Sei sulla pagina 1di 24

PUBLIC CORPORATION Section 15, LGC of 1991 !

Every local government


ATTY. LARGO unit created or recognized under this Code is a body
EH 407 politic and corporate endowed with powers to be
exercised by it in conformity with law. As such, it shall
INTRODUCTION exercise powers as a political subdivision of the
national government and as a corporate entity
DISTRIBUTION OF POWERS TO LOCAL GOVERNMENTS representing the inhabitants of its territory.
TO LOCAL GOVERNMENTS AS LIMITATION TO POLITICAL
AUTHORITY: STRUCTURES AND SYSTEM OF PHILIPPINE LOCAL
GOVERNMENT
• Horizontal Distribution Creation
- Powers of the government are distributed to the 3 - The Philippine remains a unitary state. As such, local
branches of national government: executive, governments are creatures of the national
legislative, judiciary. government.
- Distribution may either be complete (presidential - The national government, by law, creates, merges or
systems) or partial (parliamentary systems) abolishes local governments, endows with them
powers within their jurisdiction, and determines
• Vertical Distribution national-local government relations.
- Powers of the government are distributed among at
least 2 levels of government: upper level – national Tiers of Local Government
gov’t; lower level – local gov’t - The PROVINCE is the intermediate unit, providing
- The distribution of governmental powers among at supervision to the municipalities and component cities
least 2 levels of government guarantees liberty and under it, and performing services for national
democracy. government.
- The CITIES, MUNICIPALITIES AND BARANGAYS
LOCAL GOVERNMENTS AS POLITICAL AND are the basic unit of the local government, performing
TERRITORIAL SUBDIVISIONS OF THE STATE services for people who live together in a community.
• Local Government
- Political subdivision of a nation /state which is The Unitary System of Government
constituted by law and has substantial control of local - Municipal governments are only agents of the national
affairs. government.
- A body politic and corporate endowed with powers to - Local councils exercise only delegated legislative powers
be exercised by it in conformity with law. It shall conferred upon them by Congress as the national
exercise powers as a political subdivision of the lawmaking body.
national government. (Sec 15, LGC) - Congress retains control of the local government units
• The power relations between the 2 levels of the although significantly in reduced degree now than under
government vary depending on the government system our previous Constitutions.
adopted by a certain jurisdiction: - Any form of local autonomy granted to local governments
▪ UNITARY – National government supervises is limited and confined within the extent allowed by the
local government affairs, as the local central authority.
governments derive both their existence and - The principle of local autonomy under the 1987
powers from the national government. Constitution simply means “decentralization.” It does not
▪ FEDERAL – Local governments are make local governments sovereign within the state or an
supreme within their own spheres such that “imperium in imperio.”
they actually become “quasi-sovereign”
states although still subordinate to the Macariola vs. Asuncion
national government in some respects, such Branches of Political Law:
as in the area of foreign affairs, defense, Constitutional Law – a. powers and functions of the
currency & commerce. government; b. inherent powers of the State in relation to the
Bill of Rights
• The element of SUBORDINATION appears in any Administrative Law – modern field of political law.
definition of local government for by nature, local a. External Admin Law – rules and principles
governments are subordinate entities, having no inherent governing the relationships between
powers and must look up to the higher governmental level governmental agencies or organs. E.g. President
for delegation of authority. and Department of Transportation relationship; or
• Two elements found in any definition of local government: GOCC related to another agency.
1. The presence of a higher authority b. Internal Admin Law – deals with matters about
2. Territorial boundary public officials. E.g. appointments, qualifications,
promotion, demotion, discipline, etc. (recently,
LOCAL GOVERNMENTS AS MUNICIPAL CORPORATIONS Internal Admin Law is changed to Law on Public
- It is a body politic and corporate constituted by the Officers merged with Election Law).
incorporation of the inhabitants of a city/town for the Local Government Law
purpose of local government thereof. Public International Law
- 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 PART I: General Principles
internal affairs of the city, town, or district
incorporated. A. Corporation
- These dual functions of local government are
expressly recognized in Definition:
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 1 of 24
An artificial being created by operation of law, having the right the general consent to that kind of corporation, even though
of successions and the powers, attributes and properties the conditions of incorporation are not substantially complied
expressly authorized by law or incident to its existence. (Sec. with.
2, Corporation Code of the Philippines – BP Blg. 68) ! If the law creating a LGU is declared unconstitutional but the
LGU continues to perform as such. It is a corporation that only
An artificial being, invisible, intangible, and existing only in exists in fact but not in law.
contemplation of law. (Dartmouth College Case, US Case)
Corporation by Prescription
A legal institution devised to confer upon individuals of which it → Under the principles of common law, where a body of men
is composed of powers, privileges, and immunities which they have been for a long time in the exercise of corporate powers,
would not otherwise possess and the most important of which a presumption arises of an ancient charter, granted to their
are continuous legal identity or unity, and perpetual or indefinite predecessors, making the exercise of such powers lawful and
succession under the corporate name, notwithstanding rightful. A lost grant or charter from the crown is being
successive changes, by death or otherwise, in the corporators presumed.
or members. (Dillon, Commentaries on Law of Municipal ! A corporation created many, many years ago and nobody
Corporations, Vol. 1 – 5th ed.) questioned its existence.

Local government unit is a corporation. Corporation by Estoppel


- While as against the State, a corporation cannot be
Kinds/Classification of Corporations: created by the mere agreement or other act or omission
1. Private Corporation - Formed for some private purpose, by other persons, yet as between private litigants, they
benefit, aim or end, such as a business corporation place themselves where they would not be permitted to
formed and organized under a general law on corporation. deny the fact of the existence of the corporation, by their
→ It is created for private objectives. agreements, admissions or conduct.
- A corporation that is defectively created making it not a
Ø Manner of creating: Private corporation is created truly a corporation but in your dealings with other entities
pursuant to a law. A creation of a privation corporation, you represent that you are a corporation.
through SEC, must be in accordance with the provisions of
a general law—Corporation Code of the Philippines. The Kinds of Public Corporation
said Code is applicable to all corporations. A. Quasi-Public Corporation
- A private corporation that renders public service or
Ø Purpose: for private purpose—Profit is the goal unless you supplies public wants, such as public utility
are a charitable organization. companies.
- Though organized for private profit, they are
Ø Governed by: compelled by law or contract to render public service.
- General law (Corporation Code) It combines the elements of a public and private
- Its articles of incorporation corporation.
Ø Quasi - it is not but it is almost
2. Public Corporation - Organized for a government of a
portion of a State, such as a local government unit. It is B. Municipal Corporation (Pure)
created for public purposes. A body politic and corporate constituted by the incorporation of
the inhabitants for purposes of local governance thereof.
Ø Manner of creating: Created by law. A Charter refers to the Referred to as “Local Governments”.
law creating the public corporation. That’s why we have
charter day celebrations. We celebrate the day when the i. Incorporation of the inhabitants, their
local government unit had been incorporated directly by participation, means through a plebiscite. (Always
law. Directly by Congress. required)
Local Government
Ø Purpose: Public purpose — governance or administration → Political Subdivision of a nation or state which is
of a political subdivision and the delivery of basic services constituted by law and has substantial control of local
to the inhabitants but only to the extent of its governmental affairs.
purpose. We have the national government but since the E.g. Provinces – a political subdivision and territorial
national government cannot afford to take care all the subdivision under the 1987 Constitution
concerns of all geographical components of the territory,
then it has to create subsidiaries and these are LGU, an Ø LGU, as a political subdivision, are there to handle
agent of the national government. Thus, the obvious public local governance and administration of public affairs.
purpose is GOVERNANCE. LGU’s primary purpose is the As an agency.
governance of the political subdivision. Ø LGU, as a territorial subdivision, is for geographic
purposes. You perceive it as tangible and physical.
Ø Governed by: LGU, as a limitation to power, is there as a way to
- LGC of 1991 limit the powers of the government. Under the
- The charter, the law creating it. It looks like a principle of proper and valid delegation of powers,
little LGC. when some powers are supposed to be vested on the
national government, we decided to share that power.
Special Kinds of Corporations And thus, LGU exercises governmental powers as
- defects are present in the creation. thus, not a perfect well. Delegation of powers means that if those powers
corporation but the law treat them as corporation by reason of were already delegated to LGUs then that means that
equity) central government cannot exercise those powers
until and unless it will decide to re-exercise those
Corporation De Facto powers.
→ Consent of the State is implied rather than expressed, by
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 2 of 24
Boy Scouts of the Philippines vs. COA Local Government Code of 1991
Sec. 15 Political and Corporate Nature of Local Government
There are 2 types of government corporations: Units. - Every local government unit created or recognized
1. Performing governmental functions (like garbage under this Code is a body politic and corporate endowed with
disposal, waterworks, etc.) powers to be exercised by it in conformity with law. As such, it
2. Performing business functions shall exercise powers as a political subdivision of the national
government and as a corporate entity representing the
2 criteria: inhabitants of its territory.
o For gov’t corp to prove that they can be efficient in the
areas of their proper functions. What is the legal relevance of characterizing a particular
o They should not go into activities that the private function of a local government unit as either “public/
sector can do better. governmental” or “private/proprietary”?

The BSP charter created the BSP as a “public corporation.” 1. Liability


The public, rather than private, character of the BSP is 2. Garnishment of FUNDS
recognized by the fact that, along with the Girl Scouts of the 3. Liability of LGUs for CONTRACTS
Philippines, it is classified as an attached agency of the DECS 4. CONTROL OF CONGRESS OVER LGUs, especially
under the Administrative Code of 1987. in matters of disposition of properties held by LGUs
and extent of LGUs exercise of specific powers of
Since the BSP in its amended charter continues to be a public local autonomy
corporation or a government instrumentality, it is subject to the 5. Treating an LGU as an “instrumentality of the
audit jurisdiction of COA. government” or not for some legal purpose.

B. Municipal Corporations ▪ Liability of LGUs for DAMAGES


Question: Suppose that the city mayor ordered the cutting off
Elements: of tall trees because of impending storm or typhoon, and he
1) Legal Creation or Incorporation – pertains to the law ordered Juan to go to Plaza Independencia and check if there
creating the LGU. 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
2) Corporate Name – it is required. It cannot be nameless. It is on the spot. So the heirs of Pedro want to sue. Who should be
more than a name because it has to act, as a juridical entity, the defendants? Should it be Juan who caused the cutting off
carrying only that name in entering contracts. (e.g. “City of of the acacia tree that he did not observe diligence and
Cebu”) And when the name has to be changed, it can only be therefore he was negligent? Are you going to sue the mayor
changed upon consultation with the Philippine Historical because he ordered the cutting off of the tree? Or are you
Institute. And it must not carry a name of a living person except going to sue the City of Cebu? Probably, you would find the
when that name connotes to a special, social or political distinctions between these two functions relevant in this
significance in that place. And thus, you may notice that names problem.
of the municipals are names of dead people. E.g. andres,
narciso, rizal. Answer: The suability (of whoever can be sued) depends on
3) Inhabitants – people who compose the LGU. the kind of function exercised by the LGU. If governmental,
According to Dillon, there can never be a municipal corporation generally, cannot be sued.
without inhabitants.
4) Territory – consist of landmass, water and other parts ▪ Garnishment of FUNDS
of a territory. In cases involving monetary claims, the judgment will require
the defendant to pay money. It maybe that before the finality of
Dual Nature and Function of LGUs the decision (during the pendency of the case), the plaintiff is
- An important principle in the study of LGU is that every local able to get a writ preliminary attachment. Or you wait until you
government possesses dual functions: Governmental and get a favorable decision and it becomes final and executory,
Proprietary. that’s when you ask the court to issue a writ of execution, to
order the sheriff to satisfy the monetary judgment.
1. Governmental (also called public or political)
- Administering the powers of the State and promoting the If the defendant happens to be a LGU, how will the sheriff
public welfare satisfy the judgement? Because when it is a public fund is
- When exercising such powers, it is considered as a political beyond garnishment, beyond attachment, beyond execution.
subdivision, thus, it becomes accountable to the national But how do you know that the fund held by the LGU is public or
government. private?

Example: Exercise of local police power; Taxation; Eminent


domain for public works ▪ Liability of LGUs for CONTRACTS
Basic principle in consti: if the State enters into a contract, it
2. Proprietary may be held liable ex-contractu (arising out of the contract) on
- Exercised for the special benefit or advantage of the the basis that if it has descended to the level of an individual by
community entering into proprietary or commercial contracts. Therefore,
- When exercising this corporate power, then it is a the State has lost its privilege of being immune from suit. This
corporate entity representing the inhabitants of its territory. is not absolute.
- Accountable to the people, not to the national government. - But if contracts entered into by the State are for public
or governmental purpose, then you cannot sue the
Example: Slaughter Houses; Markets; Maintenance of parks; State.
Cemeteries; Fiesta Celebration - Suability is not an issue insofar as LGUs are
concerned. LGU CAN BE SUED. The relevant issue
Basis: is the liability of the LGUs.
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 3 of 24
Sec. 22 of the LGC provides an express consent by law: And then the reduced area poses a number of questions:
SEC. 22. Corporate Powers. (a) Every local government unit, Could the observations as to progressive community, large
as a corporation, shall have the following powers: aggregate population, collective income sufficient to maintain
(1) xx an independent municipality, still apply to a motley group of
(2) To sue and be sued only nine barrios out of the twenty-one? Is it fair to assume that
the inhabitants of the said remaining barrios would have
▪ CONTROL OF CONGRESS OVER LGUs agreed that they be formed into a municipality, what with the
- especially in matters of disposition of properties held by LGUs consequent duties and liabilities of an independent municipal
and extent of LGUs exercise of specific powers of local corporation? Could they stand on their own feet with the
autonomy. income to be derived in their community? How about the peace
- What properties are held by LGUs and what properties are and order, sanitation, and other corporate obligations?
under the control of Congress. (Public and Private properties of
LGU) This Court may not supply the answer to any of these
- The property under whose name it is registered does not disturbing questions. And yet, to remain deaf to these
govern. It doesn’t mean that when it is under the name of the problems, or to answer them in the negative and still cling to
City of Cebu, it is proprietary. It may be held for governmental the rule on separability, we are afraid, is to impute to Congress
capacity and when it is for governmental purpose the LGU an undeclared will. With the known premise that Dianaton was
cannot claim deprivation of beneficial use because the LGU created upon the basic considerations of progressive
here is an agent only of the government. If it is held on a community, large aggregate population and sufficient income,
proprietary capacity, it is entitled to compensable taking. we may not now say that Congress intended to create
Dianaton with only nine — of the original twenty-one — barrios,
Bar Question: Johnny was employed as a driver by the with a seat of government still left to be conjectured.
Municipality of Calumpit, Bulacan. While driving recklessly a
municipal dump truck with its load of sand for the repair of Because of the 2nd function of the LGU as an agency of the
municipal streets, Johnny hit a jeepney. Two passengers of the community in the administration of local affairs, an LGU must
jeepney were killed. be self-sufficient to enable it to exercise its corporate powers
and serve its constituents.
The Sangguniang Bayan passed an ordinance appropriating
P300,000 as compensation for the heirs of the victims. Surigao Electric Co., Inc. vs. Municipality of Surigao
1. is the municipality liable for the negligence of Johnny?
2. is the municipality ordinance valid? When Municipality of Surigao wanted to operate an electric
company of its own, it did so without a CPC, pursuant to the
1st Answer: Yes. Under Section 24 of the LGC of 1991, an LGU Public Service Act which says that “government
and its officials is not exempted from liability for death or injury instrumentalities or entities are exempt from getting CPC if
to persons or damages to property. Whether the act is they decide to operate public utility companies”. The private
governmental or proprietary it is still liable. electric company argued that an LGU is not a government
instrumentality or entity.
2nd Answer: No. LGUs are liable for negligent acts (torts) of
regular employees only when they are exercising proprietary There has been a recognition by this Court of the dual
functions. Since they deliver sand and gravel for road repairs, it character of a municipal corporation, one as governmental,
is a governmental function. Thus, the LGU must be exempt being a branch of the general administration of the state, and
from liability. (San Fernando La Union case) the other as quasi-private and corporate… It would, therefore,
erode the term "government entities" of its meaning if we are to
Bara Lidasan vs. Comelec reverse the Public Service Commission and to hold that a
municipality is considered as outside its scope.
A municipality in Mindanao was created by a statute. The
problem was when such law was passed, it enumerated So, the SC said that as an LGU possessing the first function of
barangays or barrios belonging to a different province. being an agent of the state and that is being a political
subdivision, it is a government instrumentality or entity, and
Could we indulge in the assumption that Congress still therefore, it is exempt from obtaining the CPC as provided for
intended, by the Act, to create the restricted area of nine in the Public Service Act.
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 → Because of the 1st function of the LGU as an agency of the
Buldon and Parang, Cotabato were to be excluded therefrom? State, an LGU can therefore be considered as an
instrumentality of the National Government. Therefore, it is
The answer must be in the negative. Municipal corporations exempt from obtaining the CPC as provided for in the Public
perform twin functions. Firstly. They serve as an instrumentality Service Act.
of the State in carrying out the functions of government.
Secondly. They act as an agency of the community in the → Governmental affairs do not lose their governmental
administration of local affairs. It is in the latter character that character by being delegated to the municipal governments.
they are a separate entity acting for their own purposes and Nor does the fact that such duties are performed by officers of
not a subdivision of the State. the municipality which, for convenience, the state allows the
municipality to select, change their character.
Consequently, several factors come to the fore in the
consideration of whether a group of barrios is capable of C. Classification of Power
maintaining itself as an independent municipality. Amongst ▪ express, implied, inherent (powers necessary and
these are population, territory, and income. When the foregoing proper for governance, e.g. to promote health and
bill was presented in Congress, unquestionably, the totality of safety, enhance prosperity, improve morals of
the twenty-one barrios — not nine barrios — was in the mind of inhabitants)
the proponent thereof. ▪ public or governmental, private or proprietary
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 4 of 24
▪ intramural, extramural negation of the bigger power to create municipalities, as held in
▪ mandatory, directory; ministerial, discretionary the prior case of Pelaez vs. Auditor General. On the other
hand, the officials of the municipality of Balabagan argue that
D. Sources of Powers the rule announced in Pelaez is not applicable because unlike
the municipalities involved in Pelaez, the municipality of
General: Balabagan is at least a de facto corporation, having been
organized under color of a statute before this was declared
1. 1987 Constitution (Article 10 – Sec. 5, 6 & 7) unconstitutional. Its officers have been either elected or
appointed. The municipality itself has discharged its corporate
Section 5. Each local government unit shall have the power to functions for the past five years preceding the institution of this
create its own sources of revenues and to levy taxes, fees and action. It is contended that as a de facto corporation, its
charges subject to such guidelines and limitations as the existence cannot be collaterally attacked, although it may be
Congress may provide, consistent with the basic policy of local inquired into directly in an action for quo warranto at the
autonomy. Such taxes, fees, and charges shall accrue instance of the State.
exclusively to the local governments.
ISSUE: Whether or not the Municipality of Balabagan is a de
Section 6. Local government units shall have a just share, as facto municipal corporation.
determined by law, in the national taxes which shall be
automatically released to them. RULING: While it is true that an inquiry into the legal existence
of a municipality is reserved to the State in a proceeding for
Section 7. Local governments shall be entitled to an equitable quo warranto or other direct proceeding, the rule disallowing
share in the proceeds of the utilization and development of the collateral attacks applies only where the municipal corporation
national wealth within their respective areas, in the manner is at least a de facto corporation. If it is neither a corporation de
provided by law, including sharing the same with the jure nor de facto, but a complete nullity, the rule is that its
inhabitants by way of direct benefits. existence may be questioned collaterally or directly in any
action or proceeding by any one whose rights or interests are
2. LGC of 1991 (RA 7160) – the consolidations of past affected thereby. The municipality of Balabagan was organized
local government laws. before the promulgation of Pelaez vs. Auditor General. Can the
statute creating Balabagan lend color of validity to an
3. Others statutes or acts not inconsistent with the attempted organization of a municipality despite the fact that
foregoing such statute is subsequently declared unconstitutional?

Specific: Supreme Court held that the color of authority may be:
1. A valid law enacted by the legislature.
▪ Charter – the statute creating the LGU, insofar as it is 2. An unconstitutional law, valid on its face, which has either (a)
not inconsistent with the LGC of 1991. been upheld for a time by the courts or (b) not yet been
declared void; provided that a warrant for its creation can be
Problem 1: A community of people in the northern part of Cebu found in some other valid law or in the recognition of its
had always wanted to have their own local government unit. potential existence by the general laws or constitution of the
Apparently, these people were considered minority of Cebu as state.
their predecessors were mainly from the province of Bohol.
Claiming that they have unique culture and tradition different In the case at bar, what is important is that there must be some
from most Cebuanos, they lobbied in Congress for the other valid law giving corporate vitality to the organization.
enactment of a law for the creation of a new municipality to be Hence, the mere fact that Balabagan was organized at a time
called “Buenavista 2”. Although lacking in population when the statute had not been invalidated cannot conceivably
requirement, they were able to convince the Congress to pass make it a de facto corporation, because, aside from the
a law creating the new municipality. Local officials were then Administrative Code provision in question, there is no other
elected and acted as such for 40 years. Buenavista 2 had then valid statute to give color of authority to its creation. An
entered into contracts and transactions with various persons. unconstitutional act is not a law; it confers no rights; it imposes
What are the legal considerations involved in this problem? no duties; it affords no protection; it creates no office; it is, in
legal contemplation, as inoperative as though it had never
Answer: The existence of the municipality can be questioned been passed. Therefore, Executive Order 386 created no
because of the lack in population. If it can be determined office. This is not to say, however, that the acts done by the
whether it is a de facto corporation or Buenavista 2 is really a municipality of Balabagan in the exercise of its corporate
nullity from the start, then the inquiry of its existence can be powers are a nullity because the existence of Executive Order
collaterally or directly attacked. 386 is an operative fact which cannot justly be ignored.
Therefore, Executive Order 386 is declared void, and the
The Municipality Of Malabang, Lanao Del Sur vs. municipal officials of the Municipality of Malabang were
Pangandapun Benito permanently restrained from performing the duties and
functions of their respective offices.
Amer Macaorao Balindong is the mayor of Malabang, Lanao
del Sur, while Pangandapun Benito is the mayor of the Problem 2: The municipality of Pablo was created through EO
municipality of Balabagan. Balabagan was formerly a part of 288 in 1948 and since then they have been exercising powers
the municipality of Malabang, having been created on March of a local government unit. In 1965, the SC in Pelaez vs
15, 1960, by Executive Order 386 of the then President Carlos Auditor General invalidated certain EOs issued by the
P. Garcia. Mayor Balindong filed an action for prohibition to President creating municipalities on the ground that the power
nullify Executive Order 386 and to restrain the municipal to create local government is a legislative function. EO 288
officials of Balabagan from performing the functions of their was not among those EOs that were declared void. In 1986, a
respective offices. He argues that Section 23 of Republic Act quo warranto case filed questioning the status of Pablo. Were
2370 [Barrio Charter Act] is a "statutory denial of the the transactions entered into by the Municipality of Pablo valid?
presidential authority to create a new barrio [and] implies a
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 5 of 24
Answer: Yes, the transactions entered into by the Municipality December 24, 1965. Yet the validity of E.O. No. 258
of Pablo are valid. creating it had never been questioned. Created in 1949, it
was only 40 years later that its existence was
The Municipality of Jimenez vs. Hon. Vicente T. Baz, Jr. questioned and only because it had laid claim to a certain
area.
FACTS: The Municipality of Sinacaban was created by
President Elpidio Quirino through Executive Order No. 258, 2. The State and even the Municipality of Jimenez itself have
pursuant to Section 68 of the Revised Administrative Code of recognized Sinacaban's corporate existence.
1917. EO 258 stated that the mother Municipality of Jimenez
shall have its present territory, minus the portion thereof a) Under Administrative Order No. 33 and Section 31 of
included in the Municipality of Sinacaban. Based on the the Judiciary Reorganization Act of 1980 (B. P. Blg.
technical description stated in the EO, Sinacaban laid claim to 129), Sinacaban has a municipal circuit court.
a portion of Barrio Tabo-o and to Barrios Macabayao, Adorable, b) For its part, Jimenez had earlier recognized
Sinara Baja, and Sinara Alto. In response, the Municipality of Sinacaban in 1950 by entering into an agreement
Jimenez, while conceding that the disputed area is part of with it regarding their common boundary which was
Sinacaban, nonetheless asserted jurisdiction on the basis of an embodied in Resolution No. 77 of the Provincial
agreement it had with the Municipality of Sinacaban. This Board of Misamis Occidental.
agreement was approved by the Provincial Board of Misamis c) Indeed, Sinacaban has attained de jure status by
Occidental in its Resolution No. 77, which fixed the common virtue of the Ordinance appended to the 1987
boundary of Sinacaban and Jimenez. Constitution, apportioning legislative districts
throughout the country, which considered Sinacaban
On March 20, 1990, Jimenez filed a petition for certiorari, part of the Second District of Misamis Occidental
prohibition, and mandamus in the Regional Trial Court of
Oroquieta City. The suit was filed against Sinacaban and other 3. Moreover, following the ruling in Municipality of San
government agencies. Jimenez alleged that, in accordance Narciso, Quezon v. Mendez, Sr., Sec. 442(d) of the Local
with the Pelaez ruling, the power to create municipalities is Government Code of 1991 must be deemed to have cured
essentially legislative. Consequently, Sinacaban, which was any defect in the creation of Sinacaban.
created by an executive order, had no legal personality and no
right to assert a territorial claim against Jimenez, of which it Second, the Supreme Court held that the Provincial Board did
remains part. Jimenez prayed that Sinacaban be enjoined from not have the authority to approve the agreement declaring
assuming control and supervision over the disputed barrios. certain barrios part of one or the other municipality because
RTC, however, maintained the status quo, that is, the the effect would be to amend the technical description stated in
municipality of Sinacaban shall continue to exist and operate E.O. No. 258. Any alteration of boundaries that is not in
as a regular municipality, for the following reasons: “Sinacaban accordance with the law creating a municipality is not the
is a de facto corporation since it had completely organized carrying into effect of that law but is rather considered an
itself even prior to the Pelaez case and exercised corporate amendment. Since Resolution No. 77 of the Provincial Board
powers for forty years (40) before its existence was of Misamis Occidental is contrary to the technical description of
questioned; that Jimenez did not have the legal standing to the territory of Sinacaban, it cannot be used by Jimenez as
question the existence of Sinacaban, the same being reserved basis for opposing the territorial claim of Sinacaban.
to the State as represented by the Office of the Solicitor
General in a quo warranto proceeding; that Jimenez was Sinacaban attained a status of at least a de facto municipal
estopped from questioning the legal existence of Sinacaban by corporation because its existence had not been questioned for
entering into an agreement with it concerning their common 40 years. Thus, there is long use of corporate powers. In fact, it
boundary; and that any question as to the legal existence of attained a de jure status when the 1987 Constitution included
Sinacaban had been rendered moot by Sec. 442(d) LGC. in the appended Ordinance for Legislative Districts.
Problem 3: The municipality of Auring was created through EO
405 in 1962 and immediately exercised powers of a LGU. In
ISSUES: 1965, the SC in Pelaez vs Auditor General invalidated certain
1. Whether the Municipality of Sinacaban is a legal juridical EOs issued by the President creating municipalities on the
entity, duly created in accordance with law; ground that the power to create local government is a
2. Whether the decision of the Provincial Board regarding the legislative function. EO 405 was among those EOs that were
boundaries had acquired finality. declared void by the SC. Were the transactions entered into by
the municipality of Auring between 1962-1965 valid?
RULING: The principal basis for the view that Sinacaban was
not validly created as a municipal corporation is the ruling in Answer: No, they were not valid. The case of Sultan Osop
Pelaez v. Auditor General that the creation of municipal Camid where the municipality was declared void ab initio.
corporations is essentially a legislative matter. Therefore, the
President was without power to create by executive order the
Municipality of Sinacaban. However, the Supreme Court had Sultan Osop B. Camid vs. The Office Of The President
since held that where a municipality created as such by
executive order is later impliedly recognized and its acts are FACTS: This case involves the municipality of Andong, Lanao
accorded legal validity, its creation can no longer be del Sur, which is a town that is not supposed to exist yet but is
questioned. This was the ruling in Municipality of San Narciso insisted by some as actually alive and thriving. Andong was
v. Mendez, Sr. Here, the same factors are present so as to created through Executive Order No. 107 issued by Pres.
confer on Sinacaban the status of at least a de facto municipal Macapagal in 1965, which was declared void in the case of
corporation in the sense that its legal existence has been Pelaez vs. Auditor General (1965). Sultan Camid alleges that
recognized and acquiesced publicly as shown in the following Andong “has metamorphosed into a full-blown municipality with
circumstances: a complete set of officials appointed to handle essential
services for the municipality and its constituents.” He however
1. Sinacaban had been in existence for sixteen years (16) concedes that since 1968, no person has been appointed,
when Pelaez v. Auditor General was decided on elected or qualified to serve any of the elective local
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 6 of 24
government positions in Andong. He also alleges that the town municipalities judicially-dissolved in cases such as Pelaez, San
has its own high school, Bureau of Posts, DECS Office, among Joaquin, and Malabang, remain inexistent, unless recreated
others. According to him, public officials of Andong have been through specific legislative enactments, as done with the
serving their constituents in their own little ways and means eighteen (18) municipalities certified by the DILG.
despite absence of public funds. To bolster his claims, he
presented to the Court a DENR-CENRO Certification of the Problem 4: Municipality of Badong was created in 1959 by EO
total land area of the Municipality of Andong. He also submitted 353. It became a 5th class municipality 1965. In the same year,
a Certification issued by the Provincial Statistics Office of Pelaez vs Auditor General invalidated some EOs (excluding
Marawi City concerning Andong’s population (14,059). He also EO 353) of the President which created some municipalities.
lists several government agencies and private groups that The 1987 Constitution included in its Ordinance (appendix)
have allegedly recognized Andong. Camid assails the DILG which apportioned the seats of the House of Representatives
certification of 18 municipalities certified as “existing” per DILG (as one of the 10 municipalities composing the 4th district of
records. These 18, were among the 33 municipalities whose Mangingit Province). Badong’s existence was questioned in
creation was voided by the Court in the Pelaez case. He 1989. Were the transactions entered by Badong valid?
imputes grave abuse of discretion on the part of the DILG for
not classifying Andong as a regular existing municipality and in Answer: Yes, the transactions are valid.
not including it in its records and official database. Camid also
argues that EO 107 remains valid because of the decision of Municipality Of San Narciso, Quezon Vs. Hon. Antonio V.
court in Municipality of San Narciso vs. Hon. Mendez, where Mendez, Sr.
the court affirmed the unique status of the municipality of San
Andres in Quezon as a de facto municipal corporation. He FACTS: On August 20, 1959, President Carlos P. Garcia,
insists that inspite of insurmountable obstacles, Andong lives issued Executive Order No. 353 creating the municipal district
on. Hence, its existence should be given judicial affirmation. of San Andres, Quezon, pursuant to the Sections 68 and 2630
of the Revised Administrative Code. Subsequently, the
ISSUE: Whether or not a municipality whose creation by municipal district of San Andres was later officially recognized
executive fiat, which was previously voided by the Court, may to have gained the status of a fifth class municipality. On June
attain recognition in the absence of any curative or 5, 1989, the Municipality of San Narciso filed a petition for quo
implementing statute. warranto with the Regional Trial Court against the officials of
the Municipality of San Andres, which sought the declaration of
RULING: The Court said that the case is not a fit subject for nullity of Executive Order No. 353 and prayed that the local
the special civil actions of certiorari and mandamus, as it officials of the Municipality of San Andres be permanently
pertains to the de novo appreciation of factual questions. Also, ordered to refrain from performing their duties and functions. It
the Pelaez case and its offspring cases ruled that the President was argued that EO 353, a presidential act, was a clear
has no power to create municipalities, yet limited its usurpation of the inherent powers of the legislature. On
nullificatory effects to the particular municipalities challenged in December 2, 1991, the lower court finally dismissed the
actual cases before this Court. However, with the promulgation petition for lack of cause of action on what it felt was a matter
of the Local Government Code in 1991, the legal cloud was that belonged to the State, adding that whatever defects were
lifted over the municipalities similarly created by executive present in the creation of municipal districts by the President
order but not judicially annulled. The de facto status of such pursuant to executive orders were cured by the enactment of
municipalities as San Andres, Alicia and Sinacaban was RA 7160, otherwise known as Local Government Code of
recognized by the Court, and Section 442(b) of the Local 1991. This prompted the Municipality of San Narciso to file a
Government Code deemed curative whatever legal defects petition for review on certiorari.
these municipalities had labored under. Andong is not similarly
entitled to recognition as a de facto municipal corporation. This ISSUE: Whether or not the Municipality of San Andres is a de
is because there are eminent differences between Andong and facto municipal corporation.
the other municipalities. The most prominent is that, the EO RULING:
which created Andong was expressly annulled by the Court in When the inquiry is focused on the legal existence of a body
1965. The court said that if it would affirm Andong’s de facto politic, the action is reserved to the State in a proceeding for
status by reason of its alleged continued existence despite its quo warranto or any other credit proceeding. It must be
nullification, it would in effect condone defiance of a valid order brought in the name of the Republic of the Philippines and
of the Court. Court decisions cannot lose their efficacy due to commenced by the Solicitor General Executive Order No. 353
the sheer defiance by the parties aggrieved. Andong does not creating the municipal district of San Andres was issued on
meet the requisites set forth by Sec. 442(d) of the Local August 20, 1959 but it was only after almost thirty (30)
Government Code (LGC), as it requires that, for the years, or on June 5, 1989, that the municipality of San Narciso
municipality created by EO to receive recognition, they must finally decided to challenge the legality of the executive order.
“have their respective set of elective officials holding office at In the meantime, the Municipality of San Andres began and
the time of the effectivity of the LGC. Andong has never elected continued to exercise the powers and authority of a duly
its municipal officers at all. The national government ceased to created local government unit. A quo warranto proceeding
recognize the existence of Andong, depriving it of its share of assailing the lawful authority of a political subdivision must,
the public funds, and refusing to conduct municipal elections in with greatest imperativeness, be timely raised. Public interest
the void municipality. Andong is not listed as among the demands it. Granting the Executive Order No. 353 was a
municipalities of Lanao del Sur in the Ordinance apportioning complete nullity for being the result of an unconstitutional
the seats of Congress in the 1987 Constitution. Finally, Andong delegation of legislative power, the peculiar circumstances
has not been reestablished through statute. In contrast, the 18 obtaining in this case hardly could offer a choice other than to
municipalities in the DILG certification, were recognized as consider the Municipality of San Andres to have at least
such because subsequent to the ruling in the Pelaez case, attained a status closely approximating that of a de facto
legislation was enacted to reconstitute these municipalities. municipal corporation. Created in 1959, by virtue of Executive
Section 442(d) of the LGC does not serve to affirm or Order No. 353, the Municipality of San Andres had been in
reconstitute the judicially-dissolved municipalities such as existence for more than six years when Pelaez v. Auditor
Andong, which had been previously created by presidential General was promulgated. The ruling could have sounded the
issuances or executive orders. On the other hand, the call for a similar declaration of the unconstitutionality of
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 7 of 24
Executive Order No. 353 but it did not. On the contrary, certain
governmental acts all pointed to the State's recognition of the Basis: Public policy that supports the security of units of local
continued existence of the Municipality of San Andres, such as government and the conduct of their business against attack
the following: grounded upon collateral inquiry into the legality of their
organization (doctrine of operative fact)
1. After more than five years as a municipal district, → Underlies the theory that local units may exist through
Executive Order No. 174 classified the Municipality of prescription.
San Andres as a fifth class municipality.
2. Section 31 of Batas Pambansa Blg. 129 or the Effects:
Judiciary Reorganization Act of 1980 constituted • Where there is at least a de facto municipal
Municipality of San Andres as covered by the 10th corporation
Municipal Circuit Court. - Acts of the entity will be respected and will
3. Under the Ordinance adopted on October 15, 1986, be recognized as valid and binding by the
apportioning the seats of the House of State as if it is a de jure public corporation
Representatives, which was appended to the 1987 • No municipality corporation at all
Constitution, the Municipality of San Andres has been - The acts of the entity are not recognized as
considered to be as part of the Third District of the valid by the State.
province of Quezon.
Note: The State controls the objects and methods of the
Finally, equally significant is Section 442(d) of the Local creation of local units and to effectuate a policy in that area, it
Government Code which states that municipal districts should be free to challenge local departures from that policy.
organized pursuant to presidential issuances or executive Long exercise of corporate powers without question from any
orders and which have their respective sets of elective quarter is not enough to silence the State; It might still be
municipal officials holding office at the time of the effectivity of directly attack the legal existence of a local unit, in a quo
this Code shall henceforth be considered as regular warranto or other proceedings, on the ground that there was
municipalities. The power to create political subdivisions is a no authority in law for its existence or that there were
function of the legislature. And Congress did just that when it irregularities in its organization, as the case may be.
incorporated Section 442(d) in the Code. Curative laws, in
essence, are retrospective. They are aimed at giving validity to • The State may recognized a de facto corporation and
acts done that would have been invalid under existing laws. All render it de jure by:
considered, the de jure status of the Municipality of San Andres - Subsequent legislative recognition; or
in the province of Quezon must now be conceded. - Validation

San Andres became de jure by subsequent recognition


because it was included in the appended Ordinance for
Legislative District in the 1987 Constitution.
De Facto Corporation
Elements:
1. Valid law authorizing incorporation
Kinds of Municipal Corporation 2. Attempt in good faith to organize it
▪ De Jure – created with all the elements of a municipal 3. Colorable compliance with law
corporation being present. 4. Assumption of corporate powers
▪ De Facto – there is colorable compliance with the
requisites of a de jure municipal corporation. What’s the relevance if it is de jure and not just de facto?
→ When a corporation is de jure, its existence cannot be
Doctrine of Operative Fact challenged because it is a valid corporation. If it is de facto,
→ Before a law is declared unconstitutional or void, it is being defective in nature may be challenged.
presumed to be valid. The acts existed as a fact and these acts
have consequences that cannot be ignored. How do we challenge the existence?
Quo warranto proceeding by the State only. A direct action/
Doctrine of De Facto Corporation attack.
→ There is authority in law for a municipal corporation but
there is failure to comply with the constitutional or statutory Collateral attack is not allowed, as a general rule.
requirement, it cannot be said to exist de jure. But when the - An exception is when a municipal corporation is a
organization of the people of a given territory is of a TOTAL nullity (not even a de facto corporation), the charter is
corporation under a color of delegated authority, followed by a declared void from the beginning or when there had never
user in good faith of the governmental powers incidental been any charter at all. And thus, it can be collateral attack
thereto, it will be recognized by the law as a municipal may be availed of and may be done by a private individual.
corporation de facto.
Emmanuel Pelaez vs. Auditor General
→ Municipal corporation may exist by prescription where it is
shown that the community has claimed and exercised FACTS: From September 4 to October 29, 1964, the President
corporate functions, with the knowledge and acquiescence of of the Philippines issued Executive Orders Nos. 93 to 121, 124
the legislature and without interruption or objection for a period and 126 to 129. These orders created thirty-three (33)
long enough to afford title by prescription. municipalities pursuant to Section 68 of the Revised
Administrative Code, insofar as it grants the President the
→ These municipal corporations have exercised their powers power to create municipalities. Thereafter, Vice-President
for a long period without objection on the part of the Pelaez instituted a special civil action for a writ of prohibition
government and although no charter is in existence, it is with preliminary injunction to stop the Auditor General from
presumed that they were duly incorporated in the first place disbursing funds to said municipalities, alleging that the
and that their charters had been lost. executive orders are null and void on the ground that said
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 8 of 24
Section 68 has been impliedly repealed by Republic Act No.
2370 or the Barrio Charter Act. Since January 1, 1960, when FACTS:
Republic Act No. 2370 became effective, “barrios can no longer The case revolves around the controversy on territorial
be created or their boundaries altered nor their names jurisdiction of the Municipality of Alicia, Bohol. During the
changed except by Act of Congress or of the corresponding proceedings, after presentation of evidence by the Municipality
provincial board upon petition of a majority of the voters in the of Candijay, the latter asked the trial court to bar the
areas affected and the recommendation of the council of the Municipality of Alicia from presenting its evidence on the
municipality or municipalities in which the proposed barrio is ground that it had no juridical personality. It was adjudged by
situated.” It is argued that since the creation of barrios is a the lower court that Barangay Pagahat is within the territorial
legislative act, the creation of municipalities must also require a jurisdiction of the Municipality of Candijay. Therefore, said
legislative enactment. The Executive Orders are, likewise, barrio forms part and parcel of its territory. The Regional Trial
challenged for they constitute an undue delegation of Court of Bohol permanently enjoined defendant Municipality of
legislative power. The Auditor General argues that the present Alicia to respect plaintiff's control, possession and political
action is premature and that not all proper parties, referring to supervision of Barangay Pagahat and never to molest, disturb,
the officials of the new political subdivisions in question, have harass its possession and ownership over the same barrio.
been impleaded. The Court of Appeals, however, reversed the judgment of the
Regional Trial Court. It ruled that the trial court committed an
ISSUES: error in declaring that Barrio Pagahat is within the territorial
1. Is the President empowered to create a municipality? jurisdiction of the Municipality of Candijay because the lower
2. Is Sec. 68 of the Revised Administrative Code an undue court rejected the boundary line being claimed by the
delegation of legislative power? Municipality of Alicia based on certain exhibits. If allowed, the
Municipality of Candijay will not only engulf the entire barrio of
RULING: RA 2370, being a statutory denial of the presidential Pagahat, but also of many other barrios. Candijay will eat up a
authority to create a new barrio, it also implies a negation of big chunk of territories far exceeding her territorial jurisdiction
the bigger power to create municipalities, each of which under the law creating her. CA also found, after an examination
consists of several barrios. The authority to create municipal of the respective survey plans both plans are inadequate
corporations is essentially legislative in nature. insofar as identifying the monuments of the boundary lines. It
decided the case based on the rule on equiponderance of
With respect to the issue on undue delegation of powers by the evidence. Hence, the Municipality of Candijay now files a
legislature, the Supreme Court held that although Congress petition for review on certiorari of the Decision of the CA.
may delegate to another branch of the government the power
to fill in the details in the execution, enforcement or ISSUE: Whether or not the Municipality of Alicia has a juridical
administration of a law, it is essential, to forestall a violation of personality to claim its territory.
the principle of separation of powers, that said law: (a) be
complete in itself. In other words, it must set forth therein the RULING: The Supreme Court finds that the issues of fact in
policy to be executed, carried out or implemented by the this case had been adequately passed upon by the Court of
delegate. And the law must (b) fix a standard. The limits of Appeals with the application of the equiponderance doctrine
which are sufficiently determinate or determinable to which the which states: “When the scale shall stand upon an equipoise
delegate must conform in the performance of his functions. In and there is nothing in the evidence which shall incline it to one
the case at bar, Section 68 of the Revised Administrative Code side or the other, the court will find for the defendant.” The
does not meet these well-settled requirements for a valid determination of equiponderance of evidence by the
delegation of the power to fix the details in the enforcement of respondent Court involves the appreciation of evidence by the
a law. It does not enunciate any policy to be carried out or latter tribunal, which will not be reviewed by this Court unless
implemented by the President. Neither does it give a standard shown to be whimsical or capricious; here, there has been no
sufficiently precise to avoid the evil effects above referred to. such showing. As to the issue on the personality of the
Since the creation of municipalities is not an administrative Municipality of Alicia, it is noteworthy that the Municipality of
function, it is essentially and eminently legislative in Candijay commenced its collateral attack on the juridical
character. The question whether or not public interest personality of respondent municipality on January 19, 1984 or
demands the exercise of such power is not one of fact. It is some thirty five years after respondent municipality first
purely a legislative question. The President cannot invoke its came into existence in 1949. The Municipality of Candijay
power of control or the right to interfere on the acts of the contended that Executive Order No. 265 issued by President
officers of the executive departments, bureaus, or offices of the Quirino on September 16, 1949 creating the Municipality of
national government, as well as to act in lieu of such officers. Alicia is null and void ab initio, inasmuch as Section 68 of the
This power is denied by the Constitution to the Executive, Revised Administrative Code constituted an undue delegation
insofar as local governments are concerned. Hence, the of legislative powers, and was therefore declared
President cannot interfere with local governments, so long as unconstitutional in Pelaez vs. Auditor General. However, the
the same or its officers act within the scope of their authority. factual milieu of the Municipality of Alicia is strikingly similar to
What he has is a mere power of supervision over the local that of the Municipality of San Andres in the case of
government units. As a consequence, the alleged power of the Municipality of San Narciso vs. Mendez. The latter case, in
President to create municipal corporations would necessarily appreciating the de jure status of the municipality, considered
connote the exercise by him of an authority even greater than the peculiar circumstances supporting its juridical existence.
that of control which he has over the executive departments,
bureaus or offices. Clearly, therefore, the Executive Orders In the case at bar, respondent Municipality of Alicia was
promulgated by him creating municipalities are ultra vires and created by virtue of Executive Order No. 265 in 1949, or ten
therefore, void. years ahead of the municipality of San Andres, and
therefore had been in existence for all of sixteen years
(Jimenez v. Baz, San Narciso v. Mendez, Osop Camid v. Office when Pelaez vs. Auditor General was promulgated. And
of the President – already discussed above) various governmental acts throughout the years all indicate the
State's recognition and acknowledgment of the existence
The Municipality Of Candijay, Bohol vs. Court Of Appeals and thereof. For instance, under Administrative Order No. 33
The Municipality Of Alicia, Bohol above-mentioned, the Municipality of Alicia was covered by the
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 9 of 24
7th Municipal Circuit Court. Likewise, under the Ordinance → The governmental powers reside in the central/national
appended to the 1987 Constitution, it is one of twenty government and these are distributed to the different political
municipalities comprising the Third District of Bohol. subdivision.
Inasmuch as respondent municipality of Alicia is similarly → A federal government consists of autonomous state (local)
situated as the municipality of San Andres, it should likewise government units merged into a single state, with the national
benefit from the effects of Section 442(d) of the Local government exercising a limited degree of power over the
Government Code, which states that municipal districts domestic affairs but generally full direction of the external
organized pursuant to presidential issuances or executive affairs of the state, the powers are divided by the national
orders and which have their respective sets of elective government and the local government.
municipal officials holding office at the time of the effectivity of → Powers granted to local governments are enumerated in
this Code shall henceforth be considered as regular the law that created them. Any power that is not conferred to
municipalities. the local government must, therefore, be a power pertaining to
the national government. (Same as residual power vested in
→ Same ruling in Jimenez and Narciso case the president in a horizontal form of government)
→ In addition, the Municipality of Alicia should benefit from the
effects of Section 442 (d) of the LGC of 1991 which was The Philippines is not purely a unitary government. We have
declared in Narciso as a “curative law” aimed at giving “validity adopted a unique kind of system, a decentralization system
to acts done that would have been invalid under existing laws, which enables political subdivisions to have more autonomy
as if existing laws have been complied with.” compared to a unitary set-up.

→ Municipality of Alicia attained the status of de jure SEC. 5. Rules of Interpretation - In the interpretation of the
municipality. provisions of this Code, the following rules shall apply:
• Sec. 442 (d) of LGC: “Municipalities existing as of the ▪ Any provision on a power of a local government unit
date of the effectivity of this Code shall continue to shall be liberally interpreted in its favor, and in case of
exist and operate as such. Existing municipal districts doubt, any question thereon shall be resolved in favor
organized pursuant to presidential issuances or EOs of devolution of powers and of the lower local
and which have their respective set of elective government unit. Any fair and reasonable doubt as to
municipal officials holding office at the time of the the existence of the power shall be interpreted in
effectivity of this Code shall henceforth be favor of the local government unit concerned;
considered as regular municipalities.” - Atty. DBL’s justification: To ensure local autonomy as
mandated by the Constitution.
Take note of these factual conditions/elements that must be
present: Lina vs. Pano
1. Which have their respective set of elective municipal officials
2. Holding office at the time of the effectivity of the Code. Since Congress has allowed the PCSO to operate lotteries
which PCSO seeks to conduct in Laguna, pursuant to its
legislative grant of authority, the province’s Sangguniang
C. Overview of the Philippine Local Government System Panlalawigan cannot nullify the exercise of said authority by
preventing something already allowed by Congress.
Vertical Classification of Philippine Local System:
UNITARY (as distinguished from Federal) Ours is still a unitary form of government, not a federal state.
We are now living in a generation where people believe in the Being so, any form of autonomy granted to local governments
principle of constitutionalism such that we believe in the will necessarily be limited and confined within the extent
principle of limited government. And so almost always, the allowed by the central authority. Besides, the principle of local
government powers are limited. These powers can be limited in autonomy under the 1987 Constitution simply means
a lot of ways. Examples are: "decentralization". It does not make local governments
sovereign within the state or an "imperium in imperio". To
o Provisions in the Constitution providing certain conclude our resolution of the first issue, respondent mayor of
prohibitions. E.g. Bill of Rights San Pedro, cannot avail of Kapasiyahan Bilang 508, Taon
o Social, economic and political principles. E.g. 1995, of the Provincial Board of Laguna as justification to
Democracy – as embedded in our Consti prohibit lotto in his municipality. For said resolution is nothing
o Distributing the powers of the government: but an expression of the local legislative unit concerned. The
1. Horizontal – powers are distributed in the 3 Board's enactment, like spring water, could not rise above its
branches of government, namely: Legislative, source of power, the national legislature. In sum, we find no
Executive and Judicial. It can be Presidential reversible error in the RTC decision enjoining Mayor Cataquiz
(separation of powers) or Parliamentary (fusion of from enforcing or implementing the Kapasiyahan Blg. 508, T.
powers of the legislative and executive) 1995, of the Sangguniang Panlalawigan of Laguna. That
2. Vertical – distribution of powers between the resolution expresses merely a policy statement of the Laguna
national government and the local government. It can provincial board. It possesses no binding legal force nor
be Unitary and Federal. requires any act of implementation. It provides no sufficient
legal basis for respondent mayor's refusal to issue the permit
Federal Government sought by private respondent in connection with a legitimate
→ The governmental powers are centered in the governmental business activity authorized by a law passed by Congress.
subdivision while they surrender some of their powers to create
the central/federal government. Zoomzat, Inc. vs. The People Of The Philippines
→ A unitary government is a single, centralized government,
exercising powers over both the internal and external affairs of FACTS: Petitioner Zoomzat, Inc. alleged that on December 20,
the state; the powers are shared by the national government 1991, the Sangguniang Panlungsod of Gingoog City passed
and the local government. Resolution No. 261 which resolved “to express the willingness
of the City of Gingoog to allow Zoomzat to install and operate a
Unitary Government cable TV system.” Thereupon, petitioner applied for a mayor’s
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 10 of 24
permit but the same was not acted upon by the mayor’s office. commence to operate despite the grant to it of a franchise
On April 6, 1993, respondents enacted Ordinance No. 19 under Ordinance No. 19. In addition, petitioner could not
which granted a franchise to Gingoog Spacelink Cable TV, Inc. impute manifest partiality, evident bad faith or gross
to operate a cable television for a period of ten (10) years, inexcusable negligence on the part of the respondents when
subject to automatic renewal. On July 30, 1993, Zoomzat filed they enacted Ordinance No. 19. A perfunctory reading of
a complaint with the Office of the Ombudsman against Resolution No. 261 shows that the Sangguniang Panlungsod
respondents for violation of Section 3(e), R.A. No. 3019. The did not grant a franchise to it but merely expressed its
complaint alleged that in enacting Ordinance No. 19, the willingness to allow the petitioner to install and operate a cable
respondents gave unwarranted benefits, advantage or television. Had respondents intended otherwise, they would
preference to Spacelink, to the prejudice of Zoomzat who was have couched the resolution in more concrete, specific and
a prior grantee-applicant by virtue of Resolution No. 261. A categorical terms. In contrast, Ordinance No. 19 clearly and
criminal information for violation of Section 3(e), R.A. No. 3019, unequivocally granted a franchise to Spacelink, specifically
was filed against the respondents before the Sandiganbayan. stating therein its terms and conditions. Not being a bona fide
However, upon directive by the Sandiganbayan to restudy the franchise holder, petitioner could not claim prior right on the
instant case, Special Prosecution Officer II Antonio Manzano strength of Resolution No. 261.
recommended the dismissal of the case and the Information
withdrawn for lack of probable cause. On further investigation, There is no dispute that respondent Sangguniang Panlungsod,
Special Prosecution Officer III Victor Pascual also like other local legislative bodies, has been empowered to
recommended that the case be dismissed for insufficiency of enact ordinances and approve resolutions under the general
evidence. On June 17, 1998, the Sandiganbayan issued a welfare clause of B.P. Blg. 337, the Local Government Code of
resolution approving the dismissal of the case and ordering the 1983. That it continues to possess such power is clear under
withdrawal of the Information against the respondents. On the new law, R.A. No. 7160 (the Local Government Code of
September 9, 1998, the Sandiganbayan denied petitioner’s 1991).
motion for reconsideration.
Indeed, under the general welfare clause of the Local
ISSUES: Government Code, the local government unit can regulate the
1. Whether or not LGUs have the authority to grant the operation of cable television but only when it encroaches on
franchise to operate a cable television? public properties, such as the use of public streets, rights of
2. Did the petitioners give Spacelink undue or unwarranted ways, the founding of structures, and the parceling of large
advantage and preference because it stifled business regions. Beyond these parameters, its acts, such as the grant
competition? of the franchise to Spacelink, would be ultra vires.

RULING: Executive Order No. 205 (REGULATING THE Local Autonomy, Decentralization, Devolution, and
OPERATION OF CABLE ANTENNA TELEVISION (CATV) Deconcentration
SYSTEMS IN THE PHILIPPINES, AND FOR OTHER
PURPOSES) clearly provides that only the NTC could grant Provisions about local autonomy:
certificates of authority to cable television operators and issue ▪ Art. II, Sec 25 (Constitution)—“The State shall ensure
the necessary implementing rules and regulations. Likewise, the autonomy of local governments.”
Executive Order No. 436 (PRESCRIBING POLICY ▪ Art. X, Sec 2 (Constitution)—“The territorial and political
GUIDELINES TO GOVERN THE OPERATIONS OF CABLE subdivisions shall enjoy local autonomy.”
TELEVISION IN THE PHILIPPINES) vests with the NTC the ▪ Sec. 2, LGC of 1991— Declaration of Policy. - (a) It is
regulation and supervision of cable television industry in the hereby declared the policy of the State that the territorial
Philippines. and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable
It is clear that in the absence of constitutional or legislative them to attain their fullest development as self-reliant
authorization, municipalities have no power to grant franchises. communities and make them more effective partners in the
Consequently, the protection of the constitutional provision as attainment of national goals. Toward this end, the State
to impairment of the obligation of a contract does not extend to shall provide for a more responsive and accountable local
privileges, franchises and grants given by a municipality in government structure instituted through a system of
excess of its powers, or ultra vires. It is undisputed that decentralization whereby local government units shall be
respondents were not employees of NTC. Instead, they were given more powers, authority, responsibilities, and
charged in their official capacity as members of the resources. The process of decentralization shall proceed
Sangguniang Panlungsod of Gingoog City. As such, they from the national government to the local government
cannot be charged with violation of Section 3(e), R.A. No. 3019 units.
for enacting Ordinance No. 19 which granted Spacelink a
franchise to operate a cable television. On the second issue, Local Autonomy
indeed, under the general welfare clause of the Local The degree of self-determination exercised by LGUs vis-à-vis
Government Code, the local government unit can regulate the the central government. The system of achieving local
operation of cable television but only when it encroaches on autonomy is known as decentralization and this system is
public properties, such as the use of public streets, rights of realized through the process called devolution.
ways, the founding of structures, and the parceling of large
regions. Beyond these parameters, its acts, such as the grant In the Philippines, it is the public administrative powers over
of the franchise to Spacelink, would be ultra vires. Plainly, the local affairs that are delegated to political subdivisions. It
Sangguniang Panlungsod of Gingoog City overstepped the refers to decentralization of administrative powers or functions.
bounds of its authority when it usurped the powers of the NTC
with the enactment of Ordinance No. 19. Being a void Limbona vs Mangelin
legislative act, Ordinance No. 19 did not confer any right nor
vest any privilege to Spacelink. As such, petitioner could not Autonomy is either decentralization of administration or
claim to have been prejudiced or suffered injury thereby. decentralization of power. The second is abdication by the
Incidentally, petitioner’s claim of undue injury becomes even national government of political power in favor of the local
more baseless with the finding that Spacelink did not government (essence in a federal set-up); the first consists
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 11 of 24
merely in the delegation of administrative powers to broaden 9. Such other matters as may be authorized by law for
the base of governmental power (essence in a unitary set-up). the promotion of the general welfare of the people of the
Against the first, there can be no valid constitutional challenge. region.

Local autonomy is the degree of self-determination exercised These are legal basis that although ARMM is different from the
by LGUs vis-à-vis the central government. The system of regular political subdivisions, there is no total abdication of
achieving local autonomy is known as decentralization and this powers in favor of ARMM.
system is realized through the process called devolution.
Administrative Powers of Political Powers
Generally, autonomy is either (1) Decentralization of
administration or (2) Decentralization of power. What is the kind of decentralization adopted or practiced in the
Philippines?
a. There is decentralization of administration when the
central government delegates administrative powers to Answer: Decentralization of administration. Policy-setting for
political subdivisions in order to broaden the base of govt. the entire country still lies in the President.
power and in the process to make local govts. “more
responsive and accountable,” and “ensure their fullest Pimentel vs. Aguirre
development as self-reliant communities and make them
more effective partners in the pursuit of national The President cannot order the withholding of 10% of the
development and social progress.” LGUs’ internal revenue allotments. This encroaches on the
b. Decentralization of power, on the other hand, involves fiscal autonomy of local government and violates the
an abdication of political power in favour of local Constitution and the LGC.
government units declared to be autonomous. In that
case, the autonomous government is free to chart its own ISSUE: Whether AO 372 of President Ramos which withholds
destiny and shape its future with minimum intervention 10% of LGUs IRA is valid Section 4 of AO 372 cannot,
from central authorities. According to a constitutional however, be upheld.
author, decentralization of power amounts to “self-
immolation.” Since in that event, the autonomous A basic feature of local fiscal autonomy is the automatic
government becomes accountable not to the central release of the shares of LGUs in the national internal revenue.
authorities but to its constituency. This is mandated by no less than the Constitution. The Local
Government Code specifies further that the release shall be
Insofar as Autonomous Region of Muslim Mindanao is made directly to the LGU concerned within five (5) days after
concerned, it is important to determine whether we have every quarter of the year and "shall not be subject to any lien
granted decentralization of power in order that the courts can or holdback that may be imposed by the national government
exercise judicial review over issues in ARMM. Because if there for whatever purpose." As a rule, the term "shall" is a word of
is decentralization of power, then there is total abdication of command that must be given a compulsory meaning. The
power in favor of LGU. provision is, therefore, imperative. Section 4 of AO 372,
however, orders the withholding, effective January 1, 1998, of
Constitutional provisions regarding abdication of power in 10 percent of the LGUs' IRA "pending the assessment and
ARMM: evaluation by the Development Budget Coordinating
Committee of the emerging fiscal situation" in the country.
Section 15. There shall be created autonomous regions in Such withholding clearly contravenes the Constitution and the
Muslim Mindanao and in the Cordilleras consisting of law. Although temporary, it is equivalent to a holdback, which
provinces, cities, municipalities, and geographical areas means "something held back or withheld, often temporarily."
sharing common and distinctive historical and cultural heritage, Hence, the "temporary" nature of the retention by the national
economic and social structures, and other relevant government does not matter. Any retention is prohibited. In
characteristics within the framework of this Constitution and the sum, while Section 1 of AO 372 may be upheld as an advisory
national sovereignty as well as territorial integrity of the effected in times of national crisis, Section 4 thereof has no
Republic of the Philippines. color of validity at all. The latter provision effectively
encroaches on the fiscal autonomy of local governments.
Section 16. The President shall exercise general supervision Concededly, the President was well-intentioned in issuing his
over autonomous regions to ensure that laws are faithfully Order to withhold the LGUs’ IRA, but the rule of law requires
executed. that even the best intentions must be carried out within the
parameters of the Constitution and the law. Verily, laudable
Section 17. All powers, functions, and responsibilities not purposes must be carried out by legal methods. Respondents
granted by this Constitution or by law to the autonomous and their successors are hereby permanently PROHIBITED
regions shall be vested in the National Government. from implementing Administrative Order Nos. 372 and 43
insofar as local government units are concerned.
Section 20. Within its territorial jurisdiction and subject to the
provisions of this Constitution and national laws, the organic Decentralization
act of autonomous regions shall provide for legislative powers → A system whereby “local government units” shall be given
over: more powers, authority, responsibilities, and resources.” (Sec.
1. Administrative organization; 2, LGC)
2. Creation of sources of revenues; → The Process of decentralization shall proceed from the
3. Ancestral domain and natural resources; National Government to the local government units. (Ibid.)
4. Personal, family, and property relations;
5. Regional urban and rural planning development; Devolution
6. Economic, social, and tourism development; Section 17: (e) National agencies or offices concerned shall
7. Educational policies; devolve to local government units the responsibility for the
8. Preservation and development of the cultural provision of basic services and facilities enumerated in this
heritage; and Section within six (6) months after the effectivity of this Code.
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 12 of 24
As used in this Code, the term "devolution" refers to the act by the acts of their component units are within the scope
which the national government confers power and authority of their prescribed powers and functions;
upon the various local government units to perform specific (f) Local government units may group themselves,
functions and responsibilities. consolidate or coordinate their efforts, services, and
resources for purposes commonly beneficial to them;
→ The act by which the National Government confers power (g) The capabilities of local government units, especially
and authority upon various local government units to perform the municipalities and barangays, shall be enhanced
specific functions and responsibilities. [Sec. 17(4)(e)] by providing them with opportunities to participate
→ It shall include the transfer to local government units of the actively in the implementation of national programs
records, equipment, and other assets and personnel of and projects;
national agencies and offices corresponding to the devolved (h) There shall be a continuing mechanism to enhance
powers, functions, and responsibilities. [Ibid.] local autonomy not only by legislative enabling acts
→ The powers conferred are to the local government unit but also by administrative and organizational reforms;
(i) Local government units shall share with the
Deconcentration national government the responsibility in the
SEC. 528. Deconcentration of Requisite Authority and management and maintenance of ecological balance
Power - The national government shall, six (6) months after within their territorial jurisdiction, subject to the
the effectivity of this Code, effect the deconcentration of provisions of this Code and national policies;
requisite authority and power to the appropriate regional offices (j) Effective mechanisms for ensuring the accountability
or field offices of national agencies or offices whose major of local government units to their respective
functions are not devolved to local government units. constituents shall be strengthened in order to upgrade
continually the quality of local leadership;
→ The process of transferring authority and power to the (k) The realization of local autonomy shall be facilitated
appropriate regional offices or field offices of national agencies through improved coordination of national government
or offices whose major functions are not devolved to local policies and programs and extension of adequate
government units. (Sec. 528, LGC) technical and material assistance to less developed
→ The powers conferred are to the local offices of the national and deserving local government units;
government. E.g. central office to regional office. (l) The participation of the private sector in local
governance, particularly in the delivery of basic
Basic Distinctions: services, shall be encouraged to ensure the
1) Local Autonomy – degree of self-determination viability of local autonomy as an alternative strategy
exercised by LGUs vis-à-vis the central for sustainable development; and
government. (m) The national government shall ensure that
2) To a t t a i n l o c a l a u t o n o m y, a s y s t e m o f decentralization contributes to the continuing
Decentralization is a pre-requisite. improvement of the performance of local government
3) To effect system of decentralization, a process of units and the quality of community life.
Devolution is applied.
4) Deconcentration refers to the transfer of functions PROBLEM: Even during the 1973 Constitution, local
from national office to regional and local offices governments had already been given “local autonomy.” In the
involving administrative functions. appointment of a Provincial Accountant, the Sec. of Dept. of
Budget and Management appoints from among the list of
Section 3. Operative Principles of Decentralization - The nominees the Governor would submit to the DBM.
formulation and implementation of policies and measures on
local autonomy shall be guided by the following operative This was the case before the Local Government Code of
principles: 1991 took effect. When a Governor submitted a list of
(a) There shall be an effective allocation among the nominees, namely X, Y and Z, for the position of Provincial.
different local government units of their respective Accountant, none of the nominees was a CPA, which was one
powers, functions, responsibilities, and resources; of the qualifications for a Provincial Accountant. The Sec. of
(b) There shall be established in every local DBM appointed instead W, a CPA. What are the legal aspects
government unit an accountable, efficient, and of this case?
dynamic organizational structure and operating
mechanism that will meet the priority needs and Answer: Municipality of San Juan vs. Civil Service
service requirements of its communities; Commission
(c) Subject to civil service law, rules and regulations,
local officials and employees paid wholly or mainly Although it involved validity of the appointment of a Provincial
from local funds shall be appointed or removed, Budget Officer, the issue actually was the tug of war between
according to merit and fitness, by the appropriate the Secretary of Budget and Management and the Governor of
appointing authority; the Province of Rizal over a position that involved the
(d) The vesting of duty, responsibility, and accountability application of a most important constitutional policy and
in local government units shall be accompanied with principle of local autonomy.
provision for reasonably adequate resources to
discharge their powers and effectively carry out their The SC ruled in favor of the Governor, who was allowed to
functions; hence, they shall have the power to create nominate another applicant qualified to the position because
and broaden their own sources of revenue and the the governor was seen to be in a much better position than the
right to a just share in national taxes and an equitable Secretary in determining local needs, stating the need to obey
share in the proceeds of the utilization and the clear mandate of local autonomy. Where a law is capable
development of the national wealth within their of 2 interpretations, one in favor of centralized power in
respective areas; Malacanang and the other beneficial to local autonomy, the
(e) Provinces with respect to component cities and scales must be weighed in favor of local autonomy.
municipalities, and cities and municipalities with
respect to component barangays, shall ensure that Mayor Pablo P. Magtajas vs. Pryce Properties Corporation, Inc
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 13 of 24
(PAGCOR wants to build a Casino in CDO) which is the most pervasive, the least limitable and the most
demanding of all State powers including the power of taxation.
The only question we can and shall resolve in this petition is - Accordingly, the charter of the Authority which
the validity of Ordinance No. 3355 and Ordinance No. 3375-93 embodies a valid exercise of police power should
as enacted by the Sangguniang Panlungsod of Cagayan de prevail over the Local Government Code of 1991 on
Oro City. And we shall do so only by the criteria laid down by matters affecting Laguna de Bay.
law and not by our own convictions on the propriety of
gambling. The tests of a valid ordinance are well established. To resolve the conflicts of cases involving whose authority
A long line of decisions has held to be valid, an ordinance must should prevail:
conform to the following substantive requirements: → If the legal issues are clear in favor of central government,
1) It must not contravene the constitution or any statute. the proper judicial reasoning should be in favor of the central
2) It must not be unfair or oppressive. government because we are in a unitary set-up. But in a
3) It must not be partial or discriminatory. situation where there is doubt such that the law is not clear that
4) It must not prohibit but may regulate trade. it favors central authority, it should be resolve in favor of local
5) It must be general and consistent with public policy. autonomy. To the extent that no national authority is prejudiced
6) It must not be unreasonable. in that interpretation.

We begin by observing that under Sec. 458 of the Local Ganzon vs. CA
Government Code, local government units are authorized to
prevent or suppress, among others, "gambling and other We come to the core question: Whether or not the Secretary of
prohibited games of chance." Obviously, this provision Local Government, as the President's alter ego, can suspend
excludes games of chance which are not prohibited but are in and/or remove local officials.
fact permitted by law.
SC said YES, but note that this was the ruling before where the
The petitioners are less than accurate in claiming that the president still has the power to remove local officials under the
Code could have excluded such games of chance which are previous LGC. However, under Sec. 60 of the present LGC,
not prohibited but are in fact permitted by law. The petitioners the president can no longer remove local officials. Such power
are less than accurate in claiming that the Code could have is already lodged to the regular courts.
excluded such games of chance but did not. In fact it does. The
language of the section is clear and unmistakable. Under the The petitioners are under the impression that the Constitution
rule of noscitur a sociis, a word or phrase should be interpreted has left the President mere supervisory powers, which
in relation to, or given the same meaning of, words which it is supposedly excludes the power of investigation, and denied
associated. Accordingly, we conclude that since the word her control, which allegedly embraces disciplinary authority. It
"gambling" is associated with "and other prohibited games of is a mistaken impression because legally, "supervision" is not
chance," the word should be read as referring to only illegal incompatible with disciplinary authority.
gambling which, like the other prohibited games of chance,
must be prevented or suppressed. "Control" has been defined as "the power of an officer to alter
or modify or nullify or set aside what a subordinate officer had
We could stop here as this interpretation should settle the done in the performance of his duties and the ability to
problem quite conclusively. But we will not. The vigorous efforts substitute the judgment of the subordinate with his own.”
of the petitioners on behalf of the inhabitants of Cagayan de
Oro City, and the earnestness of their advocacy, deserve more Tano vs. Socrates
than short shrift from this Court. The apparent flaw in the
ordinances in question is that they contravene P.D. 1869 and LGUs may enact police power measures pursuant to the
the public policy embodied therein insofar as they prevent general welfare clause. The Sangguniang Panlungsod of
PAGCOR from exercising the power conferred on it to the Puerto Princesa City enacted an ordinance banning shipment
operate a casino in Cagayan de Oro City. of all live fish and lobster outside the said city and prohibiting
the catching, gathering, possessing, buying, selling and
Municipal governments are only agents of the national shipment of live marine coral dwelling aquatic organisms.
government. Local councils exercise only delegated legislative Petitioners were charged criminally for violation of such
powers conferred on them by Congress as the national ordinance. They invoke the preferential right of marginal
lawmaking body. The delegate cannot be superior to the fishermen under Sec. 149 of the LGC. The so-called
principal or exercise powers higher than those of the latter. “preferential right” of subsistence or marginal-fishermen to the
use of marine resources is not at all absolute.
Municipal corporations owe their origin to, and derive their
powers and rights wholly from the legislature. This basic The LGC provisions invoked by public respondents seek to
relationship between the national legislature and the local give flesh and blood to the right of the people to a balanced
government units has not been enfeebled by the new and healthful ecology. In fact, the general welfare clause,
provisions in the Constitution strengthening the policy of local expressly mentions this right. The LGC explicitly mandates that
autonomy. That Congress retains control of the local the general welfare provisions of the LGC shall be liberally
government units although in significantly reduced degree now interpreted to give more powers to the LGUs in accelerating
than under our previous Constitutions. The power to create still economic development and upgrading the quality of life for the
includes the power to destroy. people of the community. One of the devolved powers
enumerated in the LGC on devolution is the enforcement of
Laguna Lake Development Authority vs. Court of Appeals fishery laws in municipal waters including the conservation of
mangroves. This necessarily includes the enactment of
The power of the Authority to grant permits for fishpens, ordinances to effectively carry out such fishery laws within the
fishcages, and other aqua-culture structures is for the purpose municipal waters. In light then of the principles of
of effectively regulating and monitoring activities in the Laguna decentralization and devolution enshrined in the LGC, and the
de Bay region. It does partake of the nature of police power powers granted therein to LGUs under the general welfare
clause, which unquestionably involve the exercise of police
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 14 of 24
power, the validity of the questioned ordinance cannot be Abella vs Comelec
doubted.
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.
D. Local Governments in the Philippines
Section 12, Article X of the Constitution is explicit in that aside
from highly-urbanized cities, component cities whose charters
“Regular” LGUs Provinces, Cities,
prohibit their voters from voting for provincial elective officials
Municipalities, and
are independent of the province. In the same provision, it
Barangays
provides for other component cities within a province whose
Autonomous Regions Muslim Mindanao and charters do not provide a similar prohibition.
Cordilleras
Necessarily, component cities like Ormoc City whose charters
“Special” LGUs Special Metropolitan Political prohibit their voters from voting for provincial elective officials
Subdivisions 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
Section 1, Article 10, Constitution – The territorial and carries with it the prohibition or mandate directed to their
political subdivision of the Republic of the Philippines are the registered voters not to vote and be voted for the provincial
provinces, cities, municipalities and barangays. There shall be elective offices.
autonomous regions in Muslim Mindanao and the Cordilleras
as hereinafter provided. The phrase “shall not be qualified and entitled to vote in the
election of the provincial governor and the members of the
PROBLEM: A law was passed calling for the abolition of provincial board of the Province of Leyte” as found in the
barangays. Is the law unconstitutional? Why or why not? Charter of Ormoc City (ICC) connotes two prohibitions:
From running for provincial elective posts
Answer: It is unconstitutional. Section 1, Article 10 of our From voting for provincial candidates
Constitution does not create local government units. It only
constitutionally ensures the existence of these territorial and PROBLEM: A highly urbanized city is independent of the
political units in our structure (Bernas). Hence, a law cannot, province where it is geographically located. Consequently, its
for example, abolish barangays. residents cannot run for provincial posts and cannot as well
vote for provincial candidates. Mandaue City of Cebu is a
While it is true that Congress has the power to create a LGUs HUC, but its residents can still run for provincial post and can
but that power should refer to create a SPECIFIC LGU. And so vote for provincial candidates. How was that possible?
the power to destroy should also refer to the power to abolish a
SPECIFIC LGU, assuming the conditions for abolition are Answer: Although Sec. 12, Art. 10 of the Constitution
present. But to abolish ALL barangays and consequently, mandates HUCs are independent from the province and thus,
abolish a barangay system is not allowed because of Sec. 1, outside the supervisory power of the province, Sec. 452 of the
Art. 10 of the Constitution. LGC provides a vested right for the voters provided that the
conditions required are met.
PROBLEM: You are asked about the extent of the powers of a
Province over a city which is geographically situated in the Section 452. Highly Urbanized City – xxx (c) Qualified voters of
same province. How will you respond? In particular, may the cities, who acquire the right to vote for elective provincial
Provincial Board or SP set aside an ordinance of a city that is officers prior to the classification of said cities as HUC after the
geographically situated in the province? What about the EOs of ratification of the Constitution and before the effectivity of this
the Mayor of that city, may they be set aside by the governor? Code, shall continue to exercise such right.
May the resident of that city run for Governor?
Special Metropolitan Political Subdivisions
Answer: It depends. Section, 11 Art. 10 of the 1987 Constitution – The Congress
may, by law, create special metropolitan political subdivisions,
Section 12, Article 10, Constitution – Cities that are highly subject to a plebiscite as set forth in Section 10 hereof. The
urbanized, as determined by law, and component cities whose component cities and municipalities shall retain their basic
charters prohibit their voters from voting for provincial elective autonomy and shall be entitled to their own local executive and
officials, shall be independent of the province. The voters of legislative assemblies. The jurisdiction of the metropolitan
component cities within a province, whose charters contain no authority that will thereby be created shall be limited to basic
such prohibition, shall not be deprived of their right to vote for services requiring coordination.
elective provincial officials.
→ Created by Congress and requires plebiscite.
Kinds of Cities: → The component cities and municipalities shall retain their
1. Component City – not qualified to be highly urbanized; basic autonomy and shall be entitled to their own local
inhabitants can vote for provincial candidates and can run executives and legislative assemblies
for provincial elective posts = under the supervisory power → Jurisdiction is limited to basic services requiring
of the province. coordination.
2. Independent Component City – independent in the
sense that the charter prohibits the voters from voting for MMDA vs Bel-Air Village
provincial elective posts = outside the supervisory power
of the province. (Abella vs Comelec) The MMDA which has no police and legislative powers, has no
3. Highly Urbanized City – independent from province by power to enact ordinances for the general welfare of the
reason of status = outside the supervisory power of the inhabitants of Metro Manila. It has no authority to order the
province. opening of Neptune Street, a private subdivision road in Makati
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 15 of 24
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 PART II: THE LOCAL GOVERNMENT CODE OF 1991
President exercises not just supervision but control over it.
MMMDA has purely administrative function. Because MMDA is Constitutional Mandate for the Local Government Code:
not a political subdivision, it cannot exercise political power like
police power. Section 3, Article X: The Congress shall enact a local
government code which shall provide for a more responsive
E. Loose Federation of LGUs and accountable local government structure instituted through
Section 13, Article 10 of the 1987 Constitution – Local a system of decentralization with effective mechanisms of
government units may group themselves, consolidate or recall, initiative and referendum, allocate among the different
coordinate their efforts, services, and resources for purposes local government units their powers, responsibilities and
commonly beneficial to them in accordance with law. resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions
Section 33, Local Government Code. Cooperative and duties of local government officials, and all other matters
Undertakings Among Local Government Units. - Local relating to the organization and operation of local government
government units may, through appropriate ordinances, group units.
themselves, consolidate, or coordinate their efforts, services,
and resources for purposes commonly beneficial to them. In Sources of the Code:
support of such undertakings, the local government units 1. The LGC of 1983 (BP Blg. 337)
involved may, upon approval by the sanggunian concerned 2. The Local Tax Code (PD 201)
after a public hearing conducted for the purpose, contribute 3. The Real Property Tax Code (PD 464)
funds, real estate, equipment, and other kinds of property and 4. Barangay Justice Law (PD 1508)
appoint or assign personnel under such terms and conditions
as may be agreed upon by the participating local units through Scope and Application of the Code
Memoranda of Agreement. Section 4. Scope of Application. - This Code shall apply to all
provinces, cities, municipalities, barangays, and other political
Take note: The resultant consolidation will not be a new subdivisions as may be created by law, and, to the extent
corporate body. Why? Because the requirement that an LGU herein provided, to officials, offices, or agencies of the national
should be created by law is of constitutional origin. That government.
requirement remains, so that it cannot be done either by MOA Section 526. Application of this Code to Local Government
or ordinance. It has to be by law. It cannot be given a separate Units in the Autonomous Regions. - This Code shall apply to all
personality. provinces, cities, municipalities and barangays in the
autonomous regions until such time as the regional
LGUs may group themselves, consolidate or coordinate their government concerned shall have enacted its own local
efforts, services, and resources for purposes commonly government code.
beneficial to them in accordance with law. (Sec 13 Art X Section 529. Tax Ordinances or Revenue Measures. - All
Consti) existing tax ordinances or revenue measures of local
How? (1) Through Ordinances; (2) Upon approval by government units shall continue to be in force and effect after
the Sanggunian concerned, after lawful hearing, then the effectivity of this Code unless amended by the sanggunian
contribute funds and assets thru MOA (Sec 33, LGC) concerned, or inconsistent with, or in violation of, the
provisions of this Code.
Question: May this federation or consolidation of LGU enter Section 534. Repealing Clause. –
into contracts? If yes, how may the federation or consolidation (f) All general and special laws, acts, city charters, decrees,
of LGUs enter into contracts? Under what name? executive orders, proclamations and administrative regulations,
or part or parts thereof which are inconsistent with any of the
The resultant consolidation would not be a new corporate body, provisions of this Code are hereby repealed or modified
and therefore, it does not have a personality. It cannot act as if accordingly.
it is a “person” who can act with juridical effects. What are
consolidated are not corporate personalities but only “efforts, Rules of Interpretation
services, and resources” for purposes commonly beneficial to Section 5. Rules of Interpretation. - In the interpretation of the
them. Thus, what is written in the contracts are the names of provisions of this Code, the following rules shall apply:
the LGUs concerned.
Regional Development Councils Any provision on a power of a local government unit shall be
→ To be established by the President and does not need liberally interpreted in its favor, and in case of doubt, any
authorization from Congress. question thereon shall be resolved in favor of devolution of
→ Composed of LGU officials, regional heads of Depts., and powers and of the lower local government unit. Any fair and
other government offices and representatives of NGOs within reasonable doubt as to the existence of the power shall be
the region. interpreted in favor of the local government unit concerned;

Section 14, Article 10 of the 1987 Constitution – The President In case of doubt, any tax ordinance or revenue measure shall
shall provide for regional development councils or other similar be construed strictly against the local government unit enacting
bodies composed of local government officials, regional heads it, and liberally in favor of the taxpayer. Any tax exemption,
of departments and other government offices, and incentive or relief granted by any local government unit
representatives from non-governmental organizations within pursuant to the provisions of this Code shall be construed
the regions for purposes of administrative decentralization to strictly against the person claiming it.
strengthen the autonomy of the units therein and to accelerate
the economic and social growth and development of the units The general welfare provisions in this Code shall be liberally
in the region. 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;
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 16 of 24
Rights and obligations existing on the date of effectivity of this be created shall be limited to basic services requiring
Code and arising out of contracts or any other source of coordination.
presentation involving a local government unit shall be
governed by the original terms and conditions of said contracts Local Government Code Provisions:
or the law in force at the time such rights were vested; and SECTION 6. Authority to Create Local Government Units. —
A local government unit may be created, divided, merged,
In the resolution of controversies arising under this Code abolished, or its boundaries substantially altered either by law
where no legal provision or jurisprudence applies, resort may enacted by Congress in the case of a province, city,
be had to the customs and traditions in the place where the municipality, or any other political subdivision, or by ordinance
controversies take place. passed by the sangguniang panlalawigan or sangguniang
panlungsod concerned in the case of a barangay located within
Summary: its territorial jurisdiction, subject to such limitations and
- Liberal interpretation in favour of LGUs, Devolution of requirements prescribed in this Code.
powers, and General Welfare ordinances
- In case of doubt as to existence of power, resolved in SECTION 7. Creation and Conversion. — As a general rule,
favour of LGU. (vs residual power doctrine) the creation of a local government unit or its conversion from
- But in tax ordinances are construed strictly against one level to another level shall be based on verifiable
the LGU and liberally in favour of taxpayer. indicators of viability and projected capacity to provide
- Where no law of jurisprudence applies, customs or services, to wit:
traditions in the locality may be applied to resolve (a) Income. — It must be sufficient, based on acceptable
controversies. standards, to provide for all
essential government facilities and services and
Effectivity of LGC special functions commensurate with the size of
Section 536. Effectivity Clause. - This Code shall take effect on its population, as expected of
January first, nineteen hundred ninety-two, unless otherwise the local government unit concerned;
provided herein, after its complete publication in at least one (b) Population. — It shall be determined as the total
(1) newspaper of general circulation. number of inhabitants within the territorial
jurisdiction of the local government unit
Effects: concerned; and
1. All tax ordinances or revenue measures of LGUs (c) Land Area. — It must be contiguous, unless it
enacted before the LGC of 1991 shall continue to be comprises two (2) or more islands or is separated
in fore and effect after the effectivity of the LGC, by a local government unit independent of the
unless amended by the Sanggunian or inconsistent others; properly identified by metes and bounds
with or in violation of the provisions of the code. with technical descriptions; and sufficient to
2. All general and special laws, acts, city charters, provide for such basic services and facilities to
decrees, EOs, Proclamations, and admin regulations meet the requirements of its populace.
or parts thereof that are inconsistent with any of the
provisions of the Code are repealed or modified Compliance with the foregoing indicators shall be attested to
accordingly. Sec 534 (f), LGC. by the Department of Finance (DOF), the National Statistics
Office (NSO), and the Lands Management Bureau (LMB) of the
Department of Environment and Natural Resources (DENR)

PART III: CREATION, CONVERSION, DIVISION, MERGER, SECTION 10. Plebiscite Requirement. — No creation, division,
SUBSTANTIAL CHANGE OF BOUNDARY OF LOCAL merger, abolition, or substantial alteration of boundaries
GOVERNMENT UNITS, AND ABOLITION of local government units shall take effect unless approved by
a majority of the votes cast in a plebiscite called for the
A. Regular Political Subdivisions purpose in the political unit or units directly affected. Said
plebiscite shall be conducted by the Commission on Elections
CREATION OR CONVERSION (COMELEC) within one hundred twenty (120) days from the
date of effectivity of the law or ordinance effecting such action,
General Requirements in the creation or conversion LGU: unless said law or ordinance fixes another date.
1. Law
2. Plebiscite LAW
3. Compliance with Criteria on Income, Land, &/or
Population League of Cities of the Philippines vs. COMELEC
Case stemmed from the enactment of certain laws, called
Constitutional Mandate: “cityhood laws” converting 16 municipalities into cities in the
Section 10, Article X: No province, city, municipality, or year 2007 after the effectivity of R.A. 9009 in 2001. R.A. 9009
barangay may be created, divided, merged, abolished, or its amended Section 450 of the Local Government Code by
boundary substantially altered, except in accordance with the increasing the annual income requirement for conversion of a
criteria established in the local government code and subject to municipality or cluster of barangays into a component city from
approval by a majority of the votes cast in a plebiscite in the P20 million to P100 million.
political units directly affected.
While R.A. No. 9009 was being deliberated upon, Congress
Section 11, Article X: The Congress may, by law, create special was well aware of the pendency of conversion bills of several
metropolitan political subdivisions, subject to a plebiscite as set municipalities, including those covered by the Cityhood Laws,
forth in Section 10 hereof. The component cities and desiring to become component cities which qualified under the
municipalities shall retain their basic autonomy and shall be P20 million income requirement of the old Section 450 of the
entitled to their own local executive and legislative assemblies. LGC. The interpellation of Senate President Franklin Drilon of
The jurisdiction of the metropolitan authority that will thereby Senator Pimentel is revealing. Clearly, based on the above
exchange, Congress intended that those with pending cityhood
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 17 of 24
bills during the 11th Congress would not be covered by the for these municipalities as engines for economic growth in
new and higher income requirement of P100 million imposed their respective provinces.
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 TN: Which League of Cities decision should be used as legal
intent of the law, and such were incorporated in the LGC by basis in the exam? Cite the legal standing of the SC in
which the compliance of the Cityhood Laws was gauged. upholding the Congress’ intent and SC’s legal basis in
Notwithstanding that both the 11th and 12th Congress failed to upholding the Constitution intent. (2008 ruling and 2011 Ruling)
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 What is association in Public International Law?
carried on until the 13th Congress, when the Cityhood Laws Association - means that the associated state has internal
were enacted. The exemption clauses found in the individual self- government, while the independent state with which it is
Cityhood Laws are the express articulation of that intent to associated is responsible for foreign affairs and defense.
exempt respondent municipalities from the coverage of R.A. - This happens where two States sort of collaborate or
No. 9009. enter into an agreement where one is considered
inferior and the other superior because it says of
First League of Cities decision: The Court declared the “unequal power”. E.g. colonies
cityhood laws unconstitutional for the reason that the - The weaker State is called Associated and the
Constitution specifically and deliberately makes the Local superior State is called Principal.
Government Code the only repository of the criteria and
standards for the creation of any local government unit such Question: Can an “associated state” be established in the
that no other law not even the charter of the city can govern Philippines?
such creation.

Second League of Cities decision: On Motion for Province of North Cotabato vs GRP
Reconsideration, the SC reversed itself in 2009 and declared
the 16 cityhood laws not unconstitutional. They noted that the Facts: The RP entered into a MOA with the MILF. The MOA
intent of the lawmakers when they approved the cityhood bills provided for the creation of Bangsamoro Juridical Entity (BJE)
was really to exempt these bills from the requirements of R.A. whereby there will be some sort of government structure.
9009 considering that these cityhood bills were proposed much There will also be the territory of this Bangsamoro juridical
earlier than the approval of R.A. 9009. entity and it has also defined the supposed constituents of
such juridical entity. There is a government, people, and
Third League of Cities decision: The SC reverted to the first territory. And insofar as it is allowed to relate itself to foreign
decision and affirmed the primacy of the constitutional states, the MOA provides that it can do so through the
requirement that the creation of local governments shall only instrumentality of the national government. In fact, under the
be based on uniform criteria set forth in only one law, the Local MOA, it mentioned of the so-called association kind of
Government Code. It said that the clear intent of the relationship.
Constitution is to insure that the creation of cities and other
political units must follow the same uniform, non-discriminatory Ruling: Such MOA is unconstitutional. If an associated state is
criteria found solely in the Local Government Code. legally a state then it cannot exist in the Phils. Remember,
sovereignty is indivisible. You cannot divide sovereignty, there
Fourth League of Cities decision: The Court reverted back to should only be one authority.
ruling that the cityhood laws were not unconstitutional. It cited
the deliberations during R.A. 9009 where Senator Pimentel The concept of an “associated state” is not sanctioned by the
made a remark that it would not be fair to make the said bill Constitution. Under Art. X, the following are the only
retroact to the cityhood bills pending in the Senate. recognized “political subdivisions” in the Philippines: Provinces,
Cities, Municipalities, Barangays and the ARMM and the
Last and Final League of Cities decision: The Supreme Court Cordilleras. In general, the objections against the MOA-AD
resolved that there was a clear and unmistakable legislative center on the extent of the powers conceded therein to the
intent to exclude these cityhood bills from the application of BJE. Petitioners assert that the powers granted to the BJE
R.A. 9009 thus recognizing the certain collective wisdom of exceed those granted to any local government under present
Congress. laws, and even go beyond those of the present ARMM.

Without doubt, the LGC is a creation of Congress through Before assessing some of the specific powers that would have
its law-making powers. Congress has the power to alter or been vested in the BJE, however, it would be useful to turn first
modify it as it did when it enacted R.A. No. 9009. Such power to a general idea that serves as a unifying link to the different
of amendment of laws was again exercised when Congress provisions of the MOA-AD, namely, the international law
enacted the Cityhood Laws. When Congress enacted the LGC concept of association. Significantly, the MOA-AD explicitly
in 1991, it provided for quantifiable indicators of economic alludes to this concept, indicating that the Parties actually
viability for the creation of local government units—income, framed its provisions with it in mind.
population, and land area. Congress deemed it fit to modify
the income requirement with respect to the conversion of Association is referred to in paragraph 3 on TERRITORY,
municipalities into component cities when it enacted R.A. No. paragraph 11 on RESOURCES, and paragraph 4 on
9009, imposing an amount of P100 million, computed only GOVERNANCE. It is in the last mentioned provision, however,
from locally-generated sources that the MOA-AD most clearly uses it to describe the
envisioned relationship between the BJE and the Central
However, Congress deemed it wiser to exempt respondent Government.
municipalities from such a belatedly imposed modified income
requirement in order to uphold its higher calling of putting flesh The relationship between the Central Government and the
and blood to the very intent and thrust of the LGC, which is Bangsamoro Juridical Entity shall be associative characterized
countryside development and autonomy, especially accounting by shared authority and responsibility with a structure of
governance based on executive, legislative, judicial and
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 18 of 24
administrative institutions with defined powers and functions in the ARMM during the 2001 plebiscite - Baloi, Munai,
the comprehensive compact. A period of transition shall be Nunungan, Pantar, Tagoloan and Tangkal - are automatically
established in a comprehensive peace compact specifying the part of the BJE without need of another plebiscite, in contrast
relationship between the Central Government and the BJE. to the areas under Categories A and B mentioned earlier in the
The nature of the "associative" relationship may have been overview. That the present components of the ARMM and the
intended to be defined more precisely in the still to be forged above-mentioned municipalities voted for inclusion therein in
Comprehensive Compact. Nonetheless, given that there is a 2001, however, does not render another plebiscite
concept of "association" in international law, and the MOA-AD - unnecessary under the Constitution, precisely because what
by its inclusion of international law instruments in its TOR- these areas voted for then was their inclusion in the ARMM,
placed itself in an international legal context, that concept of not the BJE.
association may be brought to bear in understanding the use of
the term "associative" in the MOA-AD. PLEBISCITE

In the same MOA-AD, it contains many provisions which are - Who shall participate?
consistent with the international legal concept of association, - What is meant by “units affected”?
specifically the following: the BJE's capacity to enter into - In what sense affected?
economic and trade relations with foreign countries, the - How is it different from the manner of creating
commitment of the Central Government to ensure the BJE's autonomous regions?
participation in meetings and events in the ASEAN and the - How about the downgrading or upgrading the city?
specialized UN agencies, and the continuing responsibility of
the Central Government over external defense. Moreover, the 2004 Bar Exam: Madako is a municipality composed of 80
BJE's right to participate in Philippine official missions bearing barangays, 30 west of Madako River and 50 east thereof. The
on negotiation of border agreements, environmental protection, 30 western barangays feeling left out of economic initiatives,
and sharing of revenues pertaining to the bodies of water wish to constitute themselves into a new and separate town to
adjacent to or between the islands forming part of the ancestral be called Masigla. Granting the Masigla’s proponents succeed
domain, resembles the right of the governments of FSM and to secure a law in their favour, would a plebiscite be necessary
the Marshall Islands to be consulted by the U.S. government or not? If it is, who should vote or participate in the plebiscite?
on any foreign affairs matter affecting them. These provisions
of the MOA indicate, among other things, that the Parties Answer: Plebiscite is necessary because this involves a
aimed to vest in the BJE the status of an associated state or, at creation of LGU. Under the Constitution and LGC of 1991, the
any rate, a status closely approximating it. Even the mere creation, conversion, division, merger and substantial change
concept animating many of the MOA-AD's provisions, of boundary requires a plebiscite as an INDISPENSIBLE
therefore, already requires for its validity the amendment of REQUIREMENT. All 80 barangays of Madako because there
constitutional provisions, specifically the provisions of Article X, would be an adverse effect of the mother unit with respect to
Section 1 & 15. income, population and territory.

The BJE is a far more powerful entity than the autonomous Tan vs COMELEC
region recognized in the Constitution. It is not merely an
expanded version of the ARMM, the status of its relationship BP 885, creating the Province of Negros del Norte, was
with the national government being fundamentally different declared unconstitutional because it excluded the voters of the
from that of the ARMM. Indeed, BJE is a state in all but name mother province from participating in the plebiscite (and it did
as it meets the criteria of a state laid down in the Montevideo not comply with the area of criterion prescribed in the LGC). A
Convention,154 namely, a permanent population, a defined plebiscite for creating a new province should include the
territory, a government, and a capacity to enter into relations participation of the residents of the mother province in order to
with other states. conform to the constitutional requirement. In this case, the
plebiscite only included the inhabitants of Negros del Norte.
Even assuming arguendo that the MOA-AD would not
necessarily sever any portion of Philippine territory, the spirit Where the law authorizing the holding of a plebiscite is
animating it - which has betrayed itself by its use of the unconstitutional, the Court cannot authorize the holding of a
concept of association - runs counter to the national new one. The fact that the plebiscite which the petition sought
sovereignty and territorial integrity of the Republic. The defining to stop had already been held and officials of the new province
concept underlying the relationship between the national appointed does not make the petition moot and academic, as
government and the BJE being itself contrary to the present the petition raises an issue of constitutional dimension. “Units
Constitution, it is not surprising that many of the specific affected” means units/residents of the political entity who stand
provisions of the MOA-AD on the formation and powers of the to be economically dislocated by the separation of a portion
BJE are in conflict with the Constitution and the laws. thereof have the right to participate in a plebiscite.

Article X, Section 18 of the Constitution provides that "[t]he TN: Here, the SC said that the effectivity of the 1987
creation of the autonomous region shall be effective when Constitution has not superseded the 1986 Tan vs. COMELEC
approved by a majority of the votes cast by the constituent Decision
units in a plebiscite called for the purpose, provided that only
provinces, cities, and geographic areas voting favorably in Padilla, Jr. vs. COMELEC
such plebiscite shall be included in the autonomous region."
Even under the 1987 Constitution, the plebiscite shall include
As reflected above, the BJE is more of a state than an all the voters of the mother province or the mother municipality.
autonomous region. But even assuming that it is covered by
the term "autonomous region" in the constitutional provision Problem: Confident that Municipality of Consolacion can
just quoted, the MOA-AD would still be in conflict with it. Under qualify as a new city under existing laws, its officials ask you
paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the whether the whole Province of Cebu will participate in the
present geographic area of the ARMM and, in addition, the plebiscite that will be conducted (assuming that they succeed
municipalities of Lanao del Norte which voted for inclusion in
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 19 of 24
in persuading Congress to pass a law converting Consolacion the purpose of ensuring free, orderly, and honest elections.”
into a city.) What will be your advice? The text and intent of Section 2 (1) of Article IX (C) is to give
COMELEC “all necessary and incidental powers for it to
Answer: If the Charter states that it will become an achieve the objective of holding free, orderly, honest, peaceful
independent component city or a highly urbanized city, then and credible elections. (Cagas vs. COMELEC, G.R. No.
you are essentially carving out. Thus, in that case, it will require 209185, October 25, 2013)
a plebiscite.
COMMON STANDARDS FOR COMPLIANCE OF CRITERIA
Problem: In 1998, by virtue of R.A. No. 8528, the City of Income—c/o Dept. of Finance
Santiago, Isabela was converted from an independent Population—c/o NSO
component city to a component city. The constitutionality of Land Area—c/o DENR (Land Management Bureau)
R.A. No. 8528 was assailed on the ground of lack of provision
in the said law submitting the same for ratification by the Note: the criteria call for ‘question of facts.’ Findings of facts by
people of Santiago City on a proper plebiscite. The issue was administrative agencies are binding and conclusive upon
whether the downgrading of Santiago City from an courts unless there is grave abuse of discretion or clear
independent component city to a mere component city requires mistake of facts. Hence, findings of facts by the DOF, NSO,
the approval of the people of Santiago City. Decide. and DENR deserve great respect, if not finality, and also enjoy
presumption of regularity being acts of government agencies.
Answer: Miranda vs. Aguirre BASIS: experts in their fields.

The Court held that the Constitution requires a plebiscite. The Navarro vs. Ermita
resolution of the issue depends on whether or not the
downgrading of Santiago City falls within the meaning of In this case, it was only the Bureau of Local Government
creation, division, merger, abolition or substantial alteration of Finance who certified the annual income requirement of the
boundaries of municipalities in Section 10, Article X of the 1987 porposed Province of Dinagat Islands. While the special
Constitution. A close analysis of the said constitutional census was conducted with the assistance of the District
provision will reveal that the common denominator is the Census Coordinator of the NSO, it was not certified by the
material change in the political and economic rights of the local NSO. The certification contemplated by law must come from
government units directly affected as well as the people the head office.
therein. It is precisely for this reason that the Constitution
requires the approval of the people in the political units “directly In this case, the Province of Dinagat failed to meet the
affected.” Further, Section 10, Chapter 2 of the Local population and land area requirement for the creation of a
Government Code and Rule II, Article 6, par. (f)(1) of the province.
Implementing Rules and Regulations of the Local Government
Code reiterate the constitutional requirement. The following are the requirements that have to be met by the
LGU before it can be created:
Umali vs. COMELEC
Unit Specific Criteria
The primordial issue in this case boils down to whether the
qualified registered voters of the entire province of Nueva Ecija Barangays Population
or only those in Cabanatuan City can participate in the
plebiscite called for the conversion of Cabanatuan City from a Income, population & land
component city into a Highly-Urbanized City. Municipalities
area

While conversion to a Highly-Urbanized City is not explicitly Income, population OR land


Component Cities
provided in Section 10, Article X of the Constitution, the area
conversion of a component city into an HUC is substantial
alteration of boundaries. As the phrase implies, “substantial Highly Urbanized Cities Income and Population
alteration of boundaries” involves and necessarily entails a
change in the geographical configuration of a local government Income, Population or Land
Province
unit or units. The phrase “boundaries” should not be limited to Area
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 INCOM POPULATI LAND
brought about by Cabanatuan City’s gain of independence. LGU
E ON AREA
With the city’s newfound autonomy, it will be free from the
oversight powers of the Province, which, in effect, reduces the
territorial jurisdiction of the latter. At least
At least Minimum
PROVINCE 2,000
20M 250K
Further, Section 453 of the LGC makes it ministerial for the sq/km
President, upon proper application, to declare a component
city as highly urbanized once the minimum requirements, At least
which are based on certifiable and measurable indices under HIGHLY-URBANIZED At least Minimum
100 sq/
Section 452, are satisfied. The mandatory language “shall” CITY 50M 200K
km
used in the provision leaves the President with no room for
discretion. At least
At least Minimum
CITY 100 sq/
The COMELEC can postpone the holding of a Plebiscite and 100M 150K
km
election to another date.
The COMELEC has “exclusive charge of the enforcement and
administration of all laws relative to the conduct of elections for
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 20 of 24
the LGC-IRR, the inclusion was intended to correct the
At least congressional oversight in Section 461 of the LGC – and to
At least Minimum
MUNICIPALITY 50 sq/ reflect the true legislative intent. It would, then, be in order for
2.5M 25K
km the Court to uphold the validity of Article 9(2) of the LGC-IRR.

BARANGAY (outside Boundary


n/a Minimum 2K n/a - should be “properly identified by metes and
Metro Manila)
bounds” (Sec. 7) WHY? –for Jurisdiction.

BARANGAY (Metro Mariano vs COMELEC


Manila, Highly n/a Minimum 5K n/a
Urbanized) 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
LAND AREA
7854 as unconstitutional on the ground that it did not properly
The land area must:
identify the land area or territorial jurisdiction of Makati by
- comply with the area requirement, unless it is an
metes and bounds, in violation of Sec. 10 of the 1987
island.
Constitution in relation to Sec. 7 and 450 of the LGC.
- Must be contiguous, unless: a) two or more islands or
Petitioners have not demonstrated that the delineation of the
b) separated by a local government unit independent
land area of the proposed City of Makati (without metes and
of the others
bounds) will cause confusion as to its boundaries. Congress
- Properly identified by metes and bounds with
has refrained from using the metes and bounds description of
technical descriptions
land areas of other LGUs.
- Be sufficient to provide for such basic services and
facilities to meet the requirements of its populace.
The requirement that the territory of newly-created LGUs be
identified by metes and bounds is intended to provide the
Problem: In the LGC of 1991, a municipality may be created
means by which the area of the LGU may be reasonably
with less than 50 sq. km. if it is an island. Under the LGC of
ascertained, i.e., as a tool in the establishment of the LGU. As
1991, however, there is no such exception when it comes to
long as the territorial jurisdiction of the newly created city may
creation of a province which normally requires at least 2,000
be reasonably ascertained – by referring to common
sq. km. May the implementing rules of the LGC of 1991
boundaries with neighboring municipalities – then, the
provide for a similar exception?
legislative intent has been sufficiently served.
Answer: Only the dry land.
Note: RA 7854, which converted Makati into a city, did not
define the boundaries of the new city by metes and bounds,
Navarro vs. Ermita
because of a territorial dispute between Makati and Taguig,
which was best left for the courts to decide.
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.
AVERAGE ANNUAL INCOME
- income accruing to the general fund (regular),
The Court held that the use of the word territory reflects that it
exclusive of special funds, trust funds, transfers, and
has reference only to the mass of land area and excludes the
non-recurring income.
waters over which the political unit exercises control.
Alvarez vs. Guingona
Paragraph 2 of Article 9 of the Rules and Regulations
Is the IRA included in the computation of average annual
implementing the LGC, which states that “the land area
income? It is automatically and regularly released, and so
requirement shall not apply where the proposed province, is
“regular” and “recurring” and they form part of the “gross
composed of one or more islands” violates the LGC and is
accretion of funds.”
therefore, null and void. Nowhere in the Local Government
Code is the said provision stated or implied. Under Section 461
However, in the case of conversion of a municipality into a city
of the Local Government Code, the only instance when the
or a cluster of barangays to be formed into a new city, RA 9009
territorial or land area requirement need not be complied with
enacted on June 30, 2001 and amending Sec. 450 of the
is when there is already compliance with the population
Code, IRAs are no longer included in the computation of the
requirement.
annual income for purposes of complying with the income
requirement. “Income” refers to “locally generated” income.
BUT, THIS CASE WAS REVERSED IN 2011 (WTF SIR.)

SC, through Nachura, ruled that Congress intended to apply


POPULATION
the exemption on land area requirements enjoyed by
- it shall be determined as the total number of
municipalities and cities which have islands as territories to the
inhabitants within the territorial jurisdiction of the local
Province. There appears neither rhyme nor reason why this
government unit concerned.
exemption should apply to cities and municipalities, but not to
provinces. In fact, considering the physical configuration of
Aquino III vs COMELEC
the Philippine archipelago, there is a greater likelihood that
islands or group of islands would form part of the land area of a
In this case, the indispensable requirement in the creation of a
newly-created province than in most cities or municipalities. It
province is that of income and either of territory or population.
is, therefore, logical to infer that the genuine legislative policy
Population requirement is not an indispensable requirement,
decision was expressed in Section 442 (for municipalities) and
but merely an alternative addition to the indispensable income
Section 450 (for component cities) of the LGC, but was
requirement.
inadvertently omitted in Section 461 (for provinces). Thus,
when the exemption was expressly provided in Article 9(2) of
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 21 of 24
Procedure in Creation and Conversion Lazi, Siquijor. Consequently, the COMELEC removed
Barangay Diwata among the list of precincts. May COMELEC
Creation: do that?
1. Petition by the prospective units in a form of resolution
2. Comments on the Petition by the Sangunian of the mother Answer: No. COMELEC cannot.
unit to be submitted to Congress.
3. Attachment of supporting documents to the Petition Sarangani v. COMELEC
consisting of Certificates of DOF, NSO, and LMB (DENR)
4. Enactment of Law by Congress Under the LGC of 1991, the abolition of a local government
5. Plebiscite will be held after law takes effect [Art. 9-11, IRR] unit may be done by Congress in the case of a province, city,
municipality, or any other political subdivision. In the case of a
Conversion from Component City to HUC: barangay, except in Metropolitan Manila area and in cultural
1. Resolution by the interested unit [by SP, duly approved communities, it may be done by the Sangguniang
and endorsed by the Mayor] to be submitted to the Office Panlalawigan or Sangguniang Panglungsod concerned subject
of President with proofs of compliance with income and to the mandatory requirement of a plebiscite conducted for the
population requirements. purpose in the political units affected.
2. Declaration of Conversion by the President – a ministerial
duty on the part of the President Question: Barangay Pobre is the poorest of all barangays in
the Municipality of Carmen mainly because of its rocky, hilly
DIVISION AND MERGER and mountainous topography. It strives mainly on the IRA that it
receives. Without IRA, it could hardly pay even the honoraria of
- Same requirements as Creation and Conversion tis tanods.
a. Can it lawfully be abolished?
Conditions and Limitations: b. If yes, what is the procedure for the abolition of
1. should not reduce the land area, population, and Barangay Pobre?
income to less than the minimum requirements under
the Code; and Answer:
2. income classification of the original LGU affected shall a. Yes it may be abolished by a law. Section 9 of RA
not fall below its current classification prior to such 7160 provides that, “The law or ordinance abolishing
division. [Sec. 8, LGC] an LGU shall specify the province, city, municipality,
or barangay with which the LGU sought to be
The income classification of local government units shall be abolished will be incorporated or merged.”
updated within six (6) months from the effectivity of this Code b. When the law takes effect, there must be a plebiscite.
to reflect the changes in their financial position resulting from
the increased revenues as provided herein. BOUNDARY DISPUTES
Merger of LGUs, political subdivisions and the like is a
legislative function. There is a need of a law enacted by 2005 Bar: There was a boundary dispute between Duenas, a
Congress. municipality, and Passi, and independent component city, both
of the same province. State how the two local government
Question: Should a law be pass for a merger of units should settle their boundary dispute.
ADMINISTRATIVE REGIONS? For the purpose of allowing a
efficiency and economy in the delivery of services? Answer: Settlement of Boundary Disputes
1. It is mandated that boundary disputes between and
Answer: You don’t need a law. Executive function. Only the among local government units shall, as much as possible,
President has the power to do that because merger of be settled amicably.
administrative regions is for administrative purposes. 2. Amicable settlement is within the jurisdiction of the
Sanggunian/s of the mother unit/s as a general rule.
SUBSTANTIAL ALTERATION OF BOUNDARIES 3. In case of failure to settle, the Sanggunian concerned tries
this case.
- Same as creation and conversion, except that the 4. Within the time and manner prescribed by the Rules of
criteria on income and population are not factors to Court, any party may elevate the decision of the
consider. sanggunian concerned to the proper RTC having
- But the alteration of the boundaries should not also jurisdiction over the area.
reduce the minimum requirements on land area.
B. Autonomous Regions
ABOLITION
Manner of Creation:
Ground: When its income, population, or land area has been a. Law
irreversibly reduced to less than the minimum standards as b. plebiscite
certified by the national agencies concerned. [Sec. 9, LGC]
Dual Purpose of Plebiscite:
Note: Irreversible reduction to less than the minimum - Determine will of the people whether to create an
standards only offers a ground for abolition. Hence, a further Autonomous Region;
act (law or ordinance) is still required to effect abolition. [DILG - Determine which LGU shall form part of AR. (only
Opinion NO. 17 S. 2006] those with majority votes, provided more than one)
[Abbas and Ordillo Cases]
Problem: In preparation for the 2016 local and national
elections, the COMELEC conducted investigations in order to Abbas vs. COMELEC
ascertain the veracity of reports of “ghost precincts.” Based on
the investigations it conducted, COMELEC discovered that As provided in the Constitution, the creation of the Autonomous
there are no inhabitants in Barangay Diwata in Municipality of region in Muslim Mindanao is made effective upon the approval
PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 22 of 24
"by majority of the votes cast by the constituent units in a “region” used in its ordinary sense means two or more
plebiscite called for the purpose" [Art. X, sec. 18]. The question provinces. Rule in statutory construction must be applied here:
has been raised as to what this majority means. Does it refer to the language of the Constitution, as much as possible should
a majority of the total votes cast in the plebiscite in all the be understood in the sense it has in common use and that the
constituent units, or a majority in each of the constituent units, words used in constitutional provisions are to be given their
or both? ordinary meaning except where technical terms are employed.

We need not go beyond the Constitution to resolve this The entirety of Republic Act No. 6766 creating the Cordillera
question. If the framers of the Constitution intended to require Autonomous Region is infused with provisions which rule
approval by a majority of all the votes cast in the plebiscite they against the sole province of Ifugao constituting the Region. It
would have so indicated. Thus, in Article XVIII, section 27, it is can be gleaned that Congress never intended that a single
provided that "[t]his Constitution shall take effect immediately province may constitute the autonomous region. If this were
upon its ratification by a majority of the votes cast in a so, we would be faced with the absurd situation of having two
plebiscite held for the purpose ... Comparing this with the sets of officials: a set of provincial officials and another set of
provision on the creation of the autonomous region, which regional officials exercising their executive and legislative
reads: powers over exactly the same small area.

The creation of the autonomous region shall be effective when


approved by majority of the votes cast by the constituent units Counting of the plebiscite votes:
in a plebiscite called for the purpose, provided that only
REGULAR LGUs AUTONOMOUS REGIONS
provinces, cities and geographic areas voting favorably in such
plebiscite shall be included in the autonomous region. [Art. X, Majority of TOTAL votes of Majority of the votes in EACH
sec, 18, para, 2]. ALL UNITS UNIT

It will readily be seen that the creation of the autonomous


region is made to depend, not on the total majority vote in the As a general rule, the autonomous regions will be governed by
plebiscite, but on the will of the majority in each of the their organic acts. [This is different because LGUs will have to
constituent units and the proviso underscores this. for if the be governed primarily by the LGC and secondarily by their
intention of the framers of the Constitution was to get the charter insofar as the provisions are not inconsistent with the
majority of the totality of the votes cast, they could have simply Code.]
adopted the same phraseology as that used for the ratification
of the Constitution, i.e. "the creation of the autonomous region Elections
shall be effective when approved by a majority of the votes
cast in a plebiscite called for the purpose." Kida vs Senate

It is thus clear that what is required by the Constitution is a Assailed in this petition is R.A. 10153 that reset the next
simple majority of votes approving the organic Act in individual ARMM regular elections to May 2013 to coincide with the
constituent units and not a double majority of the votes in all regular local and national elections of the country. Does the
constituent units put together, as well as in the individual 1987 Constitution mandate the synchronization of elections
constituent units. including the ARMM elections?

Ordillo vs. COMELEC While the Constitution does not expressly state that Congress
has to synchronize national and local elections, the clear intent
Under the Constitution and R.A. No 6734, the creation of the towards this objective can be gleaned from the Transitory
autonomous region shall take effect only when approved by a Provisions (Article XVIII) of the Constitution, which show the
majority of the votes cast by the constituent units in a extent to which the Constitutional Commission, by deliberately
plebiscite, and only those provinces and cities where a majority making adjustments to the terms of the incumbent officials,
vote in favor of the Organic Act shall be included in the sought to attain synchronization of elections. The Constitutional
autonomous region. The provinces and cities wherein such a Commission exchanges, read with the provisions of the
majority is not attained shall not be included in the autonomous Transitory Provisions of the Constitution, all serve as patent
region. It may be that even if an autonomous region is created, indicators of the constitutional mandate to hold synchronized
not all of the thirteen (13) provinces and nine (9) cities national and local elections, starting the second Monday of
mentioned in Article II, section 1 (2) of R.A. No. 6734 shall be May 1992 and for all the following elections.
included therein. The single plebiscite contemplated by the
Constitution and R.A. No. 6734 will therefore be determinative In this case, the ARMM elections, although called “regional”
of (1) whether there shall be an autonomous region in Muslim elections, should be included among the elections to be
Mindanao and (2) which provinces and cities, among synchronized as it is a “local” election based on the wording
those enumerated in R.A. No. 6734, shall compromise it. and structure of the Constitution.

There must be at least 2 LGUs because the Constitution says Thus, it is clear from the foregoing that the 1987 Constitution
“units”, so in the case of Cordillera, it’s not duly created mandates the synchronization of elections, including the
because only 1 province got an affirmative plebiscite, which is ARMM elections.
only the Ifugao province, and the rest are negative. So, no
Cordillera Autonomous Region, but simply Administrative We admit that synchronization will temporarily disrupt the
Region of the Cordilleras. No local government powers. election process in a local community, the ARMM, as well as
the community’s choice of leaders. However, we have to keep
The sole province of Ifugao cannot validly constitute the in mind that the adoption of this measure is a matter of
Cordillera Autonomous Region. The keyword in Article X, necessity in order to comply with a mandate that the
Section 15 of the 1987 Constitution – provinces, cities, Constitution itself has set out for us. Moreover, the
municipalities and geographical areas connote that “region” is implementation of the provisions of RA No. 10153 as an interim
to be made up of more than one constituent unit. The term measure is comparable to the interim measures traditionally

PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 23 of 24


practiced when, for instance, the President appoints officials
holding elective offices upon the creation of new local
government units.

C. Beginning of Corporate Existence

Section 14. Beginning of Corporate Existence. - When a new


local government unit is created, its corporate existence shall
commence upon the election and qualification of its chief
executive and a majority of the members of its sanggunian,
unless some other time is fixed therefor by the law or
ordinance creating it.

The LGU’s corporate existence begins:


a) As fixed by the law or ordinance (usually effectivity of
law) creating the LGU, or
b) Election and Qualifications of LCE and majority of
Sanggunian members (when not fixed by law or
ordinance or when it is silent)

“Election” – refers to having been proclaimed as winners in the


election

“Qualifications” – refers to the oath-taking that qualifies the


public official

PUBLIC CORPORATION LAW REVIEWER (EH 407) Page 24 of 24