PUBLIC CORPORATION
ATTY. DY
CONSTITUTION
ARTICLE X
LOCAL GOVERNMENT
GENERAL PROVISIONS
Section 1. 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.
Section 2. The territorial and political subdivisions shall
enjoy local autonomy.
Section 3. The Congress shall enact a local government code
which shall provide for a more responsive and accountable
local government structure instituted through a system of
decentralization with effective mechanisms of recall,
initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and
resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters
relating to the organization and operation of the local units.
Section 4. The President of the Philippines shall exercise
general supervision over local governments. Provinces with
respect to component cities and municipalities, and cities
and municipalities with respect to component barangays,
shall ensure that the acts of their component units are within
the scope of their prescribed powers and functions.
Section 5. 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.
Section 6. Local government units shall have a just share, as
determined by law, in the national taxes which shall be
automatically released to them.
Section 7. 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.
Section 8. The term of office of elective local officials,
except barangay officials, which shall be determined by law,
shall be three years and no such official shall serve for more
than three consecutive terms. Voluntary renunciation of the
office for any length of time shall not be considered as an
interruption in the continuity of his service for the full term
for which he was elected.
Section 9. Legislative bodies of local governments shall
have sectoral representation as may be prescribed by law.
Section 10. No province, city, municipality, or barangay
may be created, divided, merged, abolished, or its boundary
substantially altered, except in accordance with the criteria
established in the local government code and subject to
approval by a majority of the votes cast in a plebiscite in the
political units directly affected.
Section 11. The Congress may, by law, create special
metropolitan political subdivisions, subject to a plebiscite as
set forth in Section 10 hereof. The component cities and
municipalities shall retain their basic autonomy and shall be
entitled to their own local executive and legislative
assemblies. The jurisdiction of the metropolitan authority
that will thereby be created shall be limited to basic services
requiring coordination.
Section 12. 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. 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.
Section 13. Local government units may group themselves,
consolidate or coordinate their efforts, services, and
resources for purposes commonly beneficial to them in
accordance with law.
Section 14. The President shall provide for regional
development councils or other similar bodies composed of
local government officials, regional heads of departments
and other government offices, and representatives from non-
governmental organizations within the regions for purposes
of administrative decentralization to strengthen the
autonomy of the units therein and to accelerate the economic
and social growth and development of the units in the
region.
ADMINISTRATIVE CODE
INTRODUCTORY PROVISIONS
Section 1. Title. - This Act shall be known as the
"Administrative Code of 1987."
Section 2. General Terms Defined. - Unless the specific
words of the text, or the context as a whole, or a particular
statute, shall require a different meaning:
(1) Government of the Republic of the Philippines refers to
the corporate governmental entity through which the
functions of government are exercised throughout the
Philippines, including, save as the contrary appears from the
context, the various arms through which political authority
is made effective in the Philippines, whether pertaining to
the autonomous regions, the provincial, city, municipal or
barangay subdivisions or other forms of local government.
(2) National Government refers to the entire machinery of
the central government, as distinguished from the different
forms of local governments.
(3) Local Government refers to the political subdivisions
established by or in accordance with the Constitution.
(4) Agency of the Government refers to any of the various
units of the Government, including a department, bureau,
office, instrumentality, or government-owned or controlled
corporations, or a local government or a distinct unit therein.
(5) National Agency refers to a unit of the National
Government.
(6) Local Agency refers to a local government or a distinct
unit therein.
(7) Department refers to an executive department created by
law. For purposes of Book IV, this shall include any
instrumentality, as herein defined, having or assigned the
rank of a department, regardless of its name or designation.
(8) Bureau refers to any principal subdivision or unit of any
department. For purposes of Book IV, this shall include any
principal subdivision or unit of any instrumentality given or
assigned the rank of a bureau, regardless of actual name or
designation, as in the case of department-wide regional
offices.
(9) Office refers, within the framework of governmental
organization, to any major functional unit of a department or
bureau including regional offices. It may also refer to any
position held or occupied by individual persons, whose
functions are defined by law or regulation.
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department
framework vested within special functions or jurisdiction by
law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government-
owned or controlled corporations.
(11) Regulatory agency refers to any agency expressly
vested with jurisdiction to regulate, administer or adjudicate
matters affecting substantial rights and interests of private
persons, the principal powers of which are exercised by a
collective body, such as a commission, board or council.
(12) Chartered institution refers to any agency organized or
operating under a special charter, and vested by law with
functions relating to specific constitutional policies or
objectives. This term includes the state universities and
colleges and the monetary authority of the State.
(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.
(14) "Officer" as distinguished from "clerk" or "employee",
refers to a person whose duties, not being of a clerical or
manual nature, involves the exercise of discretion in the
performance of the functions of the government. When used
with reference to a person having authority to do a particular
act or perform a particular function in the exercise of
governmental power, "officer" includes any government
employee, agent or body having authority to do the act or
exercise that function.
(15) "Employee", when used with reference to a person in
the public service, includes any person in the service of the
government or any of its agencies, divisions, subdivisions or
instrumentalities.
LOCAL GOVERNMENT CODE
Section 1. Title. - This Act shall be known and cited as the
"Local Government Code of 1991".
Section 2. Declaration of Policy. -
(a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to
attain their fullest development as self-reliant communities
and make them more effective partners in the attainment of
national goals. Toward this end, the State shall provide for a
more responsive and accountable local government structure
instituted through a system of decentralization whereby
local government units shall be given more powers,
authority, responsibilities, and resources. The process of
decentralization shall proceed from the national government
to the local government units.
(b) It is also the policy of the State to ensure the
accountability of local government units through the
institution of effective mechanisms of recall, initiative and
referendum.
(c) It is likewise the policy of the State to require all national
agencies and offices to conduct periodic consultations with
appropriate local government units, nongovernmental and
people's organizations, and other concerned sectors of the
community before any project or program is implemented in
their respective jurisdictions.1awphil.net
Section 3. Operative Principles of Decentralization. - The
formulation and implementation of policies and measures on
local autonomy shall be guided by the following operative
principles:
(a) There shall be an effective allocation among the different
local government units of their respective powers, functions,
responsibilities, and resources;
(b) There shall be established in every local government unit
an accountable, efficient, and dynamic organizational
structure and operating mechanism that will meet the
priority needs and service requirements of its communities;
(c) Subject to civil service law, rules and regulations, local
officials and employees paid wholly or mainly from local
funds shall be appointed or removed, according to merit and
fitness, by the appropriate appointing authority;
(d) The vesting of duty, responsibility, and accountability in
local government units shall be accompanied with provision
for reasonably adequate resources to discharge their powers
and effectively carry out their functions: hence, they shall
have the power to create and broaden their own sources of
revenue and the right to a just share in national taxes and an
equitable share in the proceeds of the utilization and
development of the national wealth within their respective
areas;
(e) Provinces with respect to component cities and
municipalities, and cities and municipalities with respect to
component barangays, shall ensure that the acts of their
component units are within the scope of their prescribed
powers and functions;
(f) Local government units may group themselves,
consolidate or coordinate their efforts, services, and
resources commonly beneficial to them;
(g) The capabilities of local government units, especially the
municipalities and barangays, shall be enhanced by
providing them with opportunities to participate actively in
the implementation of national programs and projects;
(h) There shall be a continuing mechanism to enhance local
autonomy not only by legislative enabling acts but also by
administrative and organizational reforms;
(i) Local government units shall share with the national
government the responsibility in the management and
maintenance of ecological balance within their territorial
jurisdiction, subject to the provisions of this Code and
national policies;
(j) Effective mechanisms for ensuring the accountability of
local government units to their respective constituents shall
be strengthened in order to upgrade continually the quality
of local leadership;
(k) The realization of local autonomy shall be facilitated
through improved coordination of national government
policies and programs an extension of adequate technical
and material assistance to less developed and deserving local
government units;
(l) The participation of the private sector in local
governance, particularly in the delivery of basic services,
shall be encouraged to ensure the viability of local
autonomy as an alternative strategy for sustainable
development; and
(m) The national government shall ensure that
decentralization contributes to the continuing improvement
of the performance of local government units and the quality
of community life.
Section 4. Scope of Application. - This Code shall apply to
all provinces, cities, municipalities, barangays, and other
political subdivisions as may be created by law, and, to the
extent herein provided, to officials, offices, or agencies of
the national government.
Section 5. Rules of Interpretation. - In the interpretation of
the provisions of this Code, the following rules shall apply:
(a) Any provision on a power of a local government unit
shall be liberally interpreted in its favor, and in case of
doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government
unit. Any fair and reasonable doubt as to the existence of the
power shall be interpreted in favor of the local government
unit concerned;
(b) In case of doubt, any tax ordinance or revenue measure
shall be construed strictly against the local government unit
enacting it, and liberally in favor of the taxpayer. Any tax
exemption, incentive or relief granted by any local
government unit pursuant to the provisions of this Code
shall be construed strictly against the person claiming it.
(c) The general welfare provisions in this Code shall be
liberally interpreted to give more powers to local
government units in accelerating economic development and
upgrading the quality of life for the people in the
community;
(d) Rights and obligations existing on the date of effectivity
of this Code and arising out of contracts or any other source
of presentation involving a local government unit shall be
governed by the original terms and conditions of said
contracts or the law in force at the time such rights were
vested; and
(e) In the resolution of controversies arising under this Code
where no legal provision or jurisprudence applies, resort
may be had to the customs and traditions in the place where
the controversies take place.
Section 6. Authority to Create Local Government Units. - A
local government unit may be created, divided, merged,
abolished, or its boundaries substantially altered either by
law enacted by Congress in the case of a province, city,
municipality, or any other political subdivision, or by
ordinance passed by the sangguniang panlalawigan or
sangguniang panlungsod concerned in the case of a
barangay located within its territorial jurisdiction, subject to
such limitations and requirements prescribed in this Code.
Section 10. Plebiscite Requirement. - No creation, division,
merger, abolition, or substantial alteration of boundaries of
local government units shall take effect unless approved by
a majority of the votes cast in a plebiscite called for the
purpose in the political unit or units directly affected. Said
plebiscite shall be conducted by the Commission on
Elections (COMELEC) within one hundred twenty (120)
days from the date of effectivity of the law or ordinance
effecting such action, unless said law or ordinance fixes
another date.
Section 14. Beginning of Corporate Existence. - When a
new local government unit is created, its corporate existence
shall commence upon the election and qualification of its
chief executive and a majority of the members of its
sanggunian, unless some other time is fixed therefor by the
law or ordinance creating it.
Section 22. Corporate Powers. -
(a) Every local government unit, as a corporation, shall have
the following powers:
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;
(5) To enter into contracts; and
(6) To exercise such other powers as are granted to
corporations, subject to the limitations provided in this Code
and other laws.
(b) Local government units may continue using, modify, or
change their existing corporate seals: Provided, That newly
established local government units or those without
corporate seals may create their own corporate seals which
shall be registered with the Department of the Interior and
Local Government: Provided, further, That any change of
corporate seal shall also be registered as provided hereon.
(c) Unless otherwise provided in this Code, no contract may
be entered into by the local chief executive in behalf of the
local government unit without prior authorization by the
sanggunian concerned. A legible copy of such contract shall
be posted at a conspicuous place in the provincial capitol or
the city, municipal or barangay hall.
(d) Local government units shall enjoy full autonomy in the
exercise of their proprietary functions and in the limitations
provided in this Code and other applicable laws.
Section 25. National Supervision over Local Government
Units. -
(a) Consistent with the basic policy on local autonomy, the
President shall exercise general supervision over local
government units to ensure that their acts are within the
scope of their prescribed powers and functions.
The President shall exercise supervisory authority directly
over provinces, highly urbanized cities, and independent
component cities; through the province with respect to
component cities and municipalities; and through the city
and municipality with respect to barangays.
(b) National agencies and offices with project
implementation functions shall coordinate with one another
and with the local government units concerned in the
discharge of these functions. They shall ensure the
participation of local government units both in the planning
and implementation of said national projects.
(c) The President may, upon request of the local government
unit concerned, direct the appropriate national agency to
provide financial, technical, or other forms of assistance to
the local government unit. Such assistance shall be extended
at no extra cost to the local government unit concerned.
(d) National agencies and offices including government-
owned or controlled corporations with field units or
branches in a province, city, or municipality shall furnish the
local chief executive concerned, for his information and
guidance, monthly reports including duly certified budgetary
allocations and expenditures.
Section 386. Requisites for Creation. -
(a) A barangay may be created out of a contiguous territory
which has a population of at least two thousand (2,000)
inhabitants as certified by the National Statistics Office
except in cities and municipalities within Metro Manila and
other metropolitan political subdivisions or in highly
urbanized cities where such territory shall have a certified
population of at least five thousand (5,000) inhabitants:
Provided, That the creation thereof shall not reduce the
population of the original barangay or barangays to less than
the minimum requirement prescribed herein.
To enhance the delivery of basic services in the indigenous
cultural communities, barangays may be created in such
communities by an Act of Congress, notwithstanding the
above requirement.
(b) The territorial jurisdiction of the new barangay shall be
properly identified by metes and bounds or by more or less
permanent natural boundaries. The territory need not be
contiguous if it comprises two (2) or more islands.
(c) The governor or city mayor may prepare a consolidation
plan for barangays, based on the criteria prescribed in this
Section, within his territorial jurisdiction. The plan shall be
submitted to the sangguniang panlalawigan or sangguniang
panlungsod concerned for appropriate action.
In the case of municipalities within the Metropolitan Manila
Area and other metropolitan political subdivisions, the
barangay consolidation plan shall be prepared and approved
by the sangguniang bayan concerned.
Section 442. Requisites for Creation. -
(a) A municipality may be created if it has an average
annual income, as certified by the provincial treasurer, of at
least Two million five hundred thousand pesos
(P2,500,000.00) for the last two (2) consecutive years based
on the 1991 constant prices; a population of at least twenty-
five thousand (25,000) inhabitants as certified by the
National Statistics Office; and a contiguous territory of at
least fifty (50) square kilometers as certified by the Lands
Management Bureau: Provided, That the creation thereof
shall not reduce the land area, population or income of the
original municipality or municipalities at the time of said
creation to less than the minimum requirements prescribed
herein.
(b) The territorial jurisdiction of a newly-created
municipality shall be properly identified by metes and
bounds. The requirement on land area shall not apply where
the municipality proposed to be created is composed of one
(1) or more islands. The territory need not be contiguous if it
comprises two (2) or more islands.
(c) The average annual income shall include the income
accruing to the general fund of the municipality concerned,
exclusive of special funds, transfers and non-recurring
income.
(d) Municipalities existing as of the date of the effectivity of
this Code shall continue to exist and operate as such.
Existing municipal districts organized pursuant to
presidential issuances or executive orders and which have
their respective set of elective municipal officials holding
office at the time of the effectivity of this Code shall
henceforth be considered as regular municipalities.
Section 461. Requisites for Creation.
(a) A province may be created if it has an average annual
income, as certified by the Department of Finance, of not
less than Twenty million pesos (P20,000,000.00) based on
1991 constant prices and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000)
square kilometers, as certified by the Lands Management
Bureau; or
(ii) a population of not less than two hundred fifty thousand
(250,000) inhabitants as certified by the National Statistics
Office:
Provided, That, the creation thereof shall not reduce the land
area, population, and income of the original unit or units at
the time of said creation to less than the minimum
requirements prescribed herein.
(b) The territory need not be contiguous if it comprise two
(2) or more islands or is separated by a chartered city or
cities which do not contribute to the income of the province.
(c) The average annual income shall include the income
accruing to the general fund, exclusive of special funds, trust
funds, transfers and non-recurring income.
"Section 450. Requisites for Creation. -
(a)A municipality or a cluster of barangays may be
converted into a component city if it has a locally generated
average annual income, as certified by the Department of
Finance, of at least One hundred million pesos
(P100,000,000) for the last two (2) consecutive years based
on 2000 constant prices, and if it has either of the following
requisites:
(i)a contiguous territory of at least one hundred (100) square
kilometers, as certified by the Land Management Bureau; or
(ii)a population of not less than one hundred fifty thousand
(150,000) inhabitants, as certified by the National Statistics
Office.
The creation thereof shall not reduce the land area,
population and income of the original unit or units at the
time of said creation to less than the minimum requirements
prescribed herein.
(b)The territorial jurisdiction of a newly-created city shall be
properly identified by metes and bounds. The requirement
on land area shall not apply where the city proposed to be
created is composed of one (1) or more islands. The territory
need not be contiguous if it comprises two (2) or more
islands.
(c)The average annual income shall include the income
accruing to the general fund, exclusive of special funds,
transfers, and non-recurring income." (as amended by RA
9009)
CASES
Manila International Airport Authority vs CA
GR No. 155650, July 20, 2006, 495 SCRA 591
Facts:
Manila International Airport Authority (MIAA) is
the operator of the Ninoy International Airport located at
Paranaque City. The Officers of Paranaque City sent notices
to MIAA due to real estate tax delinquency. MIAA then
settled some of the amount. When MIAA failed to settle the
entire amount, the officers of Paranaque city threatened to
levy and subject to auction the land and buildings of MIAA,
which they did. MIAA sought for a Temporary Restraining
Order from the CA but failed to do so within the 60 days
reglementary period, so the petition was dismissed. MIAA
then sought for the TRO with the Supreme Court a day
before the public auction, MIAA was granted with the TRO
but unfortunately the TRO was received by the Paranaque
City officers 3 hours after the public auction.
MIAA claims that although the charter provides that the title
of the land and building are with MIAA still the ownership
is with the Republic of the Philippines. MIAA also contends
that it is an instrumentality of the government and as such
exempted from real estate tax. That the land and buildings of
MIAA are of public dominion therefore cannot be subjected
to levy and auction sale. On the other hand, the officers of
Paranaque City claim that MIAA is a government owned
and controlled corporation therefore not exempted to real
estate tax.
Issues:
Whether or not MIAA is an instrumentality of the
government and not a government owned and controlled
corporation and as such exempted from tax.
Whether or not the land and buildings of MIAA are
part of the public dominion and thus cannot be the subject of
levy and auction sale.
Ruling:
Under the Local government code, government
owned and controlled corporations are not exempted from
real estate tax. MIAA is not a government owned and
controlled corporation, for to become one MIAA should
either be a stock or non stock corporation. MIAA is not a
stock corporation for its capital is not divided into shares. It
is not a non stock corporation since it has no members.
MIAA is an instrumentality of the government vested with
corporate powers and government functions.
Under the civil code, property may either be under
public dominion or private ownership. Those under public
dominion are owned by the State and are utilized for public
use, public service and for the development of national
wealth. The ports included in the public dominion pertain
either to seaports or airports. When properties under public
dominion cease to be for public use and service, they form
part of the patrimonial property of the State.
The court held that the land and buildings of MIAA
are part of the public dominion. Since the airport is devoted
for public use, for the domestic and international travel and
transportation. Even if MIAA charge fees, this is for support
of its operation and for regulation and does not change the
character of the land and buildings of MIAA as part of the
public dominion. As part of the public dominion the land
and buildings of MIAA are outside the commerce of man.
To subject them to levy and public auction is contrary to
public policy. Unless the President issues a proclamation
withdrawing the airport land and buildings from public use,
these properties remain to be of public dominion and are
inalienable. As long as the land and buildings are for public
use the ownership is with the Republic of the Philippines.
Funa vs. Manila Economic and Cultural Office
715 SCRA 247, G.R. No. 193462 February 4, 2014
Facts:
Petitioner sent a letter to the COA requesting for a
“copy of the latest financial and audit report” of the MECO
invoking, for that purpose, his “constitutional right to
information on matters of public concern.” The petitioner
made the request on the belief that the MECO, being under
the “operational supervision” of the Department of Trade
and Industry (DTI), is a government owned and controlled
corporation (GOCC) and thus subject to the audit
jurisdiction of the COA. Assistant Commissioner Naranjo
issued a memorandum20 referring the petitioner’s request to
COA Assistant Commissioner Emma M. Espina for “further
disposition.” In this memorandum, however, Assistant
Commissioner Naranjo revealed that the MECO was “not
among the agencies audited by any of the three Clusters of
the Corporate Government Sector.”
The MECO was organized as a non–stock, non–
profit corporation under the Corporation Code. One of the
purposes of MECO is to establish and develop the
commercial and industrial interests of Filipino nationals here
and abroad, and assist on all measures designed to promote
and maintain the trade relations of the country with the
citizens of other foreign countries. Taking the memorandum
as an admission that the COA had never audited and
examined the accounts of the MECO, the petitioner filed the
instant petition for mandamus. Petitioner filed the suit in his
capacities as “taxpayer, concerned citizen, a member of the
Philippine Bar and law book author.”
According to petitioner, the MECO possesses all
the essential characteristics of a GOCC and an
instrumentality under the Administrative Code: it is a non–
stock corporation vested with governmental functions
relating to public needs; it is controlled by the government
thru a board of directors appointed by the President of the
Philippines; and while not integrated within the executive
departmental framework, it is nonetheless under the
operational and policy supervision of the DTI.
MECO denies the petitioner’s claim that it is a
GOCC or a government instrumentality. While performing
public functions, the MECO maintains that it is not owned
or controlled by the government, and its funds are private
funds. The MECO emphasizes that categorizing it as a
GOCC or a government instrumentality can potentially
violate the country’s commitment to the One China policy
of the PROC.
COA, on the other hand, argues that the instant
petition already became moot when COA Chairperson
Pulido–Tan issued Office Order No. 2011–69850. COA
notes that under such office order, the Chairperson already
directed a team of auditors to proceed to Taiwan,
specifically for the purpose of auditing the accounts of,
among other government agencies based therein, the
MECO.
Issues:
1.) WON MECO is a GOCC;
2.) WON COA has can audit MECO.
Held:
1.) NO. The MECO is not a GOCC or government
instrumentality. Government instrumentalities are agencies
of the national government that, by reason of some “special
function or jurisdiction” they perform or exercise, are
allotted “operational autonomy” and are “not integrated
within the department framework.” Subsumed under the
rubric “government instrumentality” are the following
entities: 1. regulatory agencies, 2. chartered institutions, 3.
government corporate entities or government
instrumentalities with corporate powers (GCE/GICP).
Despite its private origins, and perhaps deliberately so, the
Manila Economic and Cultural Office (MECO) was
“entrusted” by the government with the “delicate and
precarious” responsibility of pursuing “unofficial” relations
with the people of a foreign land whose government the
Philippines is bound not to recognize; From its overreaching
corporate objectives, its special duty and authority to
exercise certain consular functions, up to the oversight by
the executive department over its operations — all the while
maintaining its legal status as a non-governmental entity —
the Manila Economic and Cultural Office (MECO) is, for all
intents and purposes, sui generis.
2.) YES. We agree that the accounts of the MECO
pertaining to its collection of “verification fees” is subject to
the audit jurisdiction of the COA. However, We digress
from the view that such accounts are the only ones that
ought to be audited by the COA. Upon careful evaluation of
the information made available by the records vis-à-vis the
spirit and the letter of the laws and executive issuances
applicable, We find that the accounts of the MECO
pertaining to the fees it was authorized to collect under
Section 2(6) of EO No. 15, s. 2001, are likewise subject to
the audit jurisdiction of the COA.
The MECO is not a GOCC or government
instrumentality. It is a sui generis private entity especially
entrusted by the government with the facilitation of
unofficial relations with the people in Taiwan without
jeopardizing the country’s faithful commitment to the One
China policy of the PROC. However, despite its non-
governmental character, the MECO handles government
funds in the form of the “verification fees” it collects on
behalf of the DOLE and the “consular fees” it collects under
Section 2(6) of EO No. 15, s. 2001. Hence, under existing
laws, the accounts of the MECO pertaining to its collection
of such “verification fees” and “consular fees” should be
audited by the COA.
Municipality of San Fernando, La Union vs. Firme,
195 SCRA 692, G.R. No. 52179 April 8, 1991
Facts:
At about 7 o’clock in the morning of December 16,
1965, a collision occurred involving a passenger jeepney
driven by Bernardo Balagot and owned by the Estate of
Macario Nieveras, a gravel and sand truck driven by Jose
Manandeg and owned by Tanquilino Velasquez and a dump
truck of the Municipality of San Fernando, La Union and
driven by Alfredo Bislig. Due to the impact, several
passengers of the jeepney including Laureano Baniña Sr.
died as a result of the injuries they sustained and four (4)
others suffered varying degrees of physical injuries.
On December 11, 1966, the private respondents
instituted a compliant for damages against the Estate of
Macario Nieveras and Bernardo Balagot, owner and driver,
respectively, of the passenger jeepney, in the Court of First
Instance of La Union. However, the aforesaid defendants
filed a Third Party Complaint against the petitioner and the
driver of a dump truck of petitioner. Thereafter, the case was
subsequently transferred to Branch IV, presided over by
respondent judge/ By virtue of a court order dated May 7,
1975, the private respondents amended the complaint
wherein the petitioner and its regular employee, Alfredo
Bislig were impleaded for the first time as defendants.
Petitioner filed its answer and raised affirmative defenses
such as lack of cause of action, non-suability of the State,
prescription of cause of action and the negligence of the
owner and driver of the passenger jeepney as the proximate
cause of the collision.
The trial court rendered a decision in favor of the
plaintiffs and held the Municipality of San Fernando, La
Union and Alfredo Bislig liable and are ordered to them pay
jointly and severally.
Petitioner filed a MR but it was denied by the same
court. Petitioner maintains that the respondent judge
committed grave abuse of discretion amounting to excess of
jurisdiction in issuing the aforesaid orders and in rendering a
decision. Furthermore, petitioner asserts that while appeal of
the decision maybe available, the same is not the speedy and
adequate remedy in the ordinary course of law.
Issue:
WON the respondent committed grave abuse of
discretion when it failed to resolve the defense of non-
suability of the State.
Held:
YES. The respondent judge acted in excess of his
jurisdiction when in his decision dated October 10, 1979 he
held the municipality liable for the quasi-delict committed
by its regular employee. After a careful examination of
existing laws and jurisprudence, We arrive at the conclusion
that the municipality cannot be held liable for the torts
committed by its regular employee, who was then engaged
in the discharge of governmental functions. Hence, the death
of the passenger—tragic and deplorable though it may be—
imposed on the municipality no duty to pay monetary
compensation.
The doctrine of non-suability of the State is
expressly provided for in Article XVI, Section 3 of the
Constitution, to wit: “the State may not be sued without its
consent.” Stated in simple parlance, the general rule is that
the State may not be sued except when it gives consent to be
sued. Consent takes the form of express or implied consent.
Express consent may be embodied in a general law
or a special law. The standing consent of the State to be sued
in case of money claims involving liability arising from
contracts is found in Act No. 3083. A special law may be
passed to enable a person to sue the government for an
alleged quasi-delict, as in Merritt v. Government of the
Philippine Islands. Consent is implied when the government
enters into business contracts, thereby descending to the
level of the other contracting party, and also when the State
files a complaint, thus opening itself to a counterclaim.
Magtajas vs. Pryce Properties Corp., Inc.
234 SCRA 255, G.R. No. 111097 July 20, 1994
Facts:
With its tremendous success in several cities,
PAGCOR decided to expand its operations to Cagayan de
Oro City. To this end, it leased a portion of a building
belonging to Pryce Properties Corporation, Inc., one of the
herein private respondents, renovated and equipped the
same, and prepared to inaugurate its casino there during the
Christmas season.
The reaction of the Sangguniang Panlungsod of
Cagayan de Oro City was swift and hostile. On December 7,
1992, it enacted Ordinance No. 3353 which prohibits the
issuance of business permit and cancels existing business
permit to any establishment for the using and allowing to be
used its premises or portion thereof for the operation of
casino. On January 4, 1993, it adopted a sterner Ordinance
No. 3375-93 which prohibits the operation of casinos.
Pryce assailed the ordinances before the Court of
Appeals, where it was joined by PAGCOR as intervenor and
supplemental petitioner. Their challenge succeeded. On
March 31, 1993, the Court of Appeals declared the
ordinances invalid and issued the writ prayed for to prohibit
their enforcement. Reconsideration of this decision was
denied. Hence this petition.
City mayor of CDO argues that the Sanguniang
Panglundsod may prohibit the operation of casinos because
they involve games of chance, which are detrimental to the
people according to the LGC, and that he LGC has the effect
of had the effect of modifying the charter of the PAGCOR.
The Code is not only a later enactment than P.D. 1869 and
so is deemed to prevail in case of inconsistencies between
them.
Issue:
WON the ordinances in question are valid.
Held:
NO. The apparent flaw in the ordinances in
question is that they contravene P.D. 1869 and the public
policy embodied therein insofar as they prevent PAGCOR
from exercising the power conferred on it to operate a casino
in Cagayan de Oro City. The petitioners have an ingenious
answer to this misgiving. They deny that it is the ordinances
that have changed P.D. 1869 for an ordinance admittedly
cannot prevail against a statute. Their theory is that the
change has been made by the Local Government Code itself,
which was also enacted by the national lawmaking
authority.
In their view, the decree has been, not really
repealed by the Code, but merely “modified pro tanto” in the
sense that PAGCOR cannot now operate a casino over the
objection of the local government unit concerned. This
modification of P.D. 1869 of the Local Government Code is
permissible because one law can change or repeal another
law. Local government units have now no choice but to
prevent and suppress gambling, which in the petitioners’
view includes both legal and illegal gambling. Under this
construction, PAGCOR will have no more games of chance
to regulate or centralize as they must all be prohibited by the
local government units pursuant to the mandatory duty
imposed upon them by the Code. In this situation, PAGCOR
cannot continue to exist except only as a toothless tiger or a
white elephant and will no longer be able to exercise its
powers as a prime source of government revenue through
the operation of casinos.
we find that the ordinances violate P.D. 1869, which has the
character and force of a statute, as well as the public policy
expressed in the decree allowing the playing of certain
games of chance despite the prohibition of gambling in
general. The rationale of the requirement that the ordinances
should not contravene a statute is obvious. Municipal
governments are only agents of the national government.
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.
Government Service Insurance System vs. Province of
Tarlac, 417 SCRA 60, G.R. No. 157860 December 1, 2003
Facts:
On March 26, 1996, the Sangguniang Panlalawigan
of Tarlac passed a resolution which authorized and approved
the conversion of Urquico Memorial Athletic Field into a
Government Center, as well as the segregation and donation
of portions of said land to different government agencies for
the purpose of constructing or relocating their office
buildings. After receiving two letters of invitation regarding
the project, GSIS decided to put up an office at the site.
Thus, Tarlac Governor Margarita Cojuangco issued a Notice
of Construction for the building of the GSIS office on the
designated lot.
The Province of Tarlac and the GSIS then executed
a Memorandum of Agreement (MOA) whereby the Province
of Tarlac donated the said lot to the GSIS subject to the
conditions stipulated therein. On the same date, the Province
executed a Deed of Donation over the subject lot in favor of
the GSIS, which was accepted by the latter. As stipulated in
the MOA, the GSIS donated P2,000,000.00 to the Province
of Tarlac as financial assistance. The City of Tarlac issued a
building permit to the GSIS for the construction of its office.
Subsequently, Gov. Jose Yap was elected as the
new chief executive of Tarlac. He wrote a letter to the GSIS,
inviting the latter to reevaluate their respective positions
with respect to the MOA. Evidently, Gov. Yap was of the
opinion that the provisions of the Deed of Donation were
unfair to the Province. Later, the Provincial Administrator
wrote the GSIS, demanding the payment of P33,590,000.00
representing the balance of the value of the lot donated,
GSIS refused to pay.
The Province of Tarlac then filed a Complaint
against the GSIS for declaration of nullity of donation and
memorandum of agreement, recovery of possession. RTC
ruled that the donation is valid. CA reversed the decision of
the RTC saying that it is void because it was executed
without first securing an appraised valuation of the property
from the local committee on awards.
Issue:
WON the donation is valid.
Held:
YES. A transfer of real property by a local
government unit to an instrumentality of government
without first securing an appraised valuation from the local
committee on awards does not appear to be one of the void
contracts enumerated in Article 1409 of the Civil Code.
Neither does Section 381 of the Local Government Code
expressly prohibit or declare void such transfers if an
appraised valuation from the local committee on awards is
not first obtained.
he freedom of contract is both a constitutional and
statutory right and to uphold this right, courts should move
with all the necessary caution and prudence in holding
contracts void. Furthermore, a duly executed contract carries
with it the presumption of validity. There being a perfected
contract, the Province of Tarlac, through Gov. Yap, cannot
revoke or renounce the same without the consent of the
other party.
Atienza vs. Villarosa
458 SCRA 385, G.R. No. 161081 May 10, 2005
Facts:
Petitioner Atienza and respondent Villarosa were
the Vice-Governor and Governor, respectively, of the
Province of Occidental Mindoro. On June 26, 2002, the
petitioner Vice-Governor received the Memorandum issued
by the respondent Governor concerning the “authority to
sign purchase orders of supplies, materials, equipment[s],
including fuel, repairs and maintenance of the sangguniang
panlalawigan.” In reply to the above memorandum, the
petitioner Vice-Governor wrote the respondent Governor
stating that the approval of the Governor is no longer
necessary, the fact that [Secs.] 466 and 468, RA 7160
already provides for the separation of powers between the
executive and legislative. Such authority even include
everything necessary for the legislative research program of
the Sanggunian.
The respondent Governor issued the Memorandum
relating to the “termination of contract of services of
casual/job order employees and reappointment of the
respective recommendees.” the petitioner Vice-Governor
invoked the principle of separation of powers as applied to
the local government units, i.e., the respondent, as the
Governor, the head of the executive branch, and the
petitioner, as the Vice-Governor, the head of the legislative
branch, which is the Sangguniang Panlalawigan. The
petitioner Vice-Governor reiterated his request for the
respondent to make a “deeper study” on the matter before
implementing his memoranda. The request, however, went
unheeded as the respondent Governor insisted on obliging
the department heads of the provincial government to
comply with the memoranda.
The petitioner Vice-Governor thus filed with the
Court of Appeals the petition for prohibition assailing as
having been issued with grave abuse of discretion the
respondent Governor’s Memoranda dated June 25, 2002 and
July 1, 2002. The petitioner Vice-Governor claimed that
these memoranda excluded him from the use and enjoyment
of his office in violation of the pertinent provisions of
Republic Act No. 7160, or the Local Government Code of
1991, and its implementing rules and regulations. It was
prayed that the respondent Governor be enjoined from
implementing the assailed memoranda. CA dismissed the
case saying that the Governor has the authority to issue the
questioned memorandums.
Issue:
WON the Governor has the authority to issue the
memorandum for the purchases, terminate and appoint the
Sanguniang Panlalawigan.
Held:
NO. Reliance by the CA on the clause “approval of
the disbursement voucher by the local chief executive
himself shall be required whenever local funds are
disbursed” of the above section (Section 344) to rule that it
is the Governor who has the authority to approve purchase
orders for the supplies, materials or equipment for the
operation of the Sangguniang Panlalawigan is misplaced.
This clause cannot prevail over the more specific clause of
the same provision which provides that “vouchers and
payrolls shall be certified to and approved by the head of the
department or office who has administrative control of the
fund concerned.” The Vice-Governor, as the presiding
officer of the Sangguniang Panlalawigan, has administrative
control of the funds of the said body. Accordingly, it is the
Vice-Governor who has the authority to approve
disbursement vouchers for expenditures appropriated for the
operation of the Sangguniang Panlalawigan.
 Since it is the Vice-Governor who approves
disbursement vouchers and approves the payment for the
procurement of the supplies, materials and equipment
needed for the operation of the Sangguniang Panlalawigan,
then he also has the authority to approve the purchase orders
to cause the delivery of the said supplies, materials or
equipment—the express authority to approve disbursement
vouchers and, in effect, authorize the payment of money
claims for supplies, materials or equipment, necessarily
includes the authority to approve purchase orders to cause
the delivery of the same; The authority granted to the Vice-
Governor to sign all warrants drawn on the provincial
treasury for all expenditures appropriated for the operation
of the Sangguniang Panlalawigan as well as to approve
disbursement vouchers relating thereto is greater and
includes the authority to approve purchase orders for the
procurement of the supplies, materials and equipment
necessary for the operation of the Sangguniang
Panlalawigan.

While the Governor has authority to appoint

officials and employees whose salaries are paid out of the
provincial funds, this does not extend to the officials and
employees of the Sangguniang Panlalawigan because such
authority is lodged with the Vice-Governor; The appointing
power of the Vice-Governor is limited to those employees of
the Sangguniang Panlalawigan, as well as those of the
Office of the Vice Governor, whose salaries are paid out of
the funds appropriated for the Sangguniang Panlalawigan—
if the salary of an employee or official is charged against the
provincial funds, even if this employee reports to the Vice-
Governor or is assigned to his office, the Governor retains
the authority to appoint the said employee.