KLMNotes_Political Law_Law of Public Corporation

TOPICS
I. Where does the Law on Public Corporation belong in the study of law?
Political Law. Definition/Characteristics. Subdivisions. (The Local Government Code [LGC] of 1991
Annotated, Fifth Edition, Rufus B. Rodriguez;

 The People of the Philippine Islands vs. Gregorio Perfecto

- Political law is that branch of public law which deals with the organization and operation of the
government organs of the state and defines the relations of the state with the inhabitants of its territory.

- It is a general principle of the public law that on acquisition of territory the previous political relations
of the ceded region are totally abrogated. "Political" is here used to denominate the laws regulating the
relations sustained by the inhabitants to the sovereign.

- Every nation acquiring territory by treaty or otherwise, must hold it subject to the Constitution and
laws of its own government and not according to those of the government, and not according to those of
the governments ceding it.

 Political Law's subdivisions:

1. Constitutional Law
2. Administrative Law
3. Law of Public Officers
4. Law of Public Corporation

II. What is the nature of the public corporation that is the focus of the study?
 Corporation- is an artificial being created by operation of law, having the right of succession and
the powers, attributes and properties expressly authorized by law or incident to its existence

 Classes of Corporation
1. Public Corporation
-

-is one formed or organized for the governmental portion of a state.

-it is created by the state as its own agency for the accomplishment of parts of its own public works.

2. Private Corporation
- those formed for some private purpose, benefits, aim or end

Public Corp. vs Private Corp.

Public Corporation
Purpose purposes connected with
the administration of civil
or local governments
Creation by general or special act
Constitutio involuntary consequence
n of legislation
Private Corporation
Private aim, gains or
benefits of its members
by will of the incorporators
voluntary agreement by
and among its members

 Classes of Public Corporation:

1. Quasi-public Corporation
-created as agencies of the state for narrow and limited purposes without the powers and
liabilities of self-governing corporation.
-renders public service or supply public wants.

2. Municipal Corporation
-a body politic and corporate constituted by the incorporation of the inhabitants for purposes of
local government thereof.
-is established by law partly as an agency of the state to assist in the civil government, but
chiefly regulate and administer the local or internal affairs of the city, town or district which is
incorporated.

 Elements of Municipal Corporation:

1. Legal creation or incorporation
2. Corporate name
3. Inhabitants
4. Territory

 Executive Order [EO] No. 292, Administrative Code of 1987, Introductory Provisions, Sec 2,
 Par. 13
Government-owned or controlled corporation
>refers to any agency organized as a stock or non-stock corporation,
>vested with functions relating to public needs whether governmental or proprietary in nature,
>and owned by the Government directly or through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per cent of its
capital stock:
>Provided, That government-owned or controlled corporations may be further categorized by the
Department of the Budget, the Civil Service Commission, and the Commission on Audit for
purposes of the exercise and discharge of their respective powers, functions and responsibilities
with respect to such corporations.

 Republic Act [RA] No. 10149, GOCC Governance Act of 2011, Chapter I, Sec 3, Pars. (o),(n),
(m);
(m) Government Financial Institutions (GFIs) refer to financial institutions or corporations in
which the government directly or indirectly owns majority of the capital stock and. which are either:
(1) registered with or directly supervised by the Bangko Sentral ng Pilipinas; or (2) collecting or
transacting funds or contributions from the public and places them in financial instruments or assets
such as deposits, loans, bonds and equity including, but not limited to, the Government Service
Insurance System and the Social Security System.

(n) Government Instrumentalities with Corporate Powers (GICP)/Government Corporate

Entities (GCE) refer to instrumentahties or agencies of the government, which are neither
corporations nor agencies integrated within the departmental framework, but vested by law with
special functions or jurisdiction, endowed with some if not all corporate powers, administering
special funds, and enjoying operational autonomy usually through a charter including, but not
limited to, the following: the Manila International Airport Authority (MIAA), the Philippine Ports
Authority (PPA), the Philippine Deposit Insurance Corporation (PDIC), the Metropolitan
Waterworks and Sewerage System (MWSS), the Laguna Lake Development Authority (LLDA), the
Philippine Fisheries Development Authority (PFDA), the Bases Conversion and Development
Authority (BCDA), the Cebu Port Authority (CPA), the Cagayan de Orb Port Authority, the San
Fernando Port Authority, the Local Water Utilities Administration (LWUA) and the Asian
Productivity Organization (APO).

(o) Government-Owned or -Controlled Corporation (GOCC) refers to any agency organized as

a stock or nonstock corporation, vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the Government of the Republic of the
Philippines directly or through its instrumentahties either wholly or, where applicable as in the case
of stock corporations, to the extent of at least a majority of its outstanding capital stock: Provided,
however, That for purposes of this Act, the term “GOCC”- shall include GICP/GCE and GFI as
defined herein.

 Norberto Asuncion, et al. vs. Manuel De Yriarte,

-If there is any public property situated in the barrio of Pulo or San Miguel not belonging to the
general government or the province, it belongs to the municipality of Pasig and the sole authority to
manage and administer the same resides in that municipality. Until the present laws upon the
subject are charged no other entity can be the owner of such property or control or administer it.
-The object of the proposed corporation, as appears from the articles offered for registration, is to
make the barrio of Pulo or San Miguel a corporation which will become the owner of and have the
right to control and administer any property belonging to the municipality of Pasig found within the
limits of that barrio. This clearly cannot be permitted. Otherwise municipalities as now established
by law could be deprived of the property which they now own and administer. Each barrio of the
municipality would become under the scheme proposed, a separate corporation, would take over
the ownership, administration, and control of that portion of the municipal territory within its
limits. This would disrupt, in a sense, the municipalities of the Islands by dividing them into a
series of smaller municipalities entirely independent of the original municipality.

 Engr. Ranulfo C. Feliciano vs. COA

-LWDs exist by virtue of PD 198, which constitutes their special charter. Since under the
Constitution only government-owned or controlled corporations may have special charters, LWDs
can validly exist only if they are government-owned or controlled. To claim that LWDs are private
corporations with a special charter is to admit that their existence is constitutionally infirm.
-Unlike private corporations, which derive their legal existence and power from the Corporation
Code, LWDs derive their legal existence and power from PD 198. LWDs exist as corporations only
by virtue of PD 198, which expressly confers on LWDs corporate powers. Section 6 of PD 198
provides that LWDs "shall exercise the powers, rights and privileges given to private corporations
under existing laws." Without PD 198, LWDs would have no corporate powers.
 -The phrase "government-owned and controlled corporations with original charters" means GOCCs
created under special laws and not under the general incorporation law. There is no difference
between the term "original charters" and "special charters."

 Boy Scouts of the Philippines vs. COA

-There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as
presently constituted under Republic Act No. 7278, falls under the second classification. Article 44
reads:
Art. 44. The following are juridical persons:
1. xx
2. Other corporations, institutions and entities for public interest or purpose created by law; their
personality begins as soon as they have been constituted according to law;3. Xx

-The BSP, which is a corporation created for a public interest or purpose, is subject to the law
creating it under Article 45 of the Civil Code, which provides that juridical persons mentioned in
Nos. 1 and 2 in Article 44 are governed by the laws creating or recognizing them.
-As an attached agency, the BSP enjoys operational autonomy, as long as policy and program
coordination is achieved by having at least one representative of government in its governing
board, which in the case of the BSP is the DECS Secretary. In this sense, the BSP is not under
government control or "supervision and control." Still this characteristic does not make the attached
chartered agency a private corporation covered by the constitutional proscription in question.
- The Constitution emphatically prohibits the creation of private corporations except by a general
law applicable to all citizens (Article XII, Section 16). The said constitutional provision should not
be construed so as to prohibit the creation of public corporations or a corporate agency or
instrumentality of the government intended to serve a public interest or purpose, which should not
be measured on the basis of economic viability, but according to the public interest or purpose it
serves.

 Philippine Society for the Prevention of Cruelty to Animals vs. COA

-The “charter test” provides that the test to determine whether a corporation is government owned
or controlled, or private in nature is simple. Is it created by its own charter for the exercise of a
public function, or by incorporation under the general corporation law?
-Those with special charter are government corporations subject to its provisions, and its employees
are under the jurisdiction of the CSC, and are compulsory members of the GSIS.
-The fact that a certain juridical entity is impressed with public interest does not, by that
circumstance alone, make the entity a public corporation, inasmuch as a corporation may be private
although its charter contains provisions of a public character, incorporated solely for the public
good. This class of corporations may be considered quasi-public corporations, which are private
corporations that render public service, supply public wants, or pursue other eleemosynary
objectives. While purposely organized for the gain or benefit of its members, they are required by
law to discharge functions for the public benefit.
-It must be stressed that a quasi-public corporation is a species of private corporations, but the
qualifying factor is the type of service the former renders to the public: if it performs a public
service, then it becomes a quasi-public corporation. Authorities are of the view that the purpose
alone of the corporation cannot be taken as a safe guide, for the fact is that almost all corporations
are nowadays created to promote the interest, good, or convenience of the public.
-The true criterion, therefore, to determine whether a corporation is public or private is found in the
totality of the relation of the corporation to the State. If the corporation is created by the State as
the latter’s own agency or instrumentality to help it in carrying out its governmental functions, then
that corporation is considered public; otherwise, it is private. Applying the above test, provinces,
chartered cities, and barangays can best exemplify public corporations. They are created by the
State as its own device and agency for the accomplishment of parts of its own public works.
-By virtue of the fiction that all corporations owe their very existence and powers to the State, the
reportorial requirement is applicable to all corporations of whatever nature, whether they are
public, quasi-public, or private corporations—as creatures of the State, there is a reserved right in
the legislature to investigate the activities of a corporation to determine whether it acted within its
powers. In other words, the reportorial requirement is the principal means by which the State may
see to it that its creature acted according to the powers and functions conferred upon it.

 Municipality of Jimenez vs. Hon. Vicente T. Baz, Jr., et al

- The principal basis of the view that Sinacaban was not validly created as a municipal corporation
is that the creation of municipal corporations is essentially a legislative matter and therefore the
President was without power to create by executive order the Municipality of Sinacaban. However,
where a municipality created as such by executive order is later impliedly recognized and its acts
are accorded legal validity, its creation can no longer be questioned.
-Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987
Constitution, apportioning legislative districts throughout the country, which considered Sinacaban
 part of the Second District of Misamis Occidental. Moreover, Sec. 442(d) of the Local Government
Code of 1991 must be deemed to have cured any defect in the creation of Sinacaban.
-Sinacaban had attained de facto status at the time the 1987 Constitution took effect, it is not
subject to the plebiscite requirement. This requirement applies only to new municipalities created
for the first time under the 1987 Constitution. It cannot, therefore, be applied to municipal
corporations created before, such as Sinacaban.
-The power of provincial boards to settle boundary disputes is "of an administrative nature
involving the adoption of means and ways to carry into effect the law creating said municipalities."
It is a power "to fix common boundaries, in order to avoid or settle conflicts of jurisdiction between
adjoining municipalities." It is thus limited to implementing the law creating a municipality. It is
obvious that any alteration of boundaries that is not in accordance with the law creating a
municipality is not the carrying into effect of that law but its amendment. If, therefore, Resolution
No. 77 of the Provincial Board of Misamis Occidental is contrary to the technical description of the
territory of Sinacaban, it cannot be used by Jimenez as basis for opposing the claim of Sinacaban.

 Manuel M. Leyson, Jr. vs. Office of the Ombudsman, et al

-The definition of "government owned or controlled corporation" contained in par. (13), Sec. 2,
Introductory Provisions of the Administrative Code of 1987, i. e., any agency organized as a stock
or non-stock corporation vested with functions relating to public needs whether governmental or
proprietary in nature, and owned by the Government directly or through its instrumentalities either
wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one
(51) percent of its capital stock.
- The definition mentions three (3) requisites, namely, first, any agency organized as a stock or
non-stock corporation; second, vested with functions relating to public needs whether governmental
or proprietary in nature; and, third, owned by the Government directly or through its
instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the
extent of at least fifty-one (51) percent of its capital stock.
- There is no showing that GRANEXPORT and/or UNITED COCONUT was vested with functions
relating to public needs whether governmental or proprietary in nature unlike PETROPHIL in
Quimpo. The Court thus concludes that the CIIF companies are, as found by public respondent,
private corporations not within the scope of its jurisdiction.

 Remedios T. Blaquera, et al. vs. Hon. Angel C. Alcala

- Government-owned and controlled corporations may perform governmental or proprietary
functions or both, depending on the purpose for which they have been created.
-If the purpose, is to obtain special corporate benefits or earn pecuniary profit, the function is
proprietary.
-If it is in the interest of health, safety and for the advancement of public good and welfare,
affecting the public in general, the function is governmental. Powers classified as "proprietary" are
those intended for private advantage and benefit. Further, employees of government corporations
created by special charters have neither the right to strike nor the right to bargain collectively, as
defined in the Labor Code.
- Since GOCCs with original charters do have an incentive award system, RA 6971 is then enacted
to address the same concerns of officials and employees of GOCCs incorporated under the general
corporation law.
-The Constitution provides that the president shall have control of all the executive departments,
bureaus, and offices. He shall ensure that the laws be faithfully executed.
-Control means the power of an officer to alter or modify or set aside what a subordinate officer
had done in the performance of his duties and to substitute the judgment of the former for that of
the latter.
-The President can, by virtue of his power of control, review, modify, alter or nullify any action or
decision of his subordinate in the executive departments, bureau or offices under him.

 Corporate Name (Sec 13, RA No. 7160, The LGC of 1991)

SECTION 13. Naming of Local Government Units and Public Places, Streets and Structures. –
(a) The sangguniang panlalawigan may, in consultation with the Philippine Historical Commission (PHC),
change the name of the following within its territorial jurisdiction:

(1) Component cities and municipalities, upon the recommendation of the sanggunian concerned;
(2) Provincial roads, avenues, boulevards, thoroughfares, and bridges;
(3) Public vocational or technical schools and other post-secondary and tertiary schools;
(4) Provincial hospitals, health centers, and other health facilities; and
(5) Any other public place or building owned by the provincial government.

(b) The sanggunians of highly urbanized cities and of component cities whose charters prohibit their voters from
voting for provincial elective officials, hereinafter referred to in this Code as independent component cities, may,
in consultation with the Philippine Historical Commission, change the name of the following within its territorial
jurisdiction:
 (1) City barangays, upon the recommendation of the sangguniang barangay concerned;
(2) City roads, avenues, boulevards, thoroughfares, and bridges;
(3) Public elementary, secondary and vocational or technical schools, community colleges and non-
chartered colleges;
(4) City hospitals, health centers and other health facilities; and
(5) Any other public place or building owned by the city government.

(c) The sanggunians of component cities and municipalities may, in consultation with the Philippine Historical
Commission, change the name of the following within its territorial jurisdiction:

(1) City and municipal barangays, upon recommendation of the sangguniang barangay concerned;
(2) City, municipal and barangay roads, avenues, boulevards, thoroughfares, and bridges;
(3) City and municipal public elementary, secondary and vocational or technical schools, post-secondary
and other tertiary schools;
(4) City and municipal hospitals, health centers and other health facilities; and
(5) Any other public place or building owned by the municipal government.

(d) None of the foregoing local government units, institutions, places, or buildings shall be named after a living
person, nor may a change of name be made unless for a justifiable reason and, in any case, not oftener than once
every ten (10) years. The name of a local government unit or a public place, street or structure with historical,
cultural, or ethnic significance shall not be changed, unless by a unanimous vote of the sanggunian concerned and
in consultation with the PHC.

(e) A change of name of a public school shall be made only upon the recommendation of the local school board
concerned.

(f) A change of name of public hospitals, health centers, and other health facilities shall be made only upon the
recommendation of the local health board concerned.

(g) The change of name of any local government unit shall be effective only upon ratification in a plebiscite
conducted for the purpose in the political unit directly affected.
(h) In any change of name, the Office of the President, the representative of the legislative district
concerned, and the Bureau of Posts shall be notified.

Inhabitants; Territory.
(The LGC of 1991 Annotated by Rodriguez; Philippine Society vs. COA [see prior citation];

 Leopoldo T. Bacani, et al. vs. National Coconut Corporation, et al.,

-“Government of the Republic of the Philippines” refers to a government entity through which the
functions of government are exercised, including the various arms through which political authority
is made effective in the Philippines, whether pertaining to the central government or to the
provincial or municipal branches or other form of local government. This requires a little digression
on the nature and functions of our government as instituted in our Constitution.
- These functions are twofold: constitute and ministrant. The former are those which constitute the
very bonds of society and are compulsory in nature; the latter are those that are undertaken only by
way of advancing the general interests of society, and are merely optional. President Wilson
enumerates the constituent functions as follows:

“‘(1) The keeping of order and providing for the protection of persons and property from violence
and robbery.
‘(2) The fixing of the legal relations between man and wife and between parents and children.
‘(3) The regulation of the holding, transmission, and interchange of property, and the determination
of its liabilities for debt or for crime.
‘(4) The determination of contract rights between individuals.
‘(5) The definition and punishment of crime.
‘(6) The administration of justice in civil cases.
‘(7) The determination of the political duties, privileges, and relations of citizens.
‘(8) Dealings of the state with foreign powers: the preservation of the state from external danger or
encroachment and the advancement of its international interests.’

-The principles determining whether or not a government shall exercise certain of these optional
functions are:
(1) that a government should do for the public welfare those things which private capital would not
naturally undertake and
(2) that a government should do these things which by its very nature it is better equipped to
administer for the public welfare than is any private individual or group of individuals.
-there are functions which our government is required to exercise to promote its objectives as
 expressed in our Constitution and which are exercised by it as an attribute of sovereignty, and those
which it may exercise to promote merely the welfare, progress and prosperity of the people. To this
latter class belongs the organization of those corporations owned or controlled by the government to
promote certain aspects of the economic life of our people such as the National Coconut
Corporation. These are what we call government-owned or controlled corporations which may take
on the form of a private enterprise or one organized with powers and formal characteristics of a
private corporations under the Corporation Law.
-The mere fact that the Government happens to be a majority stockholder does not make it a public
corporation
-The term “Government of the Republic of the Philippines” used in section 2 of the Revised
Administrative Code refers only to that government entity through which the functions of the
government are exercised as an attribute of sovereignty, and in this are included those arms through
which political authority is made effective whether they be provincial, municipal or other form of
local government. These are what we call municipal corporations.
-They do not include government entities which are given a corporate personality separate and
distinct from the government and which are governed by the Corporation Law. Their powers, duties
and liabilities have to be determined in the light of that law and of their corporate charters. They do
not therefore come within the exemption clause prescribed in section 16, Rule 130 of our Rules of
Court.
-In its more general sense the phrase ‘municipal corporation’ may include both towns and counties,
and other public corporations created by government for political purposes. In its more common and
limited signification, it embraces only incorporated villages, towns and cities.
-A municipal corporation in its historical and strict sense to be the incorporation, by the authority of
the government, of the inhabitants of a particular place or district, and authorizing them in their
corporate capacity to exercise subordinate specified powers of legislation and regulation with
respect to their local and internal concerns. This power of local government is the distinctive
purpose and the distinguishing feature of a municipal corporation proper.

 Social Security System Employees Association [PAFLU] vs. Hon. Judge E. Soriano, et al.,
-A municipal corporation is a body politic established by law partly as an agency of the state to
assist in the civil government of the country, chiefly to regulate and administer the local and internal
affairs of the city, town or district which is incorporated. The Social Security Commission does not
regulate or administer the local affairs of a town, city, or district which is incorporated.
-The Social Security Commission or System has a personality of its own, by virtue of which it can
sue and be sued. This is clearly inferred from Section 4(k) of Republic Act No. 1161, as amended.
In fact, it is endowed with practically the same powers that are conferred by law upon any other
private corporations.
- It is interesting to note the nature of the functions that the government may exercise to accomplish
its objectives. These functions are two-fold, constituent and ministrant: the former constitutes the
very bonds of society and are compulsory in nature; the latter the those that are undertaken only by
way of advancing the general interest of society and are merely optional. President Wilson
enumerated the constituent functions as follows:

1. The keeping of order and providing for the protection of persons and property from violence
and robbery.
2. The fixing of the legal relations between man and wife and between parents and children.
3. The regulation of the holding, transmission, and interchange of property, and the determination
of its liabilities for debt or crime.
4. The determination of contract rights between individuals.
5. The definition and punishment of crimes.
6. The administration of justice in civil cases.
7. The determination of the political duties, privileges, and relations of citizens.
8. Dealings of the state with foreign powers; the preservation of the state from external danger or
encroachment and the advancement of its international interests. (Malcolm, The Government of the
Philippine Islands p. 19) (Bacani v. National Coconut Corporation, supra).

-The most important of the ministrant functions are public works, public education, public charity,
health and safety regulations, and regulations of trade and industry.
-It is noteworthy to state that the main objective of the SSS is certainly not one of the constituent
functions enumerated above but one which merely aims advancing the general interest of society
which is optional. In effect, its main aim is to provide social security to a large group of employees
who are not in the government service because as a rule private capital cannot undertake it while the
government by its very nature is better equipped to do so than any individual or group of
individuals. It may be true that social security is generally handled by the government, but it does
not follow that it cannot be exercised or performed by a private entity or individual, for, as a matter
of fact, before the SSS was established there were already many private systems adopted by private
entities thru insurance companies and mutual aid associations which served as forerunners of the
SSS.
 -These government functions are merely incidental in the sense that they are necessary to implement
and carry out of the objective of the law. The fact is that the main bulk of the questions of the SSS is
proprietary in nature judging from its main functions of investment and insurance, which were
essentially proprietary, without which its main objective cannot be carried out.

Dual Nature/Capacity: Public or Governmental and Private or Proprietary. Illustrative Implications

of Duality: Property and Liability.
(Sec 15, RA No. 7160, The LGC of 1991;
 Coyle v. Gray 30 Atlantic 728;
- A corporation is a legal institution devised to confer upon the individuals of which it is composed
powers, privileges, and immunities which they would not otherwise possess, the most important of
which are continuous legal identity, and perpetual or indefinite succession under the corporate name.
-Being the mere creature of law, it possesses only those properties which the charter of its creation
confers upon it. These are such as are supposed to be calculated to the effect the object for which it is
created.
-“Private corporations” are created for private as distinguished from purely public purposes, and they
are not, in contemplation of law, public because it may have been supposed by the legislature that
their establishment would promote, either directly or consequentially, the public interest. They cannot
be compelled to accept a charter or incorporating act but when assented to, the legislative grant is
irrevocable; and it cannot, without the consent of the corporation, be impaired or be destroyed by any
subsequent act of legislation, unless the right to do so was reserved at the time.
 
Intended to assist in the conduct of local self-government, are sometimes styled ‘political’, sometimes
‘public’, sometimes ‘civil’ and sometimes ‘municipal,’ and pertain kinds of them, with very restricted
powers, ‘quasi’ corporations, - all these by way of distinction from private corporation. All municipal
corporations are public bodies created for civil or political purposes, but all civil, political, public
corporations are not, municipal corporations. A municipal corporation may be defined to be a body
politic and corporate established by law to assist in the civil government of the state, with delegated
authority to regulate and administer the local or internal affairs of a city, town, or district which is
incorporated. Public corporations are to be governed according to the law of the land. They are the mere
creatures of the public institution, created exclusively for the public advantage, without other
endowments than such as the government may bestow upon them. It would seem reasonable that such a
corporation may be controlled, and its constitution altered and amended, by the government, in such
manner as the public interest may require. Such legislative interferences cannot be said to impair the
contract by which the corporation was formed, because there is in reality but one party to it.
 
The city of Wilmington is a public corporation. It is a municipal corporation, which is,  an
incorporation, by the authority of the state, of the inhabitants of a particular place or district, and
authorizes them, in their corporate capacity, to exercise subordinate, specified powers of legislation and
regulation, with respect to their local and internal concerns.
 
However, a municipal corporation being merely an agency of the State, the Legislature may change its
internal government at pleasure. A municipal corporation does not hold property, like water works as a
private corporation, so as to prevent the legislature from modifying the management thereof at will.
There is no diversion of the property from its original use.

 Benjamin Rabuco, et al. vs. Hon. Antonio J. Villegas, et al

-It is established doctrine that the act of classifying State property calls for the exercise of wide
discretionary legislative power which will not be interfered with by the courts.
-A property of the public domain, although titled to the local government, is held by it in trust for the
State.
-If the Act is invalid and unconstitutional for constituting deprivation of property without due process
of law and without just compensation as contended by respondents city officials, then the trial court's
refusal to enjoin ejectment and demolition of petitioners' houses may be upheld. Otherwise, petitioners'
right under the Act to continue possession and occupation of the premises and to the lifting and
dismissal of the order of demolition issued against them must be enforced and the trial court's judgment
must be set aside.
Here, Republic Act 3120 expressly declared that the properties were "reserved as communal property"
and ordered their conversion into "disposable and alienable lands of the State" for sale in small lots to
the bona fide occupants thereof. It is established doctrine that the act of classifying State property calls
for the exercise of wide discretionary legislative power which will not be interfered with by the courts.

 Municipality of San Fernando, La Union vs. Hon. Judge Romeo N. Firme, et al., G.R. No. L-
52179, April 8, 1991;
-Suability depends on the consent of the state to be sued, liability on the applicable law and the
established facts.
-The circumstance that a state is suable does not necessarily mean that it is liable; on the other hand, it
 can never be held liable if it does not first consent to be sued.
-Liability is not conceded by the mere fact that the state has allowed itself to be sued.
-When the state does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if
it can, that the defendant is liable.
-Anent the issue of whether or not the municipality is liable for the torts committed by its employee, the
test of liability of the municipality depends on whether or not the driver, acting in behalf of the
municipality, is performing governmental or proprietary functions.

 Ricardo Aguado vs. City of Manila, G.R. No. L-3282, January 9, 1908;
-A municipal corporation is a governmental agent of the state, given authority to govern the people in a
limited portion of the state. This power, however, is limited to certain particular governmental
functions, which are always expressed in writing in the form of a charter or grant of powers. To
ascertain what this power is in each particular case, reference must be made to such grant of powers.
Powers not expressly given therein or necessarily implied from such express powers cannot be
exercised by such governmental agent.
-A municipal corporation is a mere instrumentality of the state for the convenient administration of a
local government over limited territory, and as such is vested with subordinate power for local purposes
only. -The very moment it subverts these powers or arrogates to itself others not granted, or for any
other reasons deemed to be sufficient, the state may revoke its authority, dissolve such corporation, and
bring all the inhabitants and such property again under the direct control of the state or central
government in all their relations among themselves and with the state. There is no such thing as a
vested right held by any individual in the granting of legislative power to municipal corporations.
-Well established is the doctrine that a municipal corporation is a mere agent of the state.
-Certainly the general consequences of the death of the principal must follow in its effect upon the
authority of the agent. The death of the principal always revokes the agency when there are no vested
rights involved.
-A municipal corporation has no vested right to exist as such. The state may at any time revoke its
charter. Of course the state might, by such revocation, incur certain moral obligations, but the
performance of these obligations would always rest upon the conscience of the law-making or charter-
granting authority of the state. The courts have no authority to compel the state to comply with
obligations of this kind in the absence of proper legislation.
-The city of Manila is in no way the successor of the Ayuntamiento de Manila in law. The mere fact
that the present authority in these Islands has given to the present city powers like those exercised by
the Ayuntamiento de Manila in no way makes the former the successor of the latter. It is an entirely
new organization, a new agent of a new principal, and only has such authority, such powers, and such
obligations and responsibilities as the new principal has seen fit to grant and impose. The grant of
powers (the Charter of Manila) does not contain any provisions that would make the present city of
Manila liable in any way to comply with the obligations contracted by the Ayuntamiento de Manila.
-These conclusions do not amount to a denial of the obligations or a refusal to comply with the same.
Simply stated, the obligations upon which Aguado seeks to recover never were incurred by the present
city of Manila. Neither can the conclusion be construed to be an attempt to violate the terms of the
contracts. They are simply to the effect that no contractual obligation, with reference to the claim of
Aguado, ever existed.

 Vilas vs. City of Manila [1911],

We are unable to agree with the argument. It loses sight of the dual character of municipal corporations.
They exercise powers which are governmental and powers which are of a private or business character.
In the one character a municipal corporation is a governmental subdivision, and for that purpose
exercises by delegation a part of the sovereignty of the state. In the other character it is a mere legal
entity or juristic person. In the latter character it stands for the community in the administration of local
affairs wholly beyond the sphere of the public purposes for which its governmental powers are
conferred.
In view of the dual character of municipal corporations there is no public reason for presuming their
total dissolution as a mere consequence of military occupation or territorial cession. The suspension of
such governmental functions as are obviously incompatible with the new political relations thus brought
about may be presumed. But no such implication may be reasonably indulged beyond that result.
Such a conclusion is in harmony with the settled principles of public law. That there is a total
abrogation of the former political relations of the inhabitants of the ceded region is obvious. That all
laws in force which are in conflict with the political character, constitution, or institutions of the
substituted sovereign, lose their force. But it is equally settled in the same public law that that great
body of municipal law which regulates private and domestic rights continues in force until abrogated or
changed by the new ruler.
Therefore, there is not the slightest suggestion that the new corporation shall not succeed to the
contracts and obligations of the old corporation. Laying out of view any question of the constitutional
guarantee against impairment of the obligation of contracts, there is, in the absence of express
legislative declaration of a contrary purpose, no reason for supposing that the reincorporation of an old
municipality is intended to permit an escape from the obligations of the old, to whose property and
rights it has succeeded.
 Municipality of Catbalogan vs. Director of Lands, G.R. No. L-5631, October 17, 1910;
- he municipality of Catbalogan owns the land by right under the Law of the Indies and Municipal
Code. 

Law of Indies:
For the organization of new pueblos in these Islands, especially in ancient times subsequent to the
occupation of the Archipelago by the Spaniards, the inhabitants of the new town were obliged to
construct the municipal building on the land previously designated by the chief authority of the
province, which was awarded to it as its own. ..xxx…It must be understood that these lands were
awarded.. to the municipality for the municipal building ..as real property of the common and exclusive
ownership of the pueblo before the establishment of the municipality, and to the latter upon its
organization, for such organization imposed the necessity of the appropriation of lots suitable for the
erection thereon of ..the court-house, in accordance with the provisions prescribed in those remote times
by the Laws of the Indies. 
In this case, the land in litigation, which is a lot occupied by the court-house, anciently termed the casa
real, of the pueblo of Catbalogan, pertains to the said pueblo, awarded to the same, not gratuitously, but
on account of the necessity arising from its organization, and forms a part, as a patrimonial property,
of its municipal assets, and therefore it is not comprised within the common land (terreno comunal)
which may been granted to the said pueblo.
Hence, the doctrine in the case of The City of Manila v. The Insular Government (10 Phil. Rep., 327) is
inapplicable, for the reason that the land in dispute is not that of a common, but of a building lot of
which the pueblo of Catbalogan had absolute need at the beginning of its organization for the erection
thereon of its court-house. This was duly proved at trial, without possible contradiction. Also, for which
reason the doctrine in the case of Aguado vs. The City of Manila (9 Phil. Rep., 513) is also inapplicable,
inasmuch as the said municipality, in the exercise of the right of ownership in its own property, has an
independent personality of its own, recognized by law, and does not act as a mere delegate of the
central authority. 
On the other hand, the Municipal Code provides that the rights of the old municipalities to acquire real
and personal property, in accordance with their former organization, are recognized, and it is declared
that the said property and rights shall continue to pertain to the municipalities created in harmony with
the provisions of the Municipal Code, on account of such property being the patrimonial property of the
municipalities. (See: Section 2 of Act No. 82 "The Municipal Code”)
Lastly, the Municipality has been occupying the property on which its court-house is situated during
such a long space of time, much longer than that required for extraordinary prescription (art. 1959 of
the Civil Code), it can not be denied that the presumption exists, in its favor that it has been holding the
land in its character of owner, since the trial record exhibits no proof that any other parcel of land,
distinct from that in controversy, was awarded to the said municipality for the erection thereon of its
court-house, a a court-house and the land on which to build it being necessary and indispensable for the
existence of the pueblo.
Perfectly in accord with both the old and the mother legislation of this country, the municipality of
Catbalogan in possession of the land in litigation is therefore the owner thereof.
Dispositive portion: For the foregoing reasons, and considering that the municipality of Catbalogan is
the owner of the land occupied by its court-house and that it is entitled to have the said property
registered in its name in the Court of Land Registration, it is proper, in our opinion, to affirm and we
hereby affirm the judgment appealed from in its present form.

 Bara Lidasan vs. Commission on Elections [COMELEC], G.R. No. L-28089, October 25, 1967;
-The transfer of a sizeable portion of territory from one province to another necessarily involves
reduction of area, population and income of the first and a corresponding increase of the other. This is
as important as the creation of the municipality itself. And yet the title did not reflect this fact.
- unicipal corporations perform twin functions:
1. They serve as an instrumentality of the State in carrying out the functions of government.
2. They act as an agency of the community in the administration of local affairs.
-It is in the latter character that they are a separate entity acting for their own purposes and not a
subdivision of the State.
- Consequently, several factors come to the fore in the consideration of whether a group of barrios is
capable of maintaining itself as an independent municipality. Amongst these are population, territory,
and income.
- The right of every citizen, taxpayer and voter of a community affected by legislation creating a town
to ascertain that the law so created is not dismembering his place of residence “in accordance with the
Constitution” is recognized

 City of Manila v. Intermediate Appellate Court, G.R. No. 71159, November 15, 1989;
-The operations and functions of a public cemetery is characterized as a proprietary function of the City
of Manila.
-Under Philippine laws, the City of Manila is a political body corporate and as such endowed with the
faculties of municipal corporations to be exercised by and through its city government in conformity
 with law, and in its proper corporate name.
-It may sue and be sued, and contract and be contracted with. Its powers are twofold in character-public,
governmental or political on the one hand, and corporate, private and proprietary on the other.
-Governmental powers are those exercised in administering the powers of the state and promoting the
public welfare and they include the legislative, judicial, public and political.
-Municipal powers on the one hand are exercised for the special benefit and advantage of the
community and include those which are ministerial, private and corporate.
 
-In connection with the powers of a municipal corporation, it may acquire property in its public or
governmental capacity, and private or proprietary capacity. The New Civil Code divides such properties
into property for public use and patrimonial properties.
-With respect to proprietary functions the settled rule is that a municipal corporation can be held liable
to third persons ex contractu or ex delicto.
-In the absence of a special law, the North Cemetery is a patrimonial property of the City of Manila
which was created by resolution of the Municipal Board of August 27, 1903 and January 7, 1904. With
the acts of dominion, there is, therefore no doubt that the North Cemetery is within the class of property
which the City of Manila owns in its proprietary or private character.
-Under the doctrine of respondent superior petitioner City of Manila is liable for the tortious act
committed by its agents who failed to verify and check the duration of the contract of lease.

 Municipality of Oas vs. Bartolome Roa,

 City of Manila vs. Gerardo Garcia, et al
-Manila mayors did not have authority to give permits, written or oral, to defendants, and that the
permits herein granted are null and void. Squatting is unlawful and no amount of acquiescence on the
part of the city officials will elevate it into a lawful act.
-In principle, a compound of illegal entry and official permit to stay is obnoxious to our concept of
proper official norm of conduct. Because, such a permit does not serve social justice; it fosters moral
decadence. It does not promote public welfare; it abets disrespect for the law. It has its roots in vice; so
it is an infected bargain.
-Official approval of squatting should not, therefore, be permitted to obtain in this country where there
is an orderly form of government.
-The squatters’ houses and constructions clearly hinder and impair the use of the property for school
purposes. The courts may well take judicial notice of the fact that construction of elementary grades
school houses has been and still is a perennial problem in the city to which selfish interest of the
squatters must yield. The public purpose of constructing the school building annex is paramount.
-The squatters’ houses and constructions aforesaid constitute public nuisance per se for the reason that
they hinder and impair the use of the property for a badly needed school building, to the prejudice of the
education of the youth of the land. This nuisance could well have been summarily abated by the city
authorities even without the aid of courts.

 Victoriana Espiritu, et al. vs. Municipal Council of Pozzorubio

The Municipality of Pozorrubio has the power to issue Resolution No. 20, Series of 1951, ordering the
occupants and owners of the structures on the plaza to remove their buildings within 60 days from
receipt of the resolution.
There is absolutely no question that the town plaza cannot be used for the construction of market stalls,
specially of residences, and that such structures constitute a nuisance subject to abatement according to
law. Town Plazas are properties of public dominion, to be devoted to public use and to be made
available to the public in general. They are outside the commerce of man and cannot be disposed of or
even leased by the municipality to private parties. While in case of war or during an emergency, town
plazas may be occupied temporarily by private individuals, as was done and as was tolerated by the
Municipality of Pozorrubio, when the emergency has ceased, said temporary occupation or use must
also cease, and the town officials should see to it that the town plazas should ever be kept open to the
public and free from encumbrances or illegal private constructions.

 Felicidad Villanueva, et al. vs. Hon. Mariano Castañeda, Jr.,

- A public plaza is beyond the commerce of man and so cannot be the subject of lease or any other
contractual undertaking. The lease of a public plaza of a municipality in favor of a private person is null
and void. A plaza cannot be used for the construction of market stalls, specially of residences, and that
such structures constitute a nuisance subject to abatement according to law.
 
Town plazas are properties of public dominion, to be devoted to public use and to be made available to
the public in general. They are outside the commerce of man and cannot be disposed of or even leased
by the municipality to private parties. Also, a portion of a public sidewalk is likewise beyond the
commerce of man. Any contract entered into in connection with the sidewalk, is ipso facto null and
ultra vires. The sidewalk was intended for and was used by the public, in going from one place to
another. The streets and public places of the city shall be kept free and clear for the use of the public,
and the sidewalks and crossings for the pedestrians, and the same shall only be used or occupied for
other purposes as provided by ordinance or regulation; stalls block the free passage of pedestrians
 resulting to clogged with vehicular traffic.
 
On the other hand, police power under the general welfare clause authorizes the municipal council to
enact such ordinances and make such regulations, not repugnant to law, as may be necessary to carry
into effect and discharge the powers and duties conferred upon it by law and such as shall seem
necessary and proper to provide for the health and safety, promote the prosperity, improve the morals,
peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the
protection of property therein. Thus, police power cannot be surrendered or bargained away through the
medium of a contract.
 
The respondent judge did not commit grave abuse of discretion in denying the petition for prohibition.
On the contrary, he acted correctly in sustaining the right and responsibility of the mayor to evict the
petitioners from the disputed area and clear it of the structures illegally constructed therein.
 
Every contract affecting the public interest suffers a congenital infirmity in that it contains an implied
reservation of the police power as a postulate of the existing legal order. This power can be activated at
any time to change the provisions of the contract, or even abrogate it entirely, for the promotion or
protection of the general welfare. Such an act will not militate against the impairment clause, which is
subject to and limited by the paramount police power. Petition dismissed.

 Province of Zamboanga Del Norte vs. City of Zamboanga, et al.,

he principle is this: If the property is owned by the municipal corporation or municipality in its public
and governmental capacity, the property is public and Congress has absolute control over it; if the
property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no
absolute control, in which case, the municipality cannot be deprived of it without due process and
payment of just compensation.
 
The capacity in which the property is held is dependent on the use to which it is intended and devoted.
There are two norms, i.e., of the Civil Code and of the law of Municipal Corporations in classifying
whether municipal properties are patrimonial or public.
 
The Civil Code classification is found in articles 423 and 424 of the same Code. Under Art. 424,
property for public, use, consists of provincial roads, city streets, municipal streets, the squares,
fountains, public waters, promenades and public works for public service paid for by said municipal
corporations. All other property possessed by any of them is patrimonial and is governed by the Code
without prejudice to provisions of special laws. Under this classification, all the properties in question
save two lots used as High School playgrounds are patrimonial properties of Zamboanga Province; this
includes the capitol site, the hospital and leprosarium sites, and the school sites which are patrimonial as
they are not for public use. They fall outside the phrase "public works for public service" because under
the ejusdem generis rule, such public works must be for free and for the indiscriminate use by anyone.
 
Under the norm provided for by the law of Municipal Corporations, all those properties which are
devoted to public service are deemed public; the rest remain patrimonial. Under this norm, to be
considered public, it is enough that the property be held and devoted for governmental purposes like
local administration, public education, public health, etc.
 
Although the records do not show whether the buildings on the lots in question were constructed at the
expense of the municipal corporation, since said buildings were constructed even before the enactment
of Commonwealth Act 39 in 1936 and the provinces then had no power to authorize construction of
buildings at their own expense, it is presumed that the buildings were erected by national funds, In this
case, Congress could dispose of said buildings in the same manner as it did with the lots in question.
And even assuming that provincial funds were used in their construction, the buildings are mere
accessories to the lands which are public, and so they follow the nature of the lands, i.e., public.
Moreover, although located in the city, the buildings are not for the exclusive use and benefit of city
residents but also for provincial residents, wherefore the province is not really deprived of its benefits.
 
 
The controversy is more along the domains of the law of Municipal Corporations — State vs. Province
— than along that of Civil Law. The Court is not inclined to hold that municipal property held and
devoted to public service is in the same category as ordinary private property. Else, the consequences
are dire. As ordinary private properties, they can be levied upon and attached, they can be acquired thru
adverse possession - to the detriment of the local community.
 
The fact that the lots used for government purposes are registered is of no significance since registration
cannot convert public property to private.
 
The classification of properties other than those for public use in the municipalities as patrimonial under
art. 424 of the Civil Code is without prejudice to provisions of special laws. For purposes of this article,
 the law of Municipal Corporations is considered as "special laws." Hence, the classification of
municipal property devoted for distinctly governmental purposes as public should prevail over the Civil
Code classification in this particular case.
 

 Municipality [now city] of Legaspi vs. A.L. Ammen Transportation Co., Inc.,
es. Although the Supreme Court did not classify the land as patrimonial and held that act of classifying
State property calls for the exercise of wide discretionary legislative power and it should not be
interfered with by the courts, it held that the property in question was not owned by the City of Manila
in its private or corporate capacity. But even so, the law which provides for its disposal and subdivision
was declared constitutional by the Supreme Court.
It was argued by the appellants that the land involved is a communal land or "legua comunal" which is a
portion of the public domain owned by the State, that it came into existence as such when the City of
Manila, or any town or pueblo in the Philippines was founded under the laws of Spain, the former
sovereign, and that there was no immediate acquisition of ownership by the pueblo, and the land though
administered thereby, did not automatically become its property in the absence of an express grant from
the Central Government.
Appellants further argued that a municipal corporation, like a city is a governmental agent of the State
with authority to govern a limited portion of its territory or to administer purely local affairs in a given
political subdivision, and the extent of its authority is strictly delimited by the grant of power conferred
by the State and that Congress has the exclusive power to create, change or destroy municipal
corporations.
The respondents, however, contend that Congress had the power and authority to declare that the land
in question was 'communal' land and the courts have no power or authority to make a contrary finding.
This contention is not entirely correct or accurate. Congress has the power to classify 'land of the public
domain', transfer them from one classification to another and declare them disposable or not. Such
power does not, however, extend to properties which are owned by cities, provinces and municipalities
in their 'patrimonial' capacity.
Art. 324 of the Civil Code provides that properties of provinces, cities and municipalities are divided
into properties for public use and patrimonial property. Art. 424 provides that properties for public use
consist of provincial roads, city streets, municipal streets, the squares, fountains, public waters,
promenades and public works for public service paid for by said province, cities or municipalities. All
other property possessed by any of them is patrimonial. Tested by this criterion, the Supreme Court held
that the land in question is patrimonial property of the City of Manila.
The Supreme Court held that the City of Manila, although declared by the Cadastral Court as owner in
fee simple, has not shown by any shred of evidence in what manner it acquired said land as its private
or patrimonial property. It is true that the City of Manila as well as its predecessor, the
Ayuntamiento de Manila, could validly acquire property in its corporate or private capacity,
following the accepted doctrine on the dual character — public and private — of a municipal
corporation. And when it acquires property in its private capacity, it acts like an ordinary person
capable of entering into contracts or making transactions for the transmission of title or other real rights.
When it comes to acquisition of land, it must have done so under any of the modes established by law
for the acquisition of ownership and other real rights. In the absence of a title deed to any land claimed
by the City of Manila as its own, showing that it was acquired with its private or corporate funds, the
presumption is that such land came from the State upon the creation of the municipality. Originally the
municipality owned no patrimonial property except those that were granted by the State not for
its public but for private use. Other properties it owns are acquired in the course of the exercise
of its corporate powers as a juridical entity to which category a municipal corporation pertains.
It may, therefore, be laid down as a general rule that regardless of the source or classification of land in
the possession of a municipality, excepting those acquired with its own funds in its private or corporate
capacity, such property is held in trust for the State for the benefit of its inhabitants, whether it be for
governmental or proprietary purposes. It holds such lands subject to the paramount power of the
legislature to dispose of the same, for after all it owes its creation to it as an agent for the performance
of a part of its public work, the municipality being but a subdivision or instrumentality thereof for
purposes of local administration.
True it is that the legislative control over a municipal corporation is not absolute even when it comes to
its property devoted to public use, for such control must not be exercised to the extent of depriving
persons of their property or rights without due process of law, or in a manner impairing the obligations
of contracts. Nevertheless, when it comes to property of the municipality which it did not acquire
in its private or corporate capacity with its own funds, the legislature can transfer its
administration and disposition to an agency of the National Government to be disposed of
according to its discretion. Here it did so in obedience to the constitutional mandate of promoting
social justice to insure the well-being and economic security of the people.

 Rafael S. Salas, et al. vs. Hilarion U. Jarencio,

 Municipality of Makati vs. Honorable Court of Appeals, et al.,

Yes, there is merit in this contention.
 The funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds of the
municipal government. In this jurisdiction, well-settled is the rule that public funds are not subject to
levy and execution, unless otherwise provided for by statute. More particularly, the properties of a
municipality, whether real or personal, which are necessary for public use cannot be attached and sold
at execution sale to satisfy a money judgment against the municipality. Municipal revenues derived
from taxes, licenses and market fees, and which are intended primarily and exclusively for the purpose
of financing the governmental activities and functions of the municipality, are exempt from execution
The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of
Makati has passed an ordinance appropriating from its public funds an amount corresponding to the
balance due under the RTC decision dated June 4, 1987, less the sum of P99,743.94 deposited in
Account No. S/A 265-537154-3, no levy under execution may be validly effected on the public funds of
petitioner deposited in its other account for statutory obligations and other purposes of the municipal
government, Account No. S/A 263-530850-7.
Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a
municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment
rendered against it, the claimant may avail of the remedy of mandamus in order to compel the
enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement
of municipal funds therefor.
For three years now, petitioner has enjoyed possession and use of the subject property notwithstanding
its inexcusable failure to comply with its legal obligation to pay just compensation. Petitioner has
benefited from its possession of the property since the same has been the site of Makati West High
School since the school year 1986-1987. This Court will not condone petitioner's blatant refusal to settle
its legal obligation arising from expropriation proceedings it had in fact initiated.

III. What are the principles underlying Philippine Local Governments?

Local Autonomy (Administrative & Fiscal Autonomy). Devolution. Decentralization (vs. Federalism).
Deconcentration.
Sec 25, Art 2, 1987 Constitution- The State shall ensure the autonomy of local governments
Sec 2, Art 10, 1987 Constitution- The territorial and political subdivisions shall enjoy local autonomy.
Sec 3, Art 10, 1987 Constitution- The Congress shall enact a local government code which shall provide for a
more responsive and accountable local government structure instituted through a system of decentralization
with effective mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local officials, and all other
matters relating to the organization and operation of the local units.
Sections 5, 6 & 7, Art 10, 1987 Constitution;
-Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees
and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic
policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments.
-Local government units shall have a just share, as determined by law, in the national taxes which shall be
automatically released to them.
-Local governments shall be entitled to an equitable share in the proceeds of the utilization and development
of the national wealth within their respective areas, in the manner provided by law, including sharing the
same with the inhabitants by way of direct benefits.

Sec 2(a) of LGC of 1991- (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.

Sec 3 of LGC of 1991 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 for purposes 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 and 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.

Sec 17 of LGC of 1991; Sec 528 of LGC of 1991- SECTION 17. Basic Services and Facilities. – (a) Local
government units shall endeavor to be self-reliant and shall continue exercising the powers and discharging
the duties and functions currently vested upon them. They shall also discharge the functions and
responsibilities of national agencies and offices devolved to them pursuant to this Code. Local government
units shall likewise exercise such other powers and discharge such other functions and responsibilities as are
necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities
enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the following:
(1) For a Barangay:
(i) Agricultural support services which include planting materials distribution system and operation of farm
produce collection and buying stations;
(ii) Health and social welfare services which include maintenance of barangay health center and day-care
center;
(iii) Services and facilities related to general hygiene and sanitation, beautification, and solid waste
collection;
(iv) Maintenance of katarungang pambarangay;
(v) Maintenance of barangay roads and bridges and water supply systems;
(vi) Infrastructure facilities such as multi-purpose hall, multi-purpose pavement, plaza, sports center, and
other similar facilities;
(vii) Information and reading center; and
(viii) Satellite or public market, where viable;
(2) For a Municipality:
(i) Extension and on-site research services and facilities related to agriculture and fishery activities which
include dispersal of livestock and poultry, fingerlings, and other seeding materials for aquaculture; palay,
corn, and vegetable seed farms; medicinal plant gardens; fruit tree, coconut, and other kinds of seedling
nurseries; demonstration farms; quality control of copra and improvement and development of local
distribution channels, preferably through cooperatives; interbarangay irrigation systems; water and soil
resource utilization and conservation projects; and enforcement of fishery laws in municipal waters including
the conservation of mangroves;
(ii) Pursuant to national policies and subject to supervision, control and review of the DENR, implementation
of community-based forestry projects which include integrated social forestry programs and similar projects;
management and control of communal forests with an area not exceeding fifty (50) square kilometers;
establishment of tree parks, greenbelts, and similar forest development projects;
(iii) Subject to the provisions of Title Five, Book I of this Code, health services which include the
implementation of programs and projects on primary health care, maternal and child care, and communicable
and non-communicable disease control services; access to secondary and tertiary health services; purchase of
medicines, medical supplies, and equipment needed to carry out the services herein enumerated;
(iv) Social welfare services which include programs and projects on child and youth welfare, family and
community welfare, women’s welfare, welfare of the elderly and disabled persons;  community-based
rehabilitation programs for vagrants, beggars, street children, scavengers, juvenile delinquents, and victims of
drug abuse; livelihood and other pro-poor projects; nutrition services; and family planning services;
(v) Information services which include investments and job placement information systems, tax and
marketing information systems, and maintenance of a public library;
(vi) Solid waste disposal system or environmental management system and services or facilities related to
general hygiene and sanitation;
(vii) Municipal buildings, cultural centers, public parks including freedom parks, playgrounds, and other
sports facilities and equipment, and other similar facilities;
(viii) Infrastructure facilities intended primarily to service the needs of the residents of the municipality and
which are funded out of municipal funds including, but not limited to, municipal roads and bridges; school
buildings and other facilities for public elementary and secondary schools; clinics, health centers and other
health facilities necessary to carry out health services; communal irrigation, small water impounding projects
and other similar projects; fish ports; artesian wells, spring development, rainwater collectors and water
supply systems; seawalls, dikes, drainage and sewerage, and flood control; traffic signals and road signs; and
similar facilities;
(ix) Public markets, slaughterhouses and other municipal enterprises;
(x) Public cemetery;
(xi) Tourism facilities and other tourist attractions, including the acquisition of equipment, regulation and
supervision of business concessions, and security services for such facilities; and
(xii) Sites for police and fire stations and substations and municipal jail;
(3) For a Province:
(i) Agricultural extension and on-site research services and facilities which include the prevention and control
of plant and animal pests and diseases; dairy farms, livestock markets, animal breeding stations, and artificial
insemination centers; and assistance in the organization of farmers’ and fishermen’s cooperatives and other
collective organizations, as well as the transfer of appropriate technology;
(ii) Industrial research and development services, as well as the transfer of appropriate technology;
(iii) Pursuant to national policies and subject to supervision, control and review of the DENR, enforcement of
forestry laws limited to community-based forestry projects, pollution control law, small-scale mining law,
and other laws on the protection of the environment; and mini-hydroelectric projects for local purposes;
(iv) Subject to the provisions of Title Five, Book I of this Code, health services which include hospitals and
other tertiary health services;
(v) Social welfare services which include programs and projects on rebel returnees and evacuees; relief
operations; and population development services;
(vi) Provincial buildings, provincial jails, freedom parks and other public assembly areas, and similar
facilities;
(vii) Infrastructure facilities intended to service the needs of the residents of the province and which are
funded out of provincial funds including, but not limited to, provincial roads and bridges; inter-municipal
waterworks, drainage and sewerage, flood control, and irrigation systems; reclamation projects; and similar
facilities;
(viii) Programs and projects for low-cost housing and other mass dwellings, except those funded by the
Social Security System (SSS), Government Service Insurance System (GSIS), and the Home Development
Mutual Fund (HDMF); Provided, That national funds for these programs and projects shall be equitably
allocated among the regions in proportion to the ratio of the homeless to the population;
(ix) Investment support services, including access to credit financing;
(x) Upgrading and modernization of tax information and collection services through the use of computer
hardware and software and other means;
(xi) Inter-municipal telecommunications services, subject to national policy guidelines; and
(xii) Tourism development and promotion programs;
(4) For a City:
All the services and facilities of the municipality and province, and in addition thereto, the following:
(i) Adequate communication and transportation facilities;
(ii) Support for education, police and fire services and facilities;
(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure projects and
other facilities, programs and services funded by the National Government under the annual General
Appropriations Act, other special laws, pertinent executive orders, and those wholly or partially funded from
foreign sources, are not covered under this section, except in those cases where the local government unit
concerned is duly designated as the implementing agency for such projects, facilities, programs, and services.
(d) The designs, plans, specifications, testing of materials, and the procurement of equipment and materials
from both foreign and local sources necessary for the provision of the foregoing services and facilities shall
be undertaken by the local government unit concerned, based on national policies, standards and guidelines.
(e) National agencies or offices concerned shall devolve to local government units the responsibility for the
provision of basic services and facilities enumerated in this section within six (6) months after the effectivity
of this Code.
As used in this Code, the term “devolution” refers to the act by which the National Government confers
power and authority upon the various local government units to perform specific functions and
responsibilities.
(f) The National Government or the next higher level of local government unit may provide or augment the
basic services and facilities assigned to a lower level of local government unit when such services or facilities
are not made available or, if made available, are inadequate to meet the requirements of its inhabitants.
(g) The basic services and facilities hereinabove enumerated shall be funded from the share of local
government units in the proceeds of national taxes and other local revenues and funding support from the
National Government, its instrumentalities and government-owned or -controlled corporations which are
tasked by law to establish and maintain such services or facilities. Any fund or resource available for the use
of local government units shall be first allocated for the provision of basic services or facilities enumerated in
subsection (b) hereof before applying the same for other purposes, unless otherwise provided in this Code.
(h) Regional offices of national agencies or offices whose functions are devolved to local government units
as provided herein shall be phased out within one (1) year from the approval of this Code. Said national
agencies and offices may establish such field units as may be necessary for monitoring purposes and
providing technical assistance to local government units. The properties, equipment, and other assets of these
regional offices shall be distributed to the local government units in the region in accordance with the rules
and regulations issued by the Oversight Committee created under this Code.
(i) The devolution contemplated in this Code shall include the transfer to local government units of the
records, equipment, and other assets and personnel of national agencies and offices corresponding to the
devolved powers, functions, and responsibilities.
Personnel of said national agencies or offices shall be absorbed by the local government units to which they
belong or in whose areas they are assigned to the extent that it is administratively viable as determined by the
said oversight committee: Provided, That the rights accorded to such personnel pursuant to civil service law,
rules and regulations shall not be impaired: Provided, further, That regional directors who are career
executive service officers and other officers of similar rank in the said regional offices who cannot be
absorbed by the local government unit shall be retained by the National Government, without any diminution
of rank, salary or tenure.
(j) To ensure the active participation of the private sector in local governance, local government units may,
by ordinance, sell, lease, encumber, or otherwise dispose of public economic enterprises owned by them in
their proprietary capacity.
Costs may also be charged for the delivery of basic services or facilities enumerated in this section.

 Attys. Humberto Basco, et al. vs. PAGCOR

-LGUs' have no inherent right to impose taxes.
-LGUs' power to tax must always yield to a legislative act which is superior having been passed by the
state itself which has the inherent power to tax.
-The charter of LGUs is subject to control by Congress as they are mere creatures of Congress.
-Congress, therefore, has the power of control over LGUs. And if Congress can grant the City of
Manila the power to tax certain matters, it can also provide for exemptions or even take back the power.
-LGUs' have no power to tax instrumentalities of the gov't such as PAGCOR which exercises
governmental functions of regulating gambling activities.

 Rodolfo T. Ganzon vs. The Honorable Court of Appeals, et al.

-Constitution did nothing more, and insofar as existing legislation authorizes the President (through the
Secretary of Local Government) to proceed against local officials administratively, the Constitution
contains no prohibition.
-The Chief Executive is not banned from exercising acts of disciplinary authority because she did not
exercise control powers, but because no law allowed her to exercise disciplinary authority.

 Limbonas v. Mangelin
-Autonomous governments of Mindanao, as they are now constituted, are subject to the jurisdiction of
the national courts.
-Autonomous governments of Mindanao, as they are now constituted, are subject to the jurisdiction of
the national courts
- Autonomy is either decentralization of administration or decentralization of power.
There is decentralization of administration when the central government delegates administrative
powers to political subdivisions in order to broaden the base of government power and in the process to
make local governments "more responsive and accountable," "and ensure their fullest development as
self-reliant communities and make them more effective partners in the pursuit of national development
and social progress."
-At the same time, it relieves the central government of the burden of managing local affairs and
enables it to concentrate on national concerns. The President exercises "general supervision" over them,
but only to "ensure that local affairs are administered according to law." He has no control over their
acts in the sense that he can substitute their judgments with his own.
-Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local governments units declare to be autonomous. In that case, the autonomous government is free to
chart its own destiny and shape its future with minimum intervention from central authorities.
According to a constitutional author, decentralization of power amounts to "self-immolation," since in
that event, the autonomous government becomes accountable not to the central authorities but to its
constituency.
-An autonomous government that enjoys autonomy of the latter category is subject alone to the decree
of the organic act creating it and accepted principles on the effects and limits of "autonomy." On the
other hand, an autonomous government of the former class is, as we noted, under the supervision of the
national government acting through the President (and the Department of Local Government).
-If the Sangguniang Pampook (of Region XII), then, is autonomous in the latter sense, its acts are,
debatably beyond the domain of this Court in perhaps the same way that the internal acts, say, of the
Congress of the Philippines are beyond our jurisdiction. But if it is autonomous in the former category
 only, it comes unarguably under our jurisdiction.

 Lina v. Pano
- The Local Government may not deny lotto operation in its locality.
-Local government’s autonomy involves airing out its views which may be contrary to that of the
national government. However, this freedom to exercise contrary views does not mean that local
governments may actually enact ordinances that go against laws duly enacted by Congress.
-In our system of government, the power of local government units to legislate and enact ordinances
and resolutions is merely a delegated power coming from Congress. Ours is still a unitary form of
government, not a federal state. Being so, any form of autonomy granted to local governments will
necessarily be limited and confined within the extent allowed by the central authority. Besides, the
principle of local autonomy under the 1987 Constitution simply means “decentralization.” It does not
make local governments sovereign within the state.
-A local government unit, cannot issue a resolution or an ordinance that would seek to prohibit permits.
Stated otherwise, what the national legislature expressly allows by law, such as lotto, a provincial board
may not disallow by ordinance or resolution.

 Judge Dadole v. Commission on Audit

-Although our Constitution guarantees autonomy to local government units, the exercise of local
autonomy remains subject to the power of control by Congress and the power of supervision by the
President.
-the supervisory power of the President and distinguished it from the power of control exercised by
Congress. Section 4 of Article X of the 1987 Philippine Constitution has been interpreted to exclude the
power of control.
-In administrative law, supervision means overseeing or the power or authority of an officer to see that
subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may take
such action or step as prescribed by law to make them perform their duties. Control, on the other hand,
means the power of an officer to alter or modify or nullify or set aside what a subordinate officer has
done in the performance of his duties and to substitute the judgment of the former for that of the latter.
-the Chief Executive wielded no more authority than that of checking whether local governments or
their officials were performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their authority.
"Supervisory power, when contrasted with control, is the power of mere oversight over an inferior
body; it does not include any restraining authority over such body.
-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.
-The President can only interfere in the affairs and activities of a local government unit if he or she
finds that the latter has acted contrary to law. This is the scope of the Presidents supervisory powers
over local government units. Hence, the President or any of his or her alter egos cannot interfere in
local affairs as long as the concerned local government unit acts within the parameters of the law and
the Constitution.
-Any directive therefore by the President or any of his or her alter egos seeking to alter the wisdom of a
law-conforming judgment on local affairs of a local government unit is a patent nullity because it
violates the principle of local autonomy and separation of powers of the executive and legislative
departments in governing municipal corporations.

 Senator Heherson T. Alvarez, et al. vs. Hon. Teofisto T. Guingona, Jr.

-Internal Revenue Allotments form part of the income of Local Government Units.
-A Local Government Unit is a political subdivision of the State which is constituted by law and
possessed of substantial control over its own affairs. Remaining to be an intra sovereign subdivision of
one sovereign nation, but not intended, however, to be an imperium in imperio, the local government
unit is autonomous in the sense that it is given more powers, authority, responsibilities and resources.
Power which used to be highly centralized in Manila, is thereby deconcentrated, enabling especially the
peripheral local government units to develop not only at their own pace and discretion but also with
their own resources and assets.
-Availment of such resources is effectuated through the vesting in every local government unit of (1)
the right to create and broaden its own source of revenue; (2) the right to be allocated a just share in
national taxes, such share being in the form of internal revenue allotments (IRAs); and (3) the right to
be given its equitable share in the proceeds of the utilization and development of the national wealth, if
any, within its territorial boundaries.
-The IRAs are items of income because they form part of the gross accretion of the funds of the local
government unit. The IRAs regularly and automatically accrue to the local treasury without need of any
 further action on the part of the local government unit. They thus constitute income which the local
government can invariably rely upon as the source of much needed funds.
-the average annual income shall include the income accruing to the general fund, exclusive of special
funds, transfers, and non-recurring income." To reiterate, IRAs are a regular, recurring item of income;
nil is there a basis, too, to classify the same as a special fund or transfer, since IRAs have a technical
definition and meaning all its own as used in the Local Government Code that unequivocally makes it
distinct from special funds or transfers referred to when the Code speaks of "funding support from the
national government, its instrumentalities and government-owned-or-controlled corporations.

 Reynaldo R. San Juan vs. Civil Service Commission, et al.

- The head of the Department of Budget and Management is not vested with the primary authority to
appoint the PBO and is free to appoint anyone he fancies in the event that the Governor recommends an
unqualified person.
-The DBM may appoint only from the list of qualified recommendees nominated by the Governor. If
none is qualified, he must return the list of nominees to the Governor explaining why no one meets the
legal requirements and ask for new recommendees who have the necessary eligibilities and
qualifications.
-The PBO is expected to synchronize his work with DBM. More important, however, is the proper
administration of fiscal affairs at the local level. Provincial and municipal budgets are prepared at the
local level and after completion are forwarded to the national officials for review. They are prepared by
the local officials who must work within the constraints of those budgets. They are not formulated in
the inner sanctums of an all-knowing DBM and unilaterally imposed on local governments whether or
not they are relevant to local needs and resources. It is for this reason that the nomination and
appointment process involves a sharing of power between the two levels of government.
-The clear mandate on local autonomy must be obeyed. Where a law is capable of two interpretations,
one in favor of centralized power in Malacañang and the other beneficial to local autonomy, the scales
must be weighed in favor of autonomy.
-Any creation, merger, abolition, or substantial boundary alteration cannot be done except in
accordance with the local government code and upon approval by a plebiscite.
-The power to create sources of revenue and to levy taxes was specifically settled upon local
governments.

 Arsadi M. Disomangcop, et al., vs. The Secretary of DPWH Simeon A. Datumanong

-The idea behind the Constitutional provisions for autonomous regions is to allow the separate
development of peoples with distinctive cultures and traditions. These cultures, as a matter of right,
must be allowed to flourish.
-However, the creation of autonomous regions does not signify the establishment of a sovereignty
distinct from that of the Republic, as it can be installed only "within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the Republic of the Philippines.
-Regional autonomy is the degree of self-determination exercised by the local government unit vis-à-
vis the central government.
-A necessary prerequisite of autonomy is decentralization. Decentralization is a decision by the central
government authorizing its subordinates, whether geographically or functionally defined, to exercise
authority in certain areas. It involves decision-making by subnational units. It is typically a delegated
power, wherein a larger government chooses to delegate certain authority to more local governments.
Federalism implies some measure of decentralization, but unitary systems may also decentralize.
Decentralization differs intrinsically from federalism in that the sub-units that have been authorized to
act (by delegation) do not possess any claim of right against the central government.
-Decentralization comes in two forms—deconcentration and devolution.
-Deconcentration is administrative in nature; it involves the transfer of functions or the delegation of
authority and responsibility from the national office to the regional and local offices. This mode of
decentralization is also referred to as administrative decentralization.
-Devolution, on the other hand, connotes political decentralization, or the transfer of powers,
responsibilities, and resources for the performance of certain functions from the central government to
local government units. This is a more liberal form of decentralization since there is an actual transfer
of powers and responsibilities. It aims to grant greater autonomy to local government units in
cognizance of their right to self-government, to make them self-reliant, and to improve their
administrative and technical capabilities.
- The creation of autonomous regions contemplates the grant of political autonomy—an autonomy
which is greater than the administrative autonomy granted to local government units. It held that "the
constitutional guarantee of local autonomy in the Constitution (Art. X, Sec. 2) refers to administrative
autonomy of local government units or, cast in more technical language, the decentralization of
government authority…. On the other hand, the creation of autonomous regions in Muslim Mindanao
and the Cordilleras, which is peculiar to the 1987 Constitution, contemplates the grant of political
autonomy and not just administrative autonomy to these regions.
-In treading their chosen path of development, the Muslims in Mindanao are to be given freedom and
independence with minimum interference from the National Government. This necessarily includes the
freedom to decide on, build, supervise and maintain the public works and infrastructure projects within
 the autonomous region. The devolution of the powers and functions of the DPWH in the ARMM and
transfer of the administrative and fiscal management of public works and funds to the ARG are meant
to be true, meaningful and unfettered. This unassailable conclusion is grounded on a clear consensus,
reached at the Constitutional Commission and ratified by the entire Filipino electorate, on the centrality
of decentralization of power as the appropriate vessel of deliverance for Muslim Filipinos and the
ultimate unity of Muslims and Christians in this country.
-

 Mayor Pablo B. Magtajas, et al. vs. Pryce Properties Corporation, Inc., et al.
- Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under
what is known as the General Welfare Clause
-Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare.
-Within their respective territorial jurisdictions, local government units shall ensure and support, among
other things, the preservation and enrichment of culture, promote health and safety, enhance the right of
the people to a balanced ecology, encourage and support the development of appropriate and self-
reliant scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants.
-The tests of a valid ordinance are well established. A long line of decisions has held that to be valid, an
ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
- Local councils exercise only delegated legislative powers conferred on them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local government units can undo the acts of
Congress, from which they have derived their power in the first place, and negate by mere ordinance
the mandate of the statute.
 Alfredo M. De Leon, et al. vs. Hon. Benjamin B. Esguerra
-Until the term of office of barangay officials has been determined by law, therefore, the term of office
of six (6) years provided for in the Barangay Election Act of 1982 should still govern. Contrary to the
stand of respondents, there is nothing inconsistent between the term of six (6) years for elective
Barangay officials and the 1987 Constitution, and the same should, therefore, be considered as still
operative, pursuant to Section 3, Article XVIII of the 1987 Constitution

 Cordillera Broad Coalition vs. COA

- A reading of E.O. No. 220 will easily reveal that what it actually envisions is the consolidation and
coordination of the delivery of services of line departments and agencies of the National Government in
the areas covered by the administrative region as a step preparatory to the grant of autonomy to the
Cordilleras. It does not create the autonomous region contemplated in the Constitution. It merely
provides for transitory measures in anticipation of the enactment of an organic act and the creation of
an autonomous region. In short, it prepares the ground for autonomy. This does not necessarily conflict
with the provisions of the Constitution on autonomous regions, as we shall show later.
-The Constitution provides for a basic structure of government in the autonomous region composed of
an elective executive and legislature and special courts with personal, family and property law
jurisdiction
- The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the
Cordilleras as hereinafter provided.
-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.
-CAR is not a public corporation or a territorial and political subdivision. It does not have a separate
juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the powers
that are normally granted to public corporations, e.g. the power to sue and be sued, the power to own
and dispose of property, the power to create its own sources of revenue, etc. As stated earlier, the CAR
was created primarily to coordinate the planning and implementation of programs and services in the
covered areas.
-Considering the control and supervision exercised by the President over the CAR and the offices
created under E.O. No. 220, and considering further the indispensable participation of the line
departments of the National Government, the CAR may be considered more than anything else as a
 regional coordinating agency of the National Government, similar to the regional development councils
which the President may create under the Constitution
-It must be clarified that the constitutional guarantee of local autonomy in the Constitution [Art. X, sec.
2] refers to the administrative autonomy of local government units or, cast in more technical language,
the decentralization of government authority
-On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras,
which is peculiar to the 1987 Constitution contemplates the grant of political autonomy and not just
administrative autonomy these regions. Thus, the provision in the Constitution for an autonomous
regional government with a basic structure consisting of an executive department and a legislative
assembly and special courts with personal, family and property law jurisdiction in each of the
autonomous regions.
-CAR is a mere transitory coordinating agency that would prepare the stage for political autonomy for
the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent territorial
and political subdivisions already enjoying local or administrative autonomy into an autonomous region
vested with political autonomy.

 Aquilino Q. Pimentel, Jr. vs. Hon. Alexander Aguirre, et al

- the Chief Executive wielded no more authority than that of checking whether local governments or
their officials were performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of their authority.
"Supervisory power, when contrasted with control, is the power of mere oversight over an inferior
body; it does not include any restraining authority over such body,"
-The extent of the local governments' autonomy is still subject to regulation, however limited, for the
purpose of enhancing self-government. The President exercises 'general supervision' over them, but
only to 'ensure that local affairs are administered according to law. He has no control over their acts in
the sense that he can substitute their judgments with his own.
- Under the Philippine concept of local autonomy, the national government has not completely
relinquished all its powers over local governments, including autonomous regions. Only administrative
powers over local affairs are delegated to political subdivisions. The purpose of the delegation is to
make governance more directly responsive and effective at the local levels. In turn, economic, political
and social development at the smaller political units are expected to propel social and economic growth
and development. But to enable the country to develop as a whole, the programs and policies effected
locally must be integrated and coordinated towards a common national goal. Thus, policy-setting for
the entire country still lies in the President and Congress.
- Local government units, in addition to having administrative autonomy in the exercise of their
functions, enjoy fiscal autonomy as well. Local fiscal autonomy does not however rule out any manner
of national government intervention by way of supervision, in order to ensure that local programs,
fiscal and otherwise, are consistent with national goals.
-The President, by constitutional fiat, is the head of the economic and planning agency of the
government, primarily responsible for formulating and implementing continuing, coordinated and
integrated social and economic policies, plans and programs for the entire country. Under the
Constitution, the formulation and the implementation of such policies and programs are subject to
"consultations with the appropriate public agencies, various private sectors, and local government
units." The President cannot do so unilaterally.
- There are therefore several requisites before the President may interfere in local fiscal matters:
(1) an unmanaged public sector deficit of the national government;
(2) consultations with the presiding officers of the Senate and the House of Representatives and the
presidents of the various local leagues; and
(3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and
Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in
no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third
fiscal year preceding the current one.
- A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the national
internal revenue. The Local Government Code specifies further that the release shall be made directly
to the LGU concerned within five (5) days after every quarter of the year and "shall not be subject to
any lien or holdback that may be imposed by the national government for whatever purpose."

 Aquilino Q. Pimentel, Jr., et al. vs. Executive Secretary Paquito N. Ochoa, et al

- The LGC does not imply a complete relinquishment of central government powers on the matter of
providing basic facilities and services. The national government is not precluded from taking a direct
hand in the formulation and implementation of national development programs especially where it is
implemented locally in coordination with the LGUs concerned.
- The Constitution declares it a policy of the State to ensure the autonomy of local governments ( Sec 3,
Sec 14 Art 10 1987 Constitution). To fully secure to the LGUs the genuine and meaningful autonomy
that would develop them into self-reliant communities, Section 17 LGC vested upon the LGUs the
duties and functions pertaining to the delivery of basic services and facilities. However, par (c) of Sec
17 provides a categorical exception of cases involving nationally-funded projects, facilities, programs
 and services.
- Autonomy is either decentralization of administration or decentralization of power
-Decentralization of administration - when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and make local governments
‘more responsive and accountable’ and ‘ensure their fullest development as self-reliant communities.’
The President exercises ‘general supervision’ over them, but only to ensure that local affairs are
administered according to law.’ He has no control over their acts in the sense that he can substitute their
judgments with his own.
 -Decentralization of power - involves an abdication of political power in favor of LGUs   declared to
be autonomous. The autonomous government is free to chart its own destiny and shape its future with
minimum intervention from central authorities. This amounts to ‘self-immolation,’ since the
autonomous government becomes accountable not to the central authorities but to its constituency.
- It is thus clear that the LGC does not imply a complete relinquishment of central government powers
on the matter of providing basic facilities and services. The national government is not precluded from
taking a direct hand in the formulation and implementation of national development programs
especially where it is implemented locally in coordination with the LGUs concerned.
-While it is through a system of decentralization that the State shall promote a more responsive and
accountable local government structure, the concept of local autonomy does not imply the conversion
of local government units into "mini - states." With local autonomy, the Constitution did nothing more
than "to break up the monopoly of the national government over the affairs of the local government"
and, thus, did not intend to sever "the relation of partnership and interdependence between the central
administration and local government units."

 Sultan Alimbusar P. Limbona vs. Conte Mangelin, et al.,

-Courts of law have jurisdiction over the autonomous governments or regions.
-. An autonomous government that enjoys autonomy of the latter category [CONST. (1987), Art. X,
Sec. 15.] is subject alone to the decree of the organic act creating it and accepted principles on the
effects and limits of "autonomy." On the other hand, an autonomous government of the former class is,
as we noted, under the supervision of the national government acting through the President (and the
Department of Local Government).

 Hon. Jose D. Lina, Sr., et al. vs. Hon. Francisco Dizon Paño,

 Laguna Lake Development Authority vs. Court of Appeals, et al.,

- LLDA has jurisdiction over such matters because the charter of the LLDA prevails over the Local
Government Code of 1991. The said charter constitutes a special law, while the latter is a general law.
It is basic in statutory construction that the enactment of a later legislation which is a general law,
cannot be construed to have repealed a special law. The special law is to be taken as an exception to the
general law in the absence of special circumstances forcing a contrary conclusion.

 League of Provinces of the Philippines vs. Department of Environment and Natural Resources, et al.,
-General supervision by the President means no more than seeing to it that laws are faithfully executed
or that subordinate officer’s act within the law.
-The constitutional guarantee of local autonomy in the Constitution Art. X, Sec. 2 refers to the
administrative autonomy of local government units or, cast in more technical language, the
decentralization of government authority. It does not make local governments sovereign within the
State. Administrative autonomy may involve devolution of powers, but subject to limitations like
following national policies or standards, and those provided by the Local Government Code, as the
structuring of local governments and the allocation of powers, responsibilities, and resources among the
different local government units and local officials have been placed by the Constitution in the hands of
Congress under Section 3, Article X of the Constitution.
- Local Government Code did not fully devolve the enforcement of the small-scale mining law to the
provincial government, as its enforcement is subject to the supervision, control and review of the
DENR, which is in charge, subject to law and higher authority, of carrying out the State's constitutional
mandate to control and supervise exploration, development, and utilization of the country's natural
resources. 

 The Province of Batangas vs. Hon. Alberto G. Romulo, et al.,

-The State shall ensure the local autonomy of local governments“. Consistent with the principle of local
autonomy, the Constitution confines the President’s power over the LGUs to one of general
supervision, which has been interpreted to exclude the power of control.
- control lays down the rules in the doing of an act – the officer has the discretion to order his
subordinate to do or redo the act, or decide to do it himself; supervision merely sees to it that the rules
are followed but has no authority to set down the rules or the discretion to modify/replace them.
- The entire process involving the distribution & release of the LGSEF is constitutionally
impermissible. The LGSEF is part of the IRA or “just share” of the LGUs in the national taxes. Sec.6,
Art.X of the Constitution mandates that the “just share”shall be automatically released to the LGUs.
 Since the release is automatic, the LGUs aren’t required to perform any act to receive the “just share” –
it shall be released to them “without need of further action“. To subject its distribution & release to the
vagaries of the implementing rules & regulations as sanctioned by the assailed provisos in the GAAs of
1999-2001 and the OCD Resolutions would violate this constitutional mandate.
- The only possible exception to the mandatory automatic release of the LGUs IRA is if the national
internal revenue collections for the current fiscal year is less than 40% of the collections of the 3rd
preceding fiscal year.
- The Oversight Committee’s authority is limited to the implementation of the LGC of 1991 not to
supplant or subvert the same, and neither can it exercise control over the IRA of the LGUs.
-Congress may amend any of the provisions of the LGC but only through a separate law and not
through appropriations laws or GAAs. Congress cannot include in a general appropriations bill matters
that should be more properly enacted in a separate legislation
- A general appropriations bill is a special type of legislation, whose content is limited to specified
sums of money dedicated to a specific purpose or a separate fiscal unit –any provision therein which is
intended to amend another law is considered an “inappropriate provision“. Increasing/decreasing the
IRA of LGUs fixed in the LGC of 1991 are matters of general & substantive law. To permit the
Congress to undertake these amendments through the GAAs would unduly infringe the fiscal autonomy
of the LGUs.
 -The value of LGUs as institutions of democracy is measured by the degree of autonomy they enjoy.
Our national officials should not only comply with the constitutional provisions in local autonomy but
should also appreciate the spirit and liberty upon which these provisions are based.

 Alfredo Tano, et al. vs. Gov. Salvador P. Socrates, et al.,

-The Local Government Code vests municipalities with the power to grant fishery privileges in
municipal waters and impose rentals, fees or charges therefor. The Sangguniangs are directed to enact
ordinances that protect the environment and impose appropriate penalties for acts which endanger the
environment such as dynamite fishing and other forms of destructive fishing.
- One of the devolved powers under the Code is the enforcement of fishery laws in municipal waters
including the conservation of mangroves. In light then of the principles of decentralization and
devolution and the powers granted therein to local government units under the General Welfare Clause
and those which involve the exercise of police power, the validity of the questioned Ordinances cannot
be doubted.
- The ordinances find full support under R.A. 7611, otherwise known as the Strategic Environment Plan
(SEP) for Palawan Act, approved on 19 June 1992 which adopts a comprehensive framework for the
sustainable development of Palawan compatible with protecting and enhancing the natural resources
and endangered environment of the province.

 City of General Santos vs. COA

- Designing and implementing a local government units own organizational structure and staffing
pattern also implies the power to revise and reorganize. Without such power, local governments will
lose the ability to adjust to the needs of its constituents. Effective and efficient governmental services
especially at the local government level require rational and deliberate changes planned and executed in
good faith from time to time.
-The grant and release of the hospitalization and health care insurance benefits given to LGU officials
and employees were validly enacted through an ordinance passed by petitioners Sangguniang
Panlalawigan.
- Local autonomy allows an interpretation of Sections 76 and 16 as granting petitioner city the authority
to create its organization development program.

 Gov. Luis Raymund F. Villafuerte, Jr., et al. vs. Hon. Jesse M. Robredo,
- Local autonomy means a more responsive and accountable local government structure instituted
through a system of decentralization.
-Autonomy is either decentralization of administration or decentralization of power. There is
decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make
local governments "more responsive and accountable," and "ensure their fullest development as self-
reliant communities and make them more effective partners in the pursuit of national development and
social progress."

 Lucena D. Demaala vs. COA, G.R. No. 199752, February 17, 2015;
- Setting the rate of the additional levy for the special education fund at less than 1% is within the
taxing power of local government units. It is consistent with the guiding constitutional principle of local
autonomy.
- The power to tax is an attribute of sovereignty. It is inherent in the state. Provinces, cities,
municipalities, and barangays are mere territorial and political subdivisions of the state. They act only
as part of the sovereign. Thus, they do not have the inherent power to tax. Their power to tax must be
prescribed by law.
-Consistent with the view that the power to tax does not inhere in local government units, this court has
 held that a reserved temperament must be adhered to in construing the extent of a local government
unit’s power to tax.
- It is settled that a municipal corporation unlike a sovereign state is clothed with no inherent power of
taxation. The charter or statute must plainly show an intent to confer that power or the municipality,
cannot assume it. And the power when granted is to be construed in strictissimi juris. Any doubt or
ambiguity arising out of the term used in granting that power must be resolved against the municipality.
Inferences, implications, deductions – all these – have no place in the interpretation of the taxing power
of a municipal corporation.
- Each local government unit shall have the power to create its own sources of revenues and to levy
taxes, fees and charges subject to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue
exclusively to the local governments.
-The taxing power granted by constitutional fiat to local government units exists in the wider context to
"ensure the autonomy of local governments.”
-The Local Government Code allows provinces and cities, as well as municipalities in Metro Manila, to
collect, on top of the basic annual real property tax, an additional levy which shall exclusively accrue to
the special education fund

 Dr. Rolando B. Mangune, et al. vs. Hon. Secretary Eduardo Ermita, et al.,

 Michael L. Rama, et al. vs. Gilbert P. Moises

-Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit
their voters from voting for provincial elective officials, shall be independent of the province, but the
voters of component cities within a province, whose charters contain no such prohibition, shall not be
deprived of their right to vote for elective provincial officials.
- Hence, all matters relating to its administration, powers and functions were exercised through its local
executives led by the City Mayor, subject to the President's retained power of general supervision over
provinces, HUCs, and independent component cities pursuant to and in accordance with Section 252 of
the 1991 Local Government Code, a law enacted for the purpose of strengthening the autonomy of the
LGUs in accordance with the 1987 Constitution.
-Article X of the 1987 Constitution guarantees and promotes the administrative and fiscal autonomy of
the LGUs. The foregoing statutory enactments enunciate and implement the local autonomy provisions
explicitly recognized under the 1987 Constitution. To conform with the guarantees of the Constitution
in favor of the autonomy of the LGUs, therefore, it becomes the duty of the Court to declare and
pronounce Section 3(b) of P.D. No. 198 as already partially unconstitutional.

 Congressman Hermilando I. Mandanas, et al. vs. Executive Secretary Paquito N. Ochoa, Jr.,
- The share of the LGUs, heretofore known as the Internal Revenue Allotment (IRA), has been
regularly released to the LGUs. According to the implementing rules and regulations of the LGC, the
IRA is determined on the basis of the actual collections of the National Internal Revenue Taxes
(NIRTs) as certified by the Bureau of Internal Revenue (BIR).
-Fiscal autonomy means that local governments have the power to create their own sources of revenue
in addition to their equitable share in the national taxes released by the National Government, as well as
the power to allocate their resources in accordance with their own priorities. Such autonomy is as
indispensable to the viability of the policy of decentralization as the other.
-Two groups of LGUs enjoy decentralization in distinct ways. The decentralization of power has been
given to the regional units (namely, the Autonomous Region for Muslim Mindanao [ARMM] and the
constitutionally-mandated Cordillera Autonomous Region [CAR]). The other group of LGUs (i.e.,
provinces, cities, municipalities and barangays) enjoy the decentralization of administration. The
distinction can be reasonably understood.
-The provinces, cities, municipalities and barangays are given decentralized administration to make
governance at the local levels more directly responsive and effective. In turn, the economic, political
and social developments of the smaller political units are expected to propel social and economic
growth and development. In contrast, the regional autonomy of the ARMM and the CAR aims to
permit determinate groups with common traditions and shared social-cultural characteristics to freely
develop their ways of life and heritage, to exercise their rights, and to be in charge of their own affairs
through the establishment of a special governance regime for certain member communities who choose
their own authorities from within themselves, and exercise the jurisdictional authority legally accorded
to them to decide their internal community affairs.
-Only Congress could create provinces and cities. This was because the creation of provinces and cities
necessarily entailed the creation of legislative districts, a power that only Congress could exercise
pursuant to Section 5, Article VI of the 1987 Constitution.
-Decentralization can be considered as the decision by the central government to empower its
subordinates, whether geographically or functionally constituted, to exercise authority in certain areas.
It involves decision-making by subnational units, and is typically a delegated power, whereby a larger
government chooses to delegate authority to more local government.
-As a system of transferring authority and power from the National Government to the LGUs,
decentralization in the Philippines may be categorized into four, namely:
 (1) political decentralization or devolution;
(2) administrative decentralization or deconcentration;
(3) fiscal decentralization; and
(4) Policy or decision-making decentralization.
-Political decentralization or devolution occurs when there is a transfer of powers, responsibilities, and
resources from the central government to the LOU s for the performance of certain functions. It is a
more liberal form of decentralization because there is an actual transfer of powers and responsibilities.
It aims to grant greater autonomy to the LGUs in cognizance of their right to self-government, to make
them self-reliant, and to improve their administrative and technical capabilities. It is an act by which the
National Government confers power and authority upon the various LGUs to perform specific
functions and responsibilities. It encompasses reforms to open sub-national representation and policies
to "devolve political authority or electoral capacities to sub-national actors.” Section 16 to Section 19 of
the LGC characterize political decentralization in the LGC as different LGUs empowered to address the
different needs of their constituents. In contrast, devolution in favor of the regional units is more
expansive because they are given the authority to regulate a wider array of subjects, including personal,
family and property relations.
-Administrative decentralization or deconcentration involves the transfer of functions or the delegation
of authority and responsibility from the national office to the regional and local offices. Consistent
with this concept, the LGC has created the Local School Boards, the Local Health Boards and the Local
Development Councils, and has transferred some of the authority from the agencies of the National
Government, like the Department of Education and the Department of Health, to such bodies to better
cope up with the needs of particular localities.
-Fiscal decentralization means that the LGUs have the power to create their own sources of revenue in
addition to their just share in the national taxes released by the National Government. It includes the
power to allocate their resources in accordance with their own priorities. It thus extends to the
preparation of their budgets, so that the local officials have to work within the constraints of their
budgets. The budgets are not formulated at the national level and imposed on local governments,
without regard as to whether or not they are relevant to local needs and resources. Hence, the necessity
of a balancing of viewpoints and the harmonization of proposals from both local and national officials,
who in any case are partners in the attainment of national goals, is recognized and addressed.
-The constitutional authority extended to each and every LGU to create its own sources of income and
revenue has been formalized from Section 128 to Section 133 of the LGC. To implement the LGUs'
entitlement to the just share in the national taxes, Congress has enacted Section 284 to Section 288 of
the LGC. Congress has further enacted Section 289 to Section 294 of the LGC to define the share of the
LGUs in the national wealth. Indeed, the requirement for the automatic release to the LGUs of their just
share in the national taxes is but the consequence of the constitutional mandate for fiscal
decentralization.
-The concept of local fiscal autonomy does not exclude any manner of intervention by the National
Government in the form of supervision if only to ensure that the local programs, fiscal and otherwise,
are consistent with the national goals.
-policy- or decision-making decentralization exists if at least one sub-national tier of government has
exclusive authority to make decisions on at least one policy issue.
-certain limitations are and can be imposed by Congress in all the forms of decentralization, for local
autonomy, whether as to power or as to administration, is not absolute. The LGUs remain to be the
tenants of the will of Congress subject to the guarantees that the Constitution itself imposes.

 Mark Anthony V. Zabal, et al. vs. Rodrigo R. Duterte, et al

-The fact that other government agencies are involved in the rehabilitation works does not create the
inference that the powers and functions of the LGUs are being encroached upon. The respective roles
of each government agency are particularly defined and enumerated in Executive Order No. 53 65 and all
are in accordance with their respective mandates
-The situation in Boracay can in no wise be characterized or labelled as a mere local issue as to leave its
rehabilitation to local actors. Boracay is a prime tourist destination which caters to both local and
foreign tourists. Any issue thereat has corresponding effects, direct or otherwise, at a national level.
This, for one, reasonably takes the issues therein from a level that concerns only the local officials. At
any rate, notice must be taken of the fact that even if the concerned LGUs have long been fully aware
of the problems afflicting Boracay, they failed to effectively remedy it.

 Republic of the Philippines, et al., vs. Provincial Government of Palawan

-An LGU’s territorial jurisdiction is not necessarily co-extensive with its exercise or assertion of
powers. To hold otherwise may result in condoning acts that are clearly ultra vires. It may lead to, the
words of the Republic, LGUs ‘rush(ing) to exercise its powers and functions in areas rich in natural
resources even if outside its boundaries) with the intention of seeking a share in the proceeds of its
exploration’ – a situation that ‘would sow conflict not only among the local government units and the
national government but worse, between and among local government units.
-Estoppel does not lie against the Republic as previous acknowledgments of Palawan’s share were
based on the mistaken assumption that it it is entitled to the said allocation.
-Section1, Article X of the 1987 Constitution did not apportion the entire Philippine territory among the
 LGUs such that at any one time, a body of water or a piece of land should belong to some province or
city
-The United Nations Convention on the Law of the Seas (UNCLOS) did not confer on LGUs their own
continental shelf as this pertains to the coastal state.
IV. What are the Philippine Municipal Corporations (Local Government)?
Philippine Municipal Corporations (Art 10, Sec 1 1987 Philippine Constitution):
Province (Sec 459 of LGC of 1991);
City (Sec 448 of LGC of 1991); Municipality (Sec 440 of LGC of 1991);
Barangay (Sec 384 of LGC of 1991);
Autonomous Regions in Muslim Mindanao & Cordilleras (Art 10, Secs 1, 15, 16, 17, 18, 20 & 21, 1987
Philippine Constitution, Republic Act No. 6734 as amended by R.A. 9054, Administrative Order No. 220).
Cases:
 Limbonas v. Mangelin, (see prior citation)

 Datu Firdausi I.Y. Abbas, et al. vs. COMELEC

- The framers of the Constitution must have intended that the majority of votes must come from each of
the constituent units and not all the votes of the provinces and cities.
-It is not for the Court to decide on the wisdom of the law concerning the inclusion of provinces and
cities should not be included in a plebiscite.
- The power of the President to merge administrative regions is inherent in his power of general
supervision over local governments. Besides, administrative regions are not territorial or political
regions.

 Arsadi M. Disomangcop, et al. vs. The Secretary of DPWH Simeon A. Datumanong (see prior citation)

 Dr. Lampa I. Pandi, et al. vs. Court of Appeals

-An ordinary statute, whether general or special, cannot amend an organic act that provides for an
autonomous region which under the Constitution may only be created, and therefore changed, through a
plebiscite called for the purpose.  Under Section 3, Article XVIII of the Organic Act of 1989, any
amendment to the Organic Act required the approval of a majority of the votes cast in a plebiscite called
for the purpose within the constituent units of the ARMM. 
-Unless this amendatory process is followed, no subsequent law can amend or revise the Organic Act of
1989.   In any event, with respect to the appointment and assignment of provincial health officers, the
Revised Administrative Code did not change the existing law applicable to the ARMM under the
Organic Act of 1989.

 Bai Sandra S. A. Sema vs. COMELEC

-The creation of local government units is governed by Section 10, Article X of the Constitution, which
provides: 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.
Thus, the creation of any of the four local government units – province, city, municipality or barangay
– must comply with three conditions. First, the creation of a local government unit must follow the
criteria fixed in the Local Government Code. Second, such creation must not conflict with any
provision of the Constitution. Third, there must be a plebiscite in the political units affected.
-Under its plenary legislative powers, Congress can delegate to local legislative bodies the power to
create local government units, subject to reasonable standards and provided no conflict arises with any
provision of the Constitution. In fact, Congress has delegated to provincial boards, and city and
municipal councils, the power to create barangays within their jurisdiction, subject to compliance with
the criteria established in the Local Government Code, and the plebiscite requirement in Section 10,
Article X of the Constitution.
-There is no provision in the Constitution that conflicts with the delegation to regional legislative
bodies of the power to create municipalities and barangays, provided Section 10, Article X of the
Constitution is followed. However, the creation of provinces and cities is another matter. Section 5 (3),
Article VI of the Constitution provides, "Each city with a population of at least two hundred fifty
thousand, or each province, shall have at least one representative" in the House of Representatives
-A province cannot be created without a legislative district because it will violate Section 5 (3), Article
VI of the Constitution. For the same reason, a city with a population of 250,000 or more cannot also be
created without a legislative district. Thus, the power to create a province, or a city with a population of
250,000 or more, requires also the power to create a legislative district.
-The power to create a province or city inherently involves the power to create a legislative district. For
Congress to validly delegate the power to create a province or city, it must also validly delegate at the
same time the power to create a legislative district
-The power to increase the allowable membership in the House of Representatives, and to reapportion
legislative districts, is vested exclusively in Congress.
-. Section 5 (1), Article VI of the Constitution vests in Congress the power to increase, through a law,
the allowable membership in the House of Representatives. Section 5 (4) empowers Congress to
 reapportion legislative districts. The power to reapportion legislative districts necessarily includes the
power to create legislative districts out of existing ones. The allowable membership of the House of
Representatives can be increased, and new legislative districts of Congress can be created, only through
a national law passed by Congress.
-The creation of the ARMM, and the grant of legislative powers to its Regional Assembly under its
organic act, did not divest Congress of its exclusive authority to create legislative districts. This is clear
from the Constitution and the ARMM Organic Act, as amended. Nothing in Section 20, Article X of
the Constitution authorizes autonomous regions, expressly or impliedly, to create or reapportion
legislative districts for Congress.
-Since the ARMM Regional Assembly has no legislative power to enact laws relating to national
elections, it cannot create a legislative district whose representative is elected in national elections.
Indeed, the office of a legislative district representative to Congress is a national office, and its
occupant, a Member of the House of Representatives, is a national official. It would be incongruous for
a regional legislative body like the ARMM Regional Assembly to create a national office when its
legislative powers extend only to its regional territory.
-To allow the ARMM Regional Assembly to create a national office is to allow its legislative powers to
operate outside the ARMM’s territorial jurisdiction. This violates Section 20, Article X of the
Constitution which expressly limits the coverage of the Regional Assembly’s legislative powers within
its territorial jurisdiction. Clearly, the power to create or reapportion legislative districts cannot be
delegated by Congress but must be exercised by Congress itself.
-A province cannot legally be created without a legislative district because the Constitution mandates
that each province shall have at least one representative.
-

 Cordillera Broad Coalition vs. Commission on Audit, G.R. No. 79956 (consolidated with G.R. No.
82217) (see prior citation)

 Cordillera Regional Assembly Member Alexander P. Ordillo vs. COMELEC

-The keyword in Article X, Section 15 of the 1987 Constitution – provinces, cities, municipalities and
geographical areas connote that “region” is to be made up of more than one constituent unit. The term
“region” used in its ordinary sense means two or more provinces.
-

Special Metropolitan Political Subdivisions (Art 10, Sec 11 of 1987 Philippine Constitution; Republic
Act 7924;

 Metropolitan Manila Development Authority (MMDA) vs. Bel-Air Village Association, Inc.
-MMDA cannot exercises police power
-It bears stressing that police power is lodged primarily in the National Legislature. It cannot be
exercised by any group or body of individuals not possessing legislative power. The National
Legislature, however, may delegate this power to the President and administrative boards as well as the
lawmaking bodies of municipal corporations or local government units. Once delegated, the agents can
exercise only such legislative powers as are conferred on them by the national lawmaking body
-A local government is a "political subdivision of a nation or state which is constituted by law and has
substantial control of local affairs." The Local Government Code of 1991 defines a local government
unit as a "body politic and corporate." — one endowed with powers as a political subdivision of the
National Government and as a corporate entity representing the inhabitants of its territory. Local
government units are the provinces, cities, municipalities and barangays. They are also the territorial
and political subdivisions of the state.
-Local government units exercise police power through their respective legislative bodies. The
legislative body of the provincial government is the sangguniang panlalawigan, that of the city
government is the sangguniang panlungsod, that of the municipal government is the sangguniang
bayan, and that of the barangay is the sangguniang barangay. The Local Government Code of 1991
empowers the sangguniang panlalawigan, sangguniang panlungsod and sangguniang bayan to "enact
ordinances, approve resolutions and appropriate funds for the general welfare of the [province, city or
municipality, as the case may be], and its inhabitants pursuant to Section 16 of the Code and in the
proper exercise of the corporate powers of the [province, city municipality] provided under the
Code . . . " The same Code gives the sangguniang barangay the power to "enact ordinances as may be
necessary to discharge the responsibilities conferred upon it by law or ordinance and to promote the
general welfare of the inhabitants thereon."
-It will be noted that the powers of the MMDA are limited to the following acts: formulation,
coordination, regulation, implementation, preparation, management, monitoring, setting of policies,
installation of a system and administration.
-There is no syllable in R. A. No. 7924 that grants the MMDA police power, let alone legislative
power. Even the Metro Manila Council has not been delegated any legislative power. Unlike the
legislative bodies of the local government units, there is no provision in R. A. No. 7924 that empowers
the MMDA or its Council to “enact ordinances, approve resolutions and appropriate funds for the
general welfare” of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a
 “development authority.” It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people’s organizations, non-governmental
organizations and the private sector for the efficient and expeditious delivery of basic services in the
vast metropolitan area. All its functions are administrative in nature. It is thus beyond doubt that the
MMDA is not a local government unit or a public corporation endowed with legislative power. It is not
even a “special metropolitan political subdivision” as contemplated in Section 11, Article X of the
Constitution.

 MMDA v. Dante O. Garin

-MMDA may not validly exercise police power. Police Power, having been lodged primarily in the
National Legislature, cannot be exercised by any group or body of individuals not possessing
legislative power. The National Legislature, however, may delegate this power to the president and
administrative boards as well as the lawmaking bodies of municipal corporations or local government
units (LGUs). Once delegated, the agents can exercise only such legislative powers as are conferred on
them by the national lawmaking body.
-Metropolitan or Metro Manila is a body composed of several local government units. With the passage
of Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a "special development and
administrative region" and the administration of "metro-wide" basic services affecting the region placed
under "a development authority" referred to as the MMDA. Thus: The MMDA is, as termed in the
charter itself, a "development authority." It is an agency created for the purpose of laying down policies
and coordinating with the various national government agencies, people's organizations, non-
governmental organizations and the private sector for the efficient and expeditious delivery of basic
services in the vast metropolitan area. All its functions are administrative in nature and these are
actually summed up in the charter itself.
V. How are the local governments created, converted, merged, divided, altered and abolished?
Creation & Dissolution. Presumption of Constitutionality. Cases:
 Alvarez v. Guingona [see prior citation];

 League of Cities of the Philippines et al. v. COMELEC, et al.

Authority (Sec 6, R.A. 7160.

Requisites/Limitations on Creation/Conversion
 (Art 10, Sec 10 of 1987 Philippine Constitution; Sec 386, 442, 450 & 461 of LGC of 1991.):

Plebiscite (Sec 10, LGC of 1991;

 Patricio Tan, et al. vs. COMELEC

-Whenever a province is created, divided or merged and there is substantial alteration of the
boundaries, “the approval of a majority of votes in the plebiscite in the unit or units affected” must first
be obtained.
-when the Constitution speaks of “the unit or units affected” it means all of the people of the
municipality if the municipality is to be divided such as in the case at bar or of the people of two or
more municipalities if there be a merger.”
-The remaining portion of the parent province is as much an area affected. The substantial alteration of
the boundaries of the parent province, not to mention the adverse economic effects it might suffer,
eloquently argue the points raised by the petitioners.”
-SC pronounced that the plebscite has no legal effect for being a patent nullity.

 Hon. Roy A. Padilla, Jr. vs. COMELEC

-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 the approval by the majority of the votes cast in a plebiscite in the
political units directly affected—Section 10, Article X, 1987 Constitution.
-When the law states that the plebiscite shall be conducted "in the political units directly affected," it
means that residents of the political entity who would be economically dislocated by the separation
thereof have a right to vote in said plebiscite. What is contemplated by the phrase "political units
directly affected," is the plurality of political units which would participate in the plebiscite.

 Simplicio C. Grino, et al. v. COMELEC, et al.,G.R. No. 105120, September 2, 1992;

- COMELEC was under mistaken presumption that under the LGC of 1991, whether or not the
conversion of Guimaras into a regular province is ratified by the people in plebiscite, the President will
appoint provincial officials.
- Voters favored for the conversion of Guimaras into a regular province so there was need to undo what
COMELEC has done in plebiscite. There ballots in Guimaras should have contained spaces for Gov
and Vice Gov. etc. but SC has now considered the case moot and academic since majority voted in the
affirmative for the conversion of Guimaras.
 Lopez, Jr. vs. COMELEC, G.R. No. L-56022 (consolidated with G.R. No. L-56124), May 31,
1985),
- Commission on Elections was charged with the duty of supervising the conduct of such plebiscite and
empowered to promulgate the necessary rules and regulations to implement the proclamation.
-The presidential power of control over acts of the Metro Manila Commission is limited to those that
may be considered national in character. There can be no valid objection to such exercise of authority.
It is undisputed that by virtue of the 1981 amendments to the Constitution, once again, "there is one
purpose which is crystal-clear and is readily visible without the projection of judicial search light, and
that is, the establishment of a single, not plural, Executive.

Sec 7 of LGC of 1991:

Income (Alvarez v. Guingona [see prior citation];
Population; Land Area
 Juanito Mariano, Jr., et al. vs. COMELEC
-The importance of drawing with precise strokes the territorial boundaries of a local unit of government
cannot be overemphasized. The boundaries must be clear for they define the limits of the territorial
jurisdiction of a local government unit. It can legitimately exercise powers of government only within
the limits of its territorial jurisdiction. Beyond these limits, its acts are ultra vires. Needless to state, any
uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of
governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be
avoided by the Local Government Code in requiring that the land area of a local government unit must
be spelled out in metes and bounds, with technical descriptions.
- the existence of a boundary dispute does not per se present an insurmountable difficulty which will
prevent Congress from defining with reasonable certitude the territorial jurisdiction of a local
government unit.
-The Constitution clearly provides that Congress shall be composed of not more than two hundred fifty
(250) members, "unless otherwise fixed by law". As thus worded, the Constitution did not preclude
Congress from increasing its membership by passing a law, other than a general reapportionment of the
law.
-To hold that reapportionment can only be made through a general apportionment law, with a review of
all the legislative districts allotted to each local government unit nationwide, would create an
inequitable situation where a new city or province created by Congress will be denied legislative
representation for an indeterminate period of time.
-
 Republic of the Philippines, et al., vs. Provincial Government of Palawan

Other constitutional limitations, e.g., Bill of Rights.

Corporate Existence
 Flaviano Mejia, et al. vs. Pedro U. Balolong, et al.
-It is obvious that to create a public corporation or city is one thing and to organize the government
thereof is another. A public corporation is created and comes into existence from the moment the law
or charter that creates it becomes effective, and in case of a private corporation it comes into existence
as a juridical entity from the time the articles of incorporation thereof is registered in the proper bureau
or office in accordance with law.
-But a public as well as a private corporation cannot act or transact business before the governing body
thereof is organized or the officers who shall act for or in their representation have been chosen either
by appointment or election The organization of the government of a city presupposes necessarily the
previous existence of the city at the time its government is organized, because no officials of the city
may be appointed or elected before the city has come into existence.

Division & Merger & Abolition (Secs 8 & 9 of LGC of 1991).

De Facto Municipal Corporations. Requisites
 The Municipality of Malabang, et al. vs. Pangandapun Benito
I. The color of authority requisite to the organization of a de facto municipal corporation may be:
"1. A valid law enacted by the legislature.
"2. An unconstitutional law, valid on its face, which has either (a) been upheld for a time by the courts
or (b) not yet been declared void; provided that a warrant for its creation can be found in some other
valid law or in the recognition of its potential existence by the general laws or constitution of the state
"II. There can be no de facto municipal corporation unless either directly or potentially, such a de jure
corporation is authorized by some legislative fiat.
"III. There can be no color of authority in an unconstitutional statute alone, the invalidity of which is
apparent on its face.
"IV. There can be no de facto corporation created to take the place of an existing de jure corporation,
as such organization would clearly be an usurper."[10]
In the cases where a de facto municipal corporation was recognized as such despite the fact that the
statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration
that there was some other valid law giving corporate vitality to the organization.
  Emmanuel Pelaez vs. Audtior General
Attack Invalidity
 Malabang v. Benito
 Municipality of San Narciso, Quezon, et al. vs. Hon. Antonio V. Mendez, Sr

 Municipality of Candijay, Bohol vs. CA
 Municipality of Jimenez, Misamis Occidental v. Baz, Jr.

VI. What is the LGC of 1991 (RA 7160)?

The Local Government Code (R.A. 7160). Effectivity (Sec 536). Scope (Sec 4). Declaration of Policy (Sec
2). Operative Principles of Decentralization (Sec 3). Rules of Interpretation (Sec 5). Salient Features of the
Local Government Code. (The LGC of 1991 Annotated by Rodriguez; The LGC Revisited 2011 Edition by
Aquilino Pimentel; LGC Annotated by Miriam Defensor Santiago; The Essentials of Local Government Law
in the Philippines by Daryl Bretch M. Largo)