the people of their
sovereignty. After the legislative branch’s enactment of a law to create, divide, merge or alter the
boundaries of a local government unit or units, the people in the local government unit or units
directly affected vote in a plebiscite to register their approval or disapproval of the change.

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JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

The Constitution does not specify a date as to when plebiscites should be held. This is in contrast
with its provisions for the election of members of the legislature in Section 8, 4, Article VII. The
Constitution recognizes that the power to fix date of elections is legislative in nature, which is
shown by the exceptions in previously mentioned Constitutional provisions, as well as in the
election of local government officials.

Page 15 of 17
JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

CITY OF PASIG, petitioner, vs. THE HONORABLE COMMISSION ON

ELECTION and THE MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL,
respondents. [G.R. No. 128663. September 10, 1999] MUNICIPALITY OF CAINTA,
PROVINCE OF RIZAL, petitioner, vs. COMMISSION ON ELECTIONS CITY OF
PASIG, respondent. Ynares-Santiago, J
G.R. No. 125646. September 10, 1999

Two ordinances were issued by the City of Pasig for the creation of Barangays Karangalan and
Napico. The municiplaity of Cainta moved to suspend or cancel the scheduled plebiscites in view
of a pending case for settlement of boundary dispute. The petition alleged that some of the areas
included in the proposed Barangays encroached upon areas within its own jurisdiction/territory.
SC held that the holding of the plebiscites should be suspended. A requisite for the creation of a
barangay is for its territorial jurisdiction to be properly identified by metes and bounds or by
more or less permanent natural boundaries. Precisely because territorial jurisdiction is an issue
raised in the pending civil case, until and unless such issue is resolved with finality, to define the
territorial jurisdiction of the proposed barangays would only be an exercise in futility. The Court
also would be paving the way for potentially ultra vires acts of such barangays. Furthermore, the
Court did not agree that merely because a plebiscite had already been held in the case of the
proposed Barangay Napico, the petition of the Municipality of Cainta has already been rendered
moot and academic. The Supreme Court, therefore, ruled that the plebiscite on the creation of
Barangay Karangalan should be held in abeyance pending final resolution of the boundary
dispute between the City of Pasig and Municipality of Cainta by the RTC of Antipolo City. In
the same vein, the plebiscite held to ratify the creation of Barangay Napico, Pasig City, should be
annulled and set aside.

Apr 22, 1996 – Upon petition of the residents of Karangalan Village that they be segregated from
its mother Barangays Manggahan and Dela Paz in City of Pasig, and to be converted into a
distinct barangay (to be known as Barangay Karangalan), the City Council of Pasig passed &
approved Ordinance No. 21, Series of 1996 creating Barangay Karangalan in Pasig City.
Plebiscite on the creation of said barangay was set for 22 June 1996. 2) 9 Sept 1996 – City of
Pasig similarly issued on 9 Sept 1996 Ordinance No. 52, Series of 1996 creating Barangay
Napico in Pasig City. Plebiscite was set for 15 March 1997. 3) Immediately upon learning of said
ordinances, Municipality of Cainta moved to suspend or cancel the respective plebsicites
scheduled, and filed petitions with the COMELEC calling its attention to a pending case before
RTC Antipolo, Rizal, Br 74 for settlement of boundary dispute. The proposed barangays involve
areas included in the boundary dispute subject of the pending case; hence, the scheduled
plebiscites should be suspended or cancelled until after the said case shall have been finally
decided by the court. 4) In one petition, COMELEC ordered the plebisicite on the creation of
Barangay Karangalan be held in abeyance until after the court has settled with finality the
boundary dispute. However, it ruled differently in the other petition, dismissing the petition for
being moot in view of the holding of the plebiscite as scheduled where the creation of Barangay
Napico was ratified and approved by the majority of the votes cast therein.

ISSUE:
W/N the plebiscites scheduled for the creation of Barangays Karangalan and Napico
should be suspended or cancelled in view of the pending boundary dispute between the two local
governments

RULINGS:

YES. SC agreed with the position of the COMELEC that the case before RTC presents a
prejudicial question which must first be decided before plebiscites for the creation of the
proposed barangays may be held.

Pasig: there is no prejudicial question since the same contemplates a civil & criminal action, and
does not come into play where both cases are civil. SC: While this may be the general rule, the

Page 16 of 17
JAMES ANDREW L. PATACSIL
Juris Doctor III
Local Government- Creation and Conversion of Local Government Units

Court has held in Vidad v. RTC of Negros Oriental, Br 42 that, in the interest of good order, we
can very well suspend action on one case pending the final outcome of another case closely
interrelated or linked to the first. While the City of Pasig vigorously claims that the areas covered
by the proposed Barangays Karangalan and Napico are within its territory, it cannot deny that
portions of the same area are included in the boundary dispute case pending before RTC
Antipolo, the decision of which has material bearing on the creation of the proposed barangays.
Indeed, a requisite for the creation of a barangay is for its territorial jurisdiction to be properly
identified by metes and bounds or by more or less permanent natural boundaries. Precisely
because territorial jurisdiction is an issue raised in the pending civil case, until and unless such
issue is resolved with finality, to define the territorial jurisdiction of the proposed barangays
would only be an exercise in futility.

Not only that, we would be paving the way for potentially ultra vires acts of such
barangays. (The decision quoted a portion from Mariano, Jr. v. COMELEC saying something
roughly similar) Considering the expenses entailed in the holding of plebiscites, it is far more
prudent to hold in abeyance its conduct, pending final determination of W/N the entire area of
the proposed barangays are truly within the jurisdiction of the City of Pasig. Pasig: Because a
plebiscite had already been held in the case of proposed Barangay Napico, the petition of
Municipality of Cainta had already been rendered moot and academic.

NO! The issues raised by the Municipality of Cainta in its petition before the COMELEC
against the holding of the plebiscite for the creation of Barangay Napico are still pending
determination before the Antipolo Regional Trial Court.

Tan v. COMELEC it was ruled that Considering that the legality of the plebiscite itself
is challenged for non-compliance with constitutional requisites, the fact that such plebiscite had
been held and a new province proclaimed and its officials appointed, the case before Us cannot
truly be viewed as already moot and academic. Continuation of the existence of this newly
proclaimed province which petitioners strongly profess to have been illegally born, deserves to
be inquired into by this Tribunal so that, if indeed, illegality attaches to its creation, the
commission of that error should not provide the very excuse for perpetration of such wrong.

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