INTRODUCTION LOCAL GOVERNMENTS
CORPORATIONS
DISTRIBUTION OF POWERS TO LOCAL
GOVERNMENTS TO LOCAL GOVERNMENTS AS
LIMITATION TO POLITICAL AUTHORITY:
Horizontal Distribution
- Powers of the government are distributed to the
3 branches of national government: executive,
legislative, judiciary.
- Distribution may either be complete (presidential
systems) or partial (parliamentary systems)
Vertical Distribution
- Powers of the government are distributed among
at least 2 levels of government: upper level
national govt; lower level local govt
- The distribution of governmental powers among
at least 2 levels of government guarantees
liberty and democracy.
LOCAL GOVERNMENTS AS POLITICAL AND
TERRITORIAL SUBDIVISIONS OF THE STATE
Local Government
- Political subdivision of a nation /state which is
constituted by law and has substantial control of
local affairs.
- A body politic and corporate endowed with
powers to be exercised by it in conformity with
law. It shall exercise powers as a political
subdivision of the national government. (Sec 15,
LGC)
The power relations between the 2 levels of the
government vary depending on the government
system adopted by a certain jurisdiction:
UNITARY National government
supervises local government affairs, as
the local governments derive both their
existence and powers from the national
government.
FEDERAL Local governments are
supreme within their own spheres such
that they actually become quasi-
sovereign states although still
subordinate to the national government
in some respects, such as in the area of
foreign affairs, defense, currency &
commerce.
The element of SUBORDINATION appears in any
definition of local government for by nature, local
governments are subordinate entities, having no
inherent powers and must look up to the higher
governmental level for delegation of authority.
Two elements found in any definition of local
government:
1) The presence of a higher authority
2) Territorial boundary
AS MUNICIPAL
- It is a body politic and corporate constituted by
the incorporation of the inhabitants of a city/town
for the purpose of local government thereof.
- Municipal corporations are established by law:
o Partly as an agent of the state to assist in
the civil government of the country, but
o Chiefly to regulate and administer the
local internal affairs of the city, town, or
district incorporated.
- These dual functions of local government are
expressly recognized in
Section 15, LGC of 1991 - Every local
government unit created or recognized under
this Code is a body politic and corporate
endowed with powers to be exercised by it in
conformity with law. As such, it shall exercise
powers as a political subdivision of the national
government and as a corporate entity
representing the inhabitants of its territory.
STRUCTURES AND SYSTEM OF PHILIPPINE LOCAL
GOVERNMENT
Creation
- The Philippine remains a unitary state. As such,
local governments are creatures of the national
government.
- The national government, by law, creates,
merges or abolishes local governments, endows
with them powers within their jurisdiction, and
determines national-local government relations.
Tiers of Local Government
- The PROVINCE is the intermediate unit, providing
supervision to the municipalities and component
cities under it, and performing services for
national government.
- The CITIES, MUNICIPALITIES AND BARANGAYS are
the basic unit of the local government,
performing services for people who live together
in a community.
The Unitary System of Government
- Municipal governments are only agents of the
national government.
- Local councils exercise only delegated legislative
powers conferred upon them by Congress as the
national lawmaking body.
- Congress retains control of the local government
units although significantly in reduced degree now
than under our previous Constitutions.
- Any form of local autonomy granted to local
governments is limited and confined within the
extent allowed by the central authority.
- The principle of local autonomy under the 1987
Constitution simply means decentralization. It does
not make local governments sovereign within the
state or an imperium in imperio.
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Macariola vs. Asuncion
Branches of Political Law:
1) Constitutional Law a. powers and functions of
the government; b. inherent powers of the State
in relation to the Bill of Rights
2) Administrative Law modern field of political
law.
a) External Admin Law rules and
principles governing the relationships
between governmental agencies or
organs. E.g. President and Department of
Transportation relationship; or GOCC
related to another agency.
b) Internal Admin Law deals with
matters about public officials. E.g.
appointments, qualifications, promotion,
demotion, discipline, etc. (recently,
Internal Admin Law is changed to Law on
Public Officers merged with Election
Law).
3) Local Government Law
4) Public International Law

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 PART I: GENERAL PRINCIPLES national government but since the national
government cannot afford to take care all
the concerns of all geographical
(A) CORPORATION components of the territory, then it has to
create subsidiaries and these are LGU, an
Definition: agent of the national government. Thus,
An artificial being created by operation of law, the obvious public purpose is
having the right of successions and the powers, GOVERNANCE. LGUs primary purpose is
attributes and properties expressly authorized by the governance of the political subdivision.
law or incident to its existence. (Sec. 2,
Corporation Code of the Philippines BP
Blg. 68)
An artificial being, invisible, intangible, and
existing only in contemplation of law. (Dartmouth
College Case, US Case)
A legal institution devised to confer upon
individuals of which it is composed of powers,
privileges, and immunities which they would not
otherwise possess and the most important of
which are continuous legal identity or unity, and
perpetual or indefinite succession under the
corporate name, notwithstanding successive
changes, by death or otherwise, in the
corporators or members. (Dillon, Commentaries
on Law of Municipal Corporations, Vol. 1 5th ed.)
Local government unit is a corporation.

Kinds/Classification of Corporations:
1) Private Corporation - Formed for some private
purpose, benefit, aim or end, such as a business
corporation formed and organized under a
general law on corporation.
It is created for private objectives.
Manner of creating: Private Corporation is
created pursuant to a law. A creation of a
privation corporation, through SEC, must
be in accordance with the provisions of a
general lawCorporation Code of the
Philippines. The said Code is applicable to
all corporations.
Purpose: for private purposeProfit is the
goal unless you are a charitable
organization.
Governed by:
- General law (Corporation Code)
- Its articles of incorporation
2) Public Corporation - Organized for a
government of a portion of a State, such as a
local government unit. It is created for public
purposes.
Manner of creating: Created by law. A
Charter refers to the law creating the
public corporation. Thats why we have
charter day celebrations. We celebrate the
day when the local government unit had
been incorporated directly by law. Directly
by Congress.
Purpose: Public purpose governance or
administration of a political subdivision and
the delivery of basic services to the
inhabitants but only to the extent of its
governmental purpose. We have the
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 Governed by: Incorporation of the inhabitants, their
- LGC of 1991 participation, means through a plebiscite.
(Always required)
- The charter, the law creating it. It looks
like a little LGC.

Special Kinds of Corporations

Defects are present in the creation. thus, not a
perfect corporation but the law treat them as
corporation by reason of equity)
1) Corporation De Facto
- Consent of the State is implied rather than
expressed, by the general consent to that kind
of corporation, even though the conditions of
incorporation are not substantially complied
with.
- If the law creating a LGU is declared
unconstitutional but the LGU continues to
perform as such. It is a corporation that only
exists in fact but not in law.
2) Corporation by Prescription
- Under the principles of common law, where a
body of men have been for a long time in the
exercise of corporate powers, a presumption
arises of an ancient charter, granted to their
predecessors, making the exercise of such
powers lawful and rightful. A lost grant or
charter from the crown is being presumed.
- A corporation created many, many years ago
and nobody questioned its existence.
3) Corporation by Estoppel
- While as against the State, a corporation
cannot be created by the mere agreement or
other act or omission by other persons, yet as
between private litigants, they place
themselves where they would not be permitted
to deny the fact of the existence of the
corporation, by their agreements, admissions
or conduct.
- A corporation that is defectively created
making it not a truly a corporation but in your
dealings with other entities you represent that
you are a corporation.

Kinds of Public Corporation

A) Quasi-Public Corporation
- A private corporation that renders public
service or supplies public wants, such as public
utility companies.
- Though organized for private profit, they
are compelled by law or contract to render public
service. It combines the elements of a public and
private corporation.
Quasi - it is not but it is almost

B) Municipal Corporation (Pure)

A body politic and corporate constituted by the
incorporation of the inhabitants for purposes of local
governance thereof. Referred to as Local
Governments.
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Local Government
Political Subdivision of a nation or state which is
constituted by law and has substantial control of
local affairs.
E.g. Provinces a political subdivision and territorial
subdivision under the 1987 Constitution
LGU, as a political subdivision, are there to
handle local governance and administration of
public affairs. As an agency.
LGU, as a territorial subdivision, is for geographic
purposes. You perceive it as tangible and
physical. LGU, as a limitation to power, is
there as a way to limit the powers of the
government.
Under the principle of proper and valid
delegation of powers, when some powers are
supposed to be vested on the national
government, we decided to share that power.
And thus, LGU exercises governmental powers as
well. Delegation of powers means that if those
powers were already delegated to LGUs then that
means that central government cannot exercise
those powers until and unless it will decide to re-
exercise those powers.

Boy Scouts of the Philippines vs. COA

There are 2 types of government
corporations:
1) Performing governmental functions (like garbage
disposal, waterworks, etc.)
2) Performing business functions

2 criteria:
1) For govt corp to prove that they can be efficient
in the areas of their proper functions.
2) They should not go into activities that the private
sector can do better.
The BSP charter created the BSP as a public
corporation. The public, rather than private, character of
the BSP is recognized by the fact that, along with the Girl
Scouts of the Philippines, it is classified as an attached
agency of the DECS under the Administrative Code of
1987.
Since the BSP in its amended charter continues to be a
public corporation or a government instrumentality, it is
subject to the audit jurisdiction of COA.

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 (B) MUNICIPAL CORPORATIONS national government and as a corporate entity
representing the inhabitants of its territory.

ELEMENTS:
1) Legal Creation or Incorporation pertains to
the law creating the LGU.
2) Corporate Name it is required. It cannot be
nameless. It is more than a name because it has
to act, as a juridical entity, carrying only that
name in entering contracts. (e.g. City of Cebu)
And when the name has to be changed, it can
only be changed upon consultation with the
Philippine Historical Institute. And it must not
carry a name of a living person except when that
name connotes to a special, social or political
significance in that place. And thus, you may
notice that names of the municipals are names of
dead people. E.g. andres, narciso, rizal.
3) Inhabitants people who compose the LGU.
According to Dillon, there can never be a
municipal corporation without inhabitants.
4) Territory consist of landmass, water and other
parts of a territory.

Dual Nature and Function of LGUs

An important principle in the study of LGU is that every
local government possesses dual functions:
Governmental and Proprietary.

1) Governmental (also called public or political)

- Administering the powers of the State and
promoting the public welfare
- When exercising such powers, it is considered as
a political subdivision, thus, it becomes
accountable to the national government.
Example: Exercise of local police power; Taxation;
Eminent domain for public works

2) Proprietary
- Exercised for the special benefit or advantage of
the community
- When exercising this corporate power, then it is a
corporate entity representing the inhabitants of
its territory.
- Accountable to the people, not to the national
government.

Example: Slaughter Houses; Markets; Maintenance of

parks; Cemeteries; Fiesta Celebration

Basis:
Local Government Code of 1991
Sec. 15 Political and Corporate Nature of Local
Government Units. - Every local government unit
created or recognized under this Code is a body
politic and corporate endowed with powers to be
exercised by it in conformity with law. As such, it
shall exercise powers as a political subdivision of the

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What is the legal relevance of characterizing a
particular function of a local government unit as
either public/governmental or
private/proprietary?
1) Liability
2) Garnishment of FUNDS
3) Liability of LGUs for CONTRACTS
4) CONTROL OF CONGRESS OVER LGUs, especially
in matters of disposition of properties held by
LGUs and extent of LGUs exercise of specific
powers of local autonomy
5) Treating an LGU as an instrumentality of the
government or not for some legal purpose.

Liability of LGUs for DAMAGES

Question: Suppose that the city mayor ordered the
cutting off of tall trees because of impending storm or
typhoon, and he ordered Juan to go to Plaza
Independencia and check if there are tall trees there and
Juan did find an acacia tree so he had it cut off and
incidentally it fell on a pedestrian, Pedro. Pedro died on
the spot. So the heirs of Pedro want to sue.
Who should be the defendants? Should it be Juan who
caused the cutting off of the acacia tree that he did not
observe diligence and therefore he was negligent? Are
you going to sue the mayor because he ordered the
cutting off of the tree? Or are you going to sue the City of
Cebu? Probably, you would find the distinctions between
these two functions relevant in this problem.
Answer: The suability (of whoever can be sued)
depends on the kind of function exercised by the
LGU. If governmental, generally, cannot be sued.

Garnishment of FUNDS
In cases involving monetary claims, the judgment will
require the defendant to pay money.
It maybe that before the finality of the decision (during
the pendency of the case), the plaintiff is able to get a
writ preliminary attachment.
Or you wait until you get a favorable decision and it
becomes final and executory, thats when you ask the
court to issue a writ of execution, to order the sheriff to
satisfy the monetary judgment.
If the defendant happens to be a LGU, how will the sheriff
satisfy the judgement? Because when it is a public fund
is beyond garnishment, beyond attachment, beyond
execution.
But how do you know that the fund held by the LGU is
public or private?

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Liability of LGUs for CONTRACTS LGU must be exempt from liability. (San Fernando La
Union case)
Basic principle in consti: if the State enters into a
contract, it may be held liable ex-contractu (arising out
of the contract) on the basis that if it has descended to
the level of an individual by entering into proprietary or
commercial contracts. Therefore, the State has lost its
privilege of being immune from suit. This is not absolute.
- But if contracts entered into by the State are for
public or governmental purpose, then you cannot
sue the State.
- Suability is not an issue insofar as LGUs are
concerned. LGU CAN BE SUED. The relevant issue
is the liability of the LGUs.

Sec. 22 of the LGC provides an express consent by

law:
SEC. 22. Corporate Powers. (a) Every local government
unit, as a corporation, shall have the following powers:
1) xx
2) To sue and be sued

CONTROL OF CONGRESS OVER LGUs

- Especially in matters of disposition of properties held
by lgus and extent of lgus exercise of specific powers
of local autonomy.
- What properties are held by LGUs and what
properties are under the control of Congress. (Public
and Private properties of LGU)
- The property under whose name it is registered does
not govern. It doesnt mean that when it is under the
name of the City of Cebu, it is proprietary. It may be
held for governmental capacity and when it is for
governmental purpose the LGU cannot claim
deprivation of beneficial use because the LGU here is
an agent only of the government. If it is held on a
proprietary capacity, it is entitled to compensable
taking.

Bar Question:
Johnny was employed as a driver by the Municipality of
Calumpit, Bulacan. While driving recklessly a municipal
dump truck with its load of sand for the repair of
municipal streets, Johnny hit a jeepney. Two passengers
of the jeepney were killed.
The Sangguniang Bayan passed an ordinance
appropriating P300,000 as compensation for the heirs of
the victims.
1) Is the municipality liable for the negligence of
Johnny?
2) Is the municipality ordinance valid?
1st Answer: Yes. Under Section 24 of the LGC of 1991,
an LGU and its officials is not exempted from liability for
death or injury to persons or damages to property.
Whether the act is governmental or proprietary it is still
liable.
2nd Answer: No. LGUs are liable for negligent acts (torts)
of regular employees only when they are exercising
proprietary functions. Since they deliver sand and gravel
for road repairs, it is a governmental function. Thus, the

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Bara Lidasan vs. Comelec
A municipality in Mindanao was created by a statute. The
problem was when such law was passed, it enumerated
barangays or barrios belonging to a different province.
Could we indulge in the assumption that Congress still
intended, by the Act, to create the restricted area of nine
barrios in the towns of Butig and Balabagan in Lanao del
Sur into the town of Dianaton, if the twelve barrios in the
towns of Buldon and Parang, Cotabato were to be
excluded therefrom?
The answer must be in the negative. Municipal
corporations perform twin functions. Firstly. They serve
as an instrumentality of the State in carrying out the
functions of government.
Secondly. 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.
When the foregoing bill was presented in Congress,
unquestionably, the totality of the twenty-one barrios
not nine barrios was in the mind of the proponent
thereof.
And then the reduced area poses a number of questions:
Could the observations as to progressive community,
large aggregate population, collective income sufficient
to maintain an independent municipality, still apply to a
motley group of only nine barrios out of the twenty-one?
Is it fair to assume that the inhabitants of the said
remaining barrios would have agreed that they be
formed into a municipality, what with the consequent
duties and liabilities of an independent municipal
corporation?
Could they stand on their own feet with the income to be
derived in their community?
How about the peace and order, sanitation, and other
corporate obligations?
This Court may not supply the answer to any of these
disturbing questions. And yet, to remain deaf to these
problems, or to answer them in the negative and still
cling to the rule on separability, we are afraid, is to
impute to Congress an undeclared will.
With the known premise that Dianaton was created upon
the basic considerations of progressive community, large
aggregate population and sufficient income, we may not
now say that Congress intended to create Dianaton with
only nine of the original twenty-one barrios, with a
seat of government still left to be conjectured.
Because of the 2nd function of the LGU as an agency of
the community in the administration of local affairs, an
LGU must be self-sufficient to enable it to exercise its
corporate powers and serve its constituents.

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Surigao Electric Co., Inc. vs. Municipality of - Section 7. Local governments shall be entitled to
Surigao an equitable share in the proceeds of the
When Municipality of Surigao wanted to operate an utilization and development of the national
electric company of its own, it did so without a CPC, wealth within their respective areas, in the
pursuant to the Public Service Act which says that manner provided by law, including sharing the
government instrumentalities or entities are exempt same with the inhabitants by way of direct
from getting CPC if they decide to operate public utility benefits.
companies. 2) LGC of 1991 (RA 7160) the consolidations of past
The private electric company argued that an LGU is not a local government laws.
government instrumentality or entity. 3) Others statutes or acts not inconsistent with the
There has been a recognition by this Court of the dual foregoing
character of a municipal corporation, one as
governmental, being a branch of the general
administration of the state, and the other as quasi-
private and corporate It would, therefore, erode the
term "government entities" of its meaning if we are to
reverse the Public Service Commission and to hold that a
municipality is considered as outside its scope.
So, the SC said that as an LGU possessing the first
function of being an agent of the state and that is being
a political subdivision, it is a government instrumentality
or entity, and therefore, it is exempt from obtaining the
CPC as provided for in the Public Service Act.
Because of the 1st function of the LGU as an agency of
the State, an LGU can therefore be considered as an
instrumentality of the National Government.
Therefore, it is exempt from obtaining the CPC as
provided for in the Public Service Act.
Governmental affairs do not lose their governmental
character by being delegated to the municipal
governments.
Nor does the fact that such duties are performed by
officers of the municipality which, for convenience, the
state allows the municipality to select, change their
character.

CLASSIFICATION OF POWER
Express, implied, inherent (powers necessary and
proper for governance, e.g. To promote health
and safety, enhance prosperity, improve morals
of inhabitants)
Public or governmental, private or proprietary
Intramural, extramural
Mandatory, directory; ministerial, discretionary

SOURCES OF POWERS
General:
1) 1987 Constitution (Article 10 Sec. 5, 6 & 7)
- 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.

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Specific: ISSUE:
Charter the statute creating the LGU, insofar as Whether or not the Municipality of Balabagan is a de
it is not inconsistent with the LGC of 1991. facto municipal corporation.

PROBLEM 1: A community of people in the northern part

of Cebu had always wanted to have their own local
government unit.
Apparently, these people were considered minority of
Cebu as their predecessors were mainly from the
province of Bohol.
Claiming that they have unique culture and tradition
different from most Cebuanos, they lobbied in Congress
for the enactment of a law for the creation of a new
municipality to be called Buenavista 2.
Although lacking in population requirement, they were
able to convince the Congress to pass a law creating the
new municipality. Local officials were then elected and
acted as such for 40 years.
Buenavista 2 had then entered into contracts and
transactions with various persons. What are the legal
considerations involved in this problem?
Answer: The existence of the municipality can be
questioned because of the lack in population.
If it can be determined whether it is a de facto
corporation or Buenavista 2 is really a nullity from
the start, then the inquiry of its existence can be
collaterally or directly attacked.

The Municipality Of Malabang, Lanao Del Sur vs.

Pangandapun Benito
FACTS:
Amer Macaorao Balindong is the mayor of Malabang,
Lanao del Sur, while Pangandapun Benito is the mayor of
the municipality of Balabagan. Balabagan was formerly a
part of the municipality of Malabang, having been
created on March 15, 1960, by Executive Order 386 of
the then President Carlos P. Garcia.
Mayor Balindong filed an action for prohibition to nullify
Executive Order 386 and to restrain the municipal
officials of Balabagan from performing the functions of
their respective offices.
He argues that Section 23 of Republic Act 2370 [Barrio
Charter Act] is a "statutory denial of the presidential
authority to create a new barrio [and] implies a negation
of the bigger power to create municipalities, as held in
the prior case of Pelaez vs. Auditor General.
On the other hand, the officials of the municipality of
Balabagan argue that the rule announced in Pelaez is not
applicable because unlike the municipalities involved in
Pelaez, the municipality of Balabagan is at least a de
facto corporation, having been organized under color of a
statute before this was declared unconstitutional. Its
officers have been either elected or appointed.
The municipality itself has discharged its corporate
functions for the past five years preceding the institution
of this action.
It is contended that as a de facto corporation, its
existence cannot be collaterally attacked, although it
may be inquired into directly in an action for quo
warranto at the instance of the State.

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RULING: Were the transactions entered into by the Municipality of
While it is true that an inquiry into the legal existence of Pablo valid?
a municipality is reserved to the State in a proceeding for Answer: Yes, the transactions entered into by the
quo warranto or other direct proceeding, the rule Municipality of Pablo are valid.
disallowing collateral attacks applies only where the
municipal corporation is at least a de facto corporation.
If it is neither a corporation de jure nor de facto, but a
complete nullity, the rule is that its existence may be
questioned collaterally or directly in any action or
proceeding by anyone whose rights or interests are
affected thereby.
The municipality of Balabagan was organized before the
promulgation of Pelaez vs. Auditor General.
Can the statute creating Balabagan lend color of validity
to an attempted organization of a municipality despite
the fact that such statute is subsequently declared
unconstitutional?
Supreme Court held that the color of authority 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.
In the case at bar, what is important is that there must
be some other valid law giving corporate vitality to the
organization.
Hence, the mere fact that Balabagan was organized at a
time when the statute had not been invalidated cannot
conceivably make it a de facto corporation, because,
aside from the Administrative Code provision in question,
there is no other valid statute to give color of authority
to its creation.
An unconstitutional act is not a law; it confers no rights;
it imposes no duties; it affords no protection; it creates
no office; it is, in legal contemplation, as inoperative as
though it had never been passed.
Therefore, Executive Order 386 created no office. This is
not to say, however, that the acts done by the
municipality of Balabagan in the exercise of its corporate
powers are a nullity because the existence of Executive
Order 386 is an operative fact which cannot justly be
ignored.
Therefore, Executive Order 386 is declared void, and the
municipal officials of the Municipality of Malabang were
permanently restrained from performing the duties and
functions of their respective offices.

Problem 2: The municipality of Pablo was created

through EO 288 in 1948 and since then they have been
exercising powers of a local government unit.
In 1965, the SC in Pelaez vs Auditor General invalidated
certain EOs issued by the President creating
municipalities on the ground that the power to create
local government is a legislative function.
EO 288 was not among those EOs that were declared
void. In 1986, a quo warranto case filed questioning the
status of Pablo.

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The Municipality of Jimenez vs. Hon. Vicente T. 2) Whether the decision of the Provincial Board
Baz, Jr. regarding the boundaries had acquired finality.
FACTS:
The Municipality of Sinacaban was created by President
Elpidio Quirino through Executive Order No. 258,
pursuant to Section 68 of the Revised Administrative
Code of 1917.
EO 258 stated that the mother Municipality of Jimenez
shall have its present territory, minus the portion thereof
included in the Municipality of Sinacaban.
Based on the technical description stated in the EO,
Sinacaban laid claim to a portion of Barrio Tabo-o and to
Barrios Macabayao, Adorable, Sinara Baja, and Sinara
Alto.
In response, the Municipality of Jimenez, while conceding
that the disputed area is part of Sinacaban, nonetheless
asserted jurisdiction on the basis of an agreement it had
with the Municipality of Sinacaban.
This agreement was approved by the Provincial Board of
Misamis Occidental in its Resolution No. 77, which fixed
the common boundary of Sinacaban and Jimenez.
On March 20, 1990, Jimenez filed a petition for certiorari,
prohibition, and mandamus in the Regional Trial Court of
Oroquieta City.
The suit was filed against Sinacaban and other
government agencies. Jimenez alleged that, in
accordance with the Pelaez ruling, the power to create
municipalities is essentially legislative.
Consequently, Sinacaban, which was created by an
executive order, had no legal personality and no right to
assert a territorial claim against Jimenez, of which it
remains part.
Jimenez prayed that Sinacaban be enjoined from
assuming control and supervision over the disputed
barrios.
RTC, however, maintained the status quo, that is, the
municipality of Sinacaban shall continue to exist and
operate as a regular municipality, for the following
reasons:
1) Sinacaban is a de facto corporation since it had
completely organized itself even prior to the
Pelaez case and exercised corporate powers for
forty years (40) before its existence was
questioned;
2) That Jimenez did not have the legal standing to
question the existence of Sinacaban, the same
being reserved to the State as represented by
the Office of the Solicitor General in a quo
warranto proceeding;
3) That Jimenez was estopped from questioning the
legal existence of Sinacaban by entering into an
agreement with it concerning their common
boundary; and
4) That any question as to the legal existence of
Sinacaban had been rendered moot by Sec.
442(d) LGC.

ISSUES:
1) Whether the Municipality of Sinacaban is a legal
juridical entity, duly created in accordance with
law;

14 | P u b C o r p
RULING: Sinacaban attained a status of at least a de facto
The principal basis for the view that Sinacaban was not municipal corporation because its existence had not
validly created as a municipal corporation is the ruling in been questioned for 40 years.
Pelaez v. Auditor General that the creation of municipal Thus, there is long use of corporate powers. In fact, it
corporations is essentially a legislative matter. attained a de jure status when the 1987 Constitution
Therefore, the President was without power to create by included in the appended Ordinance for Legislative
executive order the Municipality of Sinacaban. Districts.
However, the Supreme Court had since held that 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.
This was the ruling in Municipality of San Narciso v.
Mendez, Sr. Here, the same factors are present so as to
confer on Sinacaban the status of at least a de facto
municipal corporation in the sense that its legal
existence has been recognized and acquiesced publicly
as shown in the following circumstances:
1) Sinacaban had been in existence for sixteen
years (16) when Pelaez v. Auditor General was
decided on December 24, 1965.
Yet the validity of E.O. No. 258 creating it had
never been questioned. Created in 1949, it was
only 40 years later that its existence was
questioned and only because it had laid claim
to a certain area.
2) The State and even the Municipality of Jimenez
itself have recognized Sinacaban's corporate
existence.
a) Under Administrative Order No. 33 and
Section 31 of the Judiciary Reorganization Act
of 1980 (B. P. Blg. 129), Sinacaban has a
municipal circuit court.
b) For its part, Jimenez had earlier recognized
Sinacaban in 1950 by entering into an
agreement with it regarding their common
boundary which was embodied in Resolution
No. 77 of the Provincial Board of Misamis
Occidental.
c) 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
3) Moreover, following the ruling in Municipality of
San Narciso, Quezon v. Mendez, Sr., Sec. 442(d)
of the Local Government Code of 1991 must be
deemed to have cured any defect in the creation
of Sinacaban.
Second, the Supreme Court held that the Provincial
Board did not have the authority to approve the
agreement declaring certain barrios part of one or the
other municipality because the effect would be to amend
the technical description stated in E.O. No. 258.
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 is rather considered an
amendment.
Since 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 territorial
claim of Sinacaban.
15 | P u b C o r p
PROBLEM 3: The municipality of Auring was created
through EO 405 in 1962 and immediately exercised ISSUE:
powers of a LGU.
Whether or not a municipality whose creation by
In 1965, the SC in Pelaez vs Auditor General invalidated executive fiat, which was previously voided by the Court,
certain EOs issued by the President creating may attain recognition in the absence of any curative or
municipalities on the ground that the power to create implementing statute.
local government is a legislative function.
EO 405 was among those EOs that were declared void by
the SC.
Were the transactions entered into by the municipality of
Auring between 1962-1965 valid?
Answer: No, they were not valid. The case of Sultan
Osop Camid where the municipality was declared
void ab initio.

Sultan Osop B. Camid vs. The Office Of The

President
FACTS:
This case involves the municipality of Andong, Lanao del
Sur, which is a town that is not supposed to exist yet but
is insisted by some as actually alive and thriving.
Andong was created through Executive Order No. 107
issued by Pres. Macapagal in 1965, which was declared
void in the case of Pelaez vs. Auditor General (1965).
Sultan Camid alleges that Andong has metamorphosed
into a full-blown municipality with a complete set of
officials appointed to handle essential services for the
municipality and its constituents.
He however concedes that since 1968, no person has
been appointed, elected or qualified to serve any of the
elective local government positions in Andong.
He also alleges that the town has its own high school,
Bureau of Posts, DECS Office, among others.
According to him, public officials of Andong have been
serving their constituents in their own little ways and
means despite absence of public funds.
To bolster his claims, he presented to the Court a DENR-
CENRO Certification of the total land area of the
Municipality of Andong.
He also submitted a Certification issued by the Provincial
Statistics Office of Marawi City concerning Andongs
population (14,059).
He also lists several government agencies and private
groups that have allegedly recognized Andong. Camid
assails the DILG certification of 18 municipalities certified
as existing per DILG records.
These 18, were among the 33 municipalities whose
creation was voided by the Court in the Pelaez case.
He imputes grave abuse of discretion on the part of the
DILG for not classifying Andong as a regular existing
municipality and in not including it in its records and
official database.
Camid also argues that EO 107 remains valid because of
the decision of court in Municipality of San Narciso vs.
Hon. Mendez, where the court affirmed the unique status
of the municipality of San Andres in Quezon as a de facto
municipal corporation.
He insists that inspite of insurmountable obstacles,
Andong lives on. Hence, its existence should be given
judicial affirmation.

16 | P u b C o r p
RULING: The 1987 Constitution included in its Ordinance
The Court said that the case is not a fit subject for the (appendix) which apportioned the seats of the House of
special civil actions of certiorari and mandamus, as it Representatives (as one of the 10 municipalities
pertains to the de novo appreciation of factual questions. composing the 4th district of Mangingit Province).
Also, the Pelaez case and its offspring cases ruled that Badongs existence was questioned in 1989. Were the
the President has no power to create municipalities, yet transactions entered by Badong valid?
limited its nullificatory effects to the particular Answer: Yes, the transactions are valid.
municipalities challenged in actual cases before this
Court.
However, with the promulgation of the Local Government
Code in 1991, the legal cloud was lifted over the
municipalities similarly created by executive order but
not judicially annulled.
The de facto status of such municipalities as San Andres,
Alicia and Sinacaban was recognized by the Court, and
Section 442(b) of the Local Government Code deemed
curative whatever legal defects these municipalities had
labored under. Andong is not similarly entitled to
recognition as a de facto municipal corporation.
This is because there are eminent differences between
Andong and the other municipalities.
The most prominent is that, the EO which created
Andong was expressly annulled by the Court in 1965. The
court said that if it would affirm Andongs de facto status
by reason of its alleged continued existence despite its
nullification, it would in effect condone defiance of a valid
order of the Court.
Court decisions cannot lose their efficacy due to the
sheer defiance by the parties aggrieved. Andong does
not meet the requisites set forth by Sec. 442(d) of the
Local Government Code (LGC), as it requires that, for the
municipality created by EO to receive recognition, they
must have their respective set of elective officials
holding office at the time of the effectivity of the LGC.
Andong has never elected its municipal officers at all.
The national government ceased to recognize the
existence of Andong, depriving it of its share of the
public funds, and refusing to conduct municipal elections
in the void municipality.
Andong is not listed as among the municipalities of
Lanao del Sur in the Ordinance apportioning the seats of
Congress in the 1987 Constitution. Finally, Andong has
not been reestablished through statute.
In contrast, the 18 municipalities in the DILG
certification, were recognized as such because
subsequent to the ruling in the Pelaez case, legislation
was enacted to reconstitute these municipalities. Section
442(d) of the LGC does not serve to affirm or reconstitute
the judicially-dissolved municipalities such as Andong,
which had been previously created by presidential
issuances or executive orders.
On the other hand, the municipalities judicially-dissolved
in cases such as Pelaez, San Joaquin, and Malabang,
remain inexistent, unless recreated through specific
legislative enactments, as done with the eighteen (18)
municipalities certified by the DILG.

PROBLEM 4: Municipality of Badong was created in

1959 by EO 353. It became a 5th class municipality
1965. In the same year, Pelaez vs Auditor General
invalidated some EOs (excluding EO 353) of the President
which created some municipalities.

17 | P u b C o r p
Municipality Of San Narciso, Quezon Vs. Hon. more than six years when Pelaez v. Auditor General was
Antonio V. Mendez, Sr. promulgated.
FACTS: The ruling could have sounded the call for a similar
On August 20, 1959, President Carlos P. Garcia, issued declaration of the unconstitutionality of Executive Order
Executive Order No. 353 creating the municipal district of No. 353 but it did not.
San Andres, Quezon, pursuant to the Sections 68 and
2630 of the Revised Administrative Code.
Subsequently, the municipal district of San Andres was
later officially recognized to have gained the status of a
fifth class municipality.
On June 5, 1989, the Municipality of San Narciso filed a
petition for quo warranto with the Regional Trial Court
against the officials of the Municipality of San Andres,
which sought the declaration of nullity of Executive Order
No. 353 and prayed that the local officials of the
Municipality of San Andres be permanently ordered to
refrain from performing their duties and functions.
It was argued that EO 353, a presidential act, was a clear
usurpation of the inherent powers of the legislature.
On December 2, 1991, the lower court finally dismissed
the petition for lack of cause of action on what it felt was
a matter that belonged to the State, adding that
whatever defects were present in the creation of
municipal districts by the President pursuant to executive
orders were cured by the enactment of RA 7160,
otherwise known as Local Government Code of 1991.
This prompted the Municipality of San Narciso to file a
petition for review on certiorari.

ISSUE:
Whether or not the Municipality of San Andres is a de
facto municipal corporation.

RULING:
When the inquiry is focused on the legal existence of a
body politic, the action is reserved to the State in a
proceeding for quo warranto or any other credit
proceeding.
It must be brought in the name of the Republic of the
Philippines and commenced by the Solicitor General
Executive Order No. 353 creating the municipal district of
San Andres was issued on August 20, 1959 but it was
only after almost thirty (30) years, or on June 5,
1989, that the municipality of San Narciso finally decided
to challenge the legality of the executive order.
In the meantime, the Municipality of San Andres began
and continued to exercise the powers and authority of a
duly created local government unit.
A quo warranto proceeding assailing the lawful authority
of a political subdivision must, with greatest
imperativeness, be timely raised. Public interest
demands it.
Granting the Executive Order No. 353 was a complete
nullity for being the result of an unconstitutional
delegation of legislative power, the peculiar
circumstances obtaining in this case hardly could offer
a choice other than to consider the Municipality of San
Andres to have at least attained a status closely
approximating that of a de facto municipal corporation.
Created in 1959, by virtue of Executive Order No. 353,
the Municipality of San Andres had been in existence for

18 | P u b C o r p
On the contrary, certain governmental acts all
pointed to the State's recognition of the continued
existence of the Municipality of San Andres, such as the
following:
1) After more than five years as a municipal district,
Executive Order No. 174 classified the
Municipality of San Andres as a fifth class
municipality.
2) Section 31 of Batas Pambansa Blg. 129 or the
Judiciary Reorganization Act of 1980 constituted
Municipality of San Andres as covered by the
10th Municipal Circuit Court.
3) Under the Ordinance adopted on October 15,
1986, apportioning the seats of the House of
Representatives, which was appended to the
1987 Constitution, the Municipality of San Andres
has been considered to be as part of the Third
District of the province of Quezon.
Finally, equally significant is Section 442(d) of the Local
Government Code which states that municipal districts
organized pursuant to presidential issuances or executive
orders and which have their respective sets of elective
municipal officials holding office at the time of the
effectivity of this Code shall henceforth be considered as
regular municipalities.
The power to create political subdivisions is a function of
the legislature. And Congress did just that when it
incorporated Section 442(d) in the Code. Curative laws,
in essence, are retrospective.
They are aimed at giving validity to acts done that would
have been invalid under existing laws. All considered, the
de jure status of the Municipality of San Andres in the
province of Quezon must now be conceded.
San Andres became de jure by subsequent recognition
because it was included in the appended Ordinance for
Legislative District in the 1987 Constitution.
TYPES OF MUNICIPAL CORPORATION
De Jure created with all the elements of a
municipal corporation being present.
De Facto there is colorable compliance with
the requisites of a de jure municipal corporation.
Doctrine of Operative Fact
Before a law is declared unconstitutional or void, it is
presumed to be valid. The acts existed as a fact and
these acts have consequences that cannot be ignored.
DOCTRINE OF DE FACTO CORPORATION
There is authority in law for a municipal corporation but
there is failure to comply with the constitutional or
statutory requirement, it cannot be said to exist de jure.
But when the organization of the people of a given
territory is of a corporation under a color of delegated
authority, followed by a user in good faith of the
governmental powers incidental thereto, it will be
recognized by the law as a municipal corporation de
facto.
Municipal corporation may exist by prescription where it
is shown that the community has claimed and exercised
corporate functions, with the knowledge and
acquiescence of the legislature and without interruption
or objection for a period long enough to afford title by
prescription.
These municipal corporations have exercised their
powers for a long period without objection on the part of
the government and although no charter is in existence,
it is presumed that they were duly incorporated in the
first place and that their charters had been lost.
Basis:
Public policy that supports the security of units of local
government and the conduct of their business against
attack grounded upon collateral inquiry into the legality
of their organization (doctrine of operative fact)
- Underlies the theory that local units may exist
through prescription.
Effects:
Where there is at least a de facto municipal
corporation
Acts of the entity will be respected and
will be recognized as valid and binding by
the State as if it is a de jure public
corporation
No municipality corporation at all
The acts of the entity are not recognized
as valid by the State.
Note: The State controls the objects and
methods of the creation of local units and to
effectuate a policy in that area, it should be
free to challenge local departures from that
policy.
Long exercise of corporate powers without
question from any quarter is not enough to
silence the State; It might still be directly
attack the legal existence of a local unit, in a
quo warranto or other proceedings, on the
ground that there was no authority in law for
its existence or that there were irregularities
in its organization, as the case may be.
The State may recognized a de facto corporation
and render it de jure by:
Subsequent legislative recognition; or
Validation
19 | P u b C o r p
De Facto Corporation ISSUES:

Elements: 1) Is the President empowered to create a

municipality?
1) Valid law authorizing incorporation 2) Is Sec. 68 of the Revised Administrative Code an
2) Attempt in good faith to organize it undue delegation of legislative power?
3) Colorable compliance with law
4) Assumption of corporate powers

Whats the relevance if it is de jure and not

just de facto?
When a corporation is de jure, its existence cannot be
challenged because it is a valid corporation. If it is de
facto, being defective in nature may be challenged.

HOW DO WE CHALLENGE THE EXISTENCE?

Quo warranto proceeding by the State only. A direct
action/attack.

Collateral attack is not allowed, as a general rule.

An exception is when a municipal corporation is a
TOTAL nullity (not even a de facto corporation), the
charter is declared void from the beginning or when
there had never been any charter at all. And thus, it can
be collateral attack may be availed of and may be done
by a private individual.

Emmanuel Pelaez vs. Auditor General

FACTS:
From September 4 to October 29, 1964, the President of
the Philippines issued Executive Orders Nos. 93 to 121,
124 and 126 to 129.
These orders created thirty-three (33) municipalities
pursuant to Section 68 of the Revised Administrative
Code, insofar as it grants the President the power to
create municipalities.
Thereafter, Vice-President Pelaez instituted a special civil
action for a writ of prohibition with preliminary injunction
to stop the Auditor General from disbursing funds to said
municipalities, alleging that the executive orders are null
and void on the ground that said Section 68 has been
impliedly repealed by Republic Act No. 2370 or the Barrio
Charter Act.
Since January 1, 1960, when Republic Act No. 2370
became effective, barrios can no longer be created or
their boundaries altered nor their names changed
except by Act of Congress or of the corresponding
provincial board upon petition of a majority of the voters
in the areas affected and the recommendation of the
council of the municipality or municipalities in which the
proposed barrio is situated.
It is argued that since the creation of barrios is a
legislative act, the creation of municipalities must also
require a legislative enactment.
The Executive Orders are, likewise, challenged for they
constitute an undue delegation of legislative power.
The Auditor General argues that the present action is
premature and that not all proper parties, referring to the
officials of the new political subdivisions in question,
have been impleaded.

20 | P u b C o r p
RULING:
RA 2370, being a statutory denial of the presidential
authority to create a new barrio, it also implies a
negation of the bigger power to create municipalities,
each of which consists of several barrios.
The authority to create municipal corporations is
essentially legislative in nature.
With respect to the issue on undue delegation of powers
by the legislature, the Supreme Court held that although
Congress may delegate to another branch of the
government the power to fill in the details in the
execution, enforcement or administration of a law, it is
essential, to forestall a violation of the principle of
separation of powers, that said law:
(a) be complete in itself - In other words, it must
set forth therein the policy to be executed,
carried out or implemented by the delegate. And
(b) the law must (b) fix a standard - The limits of
which are sufficiently determinate or
determinable to which the delegate must
conform in the performance of his functions.
In the case at bar, Section 68 of the Revised
Administrative Code does not meet these well-settled
requirements for a valid delegation of the power to fix
the details in the enforcement of a law.
It does not enunciate any policy to be carried out or
implemented by the President. Neither does it give a
standard sufficiently precise to avoid the evil effects
above referred to.
Since the creation of municipalities is not an
administrative function, it is essentially and
eminently legislative in character.
The question whether or not public interest demands the
exercise of such power is not one of fact. It is purely a
legislative question.
The President cannot invoke its power of control or the
right to interfere on the acts of the officers of the
executive departments, bureaus, or offices of the
national government, as well as to act in lieu of such
officers.
This power is denied by the Constitution to the Executive,
insofar as local governments are concerned.
Hence, the President cannot interfere with local
governments, so long as the same or its officers act
within the scope of their authority.
What he has is a mere power of supervision over the
local government units.
As a consequence, the alleged power of the President to
create municipal corporations would necessarily connote
the exercise by him of an authority even greater than
that of control which he has over the executive
departments, bureaus or offices.
Clearly, therefore, the Executive Orders promulgated by
him creating municipalities are ultra vires and therefore,
void.
(Jimenez v. Baz, San Narciso v. Mendez, Osop
Camid v. Office of the President already
discussed above)
The Municipality Of Candijay, Bohol vs. Court of
Appeals and the Municipality Of Alicia, Bohol
FACTS:
The case revolves around the controversy on territorial
jurisdiction of the Municipality of Alicia, Bohol.
During the proceedings, after presentation of evidence
by the Municipality of Candijay, the latter asked the trial
court to bar the Municipality of Alicia from presenting its
evidence on the ground that it had no juridical
personality.
It was adjudged by the lower court that Barangay
Pagahat is within the territorial jurisdiction of the
Municipality of Candijay.
Therefore, said barrio forms part and parcel of its
territory. The Regional Trial Court of Bohol permanently
enjoined defendant Municipality of Alicia to respect
plaintiff's control, possession and political supervision of
Barangay Pagahat and never to molest, disturb, harass
its possession and ownership over the same barrio.
The Court of Appeals, however, reversed the judgment of
the Regional Trial Court. It ruled that the trial court
committed an error in declaring that Barrio Pagahat is
within the territorial jurisdiction of the Municipality of
Candijay because the lower court rejected the boundary
line being claimed by the Municipality of Alicia based on
certain exhibits.
If allowed, the Municipality of Candijay will not only
engulf the entire barrio of Pagahat, but also of many
other barrios. Candijay will eat up a big chunk of
territories far exceeding her territorial jurisdiction under
the law creating her.
CA also found, after an examination of the respective
survey plans both plans are inadequate insofar as
identifying the monuments of the boundary lines.
It decided the case based on the rule on equiponderance
of evidence.
Hence, the Municipality of Candijay now files a petition
for review on certiorari of the Decision of the CA.
ISSUE:
Whether or not the Municipality of Alicia has a juridical
personality to claim its territory.
RULING:
The Supreme Court finds that the issues of fact in this
case had been adequately passed upon by the Court of
Appeals with the application of the equiponderance
doctrine which states: When the scale shall stand upon
an equipoise and there is nothing in the evidence which
shall incline it to one side or the other, the court will find
for the defendant.
The determination of equiponderance of evidence by the
respondent Court involves the appreciation of evidence
by the latter tribunal, which will not be reviewed by this
Court unless shown to be whimsical or capricious; here,
there has been no such showing.
As to the issue on the personality of the Municipality of
Alicia, it is noteworthy that the Municipality of Candijay
commenced its collateral attack on the juridical
personality of respondent municipality on January 19,
21 | P u b C o r p
1984 or some thirty five years after respondent
municipality first came into existence in 1949.
The Municipality of Candijay contended that Executive
Order No. 265 issued by President Quirino on September
16, 1949 creating the Municipality of Alicia is null and
void ab initio, inasmuch as Section 68 of the Revised
Administrative Code constituted an undue delegation of
legislative powers, and was therefore declared
unconstitutional in Pelaez vs. Auditor General.
However, the factual milieu of the Municipality of Alicia is
strikingly similar to that of the Municipality of San Andres
in the case of Municipality of San Narciso vs. Mendez.
The latter case, in appreciating the de jure status of the
municipality, considered the peculiar circumstances
supporting its juridical existence.
In the case at bar, respondent Municipality of Alicia was
created by virtue of Executive Order No. 265 in 1949, or
ten years ahead of the municipality of San Andres,
and therefore had been in existence for all of
sixteen years when Pelaez vs. Auditor General was
promulgated.
And various governmental acts throughout the years all
indicate the State's recognition and acknowledgment of
the existence thereof. For instance, under Administrative
Order No. 33 above-mentioned, the Municipality of Alicia
was covered by the 7th Municipal Circuit Court.
Likewise, under the Ordinance appended to the 1987
Constitution, it is one of twenty municipalities comprising
the Third District of Bohol.
Inasmuch as respondent municipality of Alicia is similarly
situated as the municipality of San Andres, it should
likewise benefit from the effects of Section 442(d) of the
Local Government Code, which states that municipal
districts organized pursuant to presidential issuances or
executive orders and which have their respective sets of
elective municipal officials holding office at the time of
the effectivity of this Code shall henceforth be
considered as regular municipalities.
Same ruling in Jimenez and Narciso case
In addition, the Municipality of Alicia should
benefit from the effects of Section 442 (d) of the
LGC of 1991 which was declared in Narciso as a
curative law aimed at giving validity to acts
done that would have been invalid under existing
laws, as if existing laws have been complied
with.
Municipality of Alicia attained the status of de
jure municipality.
Sec. 442 (d) of LGC: 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 EOs
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.
Take note of these factual
conditions/elements that must be present:
1) Which have their respective set of elective
municipal officials
22 | P u b C o r p
2) Holding office at the time of the effectivity of the
Code.

23 | P u b C o r p
 (C) OVERVIEW OF THE PHILIPPINE subdivisions to have more autonomy compared to a
LOCAL GOVERNMENT SYSTEM unitary set-up.

Vertical Classification of Philippine Local

System: UNITARY (as distinguished from
FEDERAL)
We are now living in a generation where people believe
in the principle of constitutionalism such that we believe
in the principle of limited government. And so almost
always, the government powers are limited. These
powers can be limited in a lot of ways. Examples are:
- Provisions in the Constitution providing certain
prohibitions. E.g. Bill of Rights
- Social, economic and political principles. E.g.
Democracy as embedded in our Consti
- Distributing the powers of the government:
1) Horizontal powers are distributed in
the 3 branches of government, namely:
Legislative, Executive and Judicial. It can
be Presidential (separation of powers) or
Parliamentary (fusion of powers of the
legislative and executive)
2) Vertical distribution of powers
between the national government and
the local government. It can be Unitary
and Federal.

FEDERAL GOVERNMENT
- The governmental powers are centered in the
governmental subdivision while they surrender
some of their powers to create the
central/federal government.
- A unitary government is a single, centralized
government, exercising powers over both the
internal and external affairs of the state; the
powers are shared by the national government
and the local government.

UNITARY GOVERNMENT
- The governmental powers reside in the
central/national government and these are
distributed to the different political subdivision.
- A federal government consists of autonomous
state (local) government units merged into a
single state, with the national government
exercising a limited degree of power over the
domestic affairs but generally full direction of the
external affairs of the state, the powers are
divided by the national government and the local
government.
- Powers granted to local governments are
enumerated in the law that created them.
Any power that is not conferred to the local
government must, therefore, be a power
pertaining to the national government. (Same as
residual power vested in the president in a
horizontal form of government)
The Philippines is not purely a unitary
government. We have adopted a unique kind of
system, a decentralization system which enables political
24 | P u b C o r p
SEC. 5. Rules of Interpretation - In the interpretation
of the provisions of this Code, the following rules shall
apply:
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;
- Atty. DBLs justification: To ensure local
autonomy as mandated by the Constitution.

Lina vs. Pano

Since Congress has allowed the PCSO to operate lotteries
which PCSO seeks to conduct in Laguna, pursuant to its
legislative grant of authority, the provinces Sangguniang
Panlalawigan cannot nullify the exercise of said authority
by preventing something already allowed by 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 or an "imperium in imperio".
To conclude our resolution of the first issue, respondent
mayor of San Pedro, cannot avail of Kapasiyahan Bilang
508, Taon 1995, of the Provincial Board of Laguna as
justification to prohibit lotto in his municipality.
For said resolution is nothing but an expression of the
local legislative unit concerned. The Board's enactment,
like spring water, could not rise above its source of
power, the national legislature.
In sum, we find no reversible error in the RTC decision
enjoining Mayor Cataquiz from enforcing or implementing
the Kapasiyahan Blg. 508, T. 1995, of the Sangguniang
Panlalawigan of Laguna.
That resolution expresses merely a policy statement of
the Laguna provincial board.
It possesses no binding legal force nor requires any act of
implementation.
It provides no sufficient legal basis for respondent
mayor's refusal to issue the permit sought by private
respondent in connection with a legitimate business
activity authorized by a law passed by Congress.

25 | P u b C o r p
Zoomzat, Inc. vs. The People Of The Philippines does not extend to privileges, franchises and grants
FACTS: given by a municipality in excess of its powers, or ultra
vires.
Petitioner Zoomzat, Inc. alleged that on December 20,
1991, the Sangguniang Panlungsod of Gingoog City It is undisputed that respondents were not employees of
passed Resolution No. 261 which resolved to express NTC.
the willingness of the City of Gingoog to allow Zoomzat
to install and operate a cable TV system. Thereupon,
petitioner applied for a mayors permit but the same was
not acted upon by the mayors office.
On April 6, 1993, respondents enacted Ordinance No. 19
which granted a franchise to Gingoog Spacelink Cable
TV, Inc. to operate a cable television for a period of ten
(10) years, subject to automatic renewal.
On July 30, 1993, Zoomzat filed a complaint with the
Office of the Ombudsman against respondents for
violation of Section 3(e), R.A. No. 3019.
The complaint alleged that in enacting Ordinance No. 19,
the respondents gave unwarranted benefits, advantage
or preference to Spacelink, to the prejudice of Zoomzat
who was a prior grantee-applicant by virtue of Resolution
No. 261. A criminal information for violation of Section
3(e), R.A. No. 3019, was filed against the respondents
before the Sandiganbayan.
However, upon directive by the Sandiganbayan to
restudy the instant case, Special Prosecution Officer II
Antonio Manzano recommended the dismissal of the case
and the Information withdrawn for lack of probable
cause.
On further investigation, Special Prosecution Officer III
Victor Pascual also recommended that the case be
dismissed for insufficiency of evidence.
On June 17, 1998, the Sandiganbayan issued a resolution
approving the dismissal of the case and ordering the
withdrawal of the Information against the respondents.
On September 9, 1998, the Sandiganbayan denied
petitioners motion for reconsideration.

ISSUES:
1) Whether or not LGUs have the authority to grant the
franchise to operate a cable television?
2) Did the petitioners give Spacelink undue or
unwarranted advantage and preference because it
stifled business competition?

RULING:
Executive Order No. 205 (REGULATING THE OPERATION
OF CABLE ANTENNA TELEVISION (CATV) SYSTEMS IN THE
PHILIPPINES, AND FOR OTHER PURPOSES) clearly
provides that only the NTC could grant certificates of
authority to cable television operators and issue the
necessary implementing rules and regulations.
Likewise, Executive Order No. 436 (PRESCRIBING POLICY
GUIDELINES TO GOVERN THE OPERATIONS OF CABLE
TELEVISION IN THE PHILIPPINES) vests with the NTC the
regulation and supervision of cable television industry in
the Philippines.
It is clear that in the absence of constitutional or
legislative authorization, municipalities have no power to
grant franchises.
Consequently, the protection of the constitutional
provision as to impairment of the obligation of a contract
26 | P u b C o r p
Instead, they were charged in their official capacity as
members of the Sangguniang Panlungsod of Gingoog
City.
As such, they cannot be charged with violation of Section
3(e), R.A. No. 3019 for enacting Ordinance No. 19 which
granted Spacelink a franchise to operate a cable
television.
On the second issue, indeed, under the general welfare
clause of the Local Government Code, the local
government unit can regulate the operation of cable
television but only when it encroaches on public
properties, such as the use of public streets, rights of
ways, the founding of structures, and the parceling of
large regions.
Beyond these parameters, its acts, such as the grant of
the franchise to Spacelink, would be ultra vires. Plainly,
the Sangguniang Panlungsod of Gingoog City
overstepped the bounds of its authority when it usurped
the powers of the NTC with the enactment of Ordinance
No. 19.
Being a void legislative act, Ordinance No. 19 did not
confer any right nor vest any privilege to Spacelink.
As such, petitioner could not claim to have been
prejudiced or suffered injury thereby.
Incidentally, petitioners claim of undue injury becomes
even more baseless with the finding that Spacelink did
not commence to operate despite the grant to it of a
franchise under Ordinance No. 19.
In addition, petitioner could not impute manifest
partiality, evident bad faith or gross inexcusable
negligence on the part of the respondents when they
enacted Ordinance No. 19.
A perfunctory reading of Resolution No. 261 shows that
the Sangguniang Panlungsod did not grant a franchise to
it but merely expressed its willingness to allow the
petitioner to install and operate a cable television.
Had respondents intended otherwise, they would have
couched the resolution in more concrete, specific and
categorical terms.
In contrast, Ordinance No. 19 clearly and unequivocally
granted a franchise to Spacelink, specifically stating
therein its terms and conditions.
Not being a bona fide franchise holder, petitioner could
not claim prior right on the strength of Resolution No.
261.
There is no dispute that respondent Sangguniang
Panlungsod, like other local legislative bodies, has been
empowered to enact ordinances and approve resolutions
under the general welfare clause of B.P. Blg. 337, the
Local Government Code of 1983.
That it continues to possess such power is clear under
the new law, R.A. No. 7160 (the Local Government Code
of 1991).
Indeed, under the general welfare clause of the Local
Government Code, the local government unit can
regulate the operation of cable television but only when
it encroaches on public properties, such as the use of
public streets, rights of ways, the founding of structures,
and the parceling of large regions.
Beyond these parameters, its acts, such as the grant of
the franchise to Spacelink, would be ultra vires.
LOCAL AUTONOMY, DECENTRALIZATION,
DEVOLUTION, AND DECONCENTRATION
Provisions about local autonomy:
Art. II, Sec 25 (Constitution)The State shall
ensure the autonomy of local governments.
Art. X, Sec 2 (Constitution)The territorial and
political subdivisions shall enjoy local autonomy.
Sec. 2, LGC of 1991 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.
Local Autonomy
The degree of self-determination exercised by LGUs vis--
vis the central government. The system of achieving
local autonomy is known as decentralization and this
system is realized through the process called devolution.
In the Philippines, it is the public administrative
powers over local affairs that are delegated to
political subdivisions. It refers to decentralization of
administrative powers or functions.
Limbona vs Mangelin
Autonomy is either decentralization of administration or
decentralization of power. The second is abdication by
the national government of political power in favor of the
local government (essence in a federal set-up); the first
consists merely in the delegation of administrative
powers to broaden the base of governmental power
(essence in a unitary set-up).
Against the first, there can be no valid constitutional
challenge.
Local autonomy is the degree of self-determination
exercised by LGUs vis--vis the central government.
The system of achieving local autonomy is known as
decentralization and this system is realized through the
process called devolution.
Generally, autonomy is either (1) Decentralization of
administration or (2) Decentralization of power.
a) There is decentralization of administration
when the central government delegates
administrative powers to political subdivisions in
order to broaden the base of govt. power and in
the process to make local govts. 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.
27 | P u b C o r p
 b) Decentralization of power, on the other hand, Administrative Powers of Political Powers
involves an abdication of political power in favour
QUESTION: What is the kind of decentralization adopted
of local government units declared to be
or practiced in the Philippines?
autonomous.
Answer: Decentralization of administration. Policy-
In that case, the autonomous government is free
setting for the entire country still lies in the
to chart its own destiny and shape its future with
President.
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.

Insofar as Autonomous Region of Muslim Mindanao

is concerned, it is important to determine whether we
have granted decentralization of power in order that the
courts can exercise judicial review over issues in ARMM.
Because if there is decentralization of power, then there
is total abdication of power in favor of LGU.

Constitutional provisions regarding abdication of

power in ARMM:
Section 15. There shall be created autonomous
regions in Muslim Mindanao and in the Cordilleras
consisting of provinces, cities, municipalities, and
geographical areas sharing common and distinctive
historical and cultural heritage, economic and
social structures, and other relevant characteristics
within the framework of this Constitution and the
national sovereignty as well as territorial integrity
of the Republic of the Philippines.
Section 16. The President shall exercise general
supervision over autonomous regions to ensure
that laws are faithfully executed.

Section 17. All powers, functions, and

responsibilities not granted by this Constitution or
by law to the autonomous regions shall be vested
in the National Government.
Section 20. Within its territorial jurisdiction and
subject to the provisions of this Constitution and
national laws, the organic act of autonomous
regions shall provide for legislative powers over:
1) Administrative organization;
2) Creation of sources of revenues;
3) Ancestral domain and natural resources;
4) Personal, family, and property relations;
5) Regional urban and rural planning
development;
6) Economic, social, and tourism
development;
7) Educational policies;
8) Preservation and development of the
cultural heritage; and
9) Such other matters as may be authorized
by law for the promotion of the general
welfare of the people of the region.

These are legal basis that although ARMM is different

from the regular political subdivisions, there is no total
abdication of powers in favor of ARMM.

28 | P u b C o r p
Pimentel vs. Aguirre
FACTS:
The President cannot order the withholding of 10% of the
LGUs internal revenue allotments.
This encroaches on the fiscal autonomy of local
government and violates the Constitution and the LGC.
ISSUE:
Whether AO 372 of President Ramos which withholds
10% of LGUs IRA is valid Section 4 of AO 372 cannot,
however, be upheld.
RULING:
A basic feature of local fiscal autonomy is the automatic
release of the shares of LGUs in the national internal
revenue. This is mandated by no less than the
Constitution.
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." As a rule, the term "shall" is a word of
command that must be given a compulsory meaning.
The provision is, therefore, imperative. Section 4 of AO
372, however, orders the withholding, effective January
1, 1998, of 10 percent of the LGUs' IRA "pending the
assessment and evaluation by the Development Budget
Coordinating Committee of the emerging fiscal situation"
in the country. Such withholding clearly contravenes the
Constitution and the law.
Although temporary, it is equivalent to a holdback, which
means "something held back or withheld, often
temporarily."
Hence, the "temporary" nature of the retention by the
national government does not matter. Any retention is
prohibited.
In sum, while Section 1 of AO 372 may be upheld as an
advisory effected in times of national crisis, Section 4
thereof has no color of validity at all.
The latter provision effectively encroaches on the fiscal
autonomy of local governments.
Concededly, the President was well-intentioned in issuing
his Order to withhold the LGUs IRA, but the rule of law
requires that even the best intentions must be carried
out within the parameters of the Constitution and the
law.
Verily, laudable purposes must be carried out by legal
methods. Respondents and their successors are hereby
permanently PROHIBITED from implementing
Administrative Order Nos. 372 and 43 insofar as local
government units are concerned.
Decentralization
A system whereby local government units shall
be given more powers, authority, responsibilities,
and resources. (Sec. 2, LGC)
The Process of decentralization shall proceed
from the National Government to the local
government units. (Ibid.)
Devolution
Section 17: (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.
The act by which the National Government confers
power and authority upon various local government
units to perform specific functions and
responsibilities. [Sec. 17(4)(e)]
It 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. [Ibid.]
The powers conferred are to the local government
unit
Deconcentration
SEC. 528. Deconcentration of Requisite Authority
and Power - The national government shall, six (6)
months after the effectivity of this Code, effect the
deconcentration of requisite authority and power to the
appropriate regional offices or field offices of national
agencies or offices whose major functions are not
devolved to local government units.
The process of transferring authority and power to
the appropriate regional offices or field offices of
national agencies or offices whose major functions
are not devolved to local government units. (Sec.
528, LGC)
The powers conferred are to the local offices of the
national government. E.g. central office to regional
office.
Basic Distinctions:
Local Autonomy degree of self-determination
exercised by LGUs vis--vis the central
government.
To attain local autonomy, a system of
Decentralization is a pre-requisite.
To effect system of decentralization, a process of
Devolution is applied.
Deconcentration refers to the transfer of
functions from national office to regional and
local offices involving administrative functions.
29 | P u b C o r p
Section 3. Operative Principles of Decentralization assistance to less developed and deserving local
- The formulation and implementation of policies and government units;
measures on local autonomy shall be guided by the l) The participation of the private sector in local
following operative principles: governance, particularly in the delivery of basic
a) There shall be an effective allocation among the services, shall be encouraged to ensure the
different local government units of their viability of local autonomy as an alternative
respective powers, functions, responsibilities, strategy for sustainable development; and
and resources; m) The national government shall ensure that
b) There shall be established in every local decentralization contributes to the continuing
government unit an accountable, efficient, and improvement of the performance of local
dynamic organizational structure and operating government units and the quality of community
mechanism that will meet the priority needs and life.
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
30 | P u b C o r p
PROBLEM: Even during the 1973 Constitution, local provision excludes games of chance which are not
governments had already been given local autonomy. prohibited but are in fact permitted by law.
In the appointment of a Provincial Accountant, the Sec. of The petitioners are less than accurate in claiming that
Dept. of Budget and Management appoints from among the Code could have excluded such games of chance
the list of nominees the Governor would submit to the which are not prohibited but are in fact permitted by law.
DBM. The petitioners are less than accurate in claiming that
This was the case before the Local Government Code of the Code could have excluded such games of chance but
1991 took effect. When a Governor submitted a list of did not.
nominees, namely X, Y and Z, for the position of
Provincial. Accountant, none of the nominees was a CPA,
which was one of the qualifications for a Provincial
Accountant. The Sec. of DBM appointed instead W, a CPA.
What are the legal aspects of this case?
Answer: Municipality of San Juan vs. Civil
Service Commission
Although it involved validity of the appointment of a
Provincial Budget Officer, the issue actually was the
tug of war between the Secretary of Budget and
Management and the Governor of the Province of
Rizal over a position that involved the application of
a most important constitutional policy and principle
of local autonomy.
The SC ruled in favor of the Governor, who was
allowed to nominate another applicant qualified to
the position because the governor was seen to be in
a much better position than the Secretary in
determining local needs, stating the need to obey the
clear mandate of local autonomy. Where a law is
capable of 2 interpretations, one in favor of
centralized power in Malacanang and the other
beneficial to local autonomy, the scales must be
weighed in favor of local autonomy.

Mayor Pablo P. Magtajas vs. Pryce Properties

Corporation, Inc
(PAGCOR wants to build a Casino in CDO)
The only question we can and shall resolve in this
petition is the validity of Ordinance No. 3355 and
Ordinance No. 3375-93 as enacted by the Sangguniang
Panlungsod of Cagayan de Oro City.
And we shall do so only by the criteria laid down by law
and not by our own convictions on the propriety of
gambling.
The tests of a valid ordinance are well established.
A long line of decisions has held 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.

We begin by observing that under Sec. 458 of the Local

Government Code, local government units are authorized
to prevent or suppress, among others, "gambling and
other prohibited games of chance." Obviously, this

31 | P u b C o r p
In fact it does. The language of the section is clear and To the extent that no national authority is
unmistakable. Under the rule of noscitur a sociis, a word prejudiced in that interpretation.
or phrase should be interpreted in relation to, or given
the same meaning of, words which it is associated.
Accordingly, we conclude that since the word "gambling"
is associated with "and other prohibited games of
chance," the word should be read as referring to only
illegal gambling which, like the other prohibited games of
chance, must be prevented or suppressed.
We could stop here as this interpretation should settle
the problem quite conclusively.
But we will not. The vigorous efforts of the petitioners on
behalf of the inhabitants of Cagayan de Oro City, and the
earnestness of their advocacy, deserve more than short
shrift from this Court.
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 the operate a
casino in Cagayan de Oro City.
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.
Municipal corporations owe their origin to, and derive
their powers and rights wholly from the legislature.
This basic relationship between the national legislature
and the local government units has not been enfeebled
by the new provisions in the Constitution strengthening
the policy of local autonomy.
That Congress retains control of the local government
units although in significantly reduced degree now than
under our previous Constitutions.
The power to create still includes the power to destroy.

Laguna Lake Development Authority vs. Court of

Appeals
The power of the Authority to grant permits for fishpens,
fishcages, and other aqua-culture structures is for the
purpose of effectively regulating and monitoring
activities in the Laguna de Bay region.
It does partake of the nature of police power which is the
most pervasive, the least limitable and the most
demanding of all State powers including the power of
taxation.
Accordingly, the charter of the Authority which
embodies a valid exercise of police power should
prevail over the Local Government Code of 1991
on matters affecting Laguna de Bay.
To resolve the conflicts of cases involving whose
authority should prevail:
If the legal issues are clear in favor of central
government, the proper judicial reasoning should
be in favor of the central government because
we are in a unitary set-up.
But in a situation where there is doubt such that
the law is not clear that it favors central
authority, it should be resolve in favor of local
autonomy.

32 | P u b C o r p
Ganzon vs. CA
We come to the core question: Whether or not the
Secretary of Local Government, as the President's alter
ego, can suspend and/or remove local officials.
SC said YES, but note that this was the ruling before
where the president still has the power to remove local
officials under the previous LGC.
However, under Sec. 60 of the present LGC, the
president can no longer remove local officials. Such
power is already lodged to the regular courts.
The petitioners are under the impression that the
Constitution has left the President mere supervisory
powers, which supposedly excludes the power of
investigation, and denied her control, which allegedly
embraces disciplinary authority.
It is a mistaken impression because legally,
"supervision" is not incompatible with disciplinary
authority.
"Control" has been defined as "the power of an
officer to alter or modify or nullify or set aside
what a subordinate officer had done in the
performance of his duties and the ability to
substitute the judgment of the subordinate with
his own.
Tano vs. Socrates
LGUs may enact police power measures pursuant to the
general welfare clause. The Sangguniang Panlungsod of
Puerto Princesa City enacted an ordinance banning
shipment of all live fish and lobster outside the said city
and prohibiting the catching, gathering, possessing,
buying, selling and shipment of live marine coral dwelling
aquatic organisms.
Petitioners were charged criminally for violation of such
ordinance. They invoke the preferential right of marginal
fishermen under Sec. 149 of the LGC.
The so-called preferential right of subsistence or
marginal-fishermen to the use of marine resources is not
at all absolute.
The LGC provisions invoked by public respondents seek
to give flesh and blood to the right of the people to a
balanced and healthful ecology.
In fact, the general welfare clause, expressly mentions
this right. The LGC explicitly mandates that the general
welfare provisions of the LGC shall be liberally
interpreted to give more powers to the LGUs in
accelerating economic development and upgrading the
quality of life for the people of the community.
One of the devolved powers enumerated in the LGC on
devolution is the enforcement of fishery laws in
municipal waters including the conservation of
mangroves.
This necessarily includes the enactment of ordinances to
effectively carry out such fishery laws within the
municipal waters.
In light then of the principles of decentralization and
devolution enshrined in the LGC, and the powers granted
therein to LGUs under the general welfare clause, which
unquestionably involve the exercise of police power, the
validity of the questioned ordinance cannot be doubted.
LOCAL GOVERNMENTS IN THE PHILIPPINES
Regular LGUs Provinces, Cities,
Municipalities, and
Barangays
Autonomous Regions Muslim Mindanao and
Cordilleras
Special LGUs Special Metropolitan
Political Subdivisions
Section 1, Article 10, Constitution The territorial
and political subdivision 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.
PROBLEM: A law was passed calling for the abolition of
barangays. Is the law unconstitutional? Why or why not?
Answer: It is unconstitutional. Section 1, Article 10
of our Constitution does not create local government
units.
It only constitutionally ensures the existence of these
territorial and political units in our structure (Bernas).
Hence, a law cannot, for example, abolish barangays.
While it is true that Congress has the power to create
a LGUs but that power should refer to create a
SPECIFIC LGU.
And so the power to destroy should also refer to the
power to abolish a SPECIFIC LGU, assuming the
conditions for abolition are present.
But to abolish ALL barangays and consequently,
abolish a barangay system is not allowed because of
Sec. 1, Art. 10 of the Constitution.
PROBLEM: You are asked about the extent of the powers
of a Province over a city which is geographically situated
in the same province. How will you respond? In
particular, may the Provincial Board or SP set aside an
ordinance of a city that is geographically situated in the
province? What about the EOs of the Mayor of that city,
may they be set aside by the governor? May the resident
of that city run for Governor?
Answer: It depends.
Section 12, Article 10, Constitution 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.
Kinds of Cities:
1) Component City not qualified to be highly
urbanized; inhabitants can vote for provincial
candidates and can run for provincial elective
posts = under the supervisory power of the
province.
2) Independent Component City independent
in the sense that the charter prohibits the voters
33 | P u b C o r p
 from voting for provincial elective posts =
outside the supervisory power of the province.
(Abella vs Comelec)
3) Highly Urbanized City independent from
province by reason of status = outside the
supervisory power of the province.
Abella vs Comelec
The main issue in these consolidated petitions centers on
who is the rightful governor of the province of Leyte.
The answer depends on the relationship of the province
and the city.
Section 12, Article X of the Constitution is explicit in that
aside from highly-urbanized cities, component cities
whose charters prohibit their voters from voting for
provincial elective officials are independent of the
province.
In the same provision, it provides for other component
cities within a province whose charters do not provide a
similar prohibition.
Necessarily, component cities like Ormoc City whose
charters prohibit their voters from voting for provincial
elective officials are treated like highly urbanized cities
which are outside the supervisory power of the province
to which they are geographically attached.
This independence from the province carries with it the
prohibition or mandate directed to their registered voters
not to vote and be voted for the provincial elective
offices.
The phrase shall not be qualified and entitled to vote in
the election of the provincial governor and the members
of the provincial board of the Province of Leyte as found
in the Charter of Ormoc City (ICC) connotes two
prohibitions:
1) From running for provincial elective posts
2) From voting for provincial candidates
PROBLEM: A highly urbanized city is independent of the
province where it is geographically located.
Consequently, its residents cannot run for provincial
posts and cannot as well vote for provincial candidates.
Mandaue City of Cebu is a HUC, but its residents can still
run for provincial post and can vote for provincial
candidates. How was that possible?
Answer: Although Sec. 12, Art. 10 of the
Constitution mandates HUCs are independent from
the province and thus, outside the supervisory power
of the province, Sec. 452 of the LGC provides a
vested right for the voters provided that the
conditions required are met.
Section 452. Highly Urbanized City xxx (c)
Qualified voters of cities, who acquire the right to
vote for elective provincial officers prior to the
classification of said cities as HUC after the
ratification of the Constitution and before the
effectivity of this Code, shall continue to exercise
such right.
Special Metropolitan Political Subdivisions
Section, 11 Art. 10 of the 1987 Constitution 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.
34 | P u b C o r p
The jurisdiction of the metropolitan authority that will
thereby be created shall be limited to basic services
requiring coordination.
Created by Congress and requires plebiscite.
The component cities and municipalities shall retain
their basic autonomy and shall be entitled to their
own local executives and legislative assemblies
Jurisdiction is limited to basic services requiring
coordination.

35 | P u b C o r p
MMDA vs Bel-Air Village It cannot act as if it is a person who can act with
The MMDA which has no police and legislative powers, juridical effects. What are consolidated are not
has no power to enact ordinances for the general welfare corporate personalities but only efforts, services,
of the inhabitants of Metro Manila. and resources for purposes commonly beneficial to
them. Thus, what is written in the contracts are the
It has no authority to order the opening of Neptune names of the LGUs concerned.
Street, a private subdivision road in Makati City and
cause the demolition of its perimeter walls.
MMDA is not even a special metropolitan political
subdivision because there was no plebiscite when the
law created it and the President exercises not just
supervision but control over it.
MMMDA has purely administrative function. Because
MMDA is not a political subdivision, it cannot exercise
political power like police power.

LOOSE FEDERATION OF LGUS

Section 13, Article 10 of the 1987 Constitution
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 33, Local Government Code. Cooperative
Undertakings Among Local Government Units. -
Local government units may, through appropriate
ordinances, group themselves, consolidate, or coordinate
their efforts, services, and resources for purposes
commonly beneficial to them.
In support of such undertakings, the local government
units involved may, upon approval by the sanggunian
concerned after a public hearing conducted for the
purpose, contribute funds, real estate, equipment, and
other kinds of property and appoint or assign personnel
under such terms and conditions as may be agreed upon
by the participating local units through Memoranda of
Agreement.

TAKE NOTE: The resultant consolidation will not be a new

corporate body. Why? Because the requirement that an
LGU should be created by law is of constitutional origin.
That requirement remains, so that it cannot be done
either by MOA or ordinance. It has to be by law. It cannot
be given a separate personality.

LGUs may group themselves, consolidate or coordinate

their efforts, services, and resources for purposes
commonly beneficial to them in accordance with law.
(Sec 13 Art X Consti) How?
1) Through Ordinances;
2) Upon approval by the Sanggunian concerned,
after lawful hearing, then contribute funds and
assets thru MOA (Sec 33, LGC)

Question: May this federation or consolidation of LGU

enter into contracts? If yes, how may the federation or
consolidation of LGUs enter into contracts? Under what
name?
The resultant consolidation would not be a new
corporate body, and therefore, it does not have a
personality.

36 | P u b C o r p
Regional Development Councils
To be established by the President and does not
need authorization from Congress.
Composed of LGU officials, regional heads of
Depts., and other government offices and
representatives of NGOs within the region.
Section 14, Article 10 of the 1987 Constitution
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.

37 | P u b C o r p
 PART II: THE LOCAL GOVERNMENT CODE
OF 1991
CONSTITUTIONAL MANDATE FOR THE LOCAL
GOVERNMENT CODE:
Section 3, Article X: 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
government officials, and all other matters relating to the
organization and operation of local government units.
SOURCES OF THE CODE:
1) The LGC of 1983 (BP Blg. 337)
2) The Local Tax Code (PD 201)
3) The Real Property Tax Code (PD 464)
4) Barangay Justice Law (PD 1508)
SCOPE AND APPLICATION OF THE CODE
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 526. Application of this Code to
Local Government Units in the Autonomous
Regions. - This Code shall apply to all provinces,
cities, municipalities and barangays in the
autonomous regions until such time as the
regional government concerned shall have
enacted its own local government code.
Section 529. Tax Ordinances or Revenue
Measures. - All existing tax ordinances or
revenue measures of local government units
shall continue to be in force and effect after the
effectivity of this Code unless amended by the
sanggunian concerned, or inconsistent with, or in
violation of, the provisions of this Code.
Section 534. Repealing Clause.
(f) All general and special laws, acts, city
charters, decrees, executive orders,
proclamations and administrative regulations, or
part or parts thereof which are inconsistent with
any of the provisions of this Code are hereby
repealed or modified accordingly.
RULES OF INTERPRETATION
Section 5. Rules of Interpretation. - In the
interpretation of the provisions of this Code, the following
rules shall apply:
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;
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.
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;
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
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.
SUMMARY:
Liberal interpretation in favour of LGUs,
Devolution of powers, and General Welfare
ordinances
In case of doubt as to existence of power,
resolved in favour of LGU. (vs residual power
doctrine)
But in tax ordinances are construed strictly
against the LGU and liberally in favour of
taxpayer.
Where no law of jurisprudence applies, customs
or traditions in the locality may be applied to
resolve controversies.
EFFECTIVITY OF LGC
Section 536. Effectivity Clause. - This Code shall take
effect on January first, nineteen hundred ninety-two,
unless otherwise provided herein, after its complete
publication in at least one (1) newspaper of general
circulation.
Effects:
1) All tax ordinances or revenue measures of LGUs
enacted before the LGC of 1991 shall continue to
be in fore and effect after the effectivity of the
38 | P u b C o r p
 LGC, unless amended by the Sanggunian or
inconsistent with or in violation of the provisions
of the code.
2) All general and special laws, acts, city charters,
decrees, EOs, Proclamations, and admin
regulations or parts thereof that are inconsistent
with any of the provisions of the Code are
repealed or modified accordingly. Sec 534 (f),
LGC.

39 | P u b C o r p
 PART III: CREATION, CONVERSION, territorial jurisdiction of the local government
unit concerned; and
DIVISION, MERGER, SUBSTANTIAL
c) Land Area. It must be contiguous, unless
CHANGE OF BOUNDARY OF LOCAL it comprises two (2) or more islands or is
GOVERNMENT UNITS, AND ABOLITION separated by a local government unit
independent of the others; properly identified
by metes and bounds with technical
(A) REGULAR POLITICAL SUBDIVISIONS descriptions; and sufficient to provide for
such basic services and facilities to meet the
requirements of its populace.
CREATION OR CONVERSION
General Requirements in the creation or
conversion LGU:
1) Law
2) Plebiscite
3) Compliance with Criteria on Income, Land,
&/or Population

Constitutional Mandate:
- Section 10, Article X: 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, Article X: 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.

Local Government Code Provisions:

- 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 7. Creation and Conversion. As a
general rule, the creation of a local government unit
or its conversion from one level to another level shall
be based on verifiable indicators of viability and
projected capacity to provide services, to wit:
a) Income. It must be sufficient, based on
acceptable standards, to provide for all
essential government facilities and services
and special functions commensurate with the
size of its population, as expected of the local
government unit concerned;
b) Population. It shall be determined as the
total number of inhabitants within the

40 | P u b C o r p
 Compliance with the foregoing indicators shall be unconstitutional. They noted that the intent of the
attested to by the Department of Finance (DOF), the lawmakers when they approved the cityhood bills
National Statistics Office (NSO), and the Lands was really to exempt these bills from the
Management Bureau (LMB) of the Department of requirements of R.A. 9009 considering that these
Environment and Natural Resources (DENR) cityhood bills were proposed much earlier than the
- SECTION 10. Plebiscite Requirement. No approval of R.A. 9009.
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.

LAW
League of Cities of the Philippines vs. COMELEC
Case stemmed from the enactment of certain laws,
called cityhood laws converting 16 municipalities into
cities in the year 2007 after the effectivity of R.A. 9009 in
2001.
R.A. 9009 amended Section 450 of the Local Government
Code by increasing the annual income requirement for
conversion of a municipality or cluster of barangays into
a component city from P20 million to P100 million.
While R.A. No. 9009 was being deliberated upon,
Congress was well aware of the pendency of conversion
bills of several municipalities, including those covered by
the Cityhood Laws, desiring to become component cities
which qualified under the P20 million income
requirement of the old Section 450 of the LGC.
The interpellation of Senate President Franklin Drilon of
Senator Pimentel is revealing. Clearly, based on the
above exchange, Congress intended that those with
pending cityhood bills during the 11th Congress would
not be covered by the new and higher income
requirement of P100 million imposed by R.A. No. 9009.
When the LGC was amended by R.A. No. 9009, the
amendment carried with it both the letter and the intent
of the law, and such were incorporated in the LGC by
which the compliance of the Cityhood Laws was gauged.
Notwithstanding that both the 11th and 12th Congress
failed to act upon the pending cityhood bills, both the
letter and intent of Section 450 of the LGC, as amended
by R.A. No. 9009, were carried on until the 13th
Congress, when the Cityhood Laws were enacted.
The exemption clauses found in the individual Cityhood
Laws are the express articulation of that intent to exempt
respondent municipalities from the coverage of R.A. No.
9009.
First League of Cities decision: The Court
declared the cityhood laws unconstitutional for the
reason that the Constitution specifically and
deliberately makes the Local Government Code the
only repository of the criteria and standards for the
creation of any local government unit such that no
other law not even the charter of the city can govern
such creation.
Second League of Cities decision: On Motion
for Reconsideration, the SC reversed itself in 2009
and declared the 16 cityhood laws not
41 | P u b C o r p
 Third League of Cities decision: The SC
reverted to the first decision and affirmed the
primacy of the constitutional requirement that the
creation of local governments shall only be based on
uniform criteria set forth in only one law, the Local
Government Code. It said that the clear intent of the
Constitution is to insure that the creation of cities
and other political units must follow the same
uniform, non-discriminatory criteria found solely in
the Local Government Code.
Fourth League of Cities decision: The Court
reverted back to ruling that the cityhood laws were
not unconstitutional. It cited the deliberations during
R.A. 9009 where Senator Pimentel made a remark
that it would not be fair to make the said bill retroact
to the cityhood bills pending in the Senate.
Last and Final League of Cities decision:
The Supreme Court resolved that there was a clear
and unmistakable legislative intent to exclude these
cityhood bills from the application of R.A. 9009 thus
recognizing the certain collective wisdom of
Congress.
Without doubt, the LGC is a creation of Congress through
its law-making powers.
Congress has the power to alter or modify it as it did
when it enacted R.A. No. 9009. Such power of
amendment of laws was again exercised when Congress
enacted the Cityhood Laws.
When Congress enacted the LGC in 1991, it provided for
quantifiable indicators of economic viability for the
creation of local government unitsincome, population,
and land area.
Congress deemed it fit to modify the income requirement
with respect to the conversion of municipalities into
component cities when it enacted R.A. No. 9009,
imposing an amount of P100 million, computed only from
locally-generated sources
However, Congress deemed it wiser to exempt
respondent municipalities from such a belatedly imposed
modified income requirement in order to uphold its
higher calling of putting flesh and blood to the very
intent and thrust of the LGC, which is countryside
development and autonomy, especially accounting for
these municipalities as engines for economic growth in
their respective provinces.
TN: Which League of Cities decision should be used as
legal basis in the exam? Cite the legal standing of the SC
in upholding the Congress intent and SCs legal basis in
upholding the Constitution intent. (2008 ruling and 2011
Ruling)
What is association in Public International
Law?
Association - means that the associated state has
internal self- government, while the independent state
with which it is associated is responsible for foreign
affairs and defense.
- This happens where two States sort of
collaborate or enter into an agreement where
one is considered inferior and the other superior
because it says of unequal power. E.g. colonies
- The weaker State is called Associated and the
superior State is called Principal.
Question: Can an associated state be established in
the Philippines?
Province of North Cotabato vs GRP
FACTS:
The RP entered into a MOA with the MILF. The MOA
provided for the creation of Bangsamoro Juridical Entity
(BJE) whereby there will be some sort of government
structure.
There will also be the territory of this Bangsamoro
juridical entity and it has also defined the supposed
constituents of such juridical entity. There is a
government, people, and territory.
And insofar as it is allowed to relate itself to foreign
states, the MOA provides that it can do so through the
instrumentality of the national government.
In fact, under the MOA, it mentioned of the so-called
association kind of relationship.
RULING:
Such MOA is unconstitutional. If an associated state is
legally a state then it cannot exist in the Phils.
Remember, sovereignty is indivisible. You cannot divide
sovereignty, there should only be one authority.
The concept of an associated state is not sanctioned by
the Constitution. Under Art. X, the following are the only
recognized political subdivisions in the Philippines:
Provinces, Cities, Municipalities, Barangays and the
ARMM and the Cordilleras. In general, the objections
against the MOA-AD center on the extent of the powers
conceded therein to the BJE.
Petitioners assert that the powers granted to the BJE
exceed those granted to any local government under
present laws, and even go beyond those of the present
ARMM.
Before assessing some of the specific powers that would
have been vested in the BJE, however, it would be useful
to turn first to a general idea that serves as a unifying
link to the different provisions of the MOA-AD, namely,
the international law concept of association. Significantly,
the MOA-AD explicitly alludes to this concept, indicating
that the Parties actually framed its provisions with it in
mind.
Association is referred to in paragraph 3 on TERRITORY,
paragraph 11 on RESOURCES, and paragraph 4 on
GOVERNANCE. It is in the last mentioned provision,
however, that the MOA-AD most clearly uses it to
42 | P u b C o r p
describe the envisioned relationship between the BJE and
the Central Government.
The relationship between the Central Government and
the Bangsamoro Juridical Entity shall be associative
characterized by shared authority and responsibility with
a structure of governance based on executive,
legislative, judicial and administrative institutions with
defined powers and functions in the comprehensive
compact.

43 | P u b C o r p
A period of transition shall be established in a purpose, provided that only provinces, cities, and
comprehensive peace compact specifying the geographic areas voting favorably in such plebiscite shall
relationship between the Central Government and the be included in the autonomous region."
BJE. As reflected above, the BJE is more of a state than an
The nature of the "associative" relationship may have autonomous region. But even assuming that it is covered
been intended to be defined more precisely in the still to by the term "autonomous region" in the constitutional
be forged Comprehensive Compact. provision just quoted, the MOA-AD would still be in
Nonetheless, given that there is a concept of conflict with it.
"association" in international law, and the MOA-AD - by
its inclusion of international law instruments in its TOR-
placed itself in an international legal context, that
concept of association may be brought to bear in
understanding the use of the term "associative" in the
MOA-AD.
In the same MOA-AD, it contains many provisions which
are consistent with the international legal concept of
association, specifically the following: the BJE's capacity
to enter into economic and trade relations with foreign
countries, the commitment of the Central Government to
ensure the BJE's participation in meetings and events in
the ASEAN and the specialized UN agencies, and the
continuing responsibility of the Central Government over
external defense.
Moreover, the BJE's right to participate in Philippine
official missions bearing on negotiation of border
agreements, environmental protection, and sharing of
revenues pertaining to the bodies of water adjacent to or
between the islands forming part of the ancestral
domain, resembles the right of the governments of FSM
and the Marshall Islands to be consulted by the U.S.
government on any foreign affairs matter affecting them.
These provisions of the MOA indicate, among other
things, that the Parties aimed to vest in the BJE the
status of an associated state or, at any rate, a status
closely approximating it.
Even the mere concept animating many of the MOA-AD's
provisions, therefore, already requires for its validity the
amendment of constitutional provisions, specifically the
provisions of Article X, Section 1 & 15.
The BJE is a far more powerful entity than the
autonomous region recognized in the Constitution. It is
not merely an expanded version of the ARMM, the status
of its relationship with the national government being
fundamentally different from that of the ARMM.
Indeed, BJE is a state in all but name as it meets the
criteria of a state laid down in the Montevideo
Convention,154 namely, a permanent population, a
defined territory, a government, and a capacity to enter
into relations with other states.
Even assuming arguendo that the MOA-AD would not
necessarily sever any portion of Philippine territory, the
spirit animating it - which has betrayed itself by its use of
the concept of association - runs counter to the national
sovereignty and territorial integrity of the Republic.
The defining concept underlying the relationship
between the national government and the BJE being
itself contrary to the present Constitution, it is not
surprising that many of the specific provisions of the
MOA-AD on the formation and powers of the BJE are in
conflict with the Constitution and the laws.
Article X, Section 18 of the Constitution provides that
"[t]he creation of the autonomous region shall be
effective when approved by a majority of the votes cast
by the constituent units in a plebiscite called for the
44 | P u b C o r p
Under paragraph 2(c) on TERRITORY in relation to 2(d)
and 2(e), the present geographic area of the ARMM and,
in addition, the municipalities of Lanao del Norte which
voted for inclusion in the ARMM during the 2001
plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan and
Tangkal - are automatically part of the BJE without need
of another plebiscite, in contrast to the areas under
Categories A and B mentioned earlier in the overview.
That the present components of the ARMM and the
above-mentioned municipalities voted for inclusion
therein in 2001, however, does not render another
plebiscite unnecessary under the Constitution, precisely
because what these areas voted for then was their
inclusion in the ARMM, not the BJE.

PLEBISCITE
Who shall participate?
What is meant by units affected?
In what sense affected?
How is it different from the manner of creating
autonomous regions?
How about the downgrading or upgrading the city?

2004 Bar Exam:

QUESTION: Madako is a municipality composed of 80
barangays, 30 west of Madako River and 50 east thereof.
The 30 western barangays feeling left out of economic
initiatives, wish to constitute themselves into a new and
separate town to be called Masigla.
Granting the Masiglas proponents succeed to secure a
law in their favour, would a plebiscite be necessary or
not? If it is, who should vote or participate in the
plebiscite?
Answer: Plebiscite is necessary because this
involves a creation of LGU.
Under the Constitution and LGC of 1991, the
creation, conversion, division, merger and substantial
change of boundary requires a plebiscite as an
INDISPENSIBLE REQUIREMENT.
All 80 barangays of Madako because there would be
an adverse effect of the mother unit with respect to
income, population and territory.

45 | P u b C o r p
Tan vs COMELEC A close analysis of the said constitutional provision
BP 885, creating the Province of Negros del Norte, was will reveal that the common denominator is the
declared unconstitutional because it excluded the voters material change in the political and economic rights
of the mother province from participating in the of the local government units directly affected as well
plebiscite (and it did not comply with the area of criterion as the people therein. It is precisely for this reason
prescribed in the LGC). that the Constitution requires the approval of the
people in the political units directly affected.
A plebiscite for creating a new province should include
the participation of the residents of the mother province Further, Section 10, Chapter 2 of the Local
in order to conform to the constitutional requirement. Government Code and Rule II, Article 6, par. (f)(1) of
the Implementing Rules and Regulations of the Local
In this case, the plebiscite only included the inhabitants Government Code reiterate the constitutional
of Negros del Norte.Where the law authorizing the requirement.
holding of a plebiscite is unconstitutional, the Court
cannot authorize the holding of a new one.
The fact that the plebiscite which the petition sought to
stop had already been held and officials of the new
province appointed does not make the petition moot and
academic, as the petition raises an issue of constitutional
dimension. Units affected means units/residents of the
political entity who stand to be economically dislocated
by the separation of a portion thereof have the right to
participate in a plebiscite.
TN: Here, the SC said that the effectivity of the 1987
Constitution has not superseded the 1986 Tan vs.
COMELEC Decision

Padilla, Jr. vs. COMELEC

Even under the 1987 Constitution, the plebiscite shall
include all the voters of the mother province or the
mother municipality.

PROBLEM: Confident that Municipality of Consolacion

can qualify as a new city under existing laws, its officials
ask you whether the whole Province of Cebu will
participate in the plebiscite that will be conducted
(assuming that they succeed in persuading Congress to
pass a law converting Consolacion into a city.) What will
be your advice?
Answer: If the Charter states that it will become an
independent component city or a highly urbanized
city, then you are essentially carving out. Thus, in
that case, it will require a plebiscite.

PROBLEM: In 1998, by virtue of R.A. No. 8528, the City

of Santiago, Isabela was converted from an independent
component city to a component city. The constitutionality
of R.A. No. 8528 was assailed on the ground of lack of
provision in the said law submitting the same for
ratification by the people of Santiago City on a proper
plebiscite.
The issue was whether the downgrading of Santiago City
from an independent component city to a mere
component city requires the approval of the people of
Santiago City. Decide.
Answer: Miranda vs. Aguirre
The Court held that the Constitution requires a
plebiscite. The resolution of the issue depends on
whether or not the downgrading of Santiago City falls
within the meaning of creation, division, merger,
abolition or substantial alteration of boundaries of
municipalities in Section 10, Article X of the 1987
Constitution.

46 | P u b C o r p
Umali vs. COMELEC
The primordial issue in this case boils down to whether
the qualified registered voters of the entire province of
Nueva Ecija or only those in Cabanatuan City can
participate in the plebiscite called for the conversion of
Cabanatuan City from a component city into a Highly-
Urbanized City.
While conversion to a Highly-Urbanized City is not
explicitly provided in Section 10, Article X of the
Constitution, the conversion of a component city into an
HUC is substantial alteration of boundaries.
As the phrase implies, substantial alteration of
boundaries involves and necessarily entails a change
in the geographical configuration of a local government
unit or units.
The phrase boundaries should not be limited to the
mere physical one, referring to the metes and bounds of
the LGU, but also to its political boundaries.
Thus, the province will inevitably suffer a corresponding
decrease in territory brought about by Cabanatuan Citys
gain of independence. With the citys newfound
autonomy, it will be free from the oversight powers of the
Province, which, in effect, reduces the territorial
jurisdiction of the latter.
Further, Section 453 of the LGC makes it ministerial for
the President, upon proper application, to declare a
component city as highly urbanized once the minimum
requirements, which are based on certifiable and
measurable indices under Section 452, are satisfied. The
mandatory language shall used in the provision leaves
the President with no room for discretion.

The COMELEC can postpone the holding of a Plebiscite

and election to another date.
The COMELEC has exclusive charge of the enforcement
and administration of all laws relative to the conduct of
elections for the purpose of ensuring free, orderly, and
honest elections.
The text and intent of Section 2 (1) of Article IX (C) is to
give COMELEC all necessary and incidental powers for it
to achieve the objective of holding free, orderly, honest,
peaceful and credible elections. (Cagas vs. COMELEC,
G.R. No. 209185, October 25, 2013)

COMMON STANDARDS FOR COMPLIANCE OF

CRITERIA
Incomec/o Dept. of Finance
Populationc/o NSO
Land Areac/o DENR (Land Management Bureau)

NOTE: the criteria call for question of facts. Findings of

facts by administrative agencies are binding and
conclusive upon courts unless there is grave abuse of
discretion or clear mistake of facts.
Hence, findings of facts by the DOF, NSO, and DENR
deserve great respect, if not finality, and also enjoy
presumption of regularity being acts of government
agencies. BASIS: experts in their fields.

47 | P u b C o r p
Navarro vs. Ermita Be sufficient to provide for such basic services and
In this case, it was only the Bureau of Local Government facilities to meet the requirements of its populace.
Finance who certified the annual income requirement of
the porposed Province of Dinagat Islands.
While the special census was conducted with the
assistance of the District Census Coordinator of the NSO,
it was not certified by the NSO. The certification
contemplated by law must come from the head office.
In this case, the Province of Dinagat failed to meet the
population and land area requirement for the creation of
a province.

The following are the requirements that have to be met

by the LGU before it can be created:
Unit Specific Criteria
Barangays Population
Income, population &
Municipalities
land area
Income, population OR
Component Cities
land area
Highly Urbanized Cities Income and Population
Income, Population or
Province
Land Area

INCOM POPULAT LAND

LGU
E ION AREA

At At least
Minimum
PROVINCE least 2,000
250K
20M sq/km

At At least
HIGHLY-URBANIZED Minimum
least 100
CITY 200K
50M sq/km

At At least
Minimum
CITY least 100
150K
100M sq/km

At At least
Minimum
MUNICIPALITY least 50
25K
2.5M sq/km

BARANGAY (outside Minimum

n/a n/a
Metro Manila) 2K

BARANGAY (Metro
Minimum
Manila, Highly n/a n/a
5K
Urbanized)

LAND AREA
The land area must:
Comply with the area requirement, unless it is an
island.
Must be contiguous, unless: a) two or more islands or
b) separated by a local government unit independent
of the others
Properly identified by metes and bounds with
technical descriptions

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PROBLEM: In the LGC of 1991, a municipality may be
created with less than 50 sq. km. if it is an island. Under
the LGC of 1991, however, there is no such exception
when it comes to creation of a province which normally
requires at least 2,000 sq. km.
May the implementing rules of the LGC of 1991 provide
for a similar exception?
Answer: Only the dry land.
Navarro vs. Ermita
One of the arguments of the respondents in order for
Dinagat Islands to comply with the land area requirement
was that the waters between the islands must be
counted.
The Court held that the use of the word territory reflects
that it has reference only to the mass of land area and
excludes the waters over which the political unit
exercises control.
Paragraph 2 of Article 9 of the Rules and Regulations
implementing the LGC, which states that the land area
requirement shall not apply where the proposed
province, is composed of one or more islands violates
the LGC and is therefore, null and void.
Nowhere in the Local Government Code is the said
provision stated or implied. Under Section 461 of the
Local Government Code, the only instance when the
territorial or land area requirement need not be complied
with is when there is already compliance with the
population requirement.
BUT, THIS CASE WAS REVERSED IN 2011 (WTF SIR.)
SC, through Nachura, ruled that Congress intended to
apply the exemption on land area requirements enjoyed
by municipalities and cities which have islands as
territories to the Province.
There appears neither rhyme nor reason why this
exemption should apply to cities and municipalities, but
not to provinces.
In fact, considering the physical configuration of the
Philippine archipelago, there is a greater likelihood that
islands or group of islands would form part of the land
area of a newly-created province than in most cities or
municipalities.
It is, therefore, logical to infer that the genuine legislative
policy decision was expressed in Section 442 (for
municipalities) and Section 450 (for component cities) of
the LGC, but was inadvertently omitted in Section 461
(for provinces).
Thus, when the exemption was expressly provided in
Article 9(2) of the LGC-IRR, the inclusion was intended to
correct the congressional oversight in Section 461 of the
LGC and to reflect the true legislative intent.
It would, then, be in order for the Court to uphold the
validity of Article 9(2) of the LGC-IRR.
Boundary
Should be properly identified by metes and
bounds (Sec. 7) WHY? for Jurisdiction.
Mariano vs COMELEC
The true test is whether or not the description of
boundary will cause territorial confusion.
Otherwise, requirement is substantially complied with.
Petitioners assail sec. 2 of RA 7854 as unconstitutional on
the ground that it did not properly identify the land area
or territorial jurisdiction of Makati by metes and bounds,
in violation of Sec. 10 of the 1987 Constitution in relation
to Sec. 7 and 450 of the LGC.
Petitioners have not demonstrated that the delineation of
the land area of the proposed City of Makati (without
metes and bounds) will cause confusion as to its
boundaries. Congress has refrained from using the metes
and bounds description of land areas of other LGUs.
The requirement that the territory of newly-created LGUs
be identified by metes and bounds is intended to provide
the means by which the area of the LGU may be
reasonably ascertained, i.e., as a tool in the
establishment of the LGU.
As long as the territorial jurisdiction of the newly created
city may be reasonably ascertained by referring to
common boundaries with neighboring municipalities
then, the legislative intent has been sufficiently served.
NOTE: RA 7854, which converted Makati into a city, did
not define the boundaries of the new city by metes and
bounds, because of a territorial dispute between Makati
and Taguig, which was best left for the courts to decide.
AVERAGE ANNUAL INCOME
Income accruing to the general fund (regular), exclusive
of special funds, trust funds, transfers, and non-recurring
income.
Alvarez vs. Guingona
Is the IRA included in the computation of average
annual income? It is automatically and regularly
released, and so regular and recurring and they form
part of the gross accretion of funds.
However, in the case of conversion of a municipality into
a city or a cluster of barangays to be formed into a new
city, RA 9009 enacted on June 30, 2001 and amending
Sec. 450 of the Code, IRAs are no longer included in the
computation of the annual income for purposes of
complying with the income requirement. Income refers
to locally generated income.
POPULATION
It shall be determined as the total number of inhabitants
within the territorial jurisdiction of the local government
unit concerned.
Aquino III vs COMELEC
In this case, the indispensable requirement in the
creation of a province is that of income and either of
territory or population.
49 | P u b C o r p
Population requirement is not an indispensable
requirement, but merely an alternative addition to the
indispensable income requirement.
Procedure in Creation and Conversion
Creation:
1) Petition by the prospective units in a form of
resolution
2) Comments on the Petition by the Sangunian of
the mother unit to be submitted to Congress.
3) Attachment of supporting documents to the
Petition consisting of Certificates of DOF, NSO,
and LMB (DENR)
4) Enactment of Law by Congress
5) Plebiscite will be held after law takes effect [Art.
9-11, IRR]
Conversion from Component City to HUC:
1) Resolution by the interested unit [by SP, duly
approved and endorsed by the Mayor] to be
submitted to the Office of President with proofs
of compliance with income and population
requirements.
2) Declaration of Conversion by the President a
ministerial duty on the part of the President
DIVISION AND MERGER
Same requirements as Creation and Conversion
Conditions and Limitations:
1) Should not reduce the land area, population, and
income to less than the minimum requirements
under the Code; and
2) Income classification of the original LGU affected
shall not fall below its current classification prior
to such division. [Sec. 8, LGC]
The income classification of local government units shall
be updated within six (6) months from the effectivity of
this Code to reflect the changes in their financial position
resulting from the increased revenues as provided
herein.
Merger of LGUs, political subdivisions and the like is a
legislative function. There is a need of a law enacted by
Congress.
QUESTION: Should a law be pass for a merger of
ADMINISTRATIVE REGIONS? For the purpose of allowing a
efficiency and economy in the delivery of services?
Answer: You dont need a law. Executive function.
Only the President has the power to do that because
merger of administrative regions is for administrative
purposes.
SUBSTANTIAL ALTERATION OF BOUNDARIES
Same as creation and conversion, except that the
criteria on income and population are not factors
to consider.
50 | P u b C o r p
 But the alteration of the boundaries should not
also reduce the minimum requirements on land
area.

51 | P u b C o r p
ABOLITION BOUNDARY DISPUTES
Ground: When its income, population, or land area has
been irreversibly reduced to less than the minimum 2005 Bar:
standards as certified by the national agencies
concerned. [Sec. 9, LGC] There was a boundary dispute between Duenas, a
municipality, and Passi, and independent component
city, both of the same province.
NOTE: Irreversible reduction to less than the minimum State how the two local government units should settle
standards only offers a ground for abolition. Hence, a their boundary dispute.
further act (law or ordinance) is still required to effect
abolition. [DILG Opinion NO. 17 S. 2006] Answer: Settlement of Boundary Disputes
1) It is mandated that boundary disputes
between and among local government units
PROBLEM: In preparation for the 2016 local and national shall, as much as possible, be settled
elections, the COMELEC conducted investigations in amicably.
order to ascertain the veracity of reports of ghost
precincts. 2) Amicable settlement is within the jurisdiction
of the Sanggunian/s of the mother unit/s as a
Based on the investigations it conducted, COMELEC general rule.
discovered that there are no inhabitants in Barangay
Diwata in Municipality of Lazi, Siquijor. Consequently, the 3) In case of failure to settle, the Sanggunian
COMELEC removed Barangay Diwata among the list of concerned tries this case.
precincts. May COMELEC do that? 4) Within the time and manner prescribed by
Answer: No. COMELEC cannot. the Rules of Court, any party may elevate the
decision of the sanggunian concerned to the
proper RTC having jurisdiction over the area.
Sarangani v. COMELEC
Under the LGC of 1991, the abolition of a local
government unit may be done by Congress in the case of
a province, city, municipality, or any other political
subdivision.
In the case of a barangay, except in Metropolitan Manila
area and in cultural communities, it may be done by the
Sangguniang Panlalawigan or Sangguniang Panglungsod
concerned subject to the mandatory requirement of a
plebiscite conducted for the purpose in the political units
affected.

QUESTION: Barangay Pobre is the poorest of all

barangays in the Municipality of Carmen mainly because
of its rocky, hilly and mountainous topography. It strives
mainly on the IRA that it receives. Without IRA, it could
hardly pay even the honoraria of tis tanods.
a) Can it lawfully be abolished?
b) If yes, what is the procedure for the abolition of
Barangay Pobre?
Answer:
a) Yes it may be abolished by a law. Section 9 of
RA 7160 provides that, The law or ordinance
abolishing an LGU shall specify the province,
city, municipality, or barangay with which the
LGU sought to be abolished will be
incorporated or merged.
b) When the law takes effect, there must be a
plebiscite.

52 | P u b C o r p
 (B) AUTONOMOUS REGIONS
Manner of Creation:
a) Law
b) Plebiscite
Dual Purpose of Plebiscite:
1) Determine will of the people whether to create
an Autonomous Region;
2) Determine which LGU shall form part of AR. (only
those with majority votes, provided more than
one) [Abbas and Ordillo Cases]
Abbas vs. COMELEC
As provided in the Constitution, the creation of the
Autonomous region in Muslim Mindanao is made
effective upon the approval "by majority of the votes cast
by the constituent units in a plebiscite called for the
purpose" [Art. X, sec. 18].
The question has been raised as to what this majority
means. Does it refer to a majority of the total votes cast
in the plebiscite in all the constituent units, or a majority
in each of the constituent units, or both?
We need not go beyond the Constitution to resolve this
question. If the framers of the Constitution intended to
require approval by a majority of all the votes cast in the
plebiscite they would have so indicated.
Thus, in Article XVIII, section 27, it is provided that "[t]his
Constitution shall take effect immediately upon its
ratification by a majority of the votes cast in a plebiscite
held for the purpose ... Comparing this with the provision
on the creation of the autonomous region, which reads:
The creation of the autonomous region shall be
effective when approved by majority of the votes
cast by the constituent units in a plebiscite called for
the purpose, provided that only provinces, cities and
geographic areas voting favorably in such plebiscite
shall be included in the autonomous region. [Art. X,
sec, 18, para, 2].
It will readily be seen that the creation of the
autonomous region is made to depend, not on the total
majority vote in the plebiscite, but on the will of the
majority in each of the constituent units and the proviso
underscores this. for if the intention of the framers of the
Constitution was to get the majority of the totality of the
votes cast, they could have simply adopted the same
phraseology as that used for the ratification of the
Constitution, i.e. "the creation of the autonomous region
shall be effective when approved by a majority of the
votes cast in a plebiscite called for the purpose."
It is thus clear that what is required by the Constitution is
a simple majority of votes approving the organic Act in
individual constituent units and not a double majority of
the votes in all constituent units put together, as well as
in the individual constituent units.
Ordillo vs. COMELEC
Under the Constitution and R.A. No 6734, the creation of
the autonomous region shall take effect only when
approved by a majority of the votes cast by the
constituent units in a plebiscite, and only those provinces
and cities where a majority vote in favor of the Organic
Act shall be included in the autonomous region.
The provinces and cities wherein such a majority is not
attained shall not be included in the autonomous region.
It may be that even if an autonomous region is created,
not all of the thirteen (13) provinces and nine (9) cities
mentioned in Article II, section 1 (2) of R.A. No. 6734
shall be included therein.
The single plebiscite contemplated by the Constitution
and R.A. No. 6734 will therefore be determinative of (1)
whether there shall be an autonomous region in Muslim
Mindanao and (2) which provinces and cities, among
those enumerated in R.A. No. 6734, shall compromise it.
There must be at least 2 LGUs because the Constitution
says units, so in the case of Cordillera, its not duly
created because only 1 province got an affirmative
plebiscite, which is only the Ifugao province, and the rest
are negative.
So, no Cordillera Autonomous Region, but simply
Administrative Region of the Cordilleras. No local
government powers.
The sole province of Ifugao cannot validly constitute the
Cordillera Autonomous Region.
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.
Rule in statutory construction must be applied here: the
language of the Constitution, as much as possible should
be understood in the sense it has in common use and
that the words used in constitutional provisions are to be
given their ordinary meaning except where technical
terms are employed.
The entirety of Republic Act No. 6766 creating the
Cordillera Autonomous Region is infused with provisions
which rule against the sole province of Ifugao
constituting the Region. It can be gleaned that Congress
never intended that a single province may constitute the
autonomous region.
If this were so, we would be faced with the absurd
situation of having two sets of officials: a set of provincial
officials and another set of regional officials exercising
their executive and legislative powers over exactly the
same small area.
Counting of the plebiscite votes:
REGULAR LGUs AUTONOMOUS REGIONS
Majority of TOTAL votes of Majority of the votes in
ALL UNITS EACH UNIT
As a GENERAL RULE, the autonomous regions will be
governed by their organic acts. [This is different because
LGUs will have to be governed primarily by the LGC and
53 | P u b C o r p
secondarily by their charter insofar as the provisions are
not inconsistent with the Code.]

54 | P u b C o r p
ELECTIONS (C) BEGINNING OF CORPORATE EXISTENCE
Kida vs Senate Section 14. Beginning of Corporate Existence. -
Assailed in this petition is R.A. 10153 that reset the next When a new local government unit is created, its
ARMM regular elections to May 2013 to coincide with the corporate existence shall commence upon the election
regular local and national elections of the country. and qualification of its chief executive and a majority of
the members of its sanggunian, unless some other time
Does the 1987 Constitution mandate the is fixed therefor by the law or ordinance creating it.
synchronization of elections including the ARMM
elections?
While the Constitution does not expressly state that The LGUs corporate existence begins:
Congress has to synchronize national and local elections, a) As fixed by the law or ordinance (usually
the clear intent towards this objective can be gleaned effectivity of law) creating the LGU, or
from the Transitory Provisions (Article XVIII) of the
b) Election and Qualifications of LCE and majority of
Constitution, which show the extent to which the
Sanggunian members (when not fixed by law or
Constitutional Commission, by deliberately making
ordinance or when it is silent)
adjustments to the terms of the incumbent officials,
sought to attain synchronization of elections.
The Constitutional Commission exchanges, read with the Election refers to having been proclaimed as
provisions of the Transitory Provisions of the Constitution, winners in the election
all serve as patent indicators of the constitutional
Qualifications refers to the oath-taking that
mandate to hold synchronized national and local
qualifies the public official
elections, starting the second Monday of May 1992 and
for all the following elections.
In this case, the ARMM elections, although called
regional elections, should be included among the
elections to be synchronized as it is a local election
based on the wording and structure of the Constitution.
Thus, it is clear from the foregoing that the 1987
Constitution mandates the synchronization of elections,
including the ARMM elections.
We admit that synchronization will temporarily disrupt
the election process in a local community, the ARMM, as
well as the communitys choice of leaders.
However, we have to keep in mind that the adoption of
this measure is a matter of necessity in order to comply
with a mandate that the Constitution itself has set out for
us.
Moreover, the implementation of the provisions of RA No.
10153 as an interim measure is comparable to the
interim measures traditionally practiced when, for
instance, the President appoints officials holding elective
offices upon the creation of new local government units.

55 | P u b C o r p