G.R. No. 177131. June 7, 2011 Administrative Code of 1987.

Administrative Code of 1987. The BSP meets the minimum statutory requirement of an attached
government agency as the DECS Secretary sits at the BSP Board ex officio, thus facilitating the
BOY SCOUTS OF THE PHILIPPINES, petitioner, vs. COMMISSION ON AUDIT, policy and program coordination between the BSP and the DECS.
respondent.
Same; Same; Same; Boy Scouts of the Philippines (BSP) is subject to the exercise by the
Commission on Audit (COA) of its audit jurisdiction in the manner consistent with the provisions
Corporation Law; Commission on Audit; Boy Scouts of the Philippines; The Boy Scouts of
of the BSP charter.—Since the BSP, under its amended charter, continues to be a public
the Philippines (BSP) is a public corporation and its funds are subject to the Commission on
corporation or a government instrumentality, we come to the inevitable conclusion that it is
Audit’s (COA’s) audit jurisdiction.—After looking at the legislative history of its amended charter
subject to the exercise by the COA of its audit jurisdiction in the manner consistent with the
and carefully studying the applicable laws and the arguments of both parties, we find that the
provisions of the BSP Charter.
BSP is a public corporation and its funds are subject to the COA’s audit jurisdiction.

Same; Same; Same; Boy Scouts of the Philippines (BSP) as presently constituted under
Republic Act No. 7278, falls under the second classification of juridical persons under Article 44
of the Civil Code.—There are three classes of juridical persons under Article 44 of the Civil Code LEONARDO-DE CASTRO, J.:
and the BSP, as presently constituted under Republic Act No. 7278,falls under the second The jurisdiction of the Commission on Audit (COA) over the Boy Scouts of the
classification. Article 44 reads: Art. 44. The following are juridical persons: (1) The State and Philippines (BSP) is the subject matter of this controversy that reached us via petition
its political subdivisions; (2) Other corporations, institutions and entities for public interest for prohibition filed by the BSP under Rule 65 of the 1997 Rules of Court. In this
or purpose created by law; their personality begins as soon as they have been
petition, the BSP seeks that the COA be prohibited from implementing its June 18,
constituted according to law; (3) Corporations, partnerships and associations for private
interest or purpose to which the law grants a juridical personality, separate and distinct from
2002 Decision, its February 21, 2007 Resolution, as well as all other issuances
that of each shareholder, partner or member. arising therefrom, and that all of the foregoing be rendered null and void.

Same; Same; Same; The Boy Scouts of the Philippines (BSP) which was created by a
special law to serve a public purpose in pursuit of a constitutional mandate, comes within the
class of “public corporations” defined by paragraph 2, Article 44 of the Civil Code.—Evidently,
the BSP, which was created by a special law to serve a public purpose in pursuit of a
constitutional mandate, comes within the class of “public corporations” defined by paragraph 2,
Article 44 of the Civil Code and governed by the law which creates it, pursuant to Article 45 of
the same Code.
Same; Same; Same; The Boy Scouts of the Philippines (BSP) is a public corporation or a
government agency or instrumentality with judicial personality, which does not fall within the
constitutional prohibition in Article XII, Section 16, notwithstanding the amendments to its
charter; Not all corporations, which are not government owned or controlled, are ipso facto to be
considered private corporations, as there exists another distinct class of corporations or
chartered institutions which are otherwise known as “public corporations.”—The BSP is a public
corporation or a government agency or instrumentality with juridical personality, which does not
fall within the constitutional prohibition in Article XII, Section 16, notwithstanding the
amendments to its charter. Not all corporations, which are not government owned or controlled,
are ipso facto to be considered private corporations as there exists another distinct class of
corporations or chartered institutions which are otherwise known as “public corporations.” These
corporations are treated by law as agencies or instrumentalities of the government which are not
subject to the tests of ownership or control and economic viability but to different criteria relating
to their public purposes/interests or constitutional policies and objectives and their administrative
relationship to the government or any of its Departments or Offices.
Same; Same; Same; The ownership and control test is likewise irrelevant for a public
corporation like the Boy Scouts of the Philippines (BSP).—The ownership and control test is
likewise irrelevant for a public corporation like the BSP. To reiterate, the relationship of the BSP,
an attached agency, to the government, through the DECS, is defined in the Revised
Antecedent Facts and Background of the Case
This case arose when the COA issued Resolution No. 99-011 on August 19,
1999 (“the COA Resolution”), with the subject “Defining the Commission’s policy with
respect to the audit of the Boy Scouts of the Philippines.” In its whereas clauses, the
COA Resolution stated that the BSP was created as a public corporation under
Commonwealth Act No. 111, as amended by Presidential Decree No. 460 and
Republic Act No. 7278; that in Boy Scouts of the Philippines v. National Labor
Relations Commission, the Supreme Court ruled that the BSP, as constituted under
its charter, was a “government-controlled corporation within the meaning of Article
IX(B)(2)(1) of the Constitution”; and that “the BSP is appropriately regarded as a
government instrumentality under the 1987 Administrative Code.” The COA
Resolution also cited its constitutional mandate under Section 2(1), Article IX (D).
Finally, the COA Resolution reads:
“NOW THEREFORE, in consideration of the foregoing premises, the
COMMISSION PROPER HAS RESOLVED, AS IT DOES HEREBY RESOLVE, to
conduct an annual financial audit of the Boy Scouts of the Philippines in
accordance with generally accepted auditing standards, and express an
opinion on whether the financial statements which include the Balance Sheet, the
Income Statement and the Statement of Cash Flows present fairly its financial
position and results of operations.
xxxx
BE IT RESOLVED FURTHERMORE, that for purposes of audit
supervision, the Boy Scouts of the Philippines shall be classified among the
government corporations belonging to the Educational, Social, Scientific,
Civic and Research Sector under the Corporate Audit Office I, to be audited,
similar to the subsidiary corporations, by employing the team audit approach.”
(Emphases supplied.)

The BSP sought reconsideration of the COA Resolution in a letter9
dated
November 26, 1999 signed by the BSP National President Jejomar C. Binay, who is
now the Vice President of the Republic, wherein he wrote:
“It is the position of the BSP, with all due respect, that it is not subject to the
Commission’s jurisdiction on the following grounds:
1. We reckon that the ruling in the case of Boy Scouts of the Philippines vs. National
Labor Relations Commission, et al. (G.R. No. 80767) classifying the BSP as a
government-controlled corporation is anchored on the “substantial Government
participation” in the National Executive Board of the BSP. It is to be noted that the
case was decided when the BSP Charter is defined by Commonwealth Act No.
111 as amended by Presidential Decree 460.
However, may we humbly refer you to Republic Act No. 7278 which amended the
BSP’s charter after the cited case was decided. The most salient of all
amendments in RA No. 7278 is the alteration of the composition of the National
Executive Board of the BSP.
The said RA virtually eliminated the “substantial government participation” in the
National Executive Board by removing: (i) the President of the Philippines and
executive secretaries, with the exception of the Secretary of Education, as
members thereof;and (ii) the appointment and confirmation power of the President
of the Philippines, as Chief Scout, over the members of the said Board.
The BSP believes that the cited case has been superseded by RA 7278. Thereby
weakening the case’s conclusion that the BSP is a government-controlled
corporation (sic). The 1987 Administrative Code itself, of which the BSP vs.
NLRC relied on for some terms, defines government-owned and controlled
corporations as agencies organized as stock or non-stock corporations which the
BSP, under its present charter, is not.
Also, the Government, like in other GOCCs, does not have funds invested in the
BSP. What RA 7278 only provides is that the Government or any of its
subdivisions, branches, offices, agencies and instrumentalities can from time to
time donate and contribute funds to the BSP.
xxxx
Also the BSP respectfully believes that the BSP is not “appropriately regarded as
a government instrumentality under the 1987 Administrative Code” as stated in the
COA resolution. As defined by Section 2(10) of the said code, instrumentality refers
to “any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some
if not all corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter.”
The BSP is not an entity administering special funds. It is not even included in the
DECS National Budget. x x x
It may be argued also that the BSP is not an “agency” of the Government. The
1987 Administrative Code, merely referred the BSP as an “attached agency” of the
DECS as distinguished from an actual line agency of departments that are included
in the National Budget. The BSP believes that an “attached agency” is different
from an “agency.” Agency, as defined in Section 2(4) of the Administrative Code,
is defined as any of the various units of the Government including a department,
bureau, office, instrumentality, government-owned or controlled corporation or
local government or distinct unit therein.
Under the above definition, the BSP is neither a unit of the Government; a
department which refers to an executive department as created by law (Section
2[7] of the Administrative Code); nor a bureau which refers to any principal
subdivision or unit of any department (Section 2[8], Administrative Code).
Subsequently, requests for reconsideration of the COA Resolution were also
made separately by Robert P. Valdellon, Regional Scout Director, Western Visayas
Region, Iloilo City and Eugenio F. Capreso, Council Scout Executive of Calbayog
City.
In a letter dated July 3, 2000, Director Crescencio S. Sunico, Corporate Audit
Officer (CAO) I of the COA, furnished the BSP with a copy of the Memorandum
dated June 20, 2000 of Atty. Santos M. Alquizalas, the COA General Counsel. In said
Memorandum, the COA General Counsel opined that Republic Act No. 7278 did not
supersede the Court’s ruling in Boy Scouts of the Philippines v. National Labor
Relations Commission, even though said law eliminated the substantial government
participation in the selection of members of the National Executive Board of the BSP.
The Memorandum further provides:
“Analysis of the said case disclosed that the substantial government
participation is only one (1) of the three (3) grounds relied upon by the Court in the
resolution of the case. Other considerations include the character of the BSP’s
purposes and functions which has a public aspect and the statutory designation of
the BSP as a “public corporation”. These grounds have not been deleted by R.A.
No. 7278. On the contrary, these were strengthened as evidenced by the
amendment made relative to BSP’s purposes stated in Section 3 of R.A. No. 7278.
On the argument that BSP is not appropriately regarded as “a government
instrumentality” and “agency” of the government, such has already been answered
and clarified. The Supreme Court has elucidated this matter in the BSP case when
it declared that BSP is regarded as, both a “government-controlled corporation with
an original charter” and as an “instrumentality” of the Government. Likewise, it is
not disputed that the Administrative Code of 1987 designated the BSP as one of
the attached agencies of DECS. Being an attached agency, however, it does not
change its nature as a government-controlled corporation with original charter and,
necessarily, subject to COA audit jurisdiction. Besides, Section 2(1), Article IX-D
of the Constitution provides that COA shall have the power, authority, and duty to
examine, audit and settle all accounts pertaining to the revenue and receipts of,
and expenditures or uses of funds and property, owned or held in trust by, or
pertaining to, the Government, or any of its subdivisions, agencies or
instrumentalities, including government-owned or controlled corporations with
original charters.”
Based on the Memorandum of the COA General Counsel, Director Sunico wrote:
“In view of the points clarified by said Memorandum upholding COA
Resolution No. 99-011, we have to comply with the provisions of the latter, among
which is to conduct an annual financial audit of the Boy Scouts of the Philippines.”
In a letter dated November 20, 2000 signed by Director Amorsonia B. Escarda,
CAO I, the COA informed the BSP that a preliminary survey of its organizational
structure, operations and accounting system/records shall be conducted on
November 21 to 22, 2000.
Upon the BSP’s request, the audit was deferred for thirty (30) days. The BSP then
filed a Petition for Review with Prayer for Preliminary Injunction and/or Temporary
Restraining Order before the COA. This was denied by the COA in its questioned
Decision, which held that the BSP is under its audit jurisdiction. The BSP moved for
reconsideration but this was likewise denied under its questioned Resolution.17
This led to the filing by the BSP of this petition for prohibition with preliminary
injunction and temporary restraining order against the COA.
The Issue
As stated earlier, the sole issue to be resolved in this case is whether the BSP
falls under the COA’s audit jurisdiction.
The Parties’ Respective Arguments
The BSP contends that Boy Scouts of the Philippines v. National Labor Relations
Commission is inapplicable for purposes of determining the audit jurisdiction of the
COA as the issue therein was the jurisdiction of the National Labor Relations
Commission over a case for illegal dismissal and unfair labor practice filed by certain
BSP employees.
While the BSP concedes that its functions do relate to those that the government
might otherwise completely assume on its own, it avers that this alone was not
determinative of the COA’s audit jurisdiction over it. The BSP further avers that the
Court in Boy Scouts of the Philippines v. National Labor Relations
Commission “simply stated x x x that in respect of functions, the BSP is akin to a
public corporation” but this was not synonymous to holding that the BSP is a
government corporation or entity subject to audit by the COA.
The BSP contends that Republic Act No. 7278 introduced crucial amendments to
its charter; hence, the findings of the Court in Boy Scouts of the Philippines
v. National Labor Relations Commission are no longer valid as the government has
ceased to play a controlling influence in it. The BSP claims that the pronouncements
of the Court therein must be taken only within the context of that case; that the Court
had categorically found that its assets were acquired from the Boy Scouts of America
and not from the Philippine government, and that its operations are financed chiefly
from membership dues of the Boy Scouts themselves as well as from property
rentals; and that “the BSP may correctly be characterized as non-governmental, and
hence, beyond the audit jurisdiction of the COA.” It further claims that the designation
by the Court of the BSP as a government agency or instrumentality is mere obiter
dictum.
The BSP maintains that the provisions of Republic Act No. 7278 suggest that
“governance of BSP has come to be overwhelmingly a private affair or nature, with
government participation restricted to the seat of the Secretary of Education, Culture
and Sports.” It cites Philippine Airlines Inc. v. Commission on Audit wherein the Court
declared that, “PAL, having ceased to be a government-owned or controlled
corporation is no longer under the audit jurisdiction of the COA.” Claiming that the
amendments introduced by Republic Act No. 7278 constituted a supervening event
that changed the BSP’s corporate identity in the same way that the government’s
privatization program changed PAL’s, the BSP makes the case that the government
no longer has control over it; thus, the COA cannot use the Boy Scouts of the
Philippines v. National Labor Relations Commission as its basis for the exercise of its
jurisdiction and the issuance of COA Resolution No. 99-011.24 The BSP further claims
as follows:
“It is not far-fetched, in fact, to concede that BSP’s funds and assets are
private in character. Unlike ordinary public corporations, such as provinces, cities,
and municipalities, or government-owned and controlled corporations, such as
Land Bank of the Philippines and the Development Bank of the Philippines, the
assets and funds of BSP are not derived from any government grant. For its
operations, BSP is not dependent in any way on any government appropriation; as
a matter of fact, it has not even been included in any appropriations for the
government. To be sure, COA has not alleged, in its Resolution No. 99-011 or in
the Memorandum of its General Counsel, that BSP received, receives or continues
to receive assets and funds from any agency of the government. The foregoing
simply point to the private nature of the funds and assets of petitioner BSP.
xxxx
As stated in petitioner’s third argument, BSP’s assets and funds were never
acquired from the government. Its operations are not in any way financed by the
government, as BSP has never been included in any appropriations act for the
government. Neither has the government invested funds with BSP. BSP, has not
been, at any time, a user of government property or funds; nor have properties of
the government been held in trust by BSP. This is precisely the reason why, until
this time, the COA has not attempted to subject BSP to its audit jurisdiction. x x x.”
To summarize its other arguments, the BSP contends that it is not a government-
owned or controlled corporation; neither is it an instrumentality, agency, or subdivision
of the government.
In its Comment, the COA argues as follows:
1. The BSP is a public corporation created under Commonwealth Act No. 111
dated October 31, 1936, and whose functions relate to the fostering of public
virtues of citizenship and patriotism and the general improvement of the moral
spirit and fiber of the youth. The manner of creation and the purpose for which
the BSP was created indubitably prove that it is a government agency.
2. Being a government agency, the funds and property owned or held in trust by
the BSP are subject to the audit authority of respondent Commission on Audit
pursuant to Section 2 (1), Article IX-D of the 1987 Constitution.
 3. Republic Act No. 7278 did not change the character of the BSP as a
government-owned or controlled corporation and government
instrumentality.27
The COA maintains that the functions of the BSP that include, among
others, the teaching to the youth of patriotism, courage, self-reliance, and
kindred virtues, are undeniably sovereign functions enshrined under the
Constitution and discussed by the Court in Boy Scouts of the Philippines v.
National Labor Relations Commission. The COA contends that any attempt
to classify the BSP as a private corporation would be incomprehensible since
no less than the law which created it had designated it as a public corporation
and its statutory mandate embraces performance of sovereign functions.
The COA claims that the only reason why the BSP employees fell within the
scope of the Civil Service Commission even before the 1987 Constitution was the fact
that it was a government-owned or controlled corporation; that as an attached agency
of the Department of Education, Culture and Sports (DECS), the BSP is an agency of
the government; and that the BSP is a chartered institution under Section 1(12) of the
Revised Administrative Code of 1987, embraced under the term government
instrumentality.
The COA concludes that being a government agency, the funds and property
owned or held by the BSP are subject to the audit authority of the COA pursuant to
Section 2(1), Article IX (D) of the 1987 Constitution.
In support of its arguments, the COA cites The Veterans Federation of the
Philippines (VFP) v. Reyes,30 wherein the Court held that among the reasons why the
VFP is a public corporation is that its charter, Republic Act No. 2640, designates it as
one. Furthermore, the COA quotes the Court as saying in that case:
“In several cases, we have dealt with the issue of whether certain specific
activities can be classified as sovereign functions. These cases, which deal with
activities not immediately apparent to be sovereign functions, upheld the public
sovereign nature of operations needed either to promote social justice or to
stimulate patriotic sentiments and love of country.
xxxx
Petitioner claims that its funds are not public funds because no budgetary
appropriations or government funds have been released to the VFP directly or
indirectly from the DBM, and because VFP funds come from membership dues
and lease rentals earned from administering government lands reserved for the
VFP.
The fact that no budgetary appropriations have been released to the VFP does
not prove that it is a private corporation. The DBM indeed did not see it fit to
propose budgetary appropriations to the VFP, having itself believed that the VFP
is a private corporation. If the DBM, however, is mistaken as to its conclusion
regarding the nature of VFP's incorporation, its previous assertions will not prevent
future budgetary appropriations to the VFP. The erroneous application of the law
by public officers does not bar a subsequent correct application of the law.”
(Citations omitted.)
The COA points out that the government is not precluded by law from extending
financial support to the BSP and adding to its funds, and that “as a government
instrumentality which continues to perform a vital function imbued with public interest
and reflective of the government’s policy to stimulate patriotic sentiments and love of
country, the BSP’s funds from whatever source are public funds, and can be used
solely for public purpose in pursuance of the provisions of Republic Act No. [7278].”
The COA claims that the fact that it has not yet audited the BSP’s funds may not
bar the subsequent exercise of its audit jurisdiction.
The BSP filed its Reply on August 29, 2007 maintaining that its statutory
designation as a “public corporation” and the public character of its purpose and
functions are not determinative of the COA’s audit jurisdiction; reiterating its stand
that Boy Scouts of the Philippines v. National Labor Relations Commission is not
applicable anymore because the aspect of government ownership and control has
been removed by Republic Act No. 7278; and concluding that the funds and property
that it either owned or held in trust are not public funds and are not subject to the
COA’s audit jurisdiction.
Thereafter, considering the BSP’s claim that it is a private corporation, this Court,
in a Resolution dated July 20, 2010, required the parties to file, within a period of
twenty (20) days from receipt of said Resolution, their respective comments on the
issue of whether Commonwealth Act No. 111, as amended by Republic Act No. 7278,
is constitutional.
In compliance with the Court’s resolution, the parties filed their respective
Comments.
In its Comment dated October 22, 2010, the COA argues that the constitutionality
of Commonwealth Act No. 111, as amended, is not determinative of the resolution of
the present controversy on the COA’s audit jurisdiction over petitioner, and in fact, the
controversy may be resolved on other grounds; thus, the requisites before a judicial
inquiry may be made, as set forth in Commissioner of Internal Revenue v. Court of
Tax Appeals, have not been fully met.3 Moreover, the COA maintains that behind
every law lies the presumption of constitutionality. The COA likewise argues that
contrary to the BSP’s position, repeal of a law by implication is not favored. Lastly, the
COA claims that there was no violation of Section 16, Article XII of the 1987
Constitution with the creation or declaration of the BSP as a government corporation.
Citing Philippine Society for the Prevention of Cruelty to Animals v. Commission on
Audit, the COA further alleges:
“The true criterion, therefore, to determine whether a corporation is public or
private is found in the totality of the relation of the corporation to the State. If the
corporation is created by the State as the latter’s own agency or instrumentality to
help it in carrying out its governmental functions, then that corporation is
considered public; otherwise, it is private. x x x.”
 For its part, in its Comment filed on December 3, 2010, the BSP submits that its
charter, Commonwealth Act No. 111, as amended by Republic Act No. 7278, is
constitutional as it does not violate Section 16, Article XII of the Constitution. The BSP
alleges that “while [it] is not a public corporation within the purview of COA’s audit
jurisdiction, neither is it a private corporation created by special law falling within the
ambit of the constitutional prohibition x x x.” The BSP further alleges:
“Petitioner’s purpose is embodied in Section 3 of C.A. No. 111, as amended
by Section 1 of R.A. No. 7278, thus:
xxxx
A reading of the foregoing provision shows that petitioner was created to
advance the interest of the youth, specifically of young boys, and to mold them into
becoming good citizens. Ultimately, the creation of petitioner redounds to the
benefit, not only of those boys, but of the public good or welfare. Hence, it can be
said that petitioner’s purpose and functions are more of a public rather than a
private character. Petitioner caters to all boys who wish to join the organization
without any distinction. It does not limit its membership to a particular class of boys.
Petitioner’s members are trained in scoutcraft and taught patriotism, civic
consciousness and responsibility, courage, self-reliance, discipline and kindred
virtues, and moral values, preparing them to become model citizens and
outstanding leaders of the country.”
The BSP reiterates its stand that the public character of its purpose and functions
do not place it within the ambit of the audit jurisdiction of the COA as it lacks the
government ownership or control that the Constitution requires before an entity may
be subject of said jurisdiction.45 It avers that it merely stated in its Reply that the
withdrawal of government control is akin to privatization, but it does not necessarily
mean that petitioner is a private corporation. The BSP claims that it has a unique
characteristic which “neither classifies it as a purely public nor a purely private
corporation”; that it is not a quasi-public corporation; and that it may belong to a
different class altogether.
The BSP claims that assuming arguendo that it is a private corporation, its
creation is not contrary to the purpose of Section 16, Article XII of the Constitution;
and that the evil sought to be avoided by said provision is inexistent in the enactment
of the BSP’s charter, as, (i) it was not created for any pecuniary purpose; (ii) those
who will primarily benefit from its creation are not its officers but its entire membership
consisting of boys being trained in scoutcraft all over the country; (iii) it caters to all
boys who wish to join the organization without any distinction; and (iv) it does not limit
its membership to a particular class or group of boys. Thus, the enactment of its
charter confers no special privilege to particular individuals, families, or groups; nor
does it bring about the danger of granting undue favors to certain groups to the
prejudice of others or of the interest of the country, which are the evils sought to be
prevented by the constitutional provision involved.
Finally, the BSP states that the presumption of constitutionality of a legislative
enactment prevails absent any clear showing of its repugnancy to the Constitution.
The Ruling of the Court
After looking at the legislative history of its amended charter and carefully
studying the applicable laws and the arguments of both parties, we find that the BSP
is a public corporation and its funds are subject to the COA’s audit jurisdiction.
The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936),
entitled “An Act to Create a Public Corporation to be Known as the Boy Scouts of the
Philippines, and to Define its Powers and Purposes” created the BSP as a “public
corporation” to serve the following public interest or purpose:
“Sec. 3. The purpose of this corporation shall be to promote through
organization and cooperation with other agencies, the ability of boys to do useful
things for themselves and others, to train them in scoutcraft, and to inculcate in
them patriotism, civic consciousness and responsibility, courage, self-reliance,
discipline and kindred virtues, and moral values, using the method which are in
common use by boy scouts.”
Presidential Decree No. 460, approved on May 17, 1974, amended Commonwealth
Act No. 111 and provided substantial changes in the BSP organizational structure.
Pertinent provisions are quoted below:
“Section II. Section 5 of the said Act is also amended to read as follows:
The governing body of the said corporation shall consist of a National
Executive Board composed of (a) the President of the Philippines or his
representative; (b) the charter and life members of the Boy Scouts of the
Philippines; (c) the Chairman of the Board of Trustees of the Philippine Scouting
Foundation; (d) the Regional Chairman of the Scout Regions of the Philippines; (e)
the Secretary of Education and Culture, the Secretary of Social Welfare, the
Secretary of National Defense, the Secretary of Labor, the Secretary of Finance,
the Secretary of Youth and Sports, and the Secretary of Local Government and
Community Development; (f) an equal number of individuals from the private
sector; (g) the National President of the Girl Scouts of the Philippines; (h) one
Scout of Senior age from each Scout Region to represent the boy membership;
and (i) three representatives of the cultural minorities. Except for the Regional
Chairman who shall be elected by the Regional Scout Councils during their annual
meetings, and the Scouts of their respective regions, all members of the National
Executive Board shall be either by appointment or cooption, subject to ratification
and confirmation by the Chief Scout, who shall be the Head of State. Vacancies in
the Executive Board shall be filled by a majority vote of the remaining members,
subject to ratification and confirmation by the Chief Scout. The by-laws may
prescribe the number of members of the National Executive Board necessary to
constitute a quorum of the board, which number may be less than a majority of the
whole number of the board. The National Executive Board shall have power to
make and to amend the by-laws, and, by a two-thirds vote of the whole board at a
meeting called for this purpose, may authorize and cause to be executed
mortgages and liens upon the property of the corporation.”
Subsequently, on March 24, 1992, Republic Act No. 7278 further amended
Commonwealth Act No. 111 “by strengthening the volunteer and democratic
character” of the BSP and reducing government representation in its governing body,
as follows:
“Section 1. Sections 2 and 3 of Commonwealth Act No. 111, as amended,
is hereby amended to read as follows:
“Sec. 2. The said corporation shall have the powers of perpetual
succession, to sue and be sued; to enter into contracts; to acquire, own, lease,
convey and dispose of such real and personal estate, land grants, rights and
choses in action as shall be necessary for corporate purposes, and to accept and
receive funds, real and personal property by gift, devise, bequest or other means,
to conduct fund-raising activities; to adopt and use a seal, and the same to alter
and destroy; to have offices and conduct its business and affairs in Metropolitan
Manila and in the regions, provinces, cities, municipalities, and barangays of the
Philippines, to make and adopt by-laws, rules and regulations not inconsistent with
this Act and the laws of the Philippines, and generally to do all such acts and things,
including the establishment of regulations for the election of associates and
successors, as may be necessary to carry into effect the provisions of this Act and
promote the purposes of said corporation: Provided, That said corporation shall
have no power to issue certificates of stock or to declare or pay dividends, its
objectives and purposes being solely of benevolent character and not for pecuniary
profit of its members.
“Sec. 3. The purpose of this corporation shall be to promote through
organization and cooperation with other agencies, the ability of boys to do
useful things for themselves and others, to train them in scoutcraft, and to
inculcate in them patriotism, civic consciousness and responsibility,
courage, self-reliance, discipline and kindred virtues, and moral values,
using the method which are in common use by boy scouts.”
Sec. 2. Section 4 of Commonwealth Act No. 111, as amended, is hereby
repealed and in lieu thereof, Section 4 shall read as follows:
“Sec. 4. The President of the Philippines shall be the Chief Scout of
the Boy Scouts of the Philippines.”
Sec. 3. Sections 5, 6, 7 and 8 of Commonwealth Act No. 111, as amended,
are hereby amended to read as follows:
“Sec. 5. The governing body of the said corporation shall consist of a
National Executive Board, the members of which shall be Filipino citizens of good
moral character. The Board shall be composed of the following:
“(a) One (1) charter member of the Boy Scouts of the Philippines who shall
be elected by the members of the National Council at its meeting called for this
purpose;
“(b) The regional chairmen of the scout regions who shall be elected by the
representatives of all the local scout councils of the region during its meeting called
for this purpose: Provided, That a candidate for regional chairman need not be the
chairman of a local scout council;
“(c) The Secretary of Education, Culture and Sports;
“(d) The National President of the Girl Scouts of the Philippines;
“(e) One (1) senior scout, each from Luzon, Visayas and Mindanao areas,
to be elected by the senior scout delegates of the local scout councils to the scout
youth forums in their respective areas, in its meeting called for this purpose, to
represent the boy scout membership;
“(f) Twelve (12) regular members to be elected by the members of the
National Council in its meeting called for this purpose;
“(g) At least ten (10) but not more than fifteen (15) additional members from
the private sector who shall be elected by the members of the National Executive
Board referred to in the immediately preceding paragraphs (a), (b), (c), (d), (e) and
(f) at the organizational meeting of the newly reconstituted National Executive
Board which shall be held immediately after the meeting of the National Council
wherein the twelve (12) regular members and the one (1) charter member were
elected.
xxxx
“Sec. 8. Any donation or contribution which from time to time may be made
to the Boy Scouts of the Philippines by the Government or any of its subdivisions,
branches, offices, agencies or instrumentalities or by a foreign government or by
private, entities and individuals shall be expended by the National Executive Board
in pursuance of this Act.”
The BSP as a Public Corporation under Par. 2, Art. 2 of the Civil Code
There are three classes of juridical persons under Article 44 of the Civil Code and
the BSP, as presently constituted under Republic Act No. 7278, falls under the
second classification. Article 44 reads:
“Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or
purpose created by law; their personality begins as soon as they have been
constituted according to law;
(3) Corporations, partnerships and associations for private interest or
purpose to which the law grants a juridical personality, separate and distinct from
that of each shareholder, partner or member.” (Emphases supplied.)
The BSP, which is a corporation created for a public interest or purpose, is
subject to the law creating it under Article 45 of the Civil Code, which provides:
“Art. 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding
article are governed by the laws creating or recognizing them.
Private corporations are regulated by laws of general application on the
subject.
Partnerships and associations for private interest or purpose are governed by
the provisions of this Code concerning partnerships.” (Emphasis and underscoring
supplied.)
The purpose of the BSP as stated in its amended charter shows that it was
created in order to implement a State policy declared in Article II, Section 13 of the
Constitution, which reads:
ARTICLE II—DECLARATION OF PRINCIPLES
AND STATE POLICIES
“Section 13. The State recognizes the vital role of the youth in nation-
building and shall promote and protect their physical, moral, spiritual, intellectual,
and social well-being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.”
Evidently, the BSP, which was created by a special law to serve a public purpose
in pursuit of a constitutional mandate, comes within the class of “public corporations”
defined by paragraph 2, Article 44 of the Civil Code and governed by the law which
creates it, pursuant to Article 45 of the same Code.
The BSP’s Classification Under the Administrative Code of 1987
The public, rather than private, character of the BSP is recognized by the fact
that, along with the Girl Scouts of the Philippines, it is classified as an attached
agency of the DECS under Executive Order No. 292, or the Administrative Code of
1987, which states:
TITLE VI—EDUCATION, CULTURE AND SPORTS
Chapter 8—Attached Agencies
SEC. 20. Attached Agencies.—The following agencies are hereby
attached to the Department:
xxxx
(12) Boy Scouts of the Philippines;
(13) Girl Scouts of the Philippines.
The administrative relationship of an attached agency to the department is
defined in the Administrative Code of 1987 as follows:
BOOK IV
THE EXECUTIVE BRANCH
Chapter 7—ADMINISTRATIVE RELATIONSHIP
“SEC. 38. Definition of Administrative Relationship.—Unless otherwise
expressly stated in the Code or in other laws defining the special relationships of
particular agencies, administrative relationships shall be categorized and defined
as follows:
xxxx
(3) Attachment.—(a) This refers to the lateral relationship between the
department or its equivalent and the attached agency or corporation for purposes
of policy and program coordination. The coordination may be accomplished
by having the department represented in the governing board of the attached
agency or corporation, either as chairman or as a member, with or without
voting rights, if this is permitted by the charter; having the attached corporation
or agency comply with a system of periodic reporting which shall reflect the
progress of programs and projects; and having the department or its equivalent
provide general policies through its representative in the board, which shall serve
as the framework for the internal policies of the attached corporation or agency.”
(Emphasis ours.)
As an attached agency, the BSP enjoys operational autonomy, as long as policy
and program coordination is achieved by having at least one representative of
government in its governing board, which in the case of the BSP is the DECS
Secretary. In this sense, the BSP is not under government control or “supervision and
control.” Still this characteristic does not make the attached chartered agency a
private corporation covered by the constitutional proscription in question.
Art. XII, Sec. 16 of the Constitution refers to “private corporations” created
by government for proprietary or economic/business purposes
At the outset, it should be noted that the provision of Section 16 in issue is found
in Article XII of the Constitution, entitled “National Economy and Patrimony.”
Section 1 of Article XII is quoted as follows:
“SECTION 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the people;
and an expanding productivity as the key to raising the quality of life for all,
especially the underprivileged.
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar collective organizations, shall be
encouraged to broaden the base of their ownership.”
The scope and coverage of Section 16, Article XII of the Constitution can be seen
from the aforementioned declaration of state policies and goals which pertains
to national economy and patrimony and the interests of the people in economic
development.
Section 16, Article XII deals with “the formation, organization, or regulation of
private corporations,” which should be done through a general law enacted by
Congress, provides for an exception, that is: if the corporation is government owned
or controlled; its creation is in the interest of the common good; and it meets the test
of economic viability. The rationale behind Article XII, Section 16 of the 1987
Constitution was explained in Feliciano v. Commission on Audit, in the following
manner:
“The Constitution emphatically prohibits the creation of private corporations
except by a general law applicable to all citizens. The purpose of this
constitutional provision is to ban private corporations created by special
charters, which historically gave certain individuals, families or groups
special privileges denied to other citizens.” (Emphasis added.)
It may be gleaned from the above discussion that Article XII, Section 16 bans the
creation of “private corporations” by speciallaw. The said constitutional provision
should not be construed so as to prohibit the creation of public corporations or a
corporate agency or instrumentality of the government intended to serve a public
interest or purpose, which should not be measured on the basis of economic viability,
but according to the public interest or purpose it serves as envisioned by paragraph
(2), of Article 44 of the Civil Code and the pertinent provisions of
the Administrative Code of 1987.

The BSP is a Public Corporation Not Subject to the Test of Government
Ownership or Control and Economic Viability
The BSP is a public corporation or a government agency or instrumentality with
juridical personality, which does not fall within the constitutional prohibition in Article
XII, Section 16, notwithstanding the amendments to its charter. Not all corporations,
which are not government owned or controlled, are ipso facto to be considered
private corporations as there exists another distinct class of corporations or chartered
institutions which are otherwise known as “public corporations.” These corporations
are treated by law as agencies or instrumentalities of the government which are not
subject to the tests of ownership or control and economic viability but to different
criteria relating to their public purposes/interests or constitutional policies and
objectives and their administrative relationship to the government or any of its
Departments or Offices.
Classification of Corporations Under Section 16, Article XII of the Constitution
on National Economy and Patrimony
The dissenting opinion of Associate Justice Antonio T. Carpio, citing a line of
cases, insists that the Constitution recognizes only two classes of
corporations: private corporations under a generallaw, and government-owned or
controlled corporations created by special charters.
We strongly disagree. Section 16, Article XII should not be construed so as to
prohibit Congress from creating public corporations. In fact, Congress has enacted
numerous laws creating public corporations or government agencies or
instrumentalities vested with corporate powers. Moreover, Section 16, Article XII,
which relates to National Economy and Patrimony, could not have tied the hands of
Congress in creating public corporations to serve any of the constitutional policies or
objectives. In his dissent, Justice Carpio contends that this ponente introduces “a
totally different species of corporation, which is neither a private corporation nor a
government owned or controlled corporation” and, in so doing, is missing the fact that
the BSP, “which was created as a non-stock, non-profit corporation, can only be
either a private corporation or a government owned or controlled corporation.”
Note that in Boy Scouts of the Philippines v. National Labor Relations
Commission, the BSP, under its former charter, was regarded as both a government
owned or controlled corporation with original charter and a “public corporation.” The
said case pertinently stated:
“While the BSP may be seen to be a mixed type of entity, combining
aspects of both public and private entities, we believe that considering the
character of its purposes and its functions, the statutory designation of the BSP as
“a public corporation” and the substantial participation of the Government in the
selection of members of the National Executive Board of the BSP, the BSP, as
presently constituted under its charter, is a government-controlled
corporation within the meaning of Article IX (B) (2) (1) of the Constitution.
We are fortified in this conclusion when we note that the Administrative Code
of 1987 designates the BSP as one of the attached agencies of the Department of
Education, Culture and Sports (“DECS”). An “agency of the Government” is
defined as referring to any of the various units of the Government including a
department, bureau, office, instrumentality, government-owned or -controlled
corporation, or local government or distinct unit therein. “Government
instrumentality” is in turn defined in the 1987 Administrative Code in the following
manner:
Instrumentality—refers to any agency of the National Government, not
integrated within the department framework, vested with special functions or
jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy usually through a
charter. This term includes regulatory agencies, chartered institutions and
government-owned or controlled corporations.
The same Code describes a “chartered institution” in the following terms:
Chartered institution—refers to any agency organized or operating under a
special charter, and vested by law with functions relating to specific constitutional
policies or objectives. This term includes the state universities and colleges, and
the monetary authority of the State.
We believe that the BSP is appropriately regarded as “a government
instrumentality” under the 1987 Administrative Code.
It thus appears that the BSP may be regarded as both a “government
controlled corporation with an original charter” and as an “instrumentality”
of the Government within the meaning of Article IX (B) (2) (1) of the
Constitution. x x x.” (Emphases supplied.)
The existence of public or government corporate or juridical entities or chartered
institutions by legislative fiat distinct from private corporations and government owned
or controlled corporation is best exemplified by the 1987 Administrative Code cited
above, which we quote in part:
“Sec. 2. General Terms Defined.—Unless the specific words of the text, or
the context as a whole, or a particular statute, shall require a different meaning:
xxxx
(10) “Instrumentality” refers to any agency of the National Government, not
integrated within the department framework, vested with special functions or
jurisdiction by law, endowed with some if not all corporate
powers, administering special funds, and enjoying operational autonomy,
usually through a charter. This term includes regulatory agencies, chartered
institutions and government-owned or controlled corporations.
xxxx
(12) “Chartered institution” refers to any agency organized or operating
under a special charter, and vested by law with functions relating to specific
constitutional policies or objectives. This term includes the state universities
and colleges and the monetary authority of the State.
(13) “Government-owned or controlled corporation”
refers to any agency organized as a stock or non-stock corporation, vested with
functions relating to public needs whether governmental or proprietary in
 nature, and owned by the Government directly or through its instrumentalities
either wholly, or, where applicable as in the case of stock corporations, to the
extent of at least fifty-one (51) per cent of its capital stock: Provided, That
government-owned or controlled corporations may be further categorized by
the Department of the Budget, the Civil Service Commission, and the
Commission on Audit for purposes of the exercise and discharge of their
respective powers, functions and responsibilities with respect to such
corporations.”
Assuming for the sake of argument that the BSP ceases to be owned or
controlled by the government because of reduction of the number of
representatives of the government in the BSP Board, it does not follow that it also
ceases to be a government instrumentality as it still retains all the characteristics
of the latter as an attached agency of the DECS under the Administrative Code.
Vesting corporate powers to an attached agency or instrumentality of the
government is not constitutionally prohibited and is allowed by the above-
mentioned provisions of the Civil Code and the 1987 Administrative Code.
Economic Viability and Ownership and Control Tests Inapplicable to Public
Corporations
As presently constituted, the BSP still remains an instrumentality of the national
government. It is a public corporation created by law for a public purpose, attached to
the DECS pursuant to its Charter and the Administrative Code of 1987. It is not a
private corporation which is required to be owned or controlled by the government
and be economically viable to justify its existence under a special law.
The dissent of Justice Carpio also submits that by recognizing “a new class of
public corporation(s)” created by special charter that will not be subject to the test of
economic viability, the constitutional provision will be circumvented.
However, a review of the Record of the 1986 Constitutional Convention reveals
the intent of the framers of the highest law of our land to distinguish
between government corporations performing governmental functions and
corporations involved in business or proprietary functions:
THE PRESIDENT. Commissioner Foz is recognized.
MR. FOZ. Madam President, I support the proposal to insert “ECONOMIC
VIABILITY” as one of the grounds for organizing government corporations. x x x.
MR. OPLE. Madam President, the reason for this concern is really that when
the government creates a corporation, there is a sense in which this corporation
becomes exempt from the test of economic performance. We know what
happened in the past. If a government corporation loses, then it makes its claim
upon the taxpayers’ money through new equity infusions from the government and
what is always invoked is the common good. x x x
Therefore, when we insert the phrase “ECONOMIC VIABILITY” together with
the “common good,” this becomes a restraint on future enthusiasts for state
capitalism to excuse themselves from the responsibility of meeting the market test
so that they become viable. x x x.
xxxx
THE PRESIDENT. Commissioner Quesada is recognized.
MS. QUESADA. Madam President, may we be clarified by the committee on
what is meant by economic viability?
THE PRESIDENT. Please proceed.
MR. MONSOD. Economic viability normally is determined by cost-benefit ratio
that takes into consideration all benefits, including economic external as well as
internal benefits. These are what they call externalities in economics, so that these
are not strictly financial criteria. Economic viability involves what we call economic
returns or benefits of the country that are not quantifiable in financial terms. x x x.
xxxx
MS. QUESADA. So, would this particular formulation now really limit the entry
of government corporations into activities engaged in by corporations?
MR. MONSOD. Yes, because it is also consistent with the economic
philosophy that this Commission approved—that there should be minimum
government participation and intervention in the economy.
MS. QUESDA. Sometimes this Commission would just refer to Congress to
provide the particular requirements when the government would get into
corporations. But this time around, we specifically mentioned economic viability.
x x x.
MR. VILLEGAS. Commissioner Ople will restate the reason for his introducing
that amendment.
MR. OPLE. I am obliged to repeat what I said earlier in moving for this
particular amendment jointly with Commissioner Foz. During the past three
decades, there had been a proliferation of government corporations, very few of
which have succeeded, and many of which are now earmarked by the Presidential
Reorganization Commission for liquidation because they failed the economic test.
x x x.
xxxx
MS. QUESADA. But would not the Commissioner say that the reason why
many of the government-owned or controlled corporations failed to come up with
the economic test is due to the management of these corporations, and not the
idea itself of government corporations? It is a problem of efficiency and
effectiveness of management of these corporations which could be remedied, not
by eliminating government corporations or the idea of getting into state-owned
corporations, but improving management which our technocrats should be able to
do, given the training and the experience.
MR. OPLE. That is part of the economic viability, Madam President.
MS. QUESADA. So, is the Commissioner saying then that the Filipinos will
benefit more if these government-controlled corporations were given to private
hands, and that there will be more goods and services that will be affordable and
within the reach of the ordinary citizens?
MR. OPLE. Yes. There is nothing here, Madam President, that will
prevent the formation of a government corporation in accordance with a
special charter given by Congress. However, we are raising the standard a
little bit so that, in the future, corporations established by the government
will meet the test of the common good but within that framework we should
also build a certain standard of economic viability.
xxxx
THE PRESIDENT. Commissioner Padilla is recognized.
 MR. PADILLA. This is an inquiry to the committee. With regard to corporations
created by a special charter for government-owned or controlled corporations, will
these be in the pioneer fields or in places where the private enterprise does not or
cannot enter? Or is this so general that these government corporations can
compete with private corporations organized under a general law?
MR. MONSOD. Madam President, x x x. There are two types of
government corporations—those that are involved in performing
governmental functions, like garbage disposal, Manila waterworks, and so on;
and those government corporations that are involved in business functions. As
we said earlier, there are two criteria that should be followed for corporations
that want to go into business. First is for government corporations to first prove
that they can be efficient in the areas of their proper functions. This is one of the
problems now because they go into all kinds of activities but are not even efficient
in their proper functions. Secondly, they should not go into activities that the
private sector can do better.
MR. PADILLA. There is no question about corporations performing
governmental functions or functions that are impressed with public interest.
But the question is with regard to matters that are covered, perhaps not
exhaustively, by private enterprise. It seems that under this provision the only
qualification is economic viability and common good, but shall government,
through government-controlled corporations, compete with private enterprise?
MR. MONSOD. No, Madam President. As we said, the government should not
engage in activities that private enterprise is engaged in and can do better. x x x.
(Emphases supplied.)
Thus, the test of economic viability clearly does not apply to public corporations
dealing with governmental functions, to which category the BSP belongs. The
discussion above conveys the constitutional intent not to apply this constitutional ban
on the creation of public corporations where the economic viability test would be
irrelevant. The said test would only apply if the corporation is engaged in some
economic activity or business function for the government.
It is undisputed that the BSP performs functions that are impressed with public
interest. In fact, during the consideration of the Senate Bill that eventually became
Republic Act No. 7278, which amended the BSP Charter, one of the bill’s sponsors,
Senator Joey Lina, described the BSP as follows:
“Senator Lina. Yes, I can only think of two organizations involving the masses
of our youth, Mr. President, that should be given this kind of a privilege—the Boy
Scouts of the Philippines and the Girl Scouts of the Philippines. Outside of these
two groups, I do not think there are other groups similarly situated.
The Boy Scouts of the Philippines has a long history of providing value
formation to our young, and considering how huge the population of the
young people is, at this point in time, and also considering the importance
of having an organization such as this that will inculcate moral uprightness
among the young people, and further considering that the development of
these young people at that tender age of seven to sixteen is vital in the
development of the country producing good citizens, I believe that we can
make an exception of the Boy Scouting movement of the Philippines from this
general prohibition against providing tax exemption and privileges.”
Furthermore, this Court cannot agree with the dissenting opinion which equates
the changes introduced by Republic Act No. 7278 to the BSP Charter as clear
manifestation of the intent of Congress “to return the BSP to the private sector.” It was
not the intent of Congress in enacting Republic Act No. 7278 to give up all interests in
this basic youth organization, which has been its partner in forming responsible
citizens for decades.
In fact, as may be seen in the deliberation of the House Bills that eventually
resulted to Republic Act No. 7278, Congress worked closely with the BSP to
rejuvenate the organization, to bring it back to its former glory reached under its
original charter, Commonwealth Act No. 111, and to correct the perceived ills
introduced by the amendments to its Charter under Presidential Decree No. 460. The
BSP suffered from low morale and decrease in number because the Secretaries of
the different departments in government who were too busy to attend the meetings of
the BSP’s National Executive Board (“the Board”) sent representatives who, as it
turned out, changed from meeting to meeting. Thus, the Scouting Councils
established in the provinces and cities were not in touch with what was happening on
the national level, but they were left to implement what was decided by the Board.
A portion of the legislators’ discussion is quoted below to clearly show their intent:
HON. DEL MAR. x x x I need not mention to you the value and the
tremendous good that the Boy Scout Movement has done not only for the
youth in particular but for the country in general. And that is why, if we look
around, our past and present national leaders, prominent men in the various
fields of endeavor, public servants in government offices, and civic leaders
in the communities all over the land, and not only in our country but all over
the world many if not most of them have at one time or another been
beneficiaries of the Scouting Movement. And so, it is along this line, Mr.
Chairman, that we would like to have the early approval of this measure if only to
pay back what we owe much to the Scouting Movement. Now, going to the meat
of the matter, Mr. Chairman, if I may just—the Scouting Movement was enacted
into law in October 31, 1936 under Commonwealth Act No. 111. x x x [W]e were
acknowledged as the third biggest scouting organization in the world x x x. And to
our mind, Mr. Chairman, this erratic growth and this decrease in membership
[number] is because of the bad policy measures that were enunciated with the
enactment or promulgation by the President before of Presidential Decree No. 460
which we feel is the culprit of the ills that is flagging the Boy Scout Movement today.
And so, this is specifically what we are attacking, Mr. Chairman, the
disenfranchisement of the National Council in the election of the national board.
x x x. And so, this is what we would like to be appraised of by the officers of the
Boy [Scouts] of the Philippines whom we are also confident, have the best interest
of the Boy Scout Movement at heart and it is in this spirit, Mr. Chairman, that we
see no impediment towards working together, the Boy Scout of the Philippines
officers working together with the House of Representatives in coming out with a
measure that will put back the vigor and enthusiasm of the Boy Scout Movement.
x x x.” (Emphasis ours.)
 The following is another excerpt from the discussion on the House version of the
bill, in the Committee on Government Enterprises:
HON. AQUINO: x x x Well, obviously, the two bills as well as the previous laws
that have created the Boy Scouts of the Philippines did not provide for any direct
government support by way of appropriation from the national budget to support
the activities of this organization. The point here is, and at the same time they have
been subjected to a governmental intervention, which to their mind has been
inimical to the objectives and to the institution per se, that is why they are seeking
legislative fiat to restore back the original mandate that they had under
Commonwealth Act 111. Such having been the experience in the hands of
government, meaning, there has been negative interference on their part and
inasmuch as their mandate is coming from a legislative fiat, then shouldn’t
it be, this rhetorical question, shouldn’t it be better for this organization to
seek a mandate from, let’s say, the government the Corporation Code of the
Philippines and register with the SEC as non-profit non-stock corporation so
that government intervention could be very very minimal. Maybe that’s a
rhetorical question, they may or they may not answer, ano. I don’t know what would
be the benefit of a charter or a mandate being provided for by way of legislation
versus a registration with the SEC under the Corporation Code of the Philippines
inasmuch as they don’t get anything from the government anyway insofar as direct
funding. In fact, the only thing that they got from government was intervention in
their affairs. Maybe we can solicit some commentary comments from the resource
persons. Incidentally, don’t take that as an objection, I’m not objecting. I’m all for
the objectives of these two bills. It just occurred to me that since you have had very
bad experience in the hands of government and you will always be open to such
possible intervention even in the future as long as you have a legislative mandate
or your mandate or your charter coming from legislative action.
xxxx
MR. ESCUDERO: Mr. Chairman, there may be a disadvantage if the Boy
Scouts of the Philippines will be required to register with the SEC. If we are
registered with the SEC, there could be a danger of proliferation of scout
organization. Anybody can organize and then register with the SEC. If there will be
a proliferation of this, then the organization will lose control of the entire
organization. Another disadvantage, Mr. Chairman, anybody can file a complaint
in the SEC against the Boy Scouts of the Philippines and the SEC may suspend
the operation or freeze the assets of the organization and hamper the operation of
the organization. I don’t know, Mr. Chairman, how you look at it but there could be
a danger for anybody filing a complaint against the organization in the SEC and
the SEC might suspend the registration permit of the organization and we will not
be able to operate.
HON. AQUINO: Well, that I think would be a problem that will not be exclusive
to corporations registered with the SEC because even if you are government
corporation, court action may be taken against you in other judicial bodies because
the SEC is simply another quasi-judicial body. But, I think, the first point would
be very interesting, the first point that you raised. In effect, what you are
saying is that with the legislative mandate creating your charter, in effect,
you have been given some sort of a franchise with this movement.
MR. ESCUDERO: Yes.
HON. AQUINO: Exclusive franchise of that movement?
MR. ESCUDERO: Yes.
HON. AQUINO: Well, that’s very well taken so I will proceed with other
issues, Mr. Chairman. x x x. (Emphases added.)
Therefore, even though the amended BSP charter did away with most of the
governmental presence in the BSP Board, this was done to more strongly promote
the BSP’s objectives, which were not supported under Presidential Decree No. 460.
The BSP objectives, as pointed out earlier, are consistent with the public purpose of
the promotion of the well-being of the youth, the future leaders of the country. The
amendments were not done with the view of changing the character of the BSP into a
privatized corporation. The BSP remains an agency attached to a department of the
government, the DECS, and it was not at all stripped of its public character.
The ownership and control test is likewise irrelevant for a public corporation like
the BSP. To reiterate, the relationship of the BSP, an attached agency, to the
government, through the DECS, is defined in the Revised Administrative Code of
1987. The BSP meets the minimum statutory requirement of an attached government
agency as the DECS Secretary sits at the BSP Board ex officio, thus facilitating the
policy and program coordination between the BSP and the DECS.
Requisites for Declaration of Unconstitutionality Not Met in this Case
The dissenting opinion of Justice Carpio improperly raised the issue of
unconstitutionality of certain provisions of the BSP Charter. Even if the parties were
asked to Comment on the validity of the BSP charter by the Court, this alone does
not comply with the requisites for judicial review, which were clearly set forth in a
recent case:
“When questions of constitutional significance are raised, the Court can
exercise its power of judicial review only if the following requisites are present: (1)
the existence of an actual and appropriate case; (2) the existence of personal
and substantial interest on the part of the party raising the constitutional
question; (3) recourse to judicial review is made at the earliest opportunity;
and (4) the constitutional question is the lis mota of the case.” (Emphasis
added.)
Thus, when it comes to the exercise of the power of judicial review, the
constitutional issue should be the very lis mota, or threshold issue, of the case, and
that it should be raised by either of the parties. These requirements would be ignored
under the dissent’srather overreaching view of how this case should have been
decided. True, it was the Court that asked the parties to comment, but the Court
cannot be the one to raise a constitutional issue. Thus, the Court chooses to once
more exhibit restraint in the exercise of its power to pass upon the validity of a law.
Re: the COA’s Jurisdiction
Regarding the COA’s jurisdiction over the BSP, Section 8 of its amended charter
allows the BSP to receive contributions or donations from the government. Section 8
reads:
 “Section 8. Any donation or contribution which from time to time may
be made to the Boy Scouts of the Philippines by the Government or any of
its subdivisions, branches, offices, agencies or instrumentalities shall be
expended by the Executive Board in pursuance of this Act.”
The sources of funds to maintain the BSP were identified before the House
Committee on Government Enterprises while the bill was being deliberated, and the
pertinent portion of the discussion is quoted below:
“MR. ESCUDERO. Yes, Mr. Chairman. The question is the sources of funds
of the organization. First, Mr. Chairman, the Boy Scouts of the Philippines do not
receive annual allotment from the government. The organization has to raise its
own funds through fund drives and fund campaigns or fund raising activities. Aside
from this, we have some revenue producing projects in the organization that gives
us funds to support the operation. x x x From time to time, Mr. Chairman, when we
have special activities we request for assistance or financial assistance from
government agencies, from private business and corporations, but this is only
during special activities that the Boy Scouts of the Philippines would conduct
during the year. Otherwise, we have to raise our own funds to support the
organization.”
The nature of the funds of the BSP and the COA’s audit jurisdiction were likewise
brought up in said congressional deliberations, to wit:
HON. AQUINO: x x x Insofar as this organization being a government created
organization, in fact, a government corporation classified as such, are your funds
or your finances subjected to the COA audit?
MR. ESCUDERO: Mr. Chairman, we are not. Our funds is not subjected. We
don’t fall under the jurisdiction of the COA.
HON. AQUINO: All right, but before were you?
MR. ESCUDERO: No, Mr. Chairman.
MR. JESUS: May I? As historical backgrounder, Commonwealth Act 111 was
written by then Secretary Jorge Vargas and before and up to the middle of the
Martial Law years, the BSP was receiving a subsidy in the form of an annual… a
one draw from the Sweepstakes. And, this was the case also with the Girl Scouts
at the Anti-TB, but then this was… and the Boy Scouts then because of this
funding partly from government was being subjected to audit in the
contributions being made in the part of the Sweepstakes. But this was
removed later during the Martial Law years with the creation of the Human
Settlements Commission. So the situation right now is that the Boy Scouts does
not receive any funding from government, but then in the case of the local councils
and this legislative charter, so to speak, enables the local councils even the
national headquarters in view of the provisions in the existing law to receive
donations from the government or any of its instrumentalities, which would be
difficult if the Boy Scouts is registered as a private corporation with the Securities
and Exchange Commission. Government bodies would be estopped from making
donations to the Boy Scouts, which at present is not the case because there is the
Boy Scouts charter, this Commonwealth Act 111 as amended by PD 463.
xxxx
HON. AMATONG: Mr. Chairman, in connection with that.
THE CHAIRMAN: Yeah, Gentleman from Zamboanga.
HON. AMATONG: There is no auditing being made because there’s no money
put in the organization, but how about donated funds to this organization? What
are the remedies of the donors of how will they know how their money are being
spent?
MR. ESCUDERO: May I answer, Mr. Chairman?
THE CHAIRMAN: Yes, gentleman.
MR. ESCUDERO: The Boy Scouts of the Philippines has an external auditor
and by the charter we are required to submit a financial report at the end of each
year to the National Executive Board. So all the funds donated or otherwise is
accounted for at the end of the year by our external auditor. In this case the SGV.
Historically, therefore, the BSP had been subjected to government audit in so far
as public funds had been infused thereto. However, this practice should not preclude
the exercise of the audit jurisdiction of COA, clearly set forth under the Constitution,
which pertinently provides:
“Section 2. (1) The Commission on Audit shall have the power,
authority, and duty to examine, audit, and settle all accounts pertaining to
the revenue and receipts of, and expenditures or uses of funds and property,
owned or held in trust by, or pertaining to, the Government, or any of its
subdivisions, agencies, or instrumentalities, including government-owned
and controlled corporations with original charters, and on a post-audit basis:
(a) constitutional bodies, commissions and offices that have been granted fiscal
autonomy under this Constitution; (b) autonomous state colleges and universities;
(c) other government-owned or controlled corporations with original charters and
their subsidiaries; and (d) such non-governmental entities receiving subsidy or
equity, directly or indirectly, from or through the Government, which are required
by law of the granting institution to submit to such audit as a condition of subsidy
or equity. x x x.”
Since the BSP, under its amended charter, continues to be a public corporation or
a government instrumentality, we come to the inevitable conclusion that it is subject to
the exercise by the COA of its audit jurisdiction in the manner consistent with the
provisions of the BSP Charter.
WHEREFORE, premises considered, the instant petition for prohibition is
DISMISSED.
SO ORDERED.
Note.—The Commission on Audit (COA) is endowed with enough latitude to determine,
prevent and disallow irregular, unnecessary, excessive, extravagant or unconscionable
expenditures of government funds. (Sanchez vs. Commission on Audit, 552 SCRA 471 [2008])
——o0o——
 G.R. No. 80391. February 28, 1989.
SULTAN ALIMBUSAR P. LIMBONA, petitioner, vs. CONTE MANGELIN, SALIC ALI,
SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS, GERRY TOMAWIS,
JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAKIL
DAGALANGIT, and BIMBO SINSUAT, respondents.
Constitutional Law; Due Process in Administrative Proceedings;Access to Judicial
Remedies; No one may be punished for seeking redress in the courts, unless the recourse
amounts to malicious prosecution.—In the second place, the resolution appears strongly to be a
bare act of vendetta by the other Assemblyman against the petitioner arising from what the
former perceive to be obduracy on the part of the latter. Indeed, it (the resolution) speaks of “a
case [having been filed] [by the petitioner] before the Supreme Court . . . on question which
should have been resolved within the confines of the Assembly—an act which some members
claimed unnecessarily and unduly assails their integrity and character as representative of the
people,” an act that cannot possibly justify expulsion. Access to judicial remedies is guaranteed
by the Constitution, and, unless the recourse amounts to malicious prosecution, no one may be
punished for seeking redress in the courts.
Same; Autonomous Regions; Administrative Law; The autonomous governments of
Mindanao are subject to the jurisdiction of our national courts.—An examination of the very
Presidential Decree creating the autonomous governments of Mindanao persuades us that they
were never meant to exercise autonomy in the second sense, that is, in which the central
government commits an act of self-immolation. Presidential Decree No. 1618, in the first place,
mandates that “[t]he President shall have the power of general supervision and control over
Autonomous Regions.” In the second place, the Sangguniang Pampook, their legislative arm, is
made to discharge chiefly administrative services. x x x Hence, we assume jurisdiction. And if
we can make an inquiry in the validity of the expulsion in question, with more reason can we
review the petitioner’s removal as Speaker.
Same; Same; Same; Decentralization; Autonomy is either decentralization of
administration or decentralization of power.—Now, autonomy is either decentralization of
administration or decentralization of power. There is decentralization of administration when the
central government delegates administrative powers to political subdivision in order to broaden
the base of government power and in the process to make local governments “more responsive
and accountable,” and “ensure their fullest development as self-reliant communities and make
them more effective partners in the pursuit of national development and social progress.” At the
same time, it relieves the central government of the burden of managing local affairs and
enables it to concentrate on national concerns. The President exercises “general supervision”
over them, but only to “ensure that local affairs are administered according to law.” He has no
control over their acts in the sense that he can substitute their judgments with his own.
Same; Same; Same; Same; Same; Decentralization of power involves an abdication of
political power in favor of local government units declared to be autonomous.—Decentralization
of power, on the other hand, involves an abdication of political power in favor of local
government units declared to be autonomous. In that case, the autonomous government is free
to chart its own destiny and shape its future with minimum intervention from central authorities.
According to a constitutional author, decentralization of power amounts to “self-immolation,”
since in that event, the autonomous government becomes accountable not to the central
authorities but to its constituency.
SARMIENTO, J.:
The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The
antecedent facts are as follows:
1.On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a
member of the Sangguniang Pampook, Regional Autonomous Government, Region
XII, representing Lanao del Sur.
2.On March 12, 1987 petitioner was elected Speaker of the Regional Legislative
Assembly or Batasang Pampook of Central Mindanao (Assembly for brevity).
3.Said Assembly is composed of eighteen (18) members. Two of said members,
respondents Acmad Tomawis and Rakil Dagalangit, filed on March 23, 1987 with the
Commission on Elections their respective certificates of candidacy in the May 11,
1987 congressional elections for the district of Lanao del Sur but they later withdrew
from the aforesaid election and thereafter resumed again their positions as members
of the Assembly.
4.On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the
Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier
Razul, Pampook Speaker of Region XI, Zamboanga City and the petitioner in his
capacity as Speaker of the Assembly, Region XII, in a letter which reads:
The Committee on Muslim Affairs will undertake consultations and dialogues with
local government officials, civic, religious organizations and traditional leaders on
the recent and present political developments and other issues affecting Regions
IX and XII.
The result of the conference, consultations and dialogues would hopefully
chart the autonomous governments of the two regions as envisioned and may prod
the President to constitute immediately the Regional Consultative Commission as
mandated by the Commission.
You are requested to invite some members of the Pampook Assembly of your
respective assembly on November 1 to 15, 1987, with venue at the Congress of
the Philippines. Your presence, unstinted support and cooperation is (sic)
indispensable.
5.Consistent with the said invitation, petitioner sent a telegram to Acting Secretary
Johnny Alimbuyao of the Assembly to wire all Assemblymen that there shall be no
session in November as “our presence in the house committee hearing of Congress
take (sic) precedence over any pending business in batasang pampook x x x.”
6.In compliance with the aforesaid instruction of the petitioner, Acting Secretary
Alimbuyao sent to the members of the Assembly the following telegram:
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM
RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY
MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS
REQUESTED ME TO ASSIST SAID COMMITTEE IN THE DISCUSSION OF THE
PROPOSED AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WIRE ALL
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN NOVEMBER AS
 OUR PRESENCE IN THE HOUSE COMMITTEE HEARING OF CONGRESS Secretary in the session last November 2, 1987 be reconfirmed in today’s
TAKE PRECEDENCE OVER ANY PENDING BUSINESS IN BATASANG session.
PAMPOOK OF MATALAM FOLLOWS UNQUOTE REGARDS. HON. SALIC ALI: I second the motions.
PRESIDING OFFICER: Any comment or objections on the two motions
7.On November 2, 1987, the Assembly held session in defiance of petitioner’s advice, presented? The chair hears none and the said motions are approved. x x x.
with the following assemblymen present: Twelve (12) members voted in favor of the motion to declare the seat of
1.Sali, Salic the Speaker vacant; one abstained and none voted against.
2.Conding, Pilipinas (sic)
3.Dagalangit, Rakil Accordingly, the petitioner prays for judgment as follows:
4.Dela Fuente, Antonio WHEREFORE, petitioner respectfully prays that—
5.Mangelen, Conte (a)This Petition be given due course;
6.Ortiz, Jesus (b)Pending hearing, a restraining order or writ of preliminary injunction be
7.Palomares, Diego issued enjoining respondents from proceeding with their session to be held
8.Sinsuat, Bimbo on November 5, 1987, and on any day thereafter;
9.Tomawis, Acmad (c)After hearing, judgment be rendered declaring the proceedings held by
10.Tomawis, Jerry respondents of their session on November 2, 1987 as null and void;
(d)Holding the election of petitioner as Speaker of said Legislative Assembly
After declaring the presence of a quorum, the Speaker Pro-Tempore was or Batasan Pampook, Region XII held on March 12, 1987 valid and
subsisting; and
authorized to preside in the session. On Motion to declare the seat of the Speaker
(e)Making the injunction permanent.
vacant, all Assemblymen in attendance voted in the affirmative, hence, the chair Petitioner likewise prays for such other relief as may be just and equitable.
declared said seat of the Speaker vacant.
Pending further proceedings, this Court, on January 19, 1988, received a resolution
8.On November 5, 1987, the session of the Assembly resumed with the following filed by the Sangguniang Pampook, “EXPELLING ALIMBUSAR P. LIMBONA FROM
Assemblymen present: MEMBERSHIP OF THE SANGGUNIANG PAMPOOK, AUTONOMOUS REGION XII,”
1.Mangelen Conte—Presiding Officer on the grounds, among other things, that the petitioner “had caused to be prepared
2.Ali Salic and signed by him paying [sic] the salaries and emoluments of Odin Abdula, who was
3.Ali Salindatu considered resigned after filing his Certificate of Candidacy for Congressmen for the
4.Aratuc, Malik First District of Maguindanao in the last May 11, elections . . . and nothing in the
5.Cajelo, Rene record of the Assembly will show that any request for reinstatement by Abdula was
6.Conding, Pilipinas (sic) ever made . . .” and that “such action of Mr. Limbona in paying Abdula his salaries
7.Dagalangit, Rakil and emoluments without authority from the Assembly . . . constituted a usurpation of
8.Dela Fuente, Antonio the power of the Assembly,” that the petitioner “had recently caused withdrawal of so
9.Ortiz, Jesus much amount of cash from the Assembly resulting to the non-payment of the salaries
10.Palamares, Diego and emoluments of some Assembly [sic],” and that he had “filed a case before the
11.Quijano, Jesus Supreme Court against some members of the Assembly on question which should
12.Sinsuat, Bimbo have been resolved within the confines of the Assembly,” for which the respondents
13.Tomawis, Acmad now submit that the petition had become “moot and academic”.
14.Tomawis, Jerry
The first question, evidently, is whether or not the expulsion of the petitioner
An excerpt from the debates and proceeding of said session reads: (pending litigation) has made the case moot and academic.
HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the
presence of our colleagues who have come to attend the session today, I
move to call the names of the new comers in order for them to cast their votes
We do not agree that the case has been rendered moot and academic by reason
on the previous motion to declare the position of the Speaker vacant. But simply of the expulsion resolution so issued. For, if the petitioner’s expulsion was
before doing so, I move also that the designation of the Speaker Pro done purposely to make this petition moot and academic, and to preempt the Court, it
Tempore as the Presiding Officer and Mr. Johnny Evangelista as Acting will not make it academic.
 On the ground of the immutable principle of due process alone, we hold that the
expulsion in question is of no force and effect. In the first place, there is no showing
that the Sanggunian had conducted an investigation, and whether or not the petitioner
had been heard in his defense, assuming that there was an investigation, or
otherwise given the opportunity to do so. On the other hand, what appears in the
records is an admission by the Assembly (at least, the respondents) that “since
November, 1987 up to this writing, the petitioner has not set foot at the Sangguniang
Pampook.” To be sure, the private respondents aver that “[t]he Assemblymen, in a
conciliatory gesture, wanted him to come to Cotabato City,” but that was “so that their
differences could be threshed out and settled.” Certainly, that avowed wanting or
desire to thresh out and settle, no matter how conciliatory it may be cannot be a
substitute for the notice and hearing contemplated by law.
While we have held that due process, as the term is known in administrative law,
does not absolutely require notice and that a party need only be given the opportunity
to be heard, it does not appear herein that the petitioner had, to begin with, been
made aware that he had in fact stood charged of graft and corruption before his
collegues. It cannot be said therefore that he was accorded any opportunity to rebut
their accusations. As it stands, then, the charges now levelled amount to mere
accusations that cannot warrant expulsion.
In the second place, the resolution appears strongly to be a bare act of vendetta
by the other Assemblymen against the petitioner arising from what the former
perceive to be abduracy on the part of the latter. Indeed, it (the resolution) speaks of
“a case [having been filed] [by the petitioner] before the Supreme Court . . . on
question which should have been resolved within the confines of the Assembly—an
act which some members claimed unnecessarily and unduly assails their integrity and
character as representative of the people,” an act that cannot possibly justify
expulsion. Access to judicial remedies is guaranteed by the Constitution, and, unless
the recourse amounts to malicious prosecution, no one may be punished for seeking
redress in the courts.
We therefore order reinstatement, with the caution that should the past acts of the
petitioner indeed warrant his removal, the Assembly is enjoined, should it still be so
minded, to commence proper proceedings therefor in line with the most elementary
requirements of due process. And while it is within the discretion of the members of
the Sanggunian to punish their erring colleagues, their acts are nonetheless subject
to the moderating hand of this Court in the event that such discretion is exercised with
grave abuse.
It is, to be sure, said that precisely because the Sangguniang Pampook(s) are
“autonomous,” the courts may not rightfully intervene in their affairs, much less strike
down their acts. We come, therefore, to the second issue: Are the so-called
autonomous governments of Mindanao, as they are now constituted, subject to the
jurisdiction of the national courts? In other words, what is the extent of self-
government given to the two autonomous governments of Region IX and XII?
The autonomous governments of Mindanao were organized in Regions IX and XII
by Presidential Decree No. 1618 promulgated on July 25, 1979. Among other things,
the Decree established “internal autonomy” in the two regions “[w]ithin the framework
of the national sovereignty and territorial integrity of the Republic of the Philippines
and its Constitution,” “with legislative and executive machinery to exercise the powers
and responsibilites” specified therein. It requires the autonomous regional
governments to “undertake all internal administrative matters for the respective
regions,” except to “act on matters which are within the jurisdiction and competence of
the National Government,” “which include, but are not limited to, the following:
(1)National defense and security;
(2)Foreign relations;
(3)Foreign trade;
(4)Currency, monetary affairs, foreign exchange, banking and quasi-banking, and
external borrowing;
(5)Disposition, exploration, development, exploitation or utilization of all natural
resources;
(6)Air and sea transport;
(7)Postal matters and telecommunications;
(8)Customs and quarantine;
(9)Immigration and deportation;
(10)Citizenship and naturalization;
(11)National economic, social and educational planning; and
(12)General auditing.”
In relation to the central government, it provides that “[t]he President shall have the
power of general supervision and control over the Autonomous Regions xxx.”
Now, autonomy is either decentralization of administration or decentralization of
power. There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the base
of government power and in the process to make local governments “more
responsive and accountable,” and “ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress.” At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises “general supervision” over them, but only
to “ensure that local affairs are administered according to law.” He has no control over
their acts in the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of political
power in the favor of local governments units declared to be autonomous. In that
case, the autonomous government is free to chart its own destiny and shape its future
with minimum intervention from central authorities. According to a constitutional
author, decentralization of power amounts to “self-immolation,” since in that event, the
autonomous government becomes accountable not to the central authorities but to its
constituency.
But the question of whether or not the grant of autonomy to Muslim Mindanao
under the 1987 Constitution involves, truly, an effort to decentralize power rather than
mere administration is a question foreign to this petition, since what is involved herein
is a local government unit constituted prior to the ratification of the present
Constitution. Hence, the Court will not resolve that controversy now, in this case,
since no controversy in fact exists. We will resolve it at the proper time and in the
proper case.
Under the 1987 Constitution, local government units enjoy autonomy in these two
senses, thus:
Section 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. There shall be
autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter
provided.
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
xxx xxx xxx
Sec. 15. There shall be created autonomous regions in Muslim Mindanao and
in the Cordilleras consisting of provinces, cities, municipalities, and geographical
areas sharing common and distinctive historical and cultural heritage, economic
and social structures, and other relevant characteristics within the framework of
this Constitution and the national sovereignty as well as territorial integrity of the
Republic of the Philippines.
An autonomous government that enjoys autonomy of the latter category [CONST.
(1987), art. X, sec. 15.] is subject alone to the decree of the organic act creating it and
accepted principles on the effects and limits of “autonomy.” On the other hand, an
autonomous government of the former class is, as we noted, under the supervision of
the national government acting through the President (and the Department of Local
Government). If the Sangguniang Pampook (of Region XII), then, is autonomous in
the latter sense, its acts are, debatably, beyond the domain of this Court in perhaps
the same way that the internal acts, say, of the Congress of the Philippines are
beyond our jurisdiction. But if it is autonomous in the former category only, it comes
unarguably under our jurisdiction.
An examination of the very Presidential Decree creating the autonomous
governments of Mindanao persuades us that they were never meant to exercise
autonomy in the second sense, that is, in which the central government commits an
act of self-immolation. Presidential Decree No. 1618, in the first place, mandates that
“[t]he President shall have the power of general supervision and control over
Autonomous Regions.” In the second place, the Sangguniang Pampook, their
legislative arm, is made to discharge chiefly administrative services, thus:
SEC. 7. Powers of the Sangguniang Pampook.—The Sangguniang Pampook shall
exercise local legislative powers over regional affairs within the framework of national
development plans, policies and goals, in the following areas:
(1)Organization of regional administrative system;
(2)Economic, social and cultural development of the Autonomous Region;
(3)Agricultural, commercial and industrial programs for the Autonomous Region;
(4)Infrastructure development for the Autonomous Region;
(5)Urban and rural planning for the Autonomous Region;
(6)Taxation and other revenue-raising measures as provided for in this Decree;
(7)Maintenance, operation and administration of schools established by the Autonomous
Region;
(8)Establishment, operation and maintenance of health, welfare and other social services,
programs and facilities;
(9)Preservation and development of customs, traditions, languages and culture
indigenous to the Autonomous Region; and
(10)Such other matters as may be authorized by law, including the enactment of such
measures as may be necessary for the promotion of the general welfare of the people in
the Autonomous Region.
The President shall exercise such powers as may be necessary to assure that
enactment and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap ng
Pook are in compliance with this Decree, national legislation, policies, plans and programs.
The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa.
Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the
expulsion in question, with more reason can we review the petitioner’s removal as
Speaker.
Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds
that: (1) the Sanggunian, in convening on November 2 and 5, 1987 (for the sole
purpose of declaring the office of the Speaker vacant), did so in violation of the Rules
of the Sangguniang Pampook since the Assembly was then on recess; and (2)
assuming that it was valid, his ouster was ineffective nevertheless for lack of quorum.
Upon the facts presented, we hold that the November 2 and 5, 1987 sessions
were invalid. It is true that under Section 31 of the Region XII Sanggunian Rules,
“[s]essions shall not be suspended or adjourned except by direction of the
Sangguniang Pampook,” but it provides likewise that “the Speaker may, on [sic] his
discretion, declare a recess of “short intervals.” Of course, there is disagreement
between the protagonists as to whether or not the recess called by the petitioner
effective November 1 through 15, 1987 is the “recess of short intervals” referred to;
the petitioner says that it is while the respondents insist that, to all intents and
purposes, it was an adjournment and that “recess” as used by their Rules only refers
to “a recess when arguments get heated up so that protagonists in a debate can talk
things out informally and obviate dissenssion [sic] and disunity.” The Court agrees
with the respondents on this regard, since clearly, the Rules speak of “short intervals.”
Secondly, the Court likewise agrees that the Speaker could not have validly called a
recess since the Assembly had yet to convene on November 1, the date session
opens under the same Rules. Hence, there can be no recess to speak of that could
possibly interrupt any session. But while this opinion is in accord with the
respondents’ own, we still invalidate the twin sessions in question, since at the time
the petitioner called the “recess,” it was not a settled matter whether or not he could
do so. In the second place, the invitation tendered by the Committee on Muslim
Affairs of the House of Representatives provided a plausible reason for the
intermission sought. Thirdly, assuming that a valid recess could not be called, it does
not appear that the respondents called his attention to this mistake. What appears is
that instead, they opened the sessions themselves behind his back in an apparent act
of mutiny. Under the circumstances, we find equity on his side. For this reason, we
uphold the “recess” called on the ground of good faith.

It does not appear to us, moreover, that the petitioner had resorted to the
aforesaid “recess” in order to forestall the Assembly from bringing about his ouster.
This is not apparent from the pleadings before us. We are convinced that the
invitation was what precipitated it.

In holding that the “recess” in question is valid, we are not to be taken as

establishing a precedent, since, as we said, a recess can not be validly declared
without a session having been first opened. In upholding the petitioner herein, we are
not giving him a carte blanche to order recesses in the future in violation of the Rules,
or otherwise to prevent the lawful meetings thereof.

Neither are we, by this disposition, discouraging the Sanggunian from

reorganizing itself pursuant to its lawful prerogatives. Certainly, it can do so at the
proper time. In the event that he petitioner should initiate obstructive moves, the Court
is certain that it is armed with enough coercive remedies to thwart them.

In view hereof, we find no need in dwelling on the issue of quorum.

WHEREFORE, premises considered, the petition is GRANTED. The

Sangguniang Pampook, Region XII, is ENJOINED to (1) REINSTATE the petitioner
as Member, Sangguniang Pampook, Region XII; and (2) REINSTATE him as
Speaker thereof. No costs.
SO ORDERED.

Note.—Due process is also required in administrative proceedings. (Doruelo vs. Commission

on Elections, 133 SCRA 376.)

——o0o——
 G.R. No. 91649. May 14, 1991
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN
AND LORENZO SANCHEZ, petitioners, vs. PHILIPPINE AMUSEMENTS AND
GAMING CORPORATION (PAGCOR), respondent.
Constitutional Law; Taxation; Municipal Corporations; Municipal corporations have no
inherent power to tax; their power to tax must always yield to a legislative act.—The City of
Manila, being a mere Municipal corporation has no inherent right to impose taxes (Icard v. City
of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of
Caloocan, 7 SCRA 643). Thus, “the Charter or statute must plainly show an intent to confer that
power or the municipality cannot assume it” (Medina v. City of Baguio, 12 SCRA 62). Its “power
to tax” therefore must always yield to a legislative act which is superior having been passed
upon by the state itself which has the “inherent power to tax” (Bernas, the Revised [1973]
Philippine Constitution, Vol. 1, 1983 ed. p. 445).
Same; Same; Same; Same; Congress has the power of control over local governments; if
Congress can grant a municipal corporation the power to tax certain matters, it can also provide
for exemptions or even take back the power.—The Charter of the City of Manila is subject to
control by Congress. It should be stressed that “municipal corporations are mere creatures of
Congress” (Unson v. Lacson, G.R. No. 7909, January 18, 1957) which has the power to “create
and abolish municipal corporations” due to its “general legislative powers” (Asuncion v. Yriantes,
28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the power of control
over local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if Congress can
grant the City of Manila the power to tax certain matters, it can also provide for exemptions or
even take back the power.
Same; Same; Same; License Fees; The power of local governments to regulate gambling
thru the grant of franchises, licenses or permits was withdrawn by PD 771, it is now vested
exclusively on the National Government.—The City of Manila’s power to impose license fees on
gambling, has long been revoked. As early as 1975, the power of local governments to regulate
gambling thru the grant of “franchise, licenses or permits” was withdrawn by P.D. No. 771 and
was vested exclusively on the National Government. xxx xxx Therefore, only the National
Government has the power to issue “licenses or permits” for the operation of gambling.
Necessarily, the power to demand or collect license fees which is a consequence of the
issuance of “licenses or permits” is no longer vested in the City of Manila.
Same; Same; Same; Same; Local governments have no power to tax instrumentalities of
the National Government; PAGCOR, being an instrumentality of the Government, is therefore
exempt from local taxes.—Local governments have no power to tax instrumentalities of the
National Government. PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the National Government. xxx
xxx PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the Government.
Being an instrumentality of the Government, PAGCOR should be and actually is exempt from
local taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a
mere Local government. “The states have no power by taxation or otherwise, to retard, impede,
burden or in any manner control the operation of constitutional laws enacted by Congress to
carry into execution the powers vested in the federal government.” (MC Culloch v. Maryland, 4
Wheat 316, 4 L Ed. 579) This doctrine emanates from the “supremacy” of the National
Government over local governments. “Justice Holmes, speaking for the Supreme Court, made
reference to the entire absence of power on the part of the States to touch, in that way (taxation)
at least, the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can
be agreed that no state or political subdivision can regulate a federal instrumentality in such a
way as to prevent it from consummating its federal responsibilities, or even to seriously burden it
in the accomplishment of them.” (Antieau, Modern Constitutional Law, Vol. 2, p. 140, italics
supplied). Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using the power
to tax as “a tool for regulation” (U.S. v. Sanchez, 340 US 42). The power to tax which was called
by Justice Marshall as the “power to destroy” (Mc Culloch v. Maryland, supra) cannot be allowed
to defeat an instrumentality or creation of the very entity which has the inherent power to wield it.
Same; Same; Same; Same; The power of local government to impose taxes and fees is
always subject to limitations which Congress may provide by law.—The power of local
government to “impose taxes and fees” is always subject to “limitations” which Congress may
provide by law. Since PD 1869 remains an “operative” law until “amended, repealed or revoked”
(Sec. 3, Art. XVIII, 1987 Constitution), its “exemption clause” remains as an exception to the
exercise of the power of local governments to impose taxes and fees. It cannot therefore be
violative but rather is consistent with the principle of local autonomy.
Same; Same; Same; Local Autonomy; The principle of local autonomy does not make
local governments sovereign within the state, it simply means decentralization.—Besides, the
principle of local autonomy under the 1987 Constitution simply means “decentralization” (III
Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, the
Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make
local governments sovereign within the state or an “imperium in imperio.” Local Government has
been described as a political subdivision of a nation or state which is constituted by law and has
substantial control of local affairs. In a unitary system of government, such as the government
under the Philippine Constitution, local governments can only be an intra sovereign
subdivision of one sovereign nation, it cannot be an imperium in imperio. Local government in
such a system can only mean a measure of decentralization of the function of government.
(italics supplied)
Same; Equal Protection Clause; The “equal protection” clause does not preclude
classification of individuals who may be accorded different treatment under the law as long as
the classification is not unreasonable or arbitrary.—Petitioners next contend that P.D. 1869
violates the equal protection clause of the Constitution, because “it legalized PAGCOR—
conducted gambling, while most gambling are outlawed together with prostitution, drug
trafficking and other vices” (p. 82, Rollo). We, likewise, find no valid ground to sustain this
contention. The petitioners’ posture ignores the well-accepted meaning of the clause “equal
protection of the laws.” The clause does not preclude classification of individuals who may be
accorded different treatment under the law as long as the classification is not unreasonable or
arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force
on all persons or things to be conformable to Article III, Section 1 of the Constitution (DECS v.
San Diego, G.R. No. 89572, December 21, 1989). The “equal protection clause” does not
prohibit the Legislature from establishing classes of individuals or objects upon which different
rules shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not require situations
which are different in fact or opinion to be treated in law as though they were the same (Gomez
v. Palomar, 25 SCRA 827). Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is
violative of the equal protection is not clearly explained in the petition. The mere fact that some
gambling activities like cockfighting (P.D. 449) horse racing (R.A. 306 as amended by RA 983),
sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are legalized under certain
conditions, while others are prohibited, does not render the applicable laws, P.D. 1869 for one,
unconstitutional. “If the law presumably hits the evil where it is most felt, it is not to be
overthrown because there are other instances to which it might have been applied.” (Gomez v.
Palomar, 25 SCRA 827) “The equal protection clause of the 14 thAmendment does not mean
that all occupations called by the same name must be treated the same way; the state may do
what it can to prevent which is deemed as evil and stop short of those cases in which harm to
the few concerned is not less than the harm to the public that would insure if the rule laid down
were made mathematically exact.” (Dominican Hotel v. Arizana, 249 U.S. 2651).
Same; Statutes; Every law has in its favor the presumption of constitutionality, for a law to
be nullified, it must be shown that there is a clear and unequivocal breach of the Constitution.—
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil.
387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179
SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution, not merely a doubtful and equivocal one. In other words,
the grounds for nullity must be clear and beyond reasonable doubt. (Peralta v. Comelec, supra)
Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly
establish the basis for such a declaration. Otherwise, their petition must fail. Based on the
grounds raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds that
petitioners have failed to overcome the presumption. The dismissal of this petition is therefore,
inevitable. But as to whether P.D. 1869 remains a wise legislation considering the issues of
“morality, monopoly, trend to free enterprise, privatization as well as the state principles on
social justice, role of youth and educational values” being raised, is up for Congress to
determine.
PARAS, J.:
A TV ad proudly announces:
“The new PAGCOR—responding through responsible gaming.”
But the petitioners think otherwise, that is why, they filed the instant petition
seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR)
Charter—PD 1869, because it is allegedly contrary to morals, public policy and order,
and because—
“A.It constitutes a waiver of a right prejudicial to a third person with a right
recognized by law. It waived the Manila City government’s right to impose taxes
and license fees, which is recognized by law;
“B.For the same reason stated in the immediately preceding paragraph, the law
has intruded into the local government’s right to impose local taxes and license
fees. This, in contravention of the constitutionally enshrined principle of local
autonomy;
“C.It violates the equal protection clause of the constitution in that it legalizes
PAGCOR—conducted gambling, while most other forms of gambling are
outlawed, together with prostitution, drug trafficking and other vices;
“C.It violates the avowed trend of the Cory government away from
monopolistic and crony economy, and toward free enterprise and privatization.” (p.
2, Amended Petition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to
the declared national policy of the “new restored democracy” and the people’s will as
expressed in the 1987 Constitution. The decree is said to have a “gambling objective”
and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII
and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended
Petition; p. 21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing lawyers
(petitioner Basco being also the Chairman of the Committee on Laws of the City
Council of Manila), can question and seek the annulment of PD 1869 on the alleged
grounds mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by
virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D
1067-B also dated January 1, 1977 “to establish, operate and maintain gambling
casinos on land or water within the territorial jurisdiction of the Philippines.” Its
operation was originally conducted in the well known floating casino “Philippine
Tourist.” The operation was considered a success for it proved to be a potential
source of revenue to fund infrastructure and socioeconomic projects, thus, P.D. 1399
was passed on June 2, 1978 for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to
enable the Government to regulate and centralize all games of chance authorized by
existing franchise or permitted by law, under the following declared policy—
“Section 1 . Declaration of Policy.—It is hereby declared to be the policy of the
State to centralize and integrate all games of chance not heretofore authorized by
existing franchises or permitted by law in order to attain the following objectives:
“(a)To centralize and integrate the right and authority to operate and conduct
games of chance into one corporate entity to be controlled, administered and
supervised by the Government.
“(b)To establish and operate clubs and casinos, for amusement and recreation,
including sports gaming pools, (basketball, football, lotteries, etc.) and such
other forms of amusement and recreation including games of chance, which
may be allowed by law within the territorial jurisdiction of the Philippines and
which will: (1) generate sources of additional revenue to fund infrastructure
and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional
Programs, Population Control and such other essential public services; (2)
create recreation and integrated facilities which will expand and improve the
country’s existing tourist attractions; and (3) minimize, if not totally eradicate,
all the evils, malpractices and corruptions that are normally prevalent on the
conduct and operation of gambling clubs and casinos without direct
government involvement.” (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the
Philippines. Under its Charter’s repealing clause, all laws, decrees, executive orders,
rules and regulations, inconsistent therewith, are accordingly repealed, amended or
modified.
It is reported that PAGCOR is the third largest source of government revenue,
next to the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone,
PAGCOR earned P3.43 Billion, and directly remitted to the National Government a
total of P2.5 Billion in form of franchise tax, government’s income share, the
President’s Social Fund and Host Cities’ share. In addition, PAGCOR sponsored
other sociocultural and charitable projects on its own or in cooperation with various
governmental agencies, and other private associations and organizations. In its 3 1/2
years of operation under the present administration, PAGCOR remitted to the
government a total of P6.2 Billion. As of December 31, 1989, PAGCOR was
employing 4,494 employees in its nine (9) casinos nationwide, directly supporting the
livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families.
But the petitioners, are questioning the validity of P.D No. 1869. They allege that
the same is “null and void” for being “contrary to morals, public policy and public
order,” monopolistic and tends toward “crony economy”, and is violative of the equal
protection clause and local autonomy as well as for running counter to the state
policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family)
and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and
the most deliberate consideration by the Court, involving as it does the exercise of
what has been described as “the highest and most delicate function which belongs to
the judicial department of the government.” (State v. Manuel, 20 N.C. 144; Lozano v.
Martinez, 146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government We need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. This is not to say
that We approach Our task with diffidence or timidity. Where it is clear that the
legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily,
as fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers’ Union, et al, 59 SCRA 54, the Court thru
Mr. Justice Zaldivar underscored the—
“x x x thoroughly established principle which must be followed in all cases where
questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a statute
alleging unconstitutionality must prove its invalidity beyond a reasonable doubt;
that a law may work hardship does not render it unconstitutional; that if any
reasonable basis may be conceived which supports the statute, it will be upheld
and the challenger must negate all possible basis; that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute and that a
liberal interpretation of the constitution in favor of the constitutionality of legislation
should be adopted.” (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeck v. Statton,
106 N.W. 2 nd 660, 663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA
734, 739 [1970]; Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978];
and Heirs of Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens
Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521,
540)
Of course, there is first, the procedural issue. The respondents are questioning the
legal personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in
keeping with the Court’s duty, under the 1987 Constitution, to determine whether or
not the other branches of government have kept themselves within the limits of the
Constitution and the laws and that they have not abused the discretion given to them,
the Court has brushed aside technicalities of procedure and has taken cognizance of
this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v.
Tan, 163 SCRA 371)
“With particular regard to the requirement of proper party as applied in the cases
before us, We hold that the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate
injury as a result of the acts or measures complained of. And even if, strictly
speaking they are not covered by the definition, it is still within the wide discretion
of the Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.
“In the first Emergency Powers Cases, ordinary citizens and taxpayers were
allowed to question the constitutionality of several executive orders issued by
President Quirino although they were involving only an indirect and general interest
shared in common with the public. The Court dismissed the objection that they
were not proper parties and ruled that ‘the transcendental importance to the public
of these cases demands that they be settled promptly and definitely, brushing
aside, if we must technicalities of procedure.’ We have since then applied the
exception in many other cases.” (Association of Small Landowners in the
Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues
raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the
prohibition of gambling does not mean that the Government cannot regulate it in the
exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been
defined as the “state authority to enact legislation that may interfere with personal
liberty or property in order to promote the general welfare.” (Edu v. Ericta, 35 SCRA
481, 487) As defined, it consists of (1) an imposition or restraint upon liberty or
property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-
comprehensive embrace. (Philippine Association of Service Exporters, Inc. v.
Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate
the future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuming the greatest benefits. (Edu
v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, refers to it succinctly as the plenary power of
the state “to govern its citizens”. (Tribe, American Constitutional Law, 323, 1978). The
police power of the State is a power coextensive with self-protection and is most aptly
termed the “law of overwhelming necessity.” (Rubi v. Provincial Board of Mindoro, 39
Phil. 660, 708) It is “the most essential, insistent, and illimitable of powers.” (Smith
Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to
meet the exigencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to “regulate and
centralize thru an appropriate institution all games of chance authorized by existing
franchise or permitted by law” (1st whereas clause, PD 1869). As was subsequently
proved, regulating and centralizing gambling operations in one corporate entity—the
PAGCOR, was beneficial not just to the Government but to society in general. It is a
reliable source of much needed revenue for the cash strapped Government. It
provided funds for social impact projects and subjected gambling to “close scrutiny,
regulation, supervision and control of the Government” (4th Whereas Clause, PD
1869). With the creation of PAGCOR and the direct intervention of the Government,
the evil practices and corruptions that go with gambling will be minimized if not totally
eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of
Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is
violative of the principle of local autonomy. They must be referring to Section 13 par.
(2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from paying any
“tax of any kind or form, income or otherwise, as well as fees, charges or levies of
whatever nature, whether National or Local.”
“(2)Income and other taxes.—(a) Franchise Holder: No tax of any kind or form,
income or otherwise as well as fees, charges or levies of whatever nature, whether
National or Local, shall be assessed and collected under this franchise from the
Corporation; nor shall any form of tax or charge attach in any way to the earnings
of the Corporation, except a franchise tax of five (5%) percent of the gross
revenues or earnings derived by the Corporation from its operations under this
franchise. Such tax shall be due and payable quarterly to the National Government
and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind,
nature or description, levied, established or collected by any municipal, provincial
or national government authority” (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a)The City of Manila, being a mere Municipal corporation has no inherent right to
impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105
Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, “the Charter or
statute must plainly show an intent to confer that power or the municipality cannot
assume it” (Medina v. City of Baguio, 12 SCRA 62). Its “power to tax” therefore must
always yield to a legislative act which is superior having been passed upon by the
state itself which has the “inherent power to tax” (Bernas, the Revised [1973]
Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b)The Charter of the City of Manila is subject to control by Congress. It should be
stressed that “municipal corporations are mere creatures of Congress” (Unson v.
Lacson, G.R. No. 7909, January 18, 1957) which has the power to “create and
abolish municipal corporations” due to its “general legislative powers” (Asuncion v.
Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has
the power of control over Local governments (Hebron v. Reyes, G.R. No. 9124, July
2, 1950). And if Congress can grant the City of Manila the power to tax certain
matters, it can also provide for exemptions or even take back the power.
(c)The City of Manila’s power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru
the grant of “franchise, licenses or permits” was withdrawn by P.D. No. 771 and was
vested exclusively on the National Government, thus:
“Section 1. Any provision of law to the contrary notwithstanding, the authority of
chartered cities and other local governments to issue license, permit or other
form of franchise to operate, maintain and establish horse and dog race
tracks, jai-alai and other forms of gambling is hereby revoked.
“Section 2. Hereafter, all permits or franchises to operate, maintain and establish,
horse and dog race tracks, jai-alai and other forms of gambling shall be issued
by the national government upon proper application and verification of the
qualification of the applicant x x x.”
Therefore, only the National Government has the power to issue “licenses or permits”
for the operation of gambling. Necessarily, the power to demand or collect license
fees which is a consequence of the issuance of “licenses or permits” is no longer
vested in the City of Manila.
(d)Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the National
Government. In addition to its corporate powers (Sec. 3, Title II,PD 1869) it also
exercises regulatory powers, thus:
“Sec. 9. Regulatory Power.—The Corporation shall maintain a Registry of the
affiliated entities, and shall exercise all the powers, authority and the
responsibilities vested in the Securities and Exchange Commission over such
affiliating entities mentioned under the preceding section, including, but not limited
to amendments of Articles of Incorporation and By-Laws, changes in corporate
term, structure, capitalization and other matters concerning the operation of the
affiliated entities, the provisions of the Corporation Code of the Philippines to the
contrary notwithstanding, except only with respect to original incorporation.”
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role
is governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
“The states have no power by taxation or otherwise, to retard, impede, burden or
in any manner control the operation of constitutional laws enacted by Congress to
carry into execution the powers vested in the federal government.” (MC Culloch v.
Marland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the “supremacy” of the National Government over local
governments.
“Justice Holmes, speaking for the Supreme Court, made reference to the entire
absence of power on the part of the States to touch, in that way (taxation) at least,
the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it
can be agreed that no state or political subdivision can regulate a federal
instrumentality in such a way as to prevent it from consummating its federal
responsibilities, or even to seriously burden it in the accmplishment of
them.” (Antieau, Modern Constitutional Law, Vol. 2, p. 140, italics supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using
the power to tax as “a tool for regulation” (U.S. v. Sanchez, 340 US 42). The power to
tax which was called by Justice Marshall as the “power to destroy” (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the
very entity which has the inherent power to wield it.
(e)Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution
(on Local Autonomy) provides:
“Sec. 5. Each local government unit shall have the power to create its own source
of revenue and to levy taxes, fees, and other charges subject to such guidelines
and limitation as the congress may provide, consistent with the basic policy on
local autonomy. Such taxes, fees and charges shall accrue exclusively to the local
government.” (italics supplied)
The power of local government to “impose taxes and fees” is always subject to
“limitations” which Congress may provide by law. Since PD 1869 remains an
“operative” law until “amended, repealed or revoked” (Sec. 3, Art. XVIII, 1987
Constitution), its “exemption clause” remains as an exception to the exercise of the
power of local governments to impose taxes and fees. It cannot therefore be violative
but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply
means “decentralization” (III Records of the 1987 Constitutional Commission, pp.
435-436, as cited in Bernas, The Constitution of the Republic of the Philippines, Vol.
II, First Ed., 1988, p. 374). It does not make local governments sovereign within the
state or an “imperium in imperio.”
“Local Government has been described as a political subdivision of a nation or
state which is constituted by law and has substantial control of local affairs. In a
unitary system of government, such as the government under the Philippine
Constitution, local governments can only be an intra sovereign subdivision of
one sovereign nation, it cannot be an imperium in imperio . Local government in
such a system can only mean a measure of decentralization of the function of
government. (italics supplied)
As to what state powers should be “decentralized” and what may be delegated to
local government units remains a matter of policy, which concerns wisdom. It is
therefore a political question. (Citizens Alliance for Consumer Protection v. Energy
Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with
gambling is a State concern and hence, it is the sole prerogative of the State to retain
it or delegate it to local governments.
“As gambling is usually an offense against the State, legislative grant or express
charter power is generally necessary to empower the local corporation to deal with
the subject. x x x In the absence of express grant of power to enact, ordinance
provisions on this subject which are inconsistent with the state laws are
void.” (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440,
27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280,
11 LRA 480, as cited in Mc Quinllan Vol. 3 ibid, p. 548, italics supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the
Constitution, because “it legalized PAGCOR—conducted gambling, while most
gambling are outlawed together with prostitution, drug trafficking and other vices” (p.
82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners’
posture ignores the well-accepted meaning of the clause “equal protection of the
laws.” The clause does not preclude classification of individuals who may be
accorded different treatment under the law as long as the classification is not
unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not
have to operate in equal force on all persons or things to be conformable to Article III,
Section 1 of the Constitution (DECS v. San Diego, G.R. No. 89572, December 21,
1989).
The “equal protection clause” does not prohibit the Legislature from establishing
classes of individuals or objects upon which different rules shall operate (Laurel v.
Misa, 43 O.G. 2847). The Constitution does not require situations which are different
in fact or opinion to be treated in law as though they were the same (Gomez v.
Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of
the equal protection is not clearly explained in the petition. The mere fact that some
gambling activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by
RA 983), sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are
legalized under certain conditions, while others are prohibited, does not render the
applicable laws, P.D. 1869 for one, unconstitutional.
“If the law presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied.” (Gomez
v. Palomar, 25 SCRA 827)
“The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state
may do what it can to prevent which is deemed as evil and stop short of those
cases in which harm to the few concerned is not less than the harm to the public
that would insure if the rule laid down were made mathematically exact.”
(Dominican Hotel v. Arizana, 249 US 2651).
Anent petitioners’ claim that PD 1869 is contrary to the “avowed trend of the Cory
Government away from monopolies and crony economy and toward free enterprise
and privatization” suffice it to state that this is not a ground for this Court to nullify P.D.
1869. If, indeed, PD 1869 runs counter to the government’s policies then it is for the
Executive Department to recommend to Congress its repeal or amendment.
“The judiciary does not settle policy issues. The Court can only declare what the
law is and not what the law should be. Under our system of government, policy
issues are within the domain of the political branches of government and of the
people themselves as the repository of all state power.” (Valmonte v. Belmonte,
Jr., 170 SCRA 256).
On the issue of “monopoly,” however, the Constitution provides that:
“Sec. 19. The State shall regulate or prohibit monopolies when public interest so
requires. No combinations in restraint of trade or unfair competition shall be
allowed.” (Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily
prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy
for the Legislature to decide.
On petitioners’ allegation that P.D. 1869 violates Sections 11 (Personality Dignity)
12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article
XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice
it to state also that these are merely statements of principles and policies. As such,
they are basically not self-executing, meaning a law should be passed by Congress to
clearly define and effectuate such principles.
“In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and the legislature. If the executive and the legislature
failed to heed the directives of the articles the available remedy was not judicial or
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot.” (Bernas, Vol. II, p.
2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v.
Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82
SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified,
it must be shown that there is a clear and unequivocal breach of the Constitution, not
merely a doubtful and equivocal one. In other words, the grounds for nullity must be
clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition
this Court to declare a law, or parts thereof, unconstitutional must clearly establish the
basis for such a declaration. Otherwise, their petition must fail. Based on the grounds
raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds
that petitioners have failed to overcome the presumption. The dismissal of this
petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise
legislation considering the issues of “morality, monopoly, trend to free enterprise,
privatization as well as the state principles on social justice, role of youth and
educational values” being raised, is up for Congress to determine.
As this Court held in Citizens’ Alliance for Consumer Protection v. Energy
Regulatory Board, 162 SCRA 521—
“Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in
any case, in its favor the presumption of validity and constitutionality which
petitioners Valmonte and the KMU have not overturned. Petitioners have not
undertaken to identify the provisions in the Constitution which they claim to have
been violated by that statute. This Court, however, is not compelled to speculate
and to imagine how the assailed legislation may possibly offend some provision of
the Constitution. The Court notes, further, in this respect that petitioners have in
the main put in question the wisdom, justice and expediency of the establishment
of the OPSF, issues which are not properly addressed to this Court and which this
Court may not constitutionally pass upon. Those issues should be addressed
rather to the political departments of government: the President and the Congress.”
Parenthetically, We wish to state that gambling is generally immoral, and this is
precisely so when the gambling resorted to is excessive. This excessiveness
necessarily depends not only on the financial resources of the gambler and his family
but also on his mental, social, and spiritual outlook on life. However, the mere fact
that some persons may have lost their material fortunes, mental control, physical
health, or even their lives does not necessarily mean that the same are directly
attributable to gambling. Gambling may have been the antecedent, but certainly not
necessarily the cause. For the same consequences could have been preceded by an
overdose of food, drink, exercise, work, and even sex.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

Note.—It is presumed that an act of the law-making body is valid and

constitutional. (National Housing Authority vs. Reyes, 123 SCRA 245.)

——o0o——
 G.R. No. 129093. August 30, 2001
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, and
HON. CALIXTO CATAQUIZ, petitioners, vs. HON. FRANCISCO DIZON PAÑO and
TONY CALVENTO, respondents.
Municipal Corporations; Local Government Units; Ordinances;Gambling; An ordinance
which merely states the “objection” of the council to lotto is but a mere policy statement on the
part of the local council which is not self-executing, and could not serve as a valid ground to
prohibit the operation of the lotto system in the province.—The entire controversy stemmed from
the refusal of Mayor Cataquiz to issue a mayor’s permit for the operation of a lotto outlet in favor
of private respondent. According to the mayor, he based his decision on an existing ordinance
prohibiting the operation of lotto in the province of Laguna. The ordinance, however, merely
states the “objection” of the council to the said game. It is but a mere policy statement on the
part of the local council, which is not selfexecuting. Nor could it serve as a valid ground to
prohibit the operation of the lotto system in the province of Laguna.
Same; Same; Same; Same; While a policy statement expressing the local government’s
objection to the lotto is valid, as it is part of the local government’s autonomy to air its views
which may be contrary to that of the national government’s, this freedom to exercise contrary
views does not mean that local governments may actually enact ordinances that go against laws
duly enacted by Congress.—As a policy statement expressing the local government’s objection
to the lotto, such resolution is valid. This is part of the local government’s autonomy to air its
views which may be contrary to that of the national government’s. However, this freedom to
exercise contrary views does not mean that local governments may actually enact ordinances
that go against laws duly enacted by Congress. Given this premise, the assailed resolution in
this case could not and should not be interpreted as a measure or ordinance prohibiting the
operation of lotto.
Same; Same; Same; Same; What the national legislature allows by law, such as lotto, a
provincial board may not disallow by ordinance or resolution.—The game of lotto is a game of
chance duly authorized by the national government through an Act of Congress. Republic Act
1169, as amended by Batas Pambansa Blg. 42, is the law which grants a franchise to the PCSO
and allows it to operate the lotteries, x x x This statute remains valid today. While lotto is clearly
a game of chance, the national government deems it wise and proper to permit it. Hence, the
Sangguniang Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an
ordinance that would seek to prohibit permits. Stated otherwise, what the national legislature
expressly allows by law, such as lotto, a provincial board may not disallow by ordinance or
resolution.
Same; Same; Same; In our system of government, the power of local government units to
legislate and enact ordinances and resolutions is merely a delegated power coming from
Congress.—In our system of government, the power of local government units to legislate and
enact ordinances and resolutions is merely a delegated power coming from Congress. As held in
Tatel vs. Virac, ordinances should not contravene an existing statute enacted by Congress. The
reasons for this is obvious, as elucidated in Magtajas v. Pryce Properties Corp. Municipal
governments are only agents of the national government. Local councils exercise only delegated
legislative powers conferred upon them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It
is a heresy to suggest that the local government units can undo the acts of Congress, from
which they have derived their power in the first place, and negate by mere ordinance the
mandate of the statute. Municipal corporations owe their origin to, and derive their powers and
rights wholly from the legislature. It breathes into them the breath of life, without which they
cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control.
Unless there is some constitutional limitation on the right, the legislature might, by a single act,
and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence
all of the municipal corporations in the state, and the corporation could not prevent it. We know
of no limitation on the right so far as the corporation themselves are concerned. They are, so to
phrase it, the mere tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc. Railroad
Co., 24 Iowa 455).
Same; Same; Same; Ours is a unitary form of government, not a federal state.—Ours is
still a unitary form of government, not a federal state. Being so, any form of autonomy granted to
local governments will necessarily be limited and confined within the extent allowed by the
central authority. Besides, the principle of local autonomy under the 1987 Constitution simply
means “decentralization”. It does not make local governments sovereign within the state or an
“imperium in imperio.”
Same; Same; Same; Gambling; Sections 2 (c) and 27 of the Local Government Code
(Republic Act 7160) apply only to national programs and/or projects which are to be
implemented in a particular local community—lotto is neither a program nor a project of the
national government, but of a charitable institution, the PCSO, and it is far fetched to say that
lotto falls within the contemplation of aforesaid legal provisions.—From a careful reading of said
provisions, we find that these apply only to national programs and/or projects which are to be
implemented in a particular local community. Lotto is neither a program nor a project of the
national government, but of a charitable institution, the PCSO. Though sanctioned by the
national government, it is far fetched to say that lotto falls within the contemplation of Sections 2
(c) and 27 of the Local Government Code.
QUISUMBING, J.:
For our resolution is a petition for review on certiorari seeking the reversal of the
decision dated February 10, 1997 of the Regional Trial Court of San Pedro, Laguna,
Branch 93, enjoining petitioners from implementing or enforcing Kapasiyahan Bilang
508, Taon 1995, of the Sangguniang Panlalawigan of Laguna and its subsequent
Order dated April 21, 1997 denying petitioners’ motion for reconsideration.
On December 29, 1995, respondent Tony Calvento was appointed agent by the
Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the
operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for
a mayor’s permit to open the lotto outlet. This was denied by Mayor Cataquiz in a
letter dated February 19, 1996. The ground for said denial was an ordinance passed
by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, Taon
1995 which was issued on September 18, 1995. The ordinance reads:
ISANG KAPASIYAHAN TINUTUTULAN ANG MGA “ILLEGAL GAM
BLING” LALO NA ANG LOTTO SA LALAWIGAN NG LAGUNA
SAPAGKAT, ang sugal dito sa lalawigan ng Laguna ay talamak na;
 SAPAGKAT, ang sugal ay nagdudulot ng masasamang impluwensiya lalo’t
higit sa mga kabataan;
KUNG KAYAT DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at
Kgg. Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano at
buong pagkakaisang sinangayunan ng lahat ng dumalo sa pulong;
IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano
mang uri ng sugal dito sa lalawigan ng Laguna lalo’t higit ang Lotto;
IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang
pinuno ng Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-
ibayuhin ang pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan ng
Laguna lalo na ang “Jueteng.”
As a result of this resolution of denial, respondent Calvento filed a complaint for
declaratory relief with prayer for preliminary injunction and temporary restraining
order. In the said complaint, respondent Calvento asked the Regional Trial Court of
San Pedro Laguna, Branch 93, for the following reliefs: (1) a preliminary injunction or
temporary restraining order, ordering the defendants to refrain from implementing or
enforcing Kapasiyahan Blg. 508, Taon 1995; (2) an order requiring Hon. Municipal
Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto
outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, Taon
1995.
On February 10, 1997, the respondent judge, Francisco Dizon Paño,
promulgated his decision enjoining the petitioners from implementing or enforcing
resolution or Kapasiyahan Blg. 508, Taon 1995. The dispositive portion of said
decision reads:
WHEREFORE, premises considered, defendants, their agents and
representatives are hereby enjoined from implementing or enforcing resolution or
kapasiyahan blg. 508, Taon 1995 of the Sangguniang Panlalawigan ng Laguna
prohibiting the operation of the lotto in the province of Laguna.
SO ORDERED.
Petitioners filed a motion for reconsideration which was subsequently denied in an
Order dated April 21, 1997, which reads:
Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr. and
the Sangguniang Panlalawigan of Laguna, thru counsel, with the opposition filed
by plaintiffs counsel and the comment thereto filed by counsel for the defendants
which were duly noted, the Court hereby denies the motion for lack of merit.
SO ORDERED.
On May 23, 1997, petitioners filed this petition alleging that the following errors were
committed by the respondent trial court:
I
THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM
IMPLEMENTING KAPASIYAHAN BLG. 508, TAON 1995 OF THE
SANGGUNIANG PANLALAWIGAN OF LAGUNA PROHIBITING THE
OPERATION OF THE LOTTO IN THE PROVINCE OF LAGUNA.
II
THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED BY
THE PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR
PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR
OFFICES, PRIOR CONSULTATION AND APPROVAL BY THE LOCAL
GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED SECTORS IS
REQUIRED.
Petitioners contend that the assailed resolution is a valid policy declaration of the
Provincial Government of Laguna of its vehement objection to the operation of lotto
and all forms of gambling. It is likewise a valid exercise of the provincial government’s
police power under the General Welfare Clause of Republic Act 7160, otherwise
known as the Local Government Code of 1991. They also maintain that respondent’s
lotto operation is illegal because no prior consultations and approval by the local
government were sought before it was implemented contrary to the express
provisions of Sections 2 (c) and 27 of R.A. 7180.
For his part, respondent Calvento argues that the questioned resolution is, in
effect, a curtailment of the power of the state since in this case the national legislature
itself had already declared lotto as legal and permitted its operations around the
country. As for the allegation that no prior consultations and approval were sought
from the sangguniang panlalawigan of Laguna, respondent Calvento contends this is
not mandatory since such a requirement is merely stated as a declaration of policy
and not a self-executing provision of the Local Government Code of 1991.9 He also
states that his operation of the lotto system is legal because of the authority given to
him by the PCSO, which in turn had been granted a franchise to operate the lotto by
Congress.
The Office of the Solicitor General (OSG), for the State, contends that the
Provincial Government of Laguna has no power to prohibit a form of gambling which
has been authorized by the national government. He argues that this is based on the
principle that ordinances should not contravene statutes as municipal governments
are merely agents of the national government. The local councils exercise only
delegated legislative powers which have been conferred on them by Congress. This
being the case, these councils, as delegates, cannot be superior to the principal or
exercise powers higher than those of the latter. The OSG also adds that the question
of whether gambling should be permitted is for Congress to determine, taking into
account national and local interests. 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 Panlalawigan cannot nullify the
exercise of said authority by preventing something already allowed by Congress.
The issues to be resolved now are the following: (1) whether Kapasiyahan Blg.
508, Taon 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a
mayor’s permit based thereon are valid; and (2) whether prior consultations and
approval by the concerned Sanggunian are needed before a lotto system can be
operated in a given local government unit.
The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a
mayor’s permit for the operation of a lotto outlet in favor of private respondent.
According to the mayor, he based his decision on an existing ordinance prohibiting
the operation of lotto in the province of Laguna. The ordinance, however, merely
states the “objection” of the council to the said game. It is but a mere policy statement
on the part of the local council, which is not self-executing. Nor could it serve as a
valid ground to prohibit the operation of the lotto system in the province of Laguna.
Even petitioners admit as much when they stated in their petition that:
5.7. The terms of the Resolution and the validity thereof are express and clear.
The Resolution is a policy declaration of the Provincial Government of Laguna of
its vehement opposition and/or objection to the operation of and/or all forms of
gambling including the Lotto operation in the Province of Laguna.
As a policy statement expressing the local government’s objection to the lotto, such
resolution is valid. This is part of the local government’s autonomy to air its views
which may be contrary to that of the national government’s. However, this freedom to
exercise contrary views does not mean that local governments may actually enact
ordinances that go against laws duly enacted by Congress. Given this premise, the
assailed resolution in this case could not and should not be interpreted as a measure
or ordinance prohibiting the operation of lotto.
The game of lotto is a game of chance duly authorized by the national
government through an Act of Congress. Republic Act 1169, as amended by Batas
Pambansa Blg. 42, is the law which grants a franchise to the PCSO and allows it to
operate the lotteries. The pertinent provision reads:
Section 1. The Philippine Charity Sweepstakes Office.—The Philippine Charity
Sweepstakes Office, hereinafter designated the Office, shall be the principal
government agency for raising and providing for funds for health programs,
medical assistance and services and charities of national character, and as such
shall have the general powers conferred in section thirteen of Act Numbered One
thousand four hundred fifty-nine, as amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries, and other similar
activities, in such frequency and manner, as shall be determined, and subject to
such rules and regulations as shall be promulgated by the Board of Directors.
This statute remains valid today. While lotto is clearly a game of chance, the national
government deems it wise and proper to permit it. Hence, the Sangguniang
Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an
ordinance that would seek to prohibit permits. Stated otherwise, what the national
legislature expressly allows by law, such as lotto, a provincial board may not disallow
by ordinance or resolution.
In our system of government, the power of local government units to legislate and
enact ordinances and resolutions is merely a delegated power coming from
Congress, As held in Tatel vs. Virac, ordinances should not contravene an existing
statute enacted by Congress. The reasons for this is obvious, as elucidated
in Magtajas v. Pryce Properties Corp.
Municipal governments are only agents of the national government. Local councils
exercise only delegated legislative powers conferred upon them by Congress as the
national lawmaking body. The delegate cannot be superior to the principal or exercise
powers higher than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have derived their
power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights
wholly from the legislature. It breathes into them the breath of life, without which they
cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and
control. Unless there is some constitutional limitation on the right, the legislature
might, by a single act, and if we can suppose it capable of so great a folly and so
great a wrong, sweep from existence all of the municipal corporations in the state,
and the corporation could not prevent it. We know of no limitation on the right so far
as the corporation themselves are concerned. They are, so to phrase it, the mere
tenants at will of the legislature (citing Clinton vs. Ceder Rapids, etc Railroad Co., 24
Iowa 455).
Nothing in the present constitutional provision enhancing local autonomy dictates
a different conclusion.
The basic relationship between the national legislature and the local government
units has not been enfeebled by the new provisions in the Constitution strengthening
the policy of local autonomy. Without meaning to detract from that policy, we here
confirm that Congress retains control of the local government units although in
significantly reduced degree now than under our previous Constitutions. The power to
create still includes the power to destroy. The power to grant still includes the power
to withhold or recall. True, there are certain notable innovations in the Constitution,
like the direct conferment on the local government units of the power to tax (citing Art.
X, Sec 5, Constitution), which cannot now be withdrawn by mere statute. By and
large, however, the national legislature is still the principal of the local government
units, which cannot defy its will or modify or violate it.
Ours is still a unitary form of government, not a federal state. Being so, any form
of autonomy granted to local governments will necessarily be limited and confined
within the extent allowed by the central authority. Besides, the principle of local
autonomy under the 1987 Constitution simply means “decentralization”. It does not
make local governments sovereign within the state or an “imperium in imperio.”
 To conclude our resolution of the first issue, respondent mayor of San Pedro, loss of crop land, range-land, or forest cover; (5) may eradicate certain animal or
cannot avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of plant species from the face of the planet; and (6) other projects or programs that may
Laguna as justification to prohibit lotto in his municipality. For said resolution is call for the eviction of a particular group of people residing in the locality where these
nothing but an expression of the local legislative unit concerned. The Board’s will be implemented. Obviously, none of these effects will be produced by the
enactment, like spring water, could not rise above its source of power, the national introduction of lotto in the province of Laguna.
legislature.
Moreover, the argument regarding lack of consultation raised by petitioners is
As for the second issue, we hold that petitioners erred in declaring that Sections 2 clearly an afterthought on their part. There is no indication in the letter of Mayor
(c) and 27 of Republic Act 7160, otherwise known as the Local Government Code of Cataquiz that this was one of the reasons for his refusal to issue a permit. That
1991, apply mandatorily in the setting up of lotto outlets around the country. These refusal was predicated solely but erroneously on the provisions of Kapasiyahan Blg.
provisions state: 508, Taon 1995, of the Sangguniang Panlalawigan of Laguna.
Section 2. Declaration of Policy, x x x
(c) It is likewise the policy of the State to require all national agencies and In sum, we find no reversible error in the RTC decision enjoining Mayor Cataquiz
offices to conduct periodic consultations with appropriate local government units, from enforcing or implementing the Kapasiyahan Blg. 508, Taon 1995, of the
non-governmental and people’s organizations, and other concerned sectors of the
Sangguniang Panlalawigan of Laguna. That resolution expresses merely a policy
community before any project or program is implemented in their respective
jurisdictions.
statement of the Laguna provincial board. It possesses no binding legal force nor
Section 27. Prior Consultations Required.—No project or program shall be requires any act of implementation. It provides no sufficient legal basis for respondent
implemented by government authorities unless the consultations mentioned in mayor’s refusal to issue the permit sought by private respondent in connection with a
Section 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian legitimate business activity authorized by a law passed by Congress.
concerned is obtained; Provided, that occupants in areas where such projects are
to be implemented shall not be evicted unless appropriate relocation sites have WHEREFORE, the petition is DENIED for lack of merit. The Order of the Regional
been provided, in accordance with the provisions of the Constitution. Trial Court of San Pedro, Laguna enjoining the petitioners from implementing or
From a careful reading of said provisions, we find that these apply only to national
enforcing Resolution or Kapasiyahan Blg. 508, Taon 1995, of the Provincial Board of
programs and/or projects which are to be implemented in a particular local
Laguna is hereby AFFIRMED. No costs.
community. Lotto is neither a program nor a project of the national government,
but of a charitable institution, the PCSO. Though sanctioned by the national SO ORDERED.
government, it is far fetched to say that lotto falls within the contemplation of
Sections 2 (c) and 27 of the Local Government Code. Notes.—Gambling is not illegal per se. (Kilosbayan, Incorporated vs. Morato, 246 SCRA
540 [1995])
Section 27 of the Code should be read in conjunction with Section 26 thereof.
Horse racing although authorized by law is still a form of gambling. (Manila Jockey Club,
Section 26 reads:
Inc. vs. Court of Appeals, 300 SCRA 181 [1998])
Section 26. Duty of National Government Agencies in the Maintenance of
Ecological Balance.—It shall be the duty of every national agency or government-
owned or controlled corporation authorizing or involved in the planning and ——o0o——
implementation of any project or program that may cause pollution, climatic
change, depletion of non-renewable resources, loss of crop land, range-land, or
forest cover, and extinction of animal or plant species, to consult with the local
government units, nongovernmental organizations, and other sectors concerned
and explain the goals and objectives of the project or program, its impact upon the
people and the community in terms of environmental or ecological balance, and
the measures that will be undertaken to prevent or minimize the adverse effects
thereof.

Thus, the projects and programs mentioned in Section 27 should be interpreted to

mean projects and programs whose effects are among those enumerated in Sections
26 and 27, to wit, those that: (1) may cause pollution; (2) may bring about climatic
change; (3) may cause the depletion of non-renewable resources; (4) may result in
 G.R. No. 79956. January 29, 1990
CORDILLERA BROAD COALITION, petitioner, vs. COMMISSION ON AUDIT,
respondent.
G.R. No. 82217. January 29, 1990.
LILIA YARANON and BONA BAUTISTA, assisted by their spouses, BRAULIO D.
YARANON and DEMETRIO D. BAUTISTA, JR., respectively; JAMES BRETT and
SINAI C. HAMADA, petitioners, vs. THE COMMISSION ON AUDIT, HON.
CATALINO MACARAIG, Executive Secretary, HON. VICENTE JAYME, Secretary of
Finance, HON. GUILLERMO N. CARAGUE, Secretary of Budget and Management,
and HON. ROSALINA S. CAJUCOM, OIC National Treasurer, respondents.
Constitutional Law; Legislative Enactments; Legislative enactments must be accorded the
presumption of constitutionality.—It is well-settled in our jurisprudence that respect for the
inherent and stated powers and prerogatives of the law-making body, as well as faithful
adherence to the principle of separation of powers, require that its enactment be accorded the
presumption of constitutionality. Thus, in any challenge to the constitutionality of a statute, the
burden of clearly and unequivocally proving its unconstitutionality always rests upon the
challenger. Conversely, failure to so prove will necessarily defeat the challenge.
Same; Same; Autonomous Regions; E.O. 220; E.O. 220 does not create the autonomous
region, it merely provides for transitory measures in anticipation of the enactment of an organic
act and the creation of an autonomous region; E.O. 220, not unconstitutional.—A reading of E.O.
No. 220 will easily reveal that what it actually envisions is the consolidation and coordination of
the delivery of services of line departments and agencies of the National Government in the
areas covered by the administrative region as a step preparatory to the grant of autonomy to the
Cordilleras. It does not create the autonomous region contemplated in the Constitution. It merely
provides for transitory measures in anticipation of the enactment of an organic act and the
creation of an autonomous region. In short, it prepares the ground for autonomy. This does not
necessarily conflict with the provisions of the Constitution on autonomous regions, as we shall
show later.
Same; Same; Same; Same; The Cordillera Administrative Region is not a territorial or
political subdivision, it is a mere sophisticated version of a regional consultative council.—After
carefully considering the provisions of E.O. No. 220, we find that it did not create a new territorial
and political subdivision or merge existing ones into a larger subdivision. 1. Firstly, the CAR is
not a public corporation or a territorial and political subdivision. It does not have a separate
juridical personality, unlike provinces, cities and municipalities. x x x Then, considering the
control and supervision exercised by the President over the CAR and the offices created under
E.O. No. 220, and considering further the indispensable participation of the line departments of
the National Government, the CAR may be considered more than anything else as a regional
coordinating agency of the National Government, similar to the regional development councils
which the President may create under the Constitution [Art. X, sec. 14]. x x x In this wise, the
CAR may be considered as a more sophisticated version of the regional development council.
Same; Same; Same; Same; Creation of autonomous regions in Muslim Mindanao and the
Cordilleras contemplates the grant of political autonomy and not just administrative autonomy to
these regions.—The creation of autonomous regions in Muslim Mindanao and the Cordilleras,
which is peculiar to the 1987 Constitution, contemplates the grant of politicalautonomy and not
just administrative autonomy to these regions. Thus, the provision in the Constitution for an
autonomous regional government with a basic structure consisting of an executive department
and a legislative assembly and special courts with personal, family and property law jurisdiction
in each of the autonomous regions [Art. X, sec. 18].
CORTÉS, J.:
In these consolidated petitions, the constitutionality of Executive Order No. 220, dated
July 15, 1987, which created the Cordillera Administrative Region, is assailed on the
primary ground that it pre-empts the enactment of an organic act by the Congress
and the creation of the autonomous region in the Cordilleras conditional on the
approval of the act through a plebiscite.
Relative to the creation of autonomous regions, the Constitution, in Article X,
provides:
AUTONOMOUS REGIONS
Sec. 15. There shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas
sharing common and distinctive historical and cultural heritage, economic and social
structures, and other relevant characteristics within the framework of this
Constitution and the national sovereignty as well as territorial integrity of the
Republic of the Philippines.
SEC. 16. The President shall exercise general supervision over autonomous
regions to ensure that laws are faithfully executed.
Sec. 17. All powers, functions, and responsibilities not granted by this Constitution
or by law to the autonomous regions shall be vested in the National Government.
Sec. 18. The Congress shall enact an organic act for each autonomous region with
the assistance and participation of the regional consultative commission composed
of representatives appointed by the President from a list of nominees from
multisectoral bodies. The organic act shall define the basic structure of government
for the region consisting of the executive department and legislative assembly, both
of which shall be elective and representative of the constituent political units. The
organic acts shall likewise provide for special courts with personal, family and
property law jurisdiction consistent with the provisions of this Constitution and
national laws.
The creation of the autonomous region shall be effective when approved by majority
of the votes cast by the constituent units in a plebiscite called for the purpose,
provided that only provinces, cities, and geographic areas voting favorably in such
plebiscite shall be included in the autonomous region.
Sec. 19. The first Congress elected under this Constitution shall, within eighteen
months from the time of organization of both Houses, pass the organic acts for the
autonomous regions in Muslim Mindanao and the Cordilleras.
Sec. 20. Within its territorial jurisdiction and subject to the provisions of this
Constitution and national laws, the organic act of autonomous regions shall provide
for legislative powers over:
(1)Administrative organization;
(2)Creation of sources of revenues;
 (3)Ancestral domain and natural resources;
(4)Personal, family and property relations;
(5)Regional urban and rural planning development;
(6)Economic, social and tourism development;
(7)Educational policies;
(8)Preservation and development of the cultural heritage; and
(9)Such other matters as may be authorized by law for the promotion of the
general welfare of the people of the region.
Sec. 21. The preservation of peace and order within the regions shall be the
responsibility of the local police agencies which shall be organized, maintained,
supervised, and utilized in accordance with applicable laws. The defense and
security of the regions shall be the responsibility of the National Government.
A study of E.O. No. 220 would be incomplete without reference to its historical
background.
In April 1986, just after the EDSA Revolution, Fr. Conrado M. Balweg, S.V.D., broke
off on ideological grounds from the Communist Party of the Philippines (CPP) and its
military arm___the New People’s Army (NPA).
After President Aquino was installed into office by People Power, she advocated
a policy of national reconciliation. She called on all revolutionary forces to a peace
dialogue. The CPLA heeded this call of the President. After the preliminary
negotiations, President Aquino and some members of her Cabinet flew to Mt. Data in
the Mountain Province on September 13, 1986 and signed with Fr. Conrado M.
Balweg (As Commander of the CPLA) and Ama Mario Yag-ao (as President of
Cordillera Bodong Administration, the civil government of the CPLA) a ceasefire
agreement that signified the cessation of hostilities (WHEREAS No. 7, E.O. 220).
The parties arrived at an agreement in principle: the Cordillera people shall not
undertake their demands through armed and violent struggle but by peaceful means,
such as political negotiations. The negotiations shall be a continuing process until the
demands of the Cordillera people shall have been substantially granted.
On March 27, 1987, Ambassador Pelaez [Acting as Chief Negotiator of the
government], in pursuance of the September 13, 1986 agreement, flew to the
Mansion House, Baguio City, and signed with Fr. Balweg (as Chairman of the
Cordillera panel) a joint agreement, paragraphs 2 and 3 of which state:
Par. 2—Work together in drafting an Executive Order to create a preparatory body
that could perform policy-making and administrative functions and undertake
consultations and studies leading to a draft organic act for the Cordilleras.
Par. 3—Have representatives from the Cordillera panel join the study group
of the R.P. Panel in drafting the Executive Order.
Pursuant to the above joint agreement, E.O. 220 was drafted by a panel of the
Philippine government and of the representatives of the Cordillera people.
On July 15, 1987, President Corazon C. Aquino signed the joint draft into law,
known now as E.O. 220. [Rejoinder, G.R. No. 82217, pp. 2-3].
Executive Order No. 220, issued by the President in the exercise of her legislative
powers under Art. XVIII, sec. 6 of the 1987 Constitution, created the Cordillera
Administrative Region (CAR), which covers the provinces of Abra, Benguet, Ifugao,
Kalinga-Apayao and Mountain Province and the City of Baguio [secs. 1 and 2]. It was
created to accelerate economic and social growth in the region and to prepare for the
establishment of the autonomous region in the Cordilleras [sec. 3]. Its main function is
to coordinate the planning and implementation of programs and services in the
region, particularly, to coordinate with the local government units as well as with the
executive departments of the National Government in the supervision of field offices
and in identifying, planning, monitoring, and accepting projects and activities in the
region [sec. 5]. It shall also monitor the implementation of all ongoing national and
local government projects in the region [sec. 20]. The CAR shall have a Cordillera
Regional Assembly as a policy-formulating body and a Cordillera Executive Board as
an implementing arm [secs. 7, 8 and 10]. The CAR and the Assembly and Executive
Board shall exist until such time as the autonomous regional government is
established and organized [sec. 17].
Explaining the rationale for the issuance of E.O. No. 220, its last “Whereas”
clause provides:
WHEREAS, pending the convening of the first Congress and the enactment of the
organic act for a Cordillera autonomous region, there is an urgent need, in the
interest of national security and public order, for the President to reorganize
immediately the existing administrative structure in the Cordilleras to suit it to the
existing political realities therein and the Government’s legitimate concerns in the
areas, without attempting to pre-empt the constitutional duty of the first Congress
to undertake the creation of an autonomous region on a permanent basis.
During the pendency of this case, Republic Act No. 6766 entitled “An Act Providing
for an Organic Act for the Cordillera Autonomous Region,” was enacted and signed
into law. The Act recognizes the CAR and the offices and agencies created under
E.O. No. 220 and its transitory nature is reinforced in Art. XXI of R.A. No. 6766, to wit:
SEC. 3. The Cordillera Executive Board, the Cordillera Regional Assembly, as well as
all offices and agencies created under Executive Order No. 220 shall cease to exist
immediately upon the ratification of this Organic Act.
All funds, properties and assets of the Cordillera Executive Board and the Cordillera
Regional Assembly shall automatically be transferred to the Cordillera Autonomous
Government.
I
It is well-settled in our jurisprudence that respect for the inherent and stated powers
and prerogatives of the law-making body, as well as faithful adherence to the principle
of separation of powers, require that its enactment be accorded the presumption of
constitutionality. Thus, in any challenge to the constitutionality of a statute, the burden
of clearly and unequivocally proving its unconstitutionality always rests upon the
challenger. Conversely, failure to so prove will necessarily defeat the challenge.
We shall be guided by these principles in considering these consolidated
petitions.
In these cases, petitioners principally argue that by issuing E.O. No. 220 the
President, in the exercise of her legislative powers prior to the convening of the first
Congress under the 1987 Constitution, has virtually pre-empted Congress from its
mandated task of enacting an organic act and created an autonomous region in the
Cordilleras. We have carefully studied the Constitution and E.O. No. 220 and we have
come to the conclusion that petitioners’ assertions are unfounded. Events subsequent
to the issuance of E.O. No. 220 also bear out this conclusion.
1. A reading of E.O. No. 220 will easily reveal that what it actually envisions is the
consolidation and coordination of the delivery of services of line departments and
agencies of the National Government in the areas covered by the administrative
region as a step preparatory to the grant of autonomy to the Cordilleras. It does not
create the autonomous region contemplated in the Constitution. It merely provides for
transitory measures in anticipation of the enactment of an organic act and the
creation of an autonomous region. In short, it prepares the ground for autonomy. This
does not necessarily conflict with the provisions of the Constitution on autonomous
regions, as we shall show later.
The Constitution outlines a complex procedure for the creation of an autonomous
region in the Cordilleras. A regional consultative commission shall first be created.
The President shall then appoint the members of a regional consultative commission
from a list of nominees from multisectoral bodies. The commission shall assist the
Congress in preparing the organic act for the autonomous region. The organic act
shall be passed by the first Congress under the 1987 Constitution within eighteen
months from the time of its organization and enacted into law. Thereafter there shall
be held a plebiscite for the approval of the organic act [Art. X, sec. 18]. Only then,
after its approval in the plebiscite, shall the autonomous region be created.
Undoubtedly, all of these will take time. The President, in 1987 still exercising
legislative powers, as the first Congress had not yet convened, saw it fit to provide for
some measures to address the urgent needs of the Cordilleras in the meantime that
the organic act had not yet been passed and the autonomous region created. These
measures we find in E.O. No. 220. The steps taken by the President are obviously
perceived by petitioners, particularly petitioner Yaranon who views E.O. No. 220 as
capitulation to the Cordillera People’s Liberation Army (CPLA) of Balweg, as
unsound, but the Court cannot inquire into the wisdom of the measures taken by the
President. We can only inquire into whether or not the measures violate the
Constitution. But as we have seen earlier, they do not.
2. Moreover, the transitory nature of the CAR does not necessarily mean that it is,
as petitioner Cordillera Broad Coalition asserts, “the interim autonomous region in the
Cordil-leras” [Petition, G.R. No. 79956, p. 25].
The Constitution provides for a basic structure of government in the autonomous
region composed of an elective executive and legislature and special courts with
personal, family and property law jurisdiction [Art. X, sec. 18]. Using this as a guide,
we find that E.O. No. 220 did not establish an autonomous regional government. It
created a region, covering a specified area, for administrative purposes with the main
objective of coordinating the planning and implementation of programs and services
[secs. 2 and 5]. To determine policy, it created a representative assembly, to convene
yearly only for a five-day regular session, tasked with, among others, identifying
priority projects and development programs [sec. 9]. To serve as an implementing
body, it created the Cordillera Executive Board composed of the Mayor of Baguio
City, provincial governors and representatives of the Cordillera Bodong
Administration, ethno-linguistic groups and non-governmental organizations as
regular members and all regional directors of the line departments of the National
Government as ex-officio members and headed by an Executive Director [secs. 10
and 11]. The bodies created by E.O. No. 220 do not supplant the existing local
governmental structure, nor are they autonomous government agencies. They merely
constitute the mechanism for an “umbrella” that brings together the existing local
governments, the agencies of the National Government, the ethno-linguistic groups or
tribes, and non-governmental organizations in a concerted effort to spur development
in the Cordilleras.
The creation of the CAR for purposes of administrative coordination is
underscored by the mandate of E.O. No. 220 for the President and appropriate
national departments and agencies to make available sources of funds for priority
development programs and projects recommended by the CAR [sec. 21] and the
power given to the President to call upon the appropriate executive departments and
agencies of the National Government to assist the CAR [sec. 24].
3. Subsequent to the issuance of E.O. No. 220, the Congress, after it was
convened, enacted Republic Act No. 6658 which created the Cordillera Regional
Consultative Commission. The President then appointed its members. The
commission prepared a draft organic act which became the basis for the deliberations
of the Senate and the House of Representatives. The result was Republic Act No.
6766, the organic act for the Cordillera autonomous region, which was signed into law
on October 23, 1989. A plebiscite for the approval of the organic act, to be conducted
shortly, shall complete the process outlined in the Constitution.
In the meantime, E.O. No. 220 had been in force and effect for more than two
years and we find that, despite E.O. No. 220, the autonomous region in the
Cordilleras is still to be created, showing the lack of basis of petitioners’ assertion.
Events have shown that petitioners’ fear that E.O. No. 220 was a “shortcut” for the
creation of the autonomous region in the Cordilleras was totally unfounded.
Clearly, petitioners’ principal challenge has failed.
II
A collateral issue raised by petitioners is the nature of the CAR: whether or not it is a
territorial and political subdivision. The Constitution provides in Article X:
Section 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. There shall be
autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter
provided.
xxx
Sec. 10. No province, city, municipality, or barangay may be created, divided,
merged, abolished, or its boundary substantially altered, except in accordance with
the criteria established in the local government code and subject to approval by a
majority of the votes cast in a plebiscite in the political units directly affected.
We have seen earlier that the CAR is not the autonomous region in the Cordilleras
contemplated by the Constitution. Thus, we now address petitioners’ assertion that
E.O. No. 220 contravenes the Constitution by creating a new territorial and political
subdivision.
After carefully considering the provisions of E.O. No. 220, we find that it did not
create a new territorial and political subdivision or merge existing ones into a larger
subdivision.
1. Firstly, the CAR is not a public corporation or a territorial and political
subdivision. It does not have a separate juridical personality, unlike provinces, cities
and municipalities. Neither is it vested with the powers that are normally granted to
public corporations, e.g. the power to sue and be sued, the power to own and dispose
of property, the power to create its own sources of revenue, etc. As stated earlier, the
CAR was created primarily to coordinate the planning and implementation of
programs and services in the covered areas.
The creation of administrative regions for the purpose of expediting the delivery of
services is nothing new. The Integrated Reorganization Plan of 1972, which was
made as part of the law of the land by virtue of Presidential Decree No. 1, established
eleven (11) regions, later increased to twelve (12), with definite regional centers and
required departments and agencies of the Executive Branch of the National
Government to set up field offices therein. The functions of the regional offices to be
established pursuant to the Reorganization Plan are: (1) to implement laws, policies,
plans, programs, rules and regulations of the department or agency in the regional
areas; (2) to provide economical, efficient and effective service to the people in the
area; (3) to coordinate with regional offices of other departments, bureaus and
agencies in the area; (4) to coordinate with local government units in the area; and (5)
to perform such other functions as may be provided by law. [See Part II, chap. III, art.
I, of the Reorganization Plan].
We can readily see that the CAR is in the same genre as the administrative
regions created under the Reorganization Plan, albeit under E.O. No. 220 the
operation of the CAR requires the participation not only of the line departments and
agencies of the National Government but also the local governments, ethnolinguistic
groups and non-governmental organizations in bringing about the desired objectives
and the appropriation of funds solely for that purpose.
2. Then, considering the control and supervision exercised by the President over
the CAR and the offices created under E.O. No. 220, and considering further the
indispensable participation of the line departments of the National Government, the
CAR may be considered more than anything else as a regional coordinating agency
of the National Government, similar to the regional development councils which the
President may create under the Constitution [Art. X, sec. 14]. These councils are
“composed of local government officials, regional heads of departments and other
government offices, and representatives from non-governmental organizations within
the region for purposes of administrative decentralization to strengthen the autonomy
of the units therein and to accelerate the economic and social growth and
development of the units in the region.” [Ibid.] In this wise, the CAR may be
considered as a more sophisticated version of the regional development council.
III
Finally, petitioners incidentally argue that the creation of the CAR contravened the
constitutional guarantee of the local autonomy for the provinces (Abra, Benguet,
Ifugao, Kalinga-Apayao and Mountain Province) and city (Baguio City) which
compose the CAR.
We find first a need to clear up petitioners’ apparent misconception of the concept
of local autonomy.
It must be clarified that the constitutional guarantee of local autonomy in the
Constitution [Art. X, sec. 2] refers to the administrative autonomy of local government
units or, cast in more technical language, the decentralization of government authority
[Villegas v. Subido, G.R. No. L-31004, January 8, 1971, 37 SCRA 1]. Local autonomy
is not unique to the 1987 Constitution, it being guaranteed also under the 1973
Constitution [Art. II, sec. 10]. And while there was no express guarantee under the
1935 Constitution, the Congress enacted the Local Autonomy Act (R.A. No. 2264)
and the Decentralization Act (R.A. No. 5185), which ushered the irreversible march
towards further enlargement of local autonomy in the country [Villegas v.
Subido, supra.]
On the other hand, the creation of autonomous regions in Muslim Mindanao and
the Cordilleras, which is peculiar to the 1987 Constitution, contemplates the grant
of political autonomy and not just administrative autonomy to these regions. Thus, the
provision in the Constitution for an autonomous regional government with a basic
structure consisting of an executive department and a legislative assembly and
special courts with personal, family and property law jurisdiction in each of the
autonomous regions [Art. X, sec. 18].

As we have said earlier, the CAR is a mere transitory coordinating agency that
would prepare the stage for political autonomy for the Cordilleras. It fills in the
resulting gap in the process of transforming a group of adjacent territorial and political
subdivisions already enjoying local or administrative autonomy into an autonomous
region vested with political autonomy.

Anent petitioners’ objection, we note the obvious failure to show how the creation
of the CAR has actually diminished the local autonomy of the covered provinces and
city. It cannot be over-emphasized that pure speculation and a resort to probabilities
are insufficient to cause the invalidation of E.O. No. 220.

WHEREFORE, the petitions are DISMISSED for lack of merit.

SO ORDERED.

Note.—In interpreting statutes, that which will avoid finding of unconstitutionality is to be

preferred. (Paredes, vs. Executive Secretary, 128 SCRA 6.)

——o0o——
 G.R. No. 195770. July 17, 2012.
AQUILINO Q. PIMENTEL, JR., SERGIO TADEO and NELSON ALCANTARA,
petitioners, vs. EXECUTIVE SECRETARY PAQUITO N. OCHOA and SECRETARY
CORAZON JULIANO-SOLIMAN OF THE DEPARTMENT OF SOCIAL WELFARE
and DEVELOPMENT, respondents.
Constitutional Law; Autonomy of Local Governments; State Policies; The Constitution
declares it a policy of the State to ensure the autonomy of local governments.―The Constitution
declares it a policy of the State to ensure the autonomy of local governments and even devotes
a full article on the subject of local governance which includes the following pertinent provisions:
Section 3. The Congres shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum, allocate among
the different local government units their powers, responsibilities, and resources, and provide for
the qualifications, election, appointment and removal, term, salaries, powers and functions and
duties of local officials, and all other matters relating to the organization and operation of the
local units. x x x Section 14. The President shall provide for regional development councils or
other similar bodies composed of local government officials, regional heads of departments and
other government offices, and representatives from non-governmental organizations within the
regions for purposes of administrative decentralization to strengthen the autonomy of the units
therein and to accelerate the economic and social growth and development of the units in the
region. (Underscoring supplied)
Same; Same; Same; While it is through a system of decentralization that the State shall
promote a more responsive and accountable local government structure, the concept of local
autonomy does not imply the conversion of local government units into “mini-states.”―The Court
held in Ganzon v. Court of Apeals, 200 SCRA 271 (1991), that while it is through a system of
decentralization that the State shall promote a more responsive and accountable local
government structure, the concept of local autonomy does not imply the conversion of local
government units into “mini-states.” We explained that, with local autonomy, the Constitution did
nothing more than “to break up the monopoly of the national government over the afairs of the
local government” and, thus, did not intend to sever “the relation of partnership and
interdependence betwen the central administration and local government units.”
Same; Every law has in its favor the presumption of constitutionality, and to justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful and
argumentative one.―Every law has in its favor the presumption of constitutionality, and to justify
its nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful
and argumentative one. Petitioners have failed to discharge the burden of proving the invalidity
of the provisions under the GAA of 2011. The allocation of a P21 billion budget for an
intervention program formulated by the national government itself but implemented in
partnership with the local government units to achieve the common national goal development
and social progress can by no means be an encroachment upon the autonomy of local
governments.
PERLAS-BERNABE, J.:
The Case
For the Court’s consideration in this Petition for Certiorari and Prohibition is the
constitutionality of certain provisions of Republic Act No. 10147 or the General
Appropriations Act [GAA] of 2011 which provides a P21 Billion budget allocation for
the Conditional Cash Transfer Program (CCTP) headed by the Department of Social
Welfare & Development (DSWD). Petitioners seek to enjoin respondents Executive
Secretary Paquito N. Ochoa and DSWD Secretary Corazon Juliano-Soliman from
implementing the said program on the ground that it amounts to a “recentralization” of
government functions that have already been devolved from the national government
to the local government units.
The Facts
In 2007, the DSWD embarked on a poverty reduction strategy with the poorest of
the poor as target beneficiaries.
Dubbed “Ahon Pamilyang Pilipino,” it was pre-pilot tested in the municipalities of
Sibagat and Esperanza in Agusan del Sur; the municipalities of Lopez Jaena and
Bonifacio in Misamis Occidental, the Caraga Region; and the cities of Pasay and
Caloocanupon the release of the amount of P50 Million Pesos under a Special
Allotment Release Order (SARO) issued by the Department of Budget and
Management.
On July 16, 2008, the DSWD issued Administrative Order No. 16, series of 2008
(A.O. No. 16, s. 2008), setting the implementing guidelines for the project renamed
“Pantawid Pamilyang Pilipino Program” (4Ps), upon the following stated objectives, to
wit:
1. To improve preventive health care of pregnant women and young children
2. To increase enrollment/attendance of children at elementary level
3. To reduce incidence of child labor
4. To raise consumption of poor households on nutrient dense foods
5. To encourage parents to invest in their children’s (and their own) future
6. To encourage parent’s participation in the growth and development of young
children, as well as involvement in the community.
This government intervention scheme, also conveniently referred to as CCTP,
“provides cash grant to extreme poor households to allow the members of the families
to meet certain human development goals.” Eligible households that are selected
from priority target areas consisting of the poorest provinces classified by the National
Statistical Coordination Board (NCSB) are granted a health assistance of
P500.00/month, or P6,000.00/year, and an educational assistance of P300.00/month
for 10 months, or a total of P3,000.00/year, for each child but up to a maximum of
three children per family. Thus, after an assessment on the appropriate assistance
package, a household beneficiary could receive from the government an annual
subsidy for its basic needs up to an amount of P15,000.00, under the following
conditionalities:
 a) Pregnant women must get pre natal care starting from the 1st trimester, child
birth is attended by skilled/trained professional, get post natal care thereafter
b) Parents/guardians must attend family planing sessions/
mother’s class, Parent Effectiveness Service and others
c) Children 0-5 years of age get regular preventive health check-ups and
vaccines
d) Children 3-5 years old must attend day care program/pre-school
e) Children 6-14 years of age are enrolled in schools and attend at least 85% of
the time.
Under A.O. No. 16, s. 2008, the DSWD also institutionalized a coordinated inter-
agency network among the Department of Education (DepEd), Department of Health
(DOH), Department of Interior and Local Government (DILG), the National Anti-
Poverty Commission (NAPC) and the local government units (LGUs), identifying
specific roles an d functions in order to ensure effective and efficient implementation
of the CCTP. As the DSWD takes on the role of lead implementing agency that must
“oversee and coordinate the implementation, monitoring and evaluation of the
program,” the concerned LGU as partner agency is particularly tasked to―
a. Ensure availability of the supply side on health and education in the target
areas
b. Provide necessary technical assistance for Program implementation
c. Coordinate the implementation/operationalization of sectoral activities at the
City/Municipal level to better execute Program objectives and functions
d. Coordinate with various concerned government agencies at the local level,
sectoral representatives and NGO to ensure effective Program implementation
e. Prepare reports on issues and concerns regarding Program implementation
and submit to the Regional Advisory Committee
and
f. Hold monthly committee meetings
A Memorandum of Agreement (MOA) executed by the DSWD with each participating
LGU outlines in detail the obligation of both parties during the intended five-year
implementation of the CCTP.
Congress, for its part, sought to ensure the success of the CCTP by providing it
with funding under the GA of 2008 in the amount of Two Hundred Ninety-Eight Million
Five Hundred Fifty Thousand Pesos (P298,550,000.00). This budget allocation
increased tremendously to P5 Billion Pesos in 2009, with the amount doubling to P10
Billion Pesos in 2010. But the biggest allotment given to the CCTP was in the GA of
2011 at Twenty One Billion One Hundred Ninety-Four Million One Hundred
Seventeen Thousand Pesos (P21,194,117,000.00).
Petitioner Aquilino Pimentel, Jr., a former Senator, joined by Sergio Tadeo,
incumbent President of the Association of Barangay Captains of Cabanatuan City,
Nueva Ecija, and Nelson Alcantara, incumbent Barangay Captain of Barangay Sta.
Monica, Quezon City, challenges before the Court the disbursement of public funds
and the implementation of the CCTP which are alleged to have encroached into the
local autonomy of the LGUs.
The Issue
THE P21 BILLION CCTP BUDGET ALLOCATION UNDER THE DSWD IN
THE GAA FY 2011 VIOLATES ART. II, SEC. 25 & ART. X, SEC. 3 OF THE 1987
CONSTITUTION IN RELATION TO SEC. 17 OF THE LOCAL GOVERNMENT
CODE OF 1991 BY PROVIDING FOR THE RECENTRALIZATION OF THE
NATIONAL GOVERNMENT IN THE DELIVERY OF BASIC SERVICES
ALREADY DEVOLVED TO THE LGUS.
Petitioners admit that the wisdom of adopting the CCTP as a poverty reduction
strategy for the Philippines is with the legislature. They take exception, however, to
the manner by which it is being implemented, that is, primarily through a national
agency like DSWD instead of the LGUs to which the responsibility and functions of
delivering social welfare, agriculture and health care services have been devolved
pursuant to Section 17 of Republic Act No. 7160, also known as the Local
Government Code of 191, in relation to Section 25, Article II & Section 3, Article X of
the 1987 Constitution.
Petitioners assert that giving the DSWD full control over the identification of
beneficiaries and the manner by which services are to be delivered or conditionalities
are to be complied with, instead of allocating the P21 Billion CCTP Budget directly to
the LGUs that would have enhanced its delivery of basic services, results in the
“recentralization” of basic government functions, which is contrary to the precepts of
local autonomy and the avowed policy of decentralization.
Our Ruling
The Constitution declares it a policy of the State to ensure the autonomy of local
governments and even devotes a full article on the subject of local governance which
includes the following pertinent provisions:
“Section 3. The Congress shall enact a local government code which shall
provide for a more responsive and accountable local government structure
instituted through a system of decentralization with effective mechanisms of recall,
initiative, and referendum, allocate among the different local government units their
powers, responsibilities, and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation of the local
units.
xxx
Section 14. The President shall provide for regional development councils or
other similar bodies composed of local government officials, regional heads of
departments and other government offices, and representatives from non-
governmental organizations within the regions for purposes of administrative
decentralization to strengthen the autonomy of the units therein and to accelerate
the economic and social growth and development of the units in the region.”
(Underscoring supplied)
 In order to fully secure to the LGUs the genuine and meaningful autonomy that
would develop them into self-reliant communities and effective partners in the
attainment of national goals, Section 17 of the Local Government Code vested upon
the LGUs the duties and functions pertaining to the delivery of basic services and
facilities, as follows:
“SECTION 17. Basic Services and Facilities.―(a) Local government units
shall endeavor to be self-reliant and shall continue exercising the powers and
discharging the duties and functions currently vested upon them. They shall also
discharge the functions and responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local government units shall like wise
exercise such other powers and discharge such other functions and
responsibilities as are necessary, appropriate, or incidental to efficient and
effective provision of the basic services and facilities enumerated herein.
(b) Such basic services and facilities include, but are not limited to, x x x.”
While the aforementioned provision charges the LGUs to take on the functions
and responsibilities that have already been devolved upon them from the national
agencies on the aspect of providing for basic services and facilities in their
respective jurisdictions, paragraph (c) of the same provision provides a categorical
exception of cases involving nationally-funded projects, facilities, programs and
services, thus:
“(c) Notwithstanding the provisions of subsection (b) hereof, public works
and infrastructure projects and other facilities, programs and services funded by
the National Government under the annual General Appropriations Act, other
special laws, pertinent executive orders, and those wholly or partially funded from
foreign sources, are not covered under this Section, except in those cases where
the local government unit concerned is duly designated as the implementing
agency for such projects, facilities, programs and services.” (Underscoring
supplied)
The essence of this express reservation of power by the national government is
that, unles an LGU is particularly designated as the implementing agency, it has no
power over a program for which funding has ben provided by the national government
under the anual general apropriations act, even if the program involves the delivery of
basic services within the jurisdiction of the LGU.
The Court held in Ganzon v. Court of Apeals that while it is through a system of
decentralization that the State shall promote a more responsive and accountable local
government structure, the concept of local autonomy does not imply the conversion of
local government units into “mini-states.” We explained that, with local autonomy, the
Constitution did nothing more than “to break up the monopoly of the national
government over the afairs of the local government” and, thus, did not intend to sever
“the relation of partnership and interdependence betwen the central administration
and local government units.” In Pimentel v. Aguirre, the Court defined the extent of the
local government’s autonomy in terms of its partnership with the national government
in the pursuit of common national goals, refering to such key concepts as integration
and cordination. Thus:
“Under the Philippine concept of local autonomy, the national government has
not completely relinquished all its powers over local governments, including
autonomous regions. Only administrative powers over local affairs are delegated
to political subdivisions. The purpose of the delegation is to make governance
more directly responsive and effective at the local levels. In turn, economic,
political and social development at the smaller political units are expected to propel
social and economic growth and development. But to enable the country to
develop as a whole, the programs and policies effected localy must be integrated
and cordinated towards a common national goal. Thus, policy-setting for the entire
country still lies in the President and Congress.”
Certainly, to yield unreserved power of governance to the local government unit as
to preclude any and all involvement by the national government in programs
implemented in the local level would be to shift the tide of monopolistic power to the
other extreme, which would amount to a decentralization of power explicated
in Limbona v. Mangelin as beyond our constitutional concept of autonomy, thus:
“Now, autonomy is either decentralization of administration or decentralization
of power. There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the
base of government power and in the process to make local governments ‘more
responsive and accountable’ and ‘ensure their fullest development a self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress.’ At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate
on national concerns. The President exercises ‘general supervision’ over them, but
only to ‘ensure that local affairs are administered according to law.’ He has no
control over their acts in the sense that he can substitute their judgments with his
own.
Decentralization of power, on the other hand, involves an abdication of political
power in the [sic] favor of local governments [sic] units declared to be autonomous.
In that case, the autonomous government is free to chart its own destiny and shape
its future with minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to ‘self-immolation,’ since
in that event, the autonomous government becomes accountable not to the central
authorities but to its constituency.”
Indeed, a complete relinquishment of central government powers on the matter of
providing basic facilities and services cannot be implied as the Local Government
Code itself weighs against it. The national government is, thus, not precluded from
taking a direct hand in the formulation and implementation of national development
programs especially where it is implemented locally in coordination with the LGUs
concerned.
Every law has in its favor the presumption of constitutionality, and to justify its
nullification, there must be a clear and unequivocal breach of the Constitution, not a
doubtful and argumentative one. Petitioners have failed to discharge the burden of
proving the invalidity of the provisions under the GAA of 2011. The allocation of a P21
billion budget for an intervention program formulated by the national government itself
but implemented in partnership with the local government units to achieve the
common national goal development and social progress can by no means be an
encroachment upon the autonomy of local governments.

WHEREFORE, premises considered, the petition is hereby DISMISSED.

SO ORDERED.

Notes.—Consistent with the state policy of local autonomy as guaranteed by the 1987
Constitution, under Section 25, Article II and Section 2, Article X, and the Local Government
Code of 1991, the Court declares that the grant and release of the hospitalization and health
care insurance benefits given to petitioner’s officials and employees were validly enacted
through an ordinance passed by petitioner’s Sangguniang Panlalawigan. (The Province of
Negros Occidental vs. The Commissioners, Commission on Audit, 631 SCRA 431 [2010])

Both autonomy and the synchronization of national and local elections are recognized and
established constitutional mandates, with one being as compelling as the other. (Kida vs. Senate
of the Philippines, 659 SCRA 270 [2011])

――o0o――
 G.R. Nos. 120865-71. December 7, 1995
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON.
JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL COURT
OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and CARLITO ARROYO; THE
MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON.
JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL
COURT OF PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC. represented by,
MR. TOBIAS REYNALD M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or
MAYOR RICARDO D. PAPA, JR., respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON.
JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE, BRANCH 79, REGIONAL TRIAL
COURT OF MORONG, RIZAL; GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT
CORPORATION and R.J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF
JALA-JALA and/or MAYOR WALFREDO M. DE LAVEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON.
JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL TRIAL
COURT OF PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM FISHING
CORP.; BDR CORPORATION, MIRT CORPORATION and TRIM CORPORATION;
MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON.
JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT
OF MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS CHICKEN GROWERS,
INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA,
respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS; HON.
JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL COURT
OF MORONG, RIZAL; AGP FISH VENTURES, INC., represented by its PRESIDENT
ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA
VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner vs. COURT OF APPEALS; HON.
JUDGE EUGENIO S. LABITORIA PRESIDING JUDGE, BRANCH 161, REGIONAL TRIAL
COURT OF PASIG, METRO MANILA; SEA MAR TRADING CO., INC.; EASTERN LAGOON
FISHING CORP.; MINAMAR FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or
MAYOR ISIDRO B. PACIS, respondents.
Ecology; It is difficult for a man, scavenging on the garbage dump or fishing in the murky
waters of the Pasig River and the Laguna Lake or making a clearing in the forest to understand
why protecting birds, fish, and trees is more important than protecting him and keeping his family
alive.—It is difficult for a man, scavenging on the garbage dump created by affluence and
profligate consumption and extravagance of the rich or fishing in the murky waters of the Pasig
River and the Laguna Lake or making a clearing in the forest so that he can produce food for his
family, to understand why protecting birds, fish, and trees is more important than protecting him
and keeping his family alive.
Administrative Law; Laguna Lake Development Authority (LLDA);Local Government
Code; Statutes; The provisions of R.A. 7160 do not necessarily repeal the laws creating the
Laguna Lake Development Authority and granting the latter water rights authority over Laguna
de Bay and the lake region.—Section 4 (k) of the charter of the Laguna Lake Development
Authority, Republic Act No. 4850, the provisions of Presidential Decree No. 813, and Section 2
of Executive Order No. 927, cited above, specifically provide that the Laguna Lake Development
Authority shall have exclusive jurisdiction to issue permits for the use of all surface water for any
projects or activities in or affecting the said region, including navigation, construction, and
operation of fishpens, fish enclosures, fish corrals and the like. On the other hand, Republic Act
No. 7160, the Local Government Code of 1991, has granted to the municipalities the exclusive
authority to grant fishery privileges in municipal waters. The Sangguniang Bayan may grant
fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area
within a definite zone of the municipal waters. We hold that the provisions of Republic Act No.
7160 do not necessarily repeal the aforementioned laws creating the Laguna Lake Development
Authority and granting the latter water rights authority over Laguna de Bay and the lake region.
Same; Same; Same; Same; Statutory Construction; The repeal of laws should be made
clear and expressed.—The Local Government Code of 1991 does not contain any express
provision which categorically expressly repeal the charter of the Authority. It has to be conceded
that there was no intent on the part of the legislature to repeal Republic Act No. 4850 and its
amendments. The repeal of laws should be made clear and expressed.
Same; Same; Same; Same; Same; It is basic in statutory construction that the enactment
of a later legislation which is a general law cannot be construed to have repealed a special
law.—It has to be conceded that the charter of the Laguna Lake Development Authority
constitutes a special law. Republic Act No. 7160, the Local Government Code of 1991, is a
general law. It is basic in statutory construction that the enactment of a later legislation which is
a general law cannot be construed to have repealed a special law. It is a well-settled rule in this
jurisdiction that a “special statute, provided for a particular case or class of cases, is not
repealed by a subsequent statute, general in its terms, provisions and application, unless the
intent to repeal or alter is manifest, although the terms of the general law are broad enough to
include the cases embraced in the special law.”
Same; Same; Same; Same; Same; A special law cannot be re pealed, amended or
altered by a subsequent general law by mere implication—thus, the charter of the LLDA should
prevail over the Local Government Code of 1991.—Where there is a conflict between a general
law and a special statute, the special statute should prevail since it evinces the legislative intent
more clearly than the general statute. The special law is to be taken as an exception to the
general law in the absence of special circumstances forcing a contrary conclusion. This is
because implied repeals are not favored and as much as possible, effect must be given to all
enactments of the legislature. A special law cannot be repealed, amended or altered by a
subsequent general law by mere implication. Thus, it has to be concluded that the charter of the
Authority should prevail over the Local Government Code of 1991.
Same; Same; Same; Police Power; The charter of the LLDA should prevail over the Local
Government Code of 1991 on matters affecting Laguna de Bay.—The power of the local
government units to issue fishing privileges was clearly granted for revenue purposes. This is
evident from the fact that Section 149 of the New Local Government Code empowering local
governments to issue fishing permits is embodied in Chapter 2, Book II, of Republic Act No.
7160 under the heading, “Specific Provisions On The Taxing And Other Revenue Raising Power
Of Local Government Units” On the other hand, the power of the Authority to grant permits for
fishpens, fishcages and other aquaculture structures is for the purpose of effectively regulating
and monitoring activities in the Laguna de Bay region (Section 2, Executive Order No. 927) and
for lake quality control and management. It does partake of the nature of police power which is
the most pervasive, the least limitable and the most demanding of all State powers including the
power of taxation. Accordingly, the charter of the Authority which embodies a valid exercise of
police power should prevail over the Local Government Code of 1991 on matters affecting
Laguna de Bay.
Same; Same; The LLDA has express powers as a regulatory and quasi-judicial body.—In
respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our
holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of
Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake
Development Authority vs. Court of Appeals, 231 SCRA 304, 306 (1994), there is no question
that the Authority has express powers as a regulatory and quasi-judicial body in respect to
pollution cases with authority to issue a “cease and desist order” and on matters affecting the
construction of illegal fishpens, fishcages and other aqua culture structures in Laguna de Bay.
Same; Same; Courts; Jurisdiction; The LLDA is not co-equal to the Regional Trial Courts,
and on actions necessitating the resolution of legal questions affecting the powers of the
Authority as provided in its charter, the Regional Trial Courts have jurisdiction.—The Authority’s
pretense, however, that it is co equal to the Regional Trial Courts such that all actions against it
may only be instituted before the Court of Appeals cannot be sustained. On actions
necessitating the resolution of legal questions affecting the powers of the Authority as provided
for in its charter, the Regional Trial Courts have jurisdiction.
Same; Same; Jurisdiction; The LLDA has the exclusive jurisdic tion to issue permits for
the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated
therein and the authority to exercise such powers as are by its charter vested on it.—In view of
the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, has not repealed the provisions of the charter of the
Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the Authority
has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna
de Bay to the exclusion of municipalities situated therein and the authority to exercise such
powers as are by its charter vested on it.
HERMOSISIMA, JR., J.:
It is difficult for a man, scavenging on the garbage dump created by affluence and
profligate consumption and extravagance of the rich or fishing in the murky waters of
the Pasig River and the Laguna Lake or making a clearing in the forest so that he can
produce food for his family, to understand why protecting birds, fish, and trees is more
important than protecting him and keeping his family alive.
How do we strike a balance between environmental protection, on the one hand,
and the individual personal interests of people, on the other?
Towards environmental protection and ecology, navigational safety, and
sustainable development, Republic Act No. 4850 created the “Laguna Lake
Development Authority.” This Government Agency is supposed to carry out and
effectuate the aforesaid declared policy, so as to accelerate the development and
balanced growth of the Laguna Lake area and the surrounding provinces, cities and
towns, in the act clearly named, within the context of the national and regional plans
and policies for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos amended
certain sections of Republic Act No. 4850 because of the concern for the rapid
expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de
Bay, combined with current and prospective uses of the lake for municipal-industrial
water supply, irrigation, fisheries, and the like. Concern on the part of the Government
and the general public over:—the environment impact of development on the water
quality and ecology of the lake and its related river systems; the inflow of polluted
water from the Pasig River, industrial, domestic and agricultural wastes from
developed areas around the lake; the increasing urbanization which induced the
deterioration of the lake, since water quality studies have shown that the lake will
deteriorate further if steps are not taken to check the same; and the floods in
Metropolitan Manila area and the lakeshore towns which will influence the hydraulic
system of Laguna de Bay, since any scheme of controlling the floods will necessarily
involve the lake and its river systems,—likewise gave impetus to the creation of the
Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
“SECTION 1. Declaration of Policy.—It is hereby declared to be the national policy
to promote, and accelerate the development and balanced growth of the Laguna
Lake area and the surrounding provinces, cities and towns hereinafter referred to
as the region, within the context of the national and regional plans and policies for
social and economic development and to carry out the development of the Laguna
Lake region with due regard and adequate provisions for environmental
management and control, preservation of the quality of human life and ecological
systems, and the prevention of undue ecological disturbances, deterioration and
pollution.”
Special powers of the Authority, pertinent to the issues in this case, include:
“SEC. 3. Section 4 of the same Act is hereby further amended by adding thereto
seven new paragraphs to be known as paragraphs (j), (k), (1), (m), (n), (o),
and (p) which shall read as follows:
xxx xxx xxx
‘(j) The provisions of existing laws to the contrary notwithstanding, to engage
in fish production and other aqua-culture projects in Laguna de Bay and other
bodies of water within its jurisdiction and in pursuance thereof to conduct
studies and make experiments, whenever necessary, with the collaboration
and assistance of the Bureau of Fisheries and Aquatic Resources, with the
end in view of improving present techniques and practices. Provided, that
until modified, altered or amended by the procedure provided in the following
 sub-paragraph, the present laws, rules and permits or authorizations remain
in force;
(k)For the purpose of effectively regulating and monitoring activities in
Laguna de Bay, the Authority shall have exclusive jurisdiction to issue new
permit for the use of the lake waters for any projects or activities in or affecting
the said lake including navigation, construction, and operation of fishpens,
fish enclo sures, fish corrals and the like, and to impose necessary
safeguards for lake quality control and management and to collect necessary
fees for said activities and projects Provided, That the fees collected for
fisheries may be shared between the Authority and other government
agencies and political sub-divisions in such proportion as may be determined
by the President of the Philippines upon recommendation of the Authority’s
Board Provided, further, That the Authority’s Board may determine new areas
of fishery development or activities which it may place under the supervision
of the Bureau of Fisheries and Aquatic Resources taking into account the
overall development plans and programs for Laguna de Bay and related
bodies of water Provided, finally, That the Authority shall subject to the
approval of the President of the Philippines promulgate such rules and
regulations which shall govern fisheries development activities in Laguna de
Bay which shall take into consideration among others the following socio-
economic amelioration of bonafide resident fishermen whether individually or
collectively in the form of cooperatives, lakeshore town development, a
master plan for fishpen construction and operation, communal fishing ground
for lake shore town residents, and preference to lake shore town residents in
hiring laborers for fishery projects;
(l)To require the cities and municipalities embraced within the region to pass
appropriate zoning ordinances and other regulatory measures necessary to
carry out the objectives of the Authority and enforce the same with the
assistance of the Authority;
(m)The provisions of existing laws to the contrary notwithstanding, to exercise
water rights over public waters within the Laguna de Bay region whenever
necessary to carry out the Authority’s projects;
(n)To act in coordination with existing governmental agencies in establishing
water quality standards for industrial, agricultural and municipal waste
discharges into the lake and to cooperate with said existing agencies of the
government of the Philippines in enforcing such standards, or to separately
pursue enforcement and penalty actions as provided for in Section 4 (d) and
Section 39-A of this Act Provided, That in case of conflict on the appropriate
water quality standard to be enforced such conflict shall be resolved thru the
NEDA Board’ ”;
To more effectively perform the role of the Authority under Republic Act No. 4850, as
though Presidential Decree No. 813 were not thought to be completely effective, the
Chief Executive, feeling that the land and waters of the Laguna Lake Region are
limited natural resources requiring judicious management to their optimal utilization to
insure renewability and to preserve the ecological balance, the competing options for
the use of such resources and conflicting jurisdictions over such uses having created
undue constraints on the institutional capabilities of the Authority in the light of the
limited powers vested in it by its charter, Executive Order No. 927 further defined and
enlarged the functions and powers of the Authority and named and enumerated the
towns, cities and provinces encompassed by the term “Laguna de Bay Region.”
Also, pertinent to the issues in this case are the following provisions of
Executive Order No. 927 which include in particular the sharing of fees:
“SEC. 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the
Lake Region: To effectively regulate and monitor activities in the Laguna de Bay
region, the Authority shall have exclusive jurisdiction to issue permit for the use of
all surface water for any projects or activities in or affecting the said region
including navigation, construction, and operation of fishpens, fish enclosures, fish
corrals and the like.
For the purpose of this Executive Order, the term ‘Laguna de Bay Region’
shall refer to the Provinces of Rizal and Laguna; the Cities of San Pablo, Pasay,
Caloocan, Quezon, Manila and Tagaytay, the towns of Tanauan, Sto. Tomas and
Malvar in Batangas Province; the towns of Silang and Carmona in Cavite Province;
the town of Lucban in Quezon Province, and the towns of Marikma, Pasig, Taguig,
Muntinlupa, and Pateros in Metro Manila.
SEC. 3. Collection of Fees. The Authority is hereby empowered to collect fees
for the use of the lake water and its tributaries for all beneficial purposes including
but not limited to fisheries, recreation, municipal, industrial, agricultural, navigation,
irrigation, and waste disposal purpose; Provided, that the rates of the fees to be
collected, and the sharing with other government agencies and political
subdivisions, if necessary, shall be subject to the approval of the President of the
Philippines upon recommendation of the Authority’s Board, except fishpen
fee, which will be shared in the following manner: 20 percent of the fee shall go to
the lakeshore local governments, 5 percent shall go to the Project Development
Fund which shall be administered by a Council and the remaining 75 percent shall
constitute the share of LLDA. However, after the implementation within the three-
year period of the Laguna Lake Fishery Zoning and Management Plan, the sharing
will be modified as follows: 35 percent of the fishpen fee goes to the lakeshore
local governments, 5 percent goes to the Project Development Fund and the
remaining 60 percent shall be retained by LLDA; Provided, however, that the share
of LLDA shall form part of its corporate funds and shall not be remitted to the
National Treasury as an exception to the provisions of Presidential Decree No.
1234.” (Italics for emphasis)
It is important to note that Section 29 of Presidential Decree No. 813 defined the term
“Laguna Lake” in this manner:
“SECTION 41. Definition of Terms.
(11) Laguna Lake or Lake.—Whenever Laguna Lake or lake is used in this
Act, the same shall refer to Laguna de Bay which is that area covered by the lake
water when it is at the average annual maximum lake level of elevation 12.50
meters, as referred to a datum 10.00 meters below mean lower low water
(M.L.L.W.). Lands located at and below such elevation are public lands which form
part of the bed of said lake.”
Then came Republic Act No. 7160, the Local Government Code of 1991. The
municipalities in the Laguna Lake Region interpreted the provisions of this law to
mean that the newly passed law gave municipal governments the exclusive
jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160
provides:
“Sec. 149. Fishery Rentals, Fees and Charges.—(a) Municipalities shall have the
exclusive authority to grant fishery privileges in the municipal waters and
impose rental fees or charges therefor in accordance with the provisions of
this Section.
(b)The Sangguniang Bayan may:
(1)Grant fishing privileges to erect fish corrals, oyster, mussel or other aquatic beds
or bangus fry areas, within a definite zone of the municipal waters, as
determined by it; x x x.
(2)Grant privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or
fry of other species and fish from the municipal waters by nets, traps or other
fishing gears to marginal fishermen free from any rental fee, charges or any
other imposition whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation. x x x.
1. (1)x x x xxx xxx
2. (2)x x x xxx xxx
(XI) Subject to the provisions of Book II of this Code, grant exclusive privileges of
constructing fish corrals or fishpens, or the taking or catching of bangus fry,
prawn fry or kawag-kawag or fry of any species or fish within the municipal
waters.
xxx xxx xxx
Municipal governments thereupon assumed the authority to issue fishing privileges
and fishpen permits. Big fishpen operators took advantage of the occasion to
establish fishpens and fishcages to the consternation of the Authority. Unregulated
fishpens and fishcages, as of July, 1995, occupied almost one-third of the entire lake
water surface area, increasing the occupation drastically from 7,000 hectares in 1990
to almost 21,000 hectares in 1995. The Mayor’s permit to construct fishpens and
fishcages were all undertaken in violation of the policies adopted by the Authority on
fishpen zoning and the Laguna Lake carrying capacity.
To be sure, the implementation by the lakeshore municipalities of separate
independent policies in the operation of fishpens and fishcages within their claimed
territorial municipal waters in the lake and their indiscriminate grant of fishpen permits
have already saturated the lake area with fishpens, thereby aggravating the current
environmental problems and ecological stress of Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to the general
public that:
“In compliance with the instructions of His Excellency PRESIDENT FIDEL V.
RAMOS given on June 23, 1993 at Pila, Laguna, pursuant to Republic Act 4850
as amended by Presidential Decree 813 and Executive Order 927 series of 1983
and in line with the policies and programs of the Presidential Task Force on Illegal
Fishpens and Illegal Fishing, the general public is hereby notified that:
1.All fishpens, fishcages and other aqua-culture structures in the Laguna de
Bay Region, which were not registered or to which no application for
registration and/or permit has been filed with Laguna Lake Development
Authority as of March 31, 1993 are hereby declared outrightly as illegal.
2.All fishpens, fishcages and other aqua-culture structures so declared as
illegal shall be subject to demolition which shall be undertaken by the
Presidential Task Force for Illegal Fishpen and Illegal Fishing.
3.Owners of fishpens, fishcages and other aqua-culture structures declared
as illegal shall, without prejudice to demolition of their structures be criminally
charged in accordance with Section 39-A of Republic Act 4850 as amended
by P.D. 813 for violation of the same laws. Violations of these laws carries a
penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five
Thousand Pesos or both at the discretion of the court.
All operators of fishpens, fishcages and other aqua-culture structures declared
as illegal in accordance with the foregoing Notice shall have one (1) month on or
before 27 October 1993 to show cause before the LLDA why their said fishpens,
fishcages and other aqua-culture structures should not be
demolished/dismantled.”
One month, thereafter, the Authority sent notices to the concerned owners of the
illegally constructed fishpens, fishcages and other aqua-culture structures advising
them to dismantle their respective structures within 10 days from receipt thereof,
otherwise, demolition shall be effected.
Reacting thereto, the affected fishpen owners filed injunction cases against the
Authority before various regional trial courts, to wit: (a) Civil Case No. 759-B, for
Prohibition, Injunction and Damages, Regional Trial Court, Branch 70, Binangonan,
Rizal, filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil Case No. 64049,
for Injunction, Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and
Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.;
(c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial Court,
Branch 163, Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias
Reynaldo M. Tiangco; (d) Civil Case No. 556-M, for Prohibition, Injunction and
Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing
Ventures, Inc.; (e) Civil Case No. 522-M, for Prohibition, Injunction and Damages,
Regional Trial Court, Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris
Chicken Growers, Inc.; (f) Civil Case No. 554, for Certiorari and Prohibition, Regional
Trial Court, Branch 79, Morong, Rizal, filed by Greenfields Ventures Industrial Corp.
and R.J. Orion Development Corp.; and (g) Civil Case No. 64124, for Injunction,
Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and
Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on jurisdictional
grounds. The motions to dismiss were invariably denied. Meanwhile, temporary
restraining order/writs of preliminary mandatory injunction were issued in Civil Cases
Nos. 64124, 759 and 566 enjoining the Authority from demolishing the fishpens and
similar structures in question.
 Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos.
120865-71, were filed by the Authority with this court. Impleaded as parties-
respondents are concerned regional trial courts and respective private parties, and
the municipalities and/or respective Mayors of Binangonan, Taguig and Jala-jala, who
issued permits for the construction and operation of fishpens in Laguna de Bay. The
Authority sought the following reliefs, viz.:
“(A)Nullification of the temporary restraining order/writs of preliminary injunction
issued in Civil Cases Nos. 64124, 759 and 566;
(B)Permanent prohibition against the regional trial courts from exercising
jurisdiction over cases involving the Authority which is a co-equal body;
(C)Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did
not repeal, alter or modify the provisions of R.A. 4850, as amended, empowering
the Authority to issue permits for fishpens, fishcages and other aqua-culture
structures in Laguna de Bay and that, the Authority the government agency vested
with exclusive authority to issue said permits.”
By this Court’s resolution of May 2, 1994, the Authority’s consolidated petitions were
referred to the Court of Appeals. In a Decision, dated June 29, 1995, the Court of
Appeals dismissed the Authority’s consolidated petitions, the Court of Appeals
holding that: (A) LLDA is not among those quasi-judicial agencies of government
whose decision or order are appealable only to the Court of Appeals; (B) the LLDA
charter does vest LLDA with quasi-judicial functions insofar as fishpens are
concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in
Laguna de Bay are concerned had been repealed by the Local Government Code of
1991; (D) in view of the aforesaid repeal, the power to grant permits devolved to and
is now vested with their respective local government units concerned.
Not satisfied with the Court of Appeals decision, the Authority has returned to this
Court charging the following errors:
“1.THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN
ERROR WHEN IT RULED THAT THE LAGUNA LAKE DEVELOPMENT
AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.
2.THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR
WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813 AND E.O. 927
SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC ACT 7160. THE SAID
RULING IS CONTRARY TO ESTABLISHED PRINCIPLES AND
JURISPRUDENCE OF STATUTORY CONSTRUCTION.
3.THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR
WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN PERMITS IN
LAGUNA DE BAY HAS BEEN DEVOLVED TO CONCERNED (LAKESHORE)
LOCAL GOVERNMENT UNITS.”
We take a simplistic view of the controversy. Actually, the main and only issue posed
is: Which agency of the Government—the Laguna Lake Development Authority or the
towns and municipalities comprising the region—should exercise jurisdiction over the
Laguna Lake and its environs insofar as the issuance of permits for fishery privileges
is concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic
Act No. 4850, the provisions of Presidential Decree No. 813, and Section 2 of
Executive Order No. 927, cited above, specifically provide that the Laguna Lake
Development Authority shall have exclusive jurisdiction to issue permits for the use of
all surface water for any projects or activities in or affecting the said region, including
navigation, construction, and operation of fishpens, fish enclosures, fish corrals and
the like. On the other hand, Republic Act No. 7160, the Local Government Code of
1991, has granted to the municipalities the exclusive authority to grant fishery
privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges
to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a
definite zone of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily repeal
the aforementioned laws creating the Laguna Lake Development Authority and
granting the latter water rights authority over Laguna de Bay and the lake region.
The Local Government Code of 1991 does not contain any express provision
which categorically expressly repeal the charter of the Authority. It has to be
conceded that there was no intent on the part of the legislature to repeal Republic Act
No. 4850 and its amendments. The repeal of laws should be made clear and
expressed.
It has to be conceded that the charter of the Laguna Lake Development Authority
constitutes a special law. Republic Act No. 7160, the Local Government Code of
1991, is a general law. It is basic in statutory construction that the enactment of a
later legislation which is a general law cannot be construed to have repealed a
special law. It is a well-settled rule in this jurisdiction that “a special statute, provided
for a particular case or class of cases, is not repealed by a subsequent statute,
general in its terms, provisions and application, unless the intent to repeal or alter is
manifest, although the terms of the general law are broad enough to include the
cases embraced in the special law.”
Where there is a conflict between a general law and a special statute, the special
statute should prevail since it evinces the legislative intent more clearly than the
general statute. The special law is to be taken as an exception to the general law in
the absence of special circumstances forcing a contrary conclusion. This is because
implied repeals are not favored and as much as possible, effect must be given to all
enactments of the legislature. A special law cannot be repealed, amended or altered
by a subsequent general law by mere implication.
Thus, it has to be concluded that the charter of the Authority should prevail over
the Local Government Code of 1991.
Considering the reasons behind the establishment of the Authority, which are
environmental protection, navigational safety, and sustainable development, there is
every indication that the legislative intent is for the Authority to proceed with its
mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development
Authority that “Laguna de Bay, like any other single body of water has its own unique
natural ecosystem. The 900 km2 lake surface water, the eight (8) major river
tributaries and several other smaller rivers that drain into the lake, the 2,920 km 2basin
or watershed transcending the boundaries of Laguna and Rizal provinces, greater
portion of Metro Manila, parts of Cavite, Batangas and Quezon provinces, constitute
one integrated delicate natural ecosystem that needs to be protected with uniform set
of policies; if we are to be serious in our aims of attaining sustainable development.
This is an exhaustible natural resource—a very limited one—which requires judicious
management and optimal utilization to ensure renewability and preserve its ecological
integrity and balance.”
“Managing the lake resources would mean the implementation of a national policy
geared towards the protection, conservation, balanced growth and sustainable
development of the region with due regard to the inter-generational use of its
resources by the inhabitants in this part of the earth. The authors of Republic Act
4850 have foreseen this need when they passed this LLDA law—the special law
designed to govern the management of our Laguna de Bay lake resources.”
“Laguna de Bay therefore cannot be subjected to fragmented concepts of
management policies where lakeshore local government units exercise exclusive
dominion over specific portions of the lake water. The garbage thrown or sewage
discharged into the lake, abstraction of water therefrom or construction of fishpens by
enclosing its certain area, affect not only that specific portion but the entire 900 km2 of
lake water. The implementation of a cohesive and integrated lake water resource
management policy, therefore, is necessary to conserve, protect and sustainably
develop Laguna de Bay.”
The power of the local government units to issue fishing privileges was clearly
granted for revenue purposes. This is evident from the fact that Section 149 of the
New Local Government Code empowering local governments to issue fishing permits
is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading,
“Specific Provisions On The Taxing And Other Revenue Raising Power Of Local
Government Units.”
On the other hand, the power of the Authority to grant permits for fishpens,
fishcages and other aqua-culture structures is for the purpose of effectively regulating
and monitoring activities in the Laguna de Bay region (Section 2, Executive Order No.
927) and for lake quality control and management. It does partake of the nature of
police power which is the most pervasive, the least limitable and the most demanding
of all State powers including the power of taxation. Accordingly, the charter of the
Authority which embodies a valid exercise of police power should prevail over the
Local Government Code of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and other
aqua-culture structures in the Laguna de Bay area. Section 3 of Executive Order No.
927 provides for the proper sharing of fees collected.
In respect to the question as to whether the Authority is a quasi-judicial agency or
not, it is our holding that, considenng the provisions of Section 4 of Republic Act No.
4850 and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this
Court in Laguna Lake Development Authority vs. Court of Appeals, 231 SCRA 304,
306, which we quote:
“x x x x x x xxx
As a general rule, the adjudication of pollution cases generally pertains to the
Pollution Adjudication Board (PAB), except in cases where the special law
provides for another forum. It must be recognized in this regard that the LLDA, as
a specialized administrative agency, is specifically mandated under Republic Act
No. 4850 and its amendatory laws to carry out and make effective the declared
national policy of promoting and accelerating the development and balanced
growth of the Laguna Lake area and the surrounding provinces of Rizal and
Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan with
due regard and adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution Under
such a broad grant of power and authority, the LLDA, by virtue of its special charter,
obviously has the responsibility to protect the inhabitants of the Laguna Lake
region from the deleterious effects of pollutants emanating from the discharge of
wastes from the surrounding areas. In carrying out the aforementioned declared
policy, the LLDA is mandated, among others, to pass upon and approve or
disapprove all plans, programs, and projects proposed by local government
offices/agencies within the region, public corporations, and private persons or
enterprises where such plans, programs and/or projects are related to those of the
LLDA for the development of the region.
xxx xxx xxx
x x x.
While it is a fundamental rule that an administrative agency has only such powers
as are expressly granted to it by law, it is likewise a settled rule that an administrative
agency has also such powers as are necessarily implied in the exercise of its express
powers In the exercise, therefore, of its express powers under its charter, as a
regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake
region, the authority of the LLDA to issue a ‘cease and desist order’ is, perforce,
implied. Otherwise, it may well be reduced to a ‘toothless’ paper agency.” there is no
question that the Authority has express powers as a regulatory and quasi-judicial
body in respect to pollution cases with authority to issue a “cease and desist order”
and on matters affecting the construction of illegal fishpens, fishcages and other
aqua-culture structures in Laguna de Bay. The Authority’s pretense, however, that it
is co-equal to the Regional Trial Courts such that all actions against it may only be
instituted before the Court of Appeals cannot be sustained. On actions necessitating Lagoon Fishing Corporation, and MINAMAR Fishing Corporation, are hereby
the resolution of legal questions affecting the powers of the Authority as provided for declared illegal structures subject to demolition by the Laguna Lake Development
in its charter, the Regional Trial Courts have jurisdiction. Authority.
SO ORDERED.
In view of the foregoing, this Court holds that Section 149 of Republic Act No.
7160, otherwise known as the Local Government Code of 1991, has not repealed the Notes.—The right to a balanced and healthful ecology carries with it the correlative duty to
provisions of the charter of the Laguna Lake Development Authority, Republic Act No. refrain from impairing the environment. (Oposa vs. Factoran, Jr., 224 SCRA 792 [1994])
4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits
The Laguna Lake Development Authority has the power and authority to issue a “cease and
for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of
desist” order under Republic Act No. 4850 and its amendatory laws. (Laguna Lake Development
municipalities situated therein and the authority to exercise such powers as are by its Authority vs. Court of Appeals, 231 SCRA 292 [1994])
charter vested on it.
——o0o——
Removal from the Authority of the aforesaid licensing authority will render
nugatory its avowed purpose of protecting and developing the Laguna Lake Region.
Otherwise stated, the abrogation of this power would render useless its reason for
being and will in effect denigrate, if not abolish, the Laguna Lake Development
Authority. This, the Local Government Code of 1991 had never intended to do.

WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby
GRANTED, insofar as they relate to the authority of the Laguna Lake Development
Authority to grant fishing privileges within the Laguna Lake Region.

The restraining orders and/or writs of injunction issued by Judge Arturo Marave,
RTC, Branch 78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70,
Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro
Manila, are hereby DECLARED NULL AND VOID and ordered SET ASIDE for
having been issued with grave abuse of discretion.

The Municipal Mayors of the Laguna Lake Region are hereby PROHIBITED from
issuing permits to construct and operate fishpens, fishcages and other aqua-culture
structures within the Laguna Lake Region, their previous issuances being declared
NULL AND VOID. Thus, the fishing permits issued by Mayors Isidro B. Pacis,
Municipality of Binangonan; Ricardo D. Papa, Municipality of Taguig; and Walfredo M.
de la Vega, Municipality of Jala-jala, specifically, are likewise declared NULL AND
VOID and ordered cancelled.

The fishpens, fishcages and other aqua-culture structures put up by operators by

virtue of permits issued by Municipal Mayors within the Laguna Lake Region,
specifically, permits issued to Fleet Development, Inc. and Carlito Arroyo; Manila
Marine Life Business Resources, Inc., represented by, Mr. Tobias Reynald M.
Tiangco; Greenfield Ventures Industrial Development Corporation and R.J. Orion
Development Corporation; IRMA Fishing And Trading Corporation, ARTM Fishing
Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue Lagoon
Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc.,
represented by its President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern
 G.R. No. 135962. March 27, 2000. Same; Same; Same; There is no syllable in Republic Act No. 7924 that grants the Metro
Manila Development Authority police power, let alone legislative power.—It will be noted that the
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs. BEL-AIR powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
implementation, preparation, management, monitoring, setting of policies, installation of a
VILLAGE ASSOCIATION, INC., respondent.
system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police
power, let alone legislative power. Even the Metro Manila Council has not been delegated any
Constitutional Law; Political Subdivision; Police Power; Definition of Police Power.—
legislative power. Unlike the legislative bodies of the local government units, there is no
Police power is an inherent attribute of sovereignty. It has been defined as the power vested by
provision in R.A. No. 7924 that empowers the MMDA or its Council to “enact ordinances,
the Constitution in the legislature to make, ordain, and establish all manner of wholesome and
approve resolutions and appropriate funds for the general welfare” of the inhabitants of Metro
reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the
Manila. The MMDA is, as termed in the charter itself, a “development authority.”
Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for
the subjects of the same. The power is plenary and its scope is vast and pervasive, reaching
Same; Same; Same; Metro Manila Development Authority is not a political unit of
and justifying measures for public health, public safety, public morals, and the general welfare.
government.—Clearly, the MMDA is not a political unit of government. The power delegated to
the MMDA is that given to the Metro Manila Council to promulgate administrative rules and
Same; Same; Same; Police power is lodged primarily in the National Legislature which
regulations in the implementation of the MMDA’s functions. There is no grant of authority to
may delegate the power to the President and administrative boards as well as the lawmaking
enact ordinances and regulations for the general welfare of the inhabitants of the metropolis.
bodies of municipal corporations or local government units.—It bears stressing that police power
is lodged primarily in the National Legislature. It cannot be exercised by any group or body of
Same; Same; Same; Metro Manila Development Authority is not a local government unit
individuals not possessing legislative power. The National Legislature, however, may delegate
or a public corporation endowed with legislative power.—It is thus beyond doubt that the MMDA
this power to the President and administrative boards as well as the lawmaking bodies of
is not a local government unit or a public corporation endowed with legislative power. It is not
municipal corporations or local government units. Once delegated, the agents can exercise only
even a “special metropolitan political subdivision” as contemplated in Section 11, Article X of the
such legislative powers as are conferred on them by the national lawmaking body.
Constitution. The creation of a “special metropolitan political subdivision” requires the approval
by a majority of the votes cast in a plebiscite in the political units directly affected. R.A. No. 7924
Same; Same; Same; Definition of Local Government.—A local government is a “political
was not submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of the MMDA
subdivision of a nation or state which is constituted by law and has substantial control of local
is not an official elected by the people, but appointed by the President with the rank and
affairs.” The Local Government Code of 1991 defines a local government unit as a “body politic
privileges of a cabinet member. In fact, part of his function is to perform such other duties as
and corporate”—one endowed with powers as a political subdivision of the National Government
may be assigned to him by the President, whereas in local government units, the President
and as a corporate entity representing the inhabitants of its territory. Local government units are
merely exercises supervisory authority. This emphasizes the administrative character of the
the provinces, cities, municipalities and barangays. They are also the territorial and political
MMDA.
subdivisions of the state.
Same; Same; Same; Unlike the Metro Manila Commission, the Metro Manila
Same; Same; Same; Same; Police power delegated to the local government units in the
Development Authority has no power to enact ordinances for the welfare of the community.—
Local Government Code of 1991.—Our Congress delegated police power to the local
Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA under R.A. No.
government units in the Local Government Code of 1991. This delegation is found in Section 16
7924. Unlike the MMC, the MMDA has no power to enact ordinances for the welfare of the
of the same Code, known as the general welfare clause.
community. It is the local government units, acting through their respective legislative councils,
that possess legislative power and police power. In the case at bar, the Sangguniang
Same; Same; Same; Same; Local government units exercise police power through their
Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of
respective legislative bodies.—Local government units exercise police power through their
Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and the respondent
respective legislative bodies. The legislative body of the provincial government is
Court of Appeals did not err in so ruling.
the sangguniang panlalawigan, that of the city government is the sangguniang panlungsod, that
of the municipal government is the sangguniang bayan, and that of the barangay is
the sangguniang barangay. The Local Government Code of 1991 empowers the sangguniang
panlalawigan, sangguniang panlungsodand sangguniang bayan to “enact ordinances, approve
resolutions and appropriate funds for the general welfare of the [province, city or municipality, as PUNO, J.:
the case may be], and its inhabitants pursuant to Section 16 of the Code and in the proper Not infrequently, the government is tempted to take legal shortcuts to solve urgent
exercise of the corporate powers of the [province, city municipality] provided under the Code x x problems of the people. But even when government is armed with the best of
x.” The same Code gives the sangguniang barangay the power to “enact ordinances as may be intention, we cannot allow it to run roughshod over the rule of law. Again, we let the
necessary to discharge the responsibilities conferred upon it by law or ordinance and to promote
hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a
the general welfare of the inhabitants thereon.”
private road in a private subdivision. While we hold that the general welfare should be
promoted, we stress that it should not be achieved at the expense of the rule of law.

Petitioner MMDA is a government agency tasked with the delivery of basic
services in Metro Manila. Respondent Bel-Air Village Association, Inc. (BAVA) is a
non-stock, non-profit corporation whose members are homeowners in Bel-Air Village,
a private subdivision in Makati City. Respondent BAVA is the registered owner of
Neptune Street, a road inside BelAir Village.
On December 30, 1995, respondent received from petitioner, through its
Chairman, a notice dated December 22, 1995 requesting respondent to open
Neptune Street to public vehicular traffic starting January 2, 1996. The notice reads:
“SUBJECT: NOTICE of the Opening of Neptune Street to Traffic
“Dear President Lindo,
“Please be informed that pursuant to the mandate of the MMDA law or
Republic Act No. 7924 which requires the Authority to rationalize the use
of roads and/or thoroughfares for the safe and convenient movement of
persons, Neptune Street shall be opened to vehicular traffic effective
January 2, 1996.
“In view whereof, the undersigned requests you to voluntarily open
the points of entry and exit on said street.
“Thank you for your cooperation and whatever assistance that may
be extended by your association to the MMDA personnel who will be
directing traffic in the area.
“Finally, we are furnishing you with a copy of the handwritten
instruction of the President on the matter.
“Very truly yours,
PROSPERO I. ORETA
Chairman”
On the same day, respondent was apprised that the perimeter wall separating the
subdivision from the adjacent Kalayaan Avenue would be demolished.
On January 2, 1996, respondent instituted against petitioner before the Regional
Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for injunction.
Respondent prayed for the issuance of a temporary restraining order and
preliminary injunction enjoining the opening of Neptune Street and prohibiting the
demolition of the perimeter wall. The trial court issued a temporary restraining order
the following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a
preliminary injunction. Respondent questioned the denial before the Court of Appeals
in CA-G.R. SP No. 39549. The appellate court conducted an ocular inspection of
Neptune Street and on February 13, 1996, it issued a writ of preliminary injunction
enjoining the implementation of the MMDA’s proposed action.
On January 28, 1997, the appellate court rendered a Decision on the merits of the
case finding that the MMDA has no authority to order the opening of Neptune Street,
a private subdivision road and cause the demolition of its perimeter walls. It held that
the authority is lodged in the City Council of Makati by ordinance. The decision
disposed of as follows:
“WHEREFORE, the Petition is GRANTED; the challenged Order dated January
23, 1995, in Civil Case No. 96-001, is SET ASIDE and the Writ of Preliminary
Injunction issued on February 13, 1996 is hereby made permanent.
“For want of sustainable substantiation, the Motion to Cite Roberto L. del
Rosario in contempt is denied.
“No pronouncement as to costs.
“SO ORDERED.”
The Motion for Reconsideration of the decision was denied on September 28, 1998.
Hence, this recourse.
Petitioner MMDA raises the following questions:
“I
HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE MANDATE
TO OPEN NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO ITS REGULATORY AND
POLICE POWERS?
II
IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE MMDA
MAY ORDER THE OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?
III
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM DENYING
OR ASSAILING THE AUTHORITY OF THE MMDA TO OPEN THE SUBJECT STREET?
IV
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL MEETINGS
HELD BETWEEN MMDA AND THE AFFECTED BEL-AIR RESIDENTS AND BAVA OFFICERS?
V
HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS?”
Neptune Street is owned by respondent BAVA. It is a private road inside Bel-Air
Village, a private residential subdivision in the heart of the financial and commercial
district of Makati City. It runs parallel to Kalayaan Avenue, a national road open to the
general public. Dividing the two (2) streets is a concrete perimeter wall approximately
fifteen (15) feet high. The western end of Neptune Street intersects Nicanor Garcia,
formerly Reposo Street, a subdivision road open to public vehicular traffic, while its
eastern end intersects Makati Avenue, a national road. Both ends of Neptune Street
are guarded by iron gates.
Petitioner MMDA claims that it has the authority to open Neptune Street to public
traffic because it is an agent of the state endowed with police power in the delivery of
basic services in Metro Manila. One of these basic services is traffic management
which involves the regulation of the use of thoroughfares to insure the safety,
convenience and welfare of the general public. It is alleged that the police power of
MMDA was affirmed by this Court in the consolidated cases of Sangalang v.
Intermediate AppellateCourt. From the premise that it has police power, it is now
urged that there is no need for the City of Makati to enact an ordinance opening
Neptune street to the public.
Police power is an inherent attribute of sovereignty. It has been defined as the
power vested by the Constitution in the legislature to make, ordain, and establish all
manner of wholesome and reasonable laws, statutes and ordinances, either with
penalties or without, not repugnant to the Constitution, as they shall judge to be for
the good and welfare of the commonwealth, and for the subjects of the same. The
power is plenary and its scope is vast and pervasive, reaching and justifying
measures for public health, public safety, public morals, and the general welfare.
It bears stressing that police power is lodged primarily in the National Legislature.
It cannot be exercised by any group or body of individuals not possessing legislative
power. The National Legislature, however, may delegate this power to the President
and administrative boards as well as the lawmaking bodies of municipal corporations
or local government units. Once delegated, the agents can exercise only such
legislative powers as are conferred on them by the national lawmaking body.
A local government is a “political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs.” The Local Government
Code of 1991 defines a local government unit as a “body politic and corporate” —one
endowed with powers as a political subdivision of the National Government and as a
corporate entity representing the inhabitants of its territory. Local government units
are the provinces, cities, municipalities and barangays. They are also the territorial
and political subdivisions of the state.
Our Congress delegated police power to the local government units in the Local
Government Code of 1991. This delegation is found in Section 16 of the same Code,
known as the general welfare clause, viz..
“Sec. 16. General Welfare.—Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health
and safety, enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain peace and order,
and preserve the comfort and convenience of their inhabitants.”
Local government units exercise police power through their respective legislative
bodies. The legislative body of the provincial government is the sangguniang
panlalawigan, that of the city government is the sangguniang panlungsod, that of the
municipal government is the sangguniang bayan, and that of the barangay is
the sangguniang barangay. The Local Government Code of 1991 empowers
the sangguniang panlalawigan, sangguniang panlungsodand sangguniang bayan to
“enact ordinances, approve resolutions and appropriate funds for the general welfare
of the [province, city or municipality, as the case may be], and its inhabitants pursuant
to Section 16 of the Code and in the proper exercise of the corporate powers of the
[province, city municipality] provided under the Code x x x.” The same Code gives
the sangguniang barangay the power to “enact ordinances as may be necessary to
discharge the responsibilities conferred upon it by law or ordinance and to promote
the general welfare of the inhabitants thereon.”
Metropolitan or Metro Manila is a body composed of several local government
units—i.e., twelve (12) cities and five (5) municipalities, namely, the cities of
Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las
Pinas, Marikina, Parañaque and Valenzuela, and the municipalities of Malabon,
Navotas, Pateros, San Juan and Taguig. With the passage of Republic Act (R.A.) No.
7924 in 1995, Metropolitan Manila was declared as a “special development and
administrative region” and the Administration of “metrowide” basic services affecting
the region placed under “a development authority” referred to as the MMDA.
“Metro-wide services” are those “services which have metrowide impact and
transcend local political boundaries or entail huge expenditures such that it would not
be viable for said services to be provided by the individual local government units
comprising Metro Manila.” There are seven (7) basic metro-wide services and the
scope of these services cover the following: (1) development planning; (2) transport
and traffic management; (3) solid waste disposal and management; (4) flood control
and sewerage management; (5) urban renewal, zoning and land use planning, and
shelter services; (6) health and sanitation, urban protection and pollution control; and
(7) public safety. The basic service of transport and traffic management includes the
following:
“(b) Transport and traffic management which include the
formulation, coordination, and monitoring of policies, standards, programs and
projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares, and promotion of safe and convenient
movement of persons and goods; provision for the mass transport system and the
institution of a system to regulate road users; administration and implementation
of all traffic enforcement operations, traffic engineering services and traffic
education programs, including the institution of a single ticketing system in
Metropolitan Manila;”
In the delivery of the seven (7) basic services, the MMDA has the following powers
and functions:
“Sec. 5. Functions and powers of the Metro Manila Development Authority.—The
MMDA shall:
(a)Formulate, coordinate and regulate the implementation of medium and
long-term plans and programs for the delivery of metrowide services, land
 use and physical development within Metropolitan Manila, consistent with
national development objectives and priorities;
(b)Prepare, coordinate and regulate the implementation of medium-term
investment programs for metro-wide services which shall indicate sources
and uses of funds for priority programs and projects, and which shall include
the packaging of projects and presentation to funding institutions;
(c)Undertake and manage on its own metro-wide programs and projects for
the delivery of specific services under its jurisdiction, subject to the approval
of the Council. For this purpose, MMDA can create appropriate project
management offices;
(d)Coordinate and monitor the implementation of such plans, programs and
projects in Metro Manila; identify bottlenecks and adopt solutions to problems
of implementation;
(e)The MMDA shall set the policies concerning traffic in Metro Manila, and
shall coordinate and regulate the implementation of all programs and projects
concerning traffic management, specifically pertaining to
enforcement, engineering and education. Upon request, it shall be extended
assistance and cooperation, including but not limited to, assignment of
personnel, by all other government agencies and offices concerned;
(f)Install and administer a single ticketing system, fix, impose and collect fines
and penalties for all kinds of violations of traffic rules and regulations, whether
moving or non-moving in nature, and confiscate and suspend or revoke
drivers’ licenses in the enforcement of such traffic laws and regulations, the
provisions of RA 4136 and PD 1605 to the contrary notwithstanding. For this
purpose, the Authority shall impose all traffic laws and regulations in Metro
Manila, through its traffic operation center, and may deputize members of the
PNP, traffic enforcers of local government units, duly licensed security
guards, or members of non-governmental organizations to whom may be
delegated certain authority, subject to such conditions and requirements as
the Authority may impose; and
(g)Perform other related functions required to achieve the objectives of the
MMDA, including the undertaking of delivery of basic services to the local
government units, when deemed necessary subject to prior coordination with
and consent of the local government unit concerned.”
The implementation of the MMDA’s plans, programs and projects is undertaken by
the local government units, national government agencies, accredited people’s
organizations, nongovernmental organizations, and the private sector as well as by
the MMDA itself. For this purpose, the MMDA has the power to enter into contracts,
memoranda of agreement and other cooperative arrangements with these bodies for
the delivery of the required services within Metro Manila.
The governing board of the MMDA is the Metro Manila Council.The Council is
composed of the mayors of the component 12 cities and 5 municipalities, the
president of the Metro Manila Vice-Mayors’ League and the president of the Metro
Manila Councilors’ League. The Council is headed by a Chairman who is appointed
by the President and vested with the rank of cabinet member. As the policy-making
body of the MMDA, the Metro Manila Council approves metro-wide plans, programs
and projects, and issues the necessary rules and regulations for the implementation
of said plans; it approves the annual budget of the MMDA and promulgates the rules
and regulations for the delivery of basic services, collection of service and regulatory
fees, fines and penalties. These functions are particularly enumerated as follows:
“Sec. 6. Functions of the Metro Manila Council.—
(a)The Council shall be the policy-making body of the MMDA;
(b)It shall approve metro-wide plans, programs and projects and issue rules
and regulations deemed necessary by the MMDA to carry out the purposes
of this Act;
(c)It may increase the rate of allowances and per diems of the members of
the Council to be effective during the term of the succeeding Council. It shall
fix the compensation of the officers and personnel of the MMDA, and approve
the annual budget thereof for submission to the Department of Budget and
Management (DBM);
(d)It shall promulgate rules and regulations and set policies and standards for
metro-wide application governing the delivery of basic services, prescribe and
collect service and regulatory fees, and impose and collect fines and
penalties.”
Clearly, the scope of the MMDA’s function is limited to the delivery of the seven (7)
basic services. One of these is transport and traffic management which includes the
formulation and monitoring of policies, standards and projects to rationalize the
existing transport operations, infrastructure requirements, the use of thoroughfares
and promotion of the safe movement of persons and goods. It also covers the mass
transport system and the institution of a system of road regulation, the administration
of all traffic enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metro Manila for
traffic violations. Under this service, the MMDA is expressly authorized “to set the
policies concerning traffic” and “coordinate and regulate the implementation of all
traffic management programs.” In addition, the MMDA may “install and administer a
single ticketing system,” fix, impose and collect fines and penalties for all traffic
violations.
It will be noted that the powers of the MMDA are limited to the following acts:
formulation, coordination, regulation, implementation, preparation, management,
monitoring, setting of policies, installation of a system and administration. There is no
syllable in R.A. No. 7924 that grants the MMDA police power, let alone legislative
power. Even the Metro Manila Council has not been delegated any legislative power.
Unlike the legislative bodies of the local government units, there is no provision in
R.A. No. 7924 that empowers the MMDA or its Council to “enact ordinances, approve
resolutions and appropriate funds for the general welfare” of the inhabitants of Metro
Manila. The MMDA is, as termed in the charter itself, a “development authority.”30 It
is an agency created for the purpose of laying down policies and coordinating with the
various national government agencies, people’s organizations, non-governmental
organizations and the private sector for the efficient and expeditious delivery of basic
services in the vast metropolitan area. All its functions are administrative in
nature and these are actually summed up in the charter itself, viz.:
“Sec. 2. Creation of the Metropolitan Manila Development Authority.—x x x.
 The MMDA shall perform planning, monitoring and coordinative functions, and In the second Sangalang/Yabut decision, we held that the opening of Jupiter
in the process exercise regulatory and supervisory authorityover the delivery of Street was warranted by the demands of the common good in terms of “traffic
metro-wide services within Metro Manila, without diminution of the autonomy of the decongestion and public convenience.” Jupiter was opened by the Municipal Mayor to
local government units concerning purely local matters.”
alleviate traffic congestion along the public streets adjacent to the Village. The same
reason was given for the opening to public vehicular traffic of Orbit Street, a road
Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate Appellate
inside the same village. The destruction of the gate in Orbit Street was also made
Court where we upheld a zoning ordinance issued by the Metro Manila Commission
under the police power of the municipal government. The gate, like the perimeter wall
(MMC), the predecessor of the MMDA, as an exercise of police power. The
along Jupiter, was a public nuisance because it hindered and impaired the use of
first Sangalangdecision was on the merits of the petition, while the second decision
property, hence, its summary abatement by the mayor was proper and legal.
denied reconsideration of the first case and in addition discussed the case of Yabut v.
Court of Appeals.
Contrary to petitioner’s claim, the two Sangalang cases do not apply to the case
at bar. Firstly, both involved zoning ordinances passed by the municipal council of
Sangalang v. IAC involved five (5) consolidated petitions filed by respondent
Makati and the MMC. In the instant case, the basis for the proposed opening of
BAVA and three residents of Bel-Air Village against other residents of the Village and
Neptune Street is contained in the notice of December 22, 1995 sent by petitioner to
the Ayala Corporation, formerly the Makati Development Corporation, as the
respondent BAVA, through its president. The notice does not cite any ordinance or
developer of the subdivision. The petitioners sought to enforce certain restrictive
law, either by the Sangguniang Panlungsod of Makati City or by the MMDA, as the
easements in the deeds of sale over their respective lots in the subdivision. These
legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply
were the prohibition on the setting up of commercial and advertising signs on the lots,
relied on its authority under its charter “to rationalize the use of roads and/or
and the condition that the lots be used only for residential purposes. Petitioners
thoroughfares for the safe and convenient movement of persons.” Rationalizing the
alleged that respondents, who were residents along Jupiter Street of the subdivision,
use of roads and thoroughfares is one of the acts that fall within the scope of
converted their residences into commercial establishments in violation of the “deed
transport and traffic management. By no stretch of the imagination, however, can this
restrictions,” and that respondent Ayala Corporation ushered in the full
be interpreted as an express or implied grant of ordinancemaking power, much less
“commercialization” of Jupiter Street by tearing down the perimeter wall that
police power.
separated the commercial from the residential section of the village.
Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although
The petitions were dismissed based on Ordinance No. 81 of the Municipal
the MMC is the forerunner of the present MMDA, an examination of Presidential
Council of Makati and Ordinance No. 81-01 of the Metro Manila Commission (MMC).
Decree (P.D.) No. 824, the charter of the MMC, shows that the latter possessed
Municipal Ordinance No. 81 classified Bel-Air Village as a Class A Residential Zone,
greater powers which were not bestowed on the present MMDA.
with its boundary in the south extending to the center line of Jupiter Street. The
Municipal Ordinance was adopted by the MMC under the Comprehensive Zoning
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.) No.
Ordinance for the National Capital Region and promulgated as MMC Ordinance No.
824. It comprised the Greater Manila Area composed of the contiguous four (4) cities
81-01. Bel-Air Village was indicated therein as bounded by Jupiter Street and the
of Manila, Quezon, Pasay and Caloocan, and the thirteen (13) municipalities of
block adjacent thereto was classified as a High Intensity Commercial Zone.
Makati, Mandaluyong, San Juan, Las Piñas, Malabon, Navotas, Pasig, Pateros,
Parañaque, Marikina, Muntinlupa and Taguig in the province of Rizal, and Valenzuela
We ruled that since both Ordinances recognized Jupiter Street as the boundary
in the province of Bulacan. Metropolitan Manila was created as a response to the
between Bel-Air Village and the commercial district, Jupiter Street was not for the
finding that the rapid growth of population and the increase of social and economic
exclusive benefit of Bel-Air residents. We also held that the perimeter wall on said
requirements in these areas demand a call for simultaneous and unified development;
street was constructed not to separate the residential from the commercial blocks but
that the public services rendered by the respective local governments could be
simply for security reasons, hence, in tearing down said wall, Ayala Corporation did
administered more efficiently and economically if integrated under a system of central
not violate the “deed restrictions” in the deeds of sale.
planning; and this coordination, “especially in the maintenance of peace and order
and the eradication of social and economic ills that fanned the flames of rebellion and
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a legitimate
discontent [were] part of reform measures under Martial Law essential to the safety
exercise of police power. The power of the MMC and the Makati Municipal Council to
and security of the State.” Metropolitan Manila was established as a “public
enact zoning ordinances for the general welfare prevailed over the “deed restrictions.”
corporation” with the following powers:
 “Section 1. Creation of the Metropolitan Manila.—There is hereby created a public
corporation, to be known as the Metropolitan Manila, vested with powers and
attributes of a corporation including the power to make contracts, sue and be
sued, acquire, purchase, expropriate, hold, transfer and dispose of property and
such other powers as are necessary to carry out its purposes. The Corporation
shall be administered by a Commission created under this Decree.”
The administration of Metropolitan Manila was placed under the Metro Manila
Commission (MMC) vested with the following powers:
“Sec. 4. Powers and Functions of the Commission.—The Commission shall have
the following powers and functions:
1.To act as a central government to establish and administer programs and
provide services common to the area;
2.To levy and collect taxes and special assessments, borrow and expend
money and issue bonds, revenue certificates, and other obligations of
indebtedness. Existing tax measures should, however, continue to be
operative until otherwise modified or repealed by the Commission;
3.To charge and collect fees for the use of public service facilities;
4.To appropriate money for the operation of the metropolitan government
and review appropriations for the city and municipal units within its
jurisdiction with authority to disapprove the same if found to be not in
accordance with the established policies of the Commission, without
prejudice to any contractual obligation of the local government units
involved existing at the time of approval of this Decree;
5.To review, amend, revise or repeal all ordinances, resolutions and acts
of cities and municipalities within Metropolitan Ma-nila;
6.To enact or approve ordinances, resolutions and to fix penalties for any
violation thereof which shall not exceed a fine of P10,000.00 or
imprisonment of six years or both such fine and imprisonment for a single
offense;
7.To perform general administrative, executive and policymaking
functions;
8.To establish a fire control operation center, which shall direct the fire
services of the city and municipal governments in the metropolitan area;
9.To establish a garbage disposal operation center, which shall direct
garbage collection and disposal in the metropolitan area;
10.To establish and operate a transport and traffic center, which shall direct
traffic activities;
11.To coordinate and monitor governmental and private activities
pertaining to essential services such as transportation, flood control and
drainage, water supply and sewerage, social, health and environmental
services, housing, park development, and others;
12.To insure and monitor the undertaking of a comprehensive social,
economic and physical planning and development of the area;
13.To study the feasibility of increasing barangay participation in the affairs
of their respective local governments and to propose to the President of
the Philippines definite programs and policies for implementation;
14.To submit within thirty (30) days after the close of each fiscal year an
annual report to the President of the Philippines and to submit a periodic
report whenever deemed necessary; and
15.To perform such other tasks as may be assigned or directed by the
President of the Philippines.”
The MMC was the “central government” of Metro Manila for the purpose of
establishing and administering programs providing services common to the area. As a
“central government” it had the power to levy and collect taxes and special
assessments, the power to charge and collect fees; the power to appropriate money
for its operation, and at the same time, review appropriations for the city and
municipal units within its jurisdiction. It was bestowed the power to enact or approve
ordinances, resolutions and fix penalties for violation of such ordinances and
resolutions. It also had the power to review, amend, revise or repeal all ordinances,
resolutions and acts of any of the four (4) cities and thirteen (13) municipalities
comprising Metro Manila.
P.D. No. 824 further provided:
“Sec. 9. Until otherwise provided, the governments of the four cities and thirteen
municipalities in the Metropolitan Manila shall continue to exist in their present form
except as may be inconsistent with this Decree. The members of the existing city
and municipal councils in Metropolitan Manila shall, upon promulgation of this
Decree, and until December 31, 1975, become members of the Sangguniang
Bayan which is hereby created for every city and municipality of Metropolitan
Manila.
In addition, the Sangguniang Bayan shall be composed of as many barangay
captains as may be determined and chosen by the Commission, and such number
of representatives from other sectors of the society as may be appointed by the
President upon recommendation of the Commission.
x x x.
The Sangguniang Bayan may recommend to the Commission
ordinances, resolutions or such measures as it may adopt; Provided, that no such
ordinance, resolution or measure shall become effective, until after its approval by
the Commission; and Provided further, that the power to impose taxes and other
levies, the power to appropriate money and the power to pass ordinances or
resolutions with penal sanctions shall be vested exclusively in the Commission.”
The creation of the MMC also carried with it the creation of the Sangguniang
Bayan. This was composed of the members of the component city and municipal
councils, barangay captains chosen by the MMC and sectoral representatives
appointed by the President. The Sangguniang Bayan had the power to recommend to
the MMC the adoption of ordinances, resolutions or measures. It was the MMC
itself, however, that possessed legislative powers. All ordinances, resolutions and
measures recommended by the Sangguniang Bayanwere subject to the MMC’s
approval. Moreover, the power to impose taxes and other levies, the power to
appropriate money, and the power to pass ordinances or resolutions with penal
sanctions were vested exclusively in the MMC.
 Thus, Metropolitan Manila had a “central government,” i.e., the MMC which fully
possessed legislative and police powers. Whatever legislative powers the component
cities and municipalities had were all subject to review and approval by the MMC.
After President Corazon Aquino assumed power, there was a clamor to restore
the autonomy of the local government units in Metro Manila. Hence, Sections 1 and 2
of Article X of the 1987 Constitution provided:
“Section 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities and barangays. There shall be
autonomous regions in Muslim Mindanao and the Cordilleras as herein provided.
Section 2. The territorial and political subdivisions shall enjoy local autonomy.”
The Constitution, however, recognized the necessity of creating metropolitan regions
not only in the existing National Capital Region but also in potential equivalents in the
Visayas and Mindanao. Section 11 of the same Article X thus provided:
“Section 11. The Congress may, by law, create special metropolitan political
subdivisions, subject to a plebiscite as set forth in Section 10 hereof. The
component cities and municipalities shall retain their basic autonomy and shall be
entitled to their own local executives and legislative assemblies. The jurisdiction of
the metropolitan authority that will thereby be created shall be limited to basic
services requiring coordination.”
The Constitution itself expressly provides that Congress may, by law, create “special
metropolitan political subdivisions” which shall be subject to approval by a majority of
the votes cast in a plebiscite in the political units directly affected; the jurisdiction of
this subdivision shall be limited to basic services requiring coordination; and the cities
and municipalities comprising this subdivision shall retain their basic autonomy and
their own local executive and legislative assemblies. Pending enactment of this law,
the Transitory Provisions of the Constitution gave the President of the Philippines the
power to constitute the Metropolitan Authority, viz.:
“Section 8. Until otherwise provided by Congress, the President may constitute the
Metropolitan Authority to be composed of the heads of all local government units
comprising the Metropolitan Manila area.”
In 1990, President Aquino issued Executive Order (E.O.) No. 392 and constituted the
Metropolitan Manila Authority (MMA). The powers and functions of the MMC were
devolved to the MMA. It ought to be stressed, however, that not all powers and
functions of the MMC were passed to the MMA.
The MMA’s power was limited to the “delivery of basic urban services requiring
coordination in Metropolitan Manila.” The MMA’s governing body, the Metropolitan
Manila Council, although composed of the mayors of the component cities and
municipalities, was merely given the power of: (1) formulation of policies on the
delivery of basic services requiring coordination and consolidation; and (2)
promulgation of resolutions and other issuances, approval of a code of basic services
and the exercise of its rule-making power.
Under the 1987 Constitution, the local government units became primarily
responsible for the governance of their respective political subdivisions. The MMA’s
jurisdiction was limited to addressing common problems involving basic services that
transcended local boundaries. It did not have legislative power. Its power was merely
to provide the local government units technical assistance in the preparation of local
development plans. Any semblance of legislative power it had was confined to a
“review [of] legislation proposed by the local legislative assemblies to ensure
consistency among local governments and with the comprehensive development plan
of Metro Manila,” and to “advise the local governments accordingly.”
When R.A. No. 7924 took effect, Metropolitan Manila became a“special
development and administrative region” and the MMDA a“special development
authority” whose functions were “without prejudice to the autonomy of the affected
local government units.” The character of the MMDA was clearly defined in the
legislative debates enacting its charter.
R.A. No. 7924 originated as House Bill No. 14170/11116 and was introduced by
several legislators led by Dante Tinga, Roilo Golez and Feliciano Belmonte. It was
presented to the House of Representatives by the Committee on Local Governments
chaired by Congressman Ciriaco R. Alfelor. The bill was a product of Committee
consultations with the local government units in the National Capital Region (NCR),
with former Chairmen of the MMC and MMA, and career officials of said agencies.
When the bill was first taken up by the Committee on Local Governments, the
following debate took place:
“THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This has been
debated a long time ago, you know. It’s a special... we can create a special
metropolitan political subdivision.
Actually, there are only six (6) political subdivisions provided for in the
Constitution: barangay, municipality, city, province, and we have the Autonomous
Region of Mindanao and we have the Cordillera. So we have 6. Now . . . .
HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of the
Autonomous Region, that is also specifically mandated by the Constitution.
THE CHAIRMAN: That’s correct. But it is considered to be a political
subdivision. What is the meaning of a political subdivision? Meaning to say, that it
has its own government, it has its own political personality, it has the power to tax,
and all governmental powers: police power and everything. All right. Authority is
different; because it does not have its own government. It is only a council, it is an
organization of political subdivision, powers,‘no, which is not imbued with any
political power.
If you go over Section 6, where the powers and functions of the Metro Manila
Development Authority, it is purely coordinative. And it provides here that the
council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with coordinative power.
Meaning to say, it coordinates all of the different basic services which have to be
delivered to the constituency. All right.
There is now a problem. Each local government unit is given its respective . .
. as a political subdivision. Kalookan has its powers, as provided for and protected
and guaranteed by the Constitution. All right, the exercise. However, in the
 exercise of that power, it might be deleterious and disadvantageous to other local
government units. So, we are forming an authority where all of these will be
members and then set up a policy in order that the basic services can be effectively
coordinated. All right.
Of course, we cannot deny that the MMDA has to survive. We have to provide
some funds, resources. But it does not possess any political power. We do not
elect the Governor. We do not have the power to tax. As a matter of fact, I was
trying to intimate to the author that it must have the power to sue and be sued
because it coordinates. All right. It coordinates practically all these basic services
so that the flow and the distribution of the basic services will be continuous. Like
traffic, we cannot deny that. It’s before our eyes. Sewerage, flood control, water
system, peace and order, we cannot deny these. It’s right on our face. We have to
look for a solution. What would be the right solution? All right, we envision that
there should be a coordinating agency and it is called an authority. All right, if you
do not want to call it an authority, it’s alright. We may call it a council or maybe a
management agency.
x x x.”
Clearly, the MMDA is not a political unit of government. The power delegated to the
MMDA is that given to the Metro Manila Council to promulgate administrative rules
and regulations in the implementation of the MMDA’s functions. There is no grant of
authority to enact ordinances and regulations for the general welfare of the
inhabitants of the metropolis. This was explicitly stated in the last Committee
deliberations prior to the bill’s presentation to Congress. Thus:
“THE CHAIRMAN: Yeah, but we have to go over the suggested revision. I think
this was already approved before, but it was reconsidered in view of the
proposals, set-up, to make the MMDA stronger. Okay, so if there is no
objection to paragraph “f”. . . And then next is paragraph “b,” under Section
6. “It shall approve metrowide plans, programs and projects and issue
ordinances or resolutions deemed necessary by the MMDA to carry out the
purposes of this Act.” Do you have the powers? Does the MMDA . . . because
that takes the form of a local government unit, a political subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we say that it
has the policies, it’s very clear that those policies must be followed.
Otherwise, what’s the use of empowering it to come out with policies. Now,
the policies may be in the form of a resolution or it may be in the form of a
ordinance. The term “ordinance” in this case really gives it more teeth, your
honor. Otherwise, we are going to see a situation where you have the power
to adopt the policy but you cannot really make it stick as in the case now, and
I think here is Chairman Bunye. I think he will agree that that is the case now.
You’ve got the power to set a policy, the body wants to follow your policy,
then we say let’s call it an ordinance and see if they will not follow it.
THE CHAIRMAN: That’s very nice. I like that. However, there is a constitutional
impediment. You are making this MMDA a political subdivision. The creation
of the MMDA would be subject to a plebiscite. That is what I’m trying to
avoid. I’ve been trying to avoid this kind of predicament. Under the
Constitution it states: if it is a political subdivision, once it is created it has to
be subject to a plebiscite. I’m trying to make this as administrative. That’s why
we place the Chairman as a cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what you are saying there is . .
..
THE CHAIRMAN: In setting up ordinances, it is a political exercise. Believe me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances of rules and
regulations. That would be . . . it shall also be enforced.
HON. BELMONTE: Okay, I will . . . .
HON. LOPEZ: And you can also say that violation of such rule, you impose a
sanction. But you know, ordinance has a different legal connotation.
HON. BELMONTE: All right. I defer to that opinion, your Honor.
THE CHAIRMAN: So instead of ordinances, say rules and regulations.
HON. BELMONTE: Or resolutions. Actually, they are actually considering
resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and resolutions.”
The draft of H.B. No. 14170/11116 was presented by the Committee to the House of
Representatives. The explanatory note to the bill stated that the proposed MMDA is a
“development authority” which is a “national agency, not a political government unit.”
The explanatory note was adopted as the sponsorship speech of the Committee on
Local Governments. No interpellations or debates were made on the floor and no
amendments introduced. The bill was approved on second reading on the same day it
was presented.
When the bill was forwarded to the Senate, several amendments were made.
These amendments, however, did not affect the nature of the MMDA as originally
conceived in the House of Representatives.
It is thus beyond doubt that the MMDA is not a local government unit or a public
corporation endowed with legislative power. It is not even a “special metropolitan
political subdivision” as contemplated in Section 11, Article X of the Constitution. The
creation of a “special metropolitan political subdivision” requires the approval by a
majority of the votes cast in a plebiscite in the political units directly affected. R.A. No.
7924 was not submitted to the inhabitants of Metro Manila in a plebiscite. The
Chairman of the MMDA is not an official elected by the people, but appointed by the
President with the rank and privileges of a cabinet member. In fact, part of his
function is to perform such other duties as may be assigned to him by the President,
whereas in local government units, the President merely exercises supervisory
authority. This emphasizes the administrative character of the MMDA.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the MMDA
under R.A. No. 7924. Unlike the MMC, the MMDA has no power to enact ordinances
for the welfare of the community. It is the local government units, acting through their
respective legislative councils, that possess legislative power and police power. In the
case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance
or resolution ordering the opening of Neptune Street, hence, its proposed opening by
petitioner MMDA is illegal and the respondent Court of Appeals did not err in so
ruling. We desist from ruling on the other issues as they are unnecessary.
 We stress that this decision does not make light of the MMDA’s noble efforts to
solve the chaotic traffic condition in Metro Manila. Everyday, traffic jams and traffic
bottlenecks plague the metropolis. Even our once sprawling boulevards and avenues
are now crammed with cars while city streets are clogged with motorists and
pedestrians. Traffic has become a social malaise affecting our people’s productivity
and the efficient delivery of goods and services in the country. The MMDA was
created to put some order in the metropolitan transportation system but unfortunately
the powers granted by its charter are limited. Its good intentions cannot justify the
opening for public use of a private street in a private subdivision without any legal
warrant. The promotion of the general welfare is not antithetical to the preservation of
the rule of law.

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 39549 are affirmed.
SO ORDERED.

Note.—In order that a local government may exercise police power, there must be
a legislative grant which necessarily sets the limits for the exercise of the power. (Tano
vs. Socrates, 278 SCRA 154 [1997])

——o0o——
 G.R. No. 149848. November 25, 2004.
ARSADI M. DISOMANGCOP and RAMIR M. DIMALOTANG, petitioners, vs. THE
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS,
SIMEON A. DATUMANONG and THE SECRETARY OF BUDGET and
MANAGEMENT EMILIA T. BONCODIN, respondents.
Constitutional Law; Political Law; The 1987 Constitution is explicit in defining the scope of
judicial power; It establishes the authority of the courts to determine in an appropriate action the
validity of acts of the political departments; Requisites for the exercise of judicial power.—The
1987 Constitution is explicit in defining the scope of judicial power. It establishes the authority of
the courts to determine in an appropriate action the validity of acts of the political departments. It
speaks of judicial prerogative in terms of duty. Jurisprudence has laid down the following
requisites for the exercise of judicial power: First, there must be before the Court an actual case
calling for the exercise of judicial review. Second, the question before the Court must be ripe for
adjudication. Third, the person challenging the validity of the act must have standing to
challenge. Fourth,the question of constitutionality must have been raised at the earliest
opportunity. Fifth, the issue of constitutionality must be the very lis mota of the case.
Same; Same; Where an action of the legislative branch is seriously alleged to have
infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to
settle the dispute; Grounds to strike down acts of the political departments of government.—In
seeking to nullify acts of the legislature and the executive department on the ground that they
contravene the Constitution, the petition no doubt raises a justiciable controversy. As held
in Tañada v. Angara, “where an action of the legislative branch is seriously alleged to have
infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to
settle the dispute.” But in deciding to take jurisdiction over this petition questioning acts of the
political departments of government, the Court will not review the wisdom, merits, or propriety
thereof, but will strike them down only on either of two grounds: (1) unconstitutionality or illegality
and (2) grave abuse of discretion.
Same; Same; Definition of Legal Standing or Law Stands; Petitioner must show that he
has been, or is about to be, denied some right or privilege to which he is lawfully entitled, or that
he is about to be subjected to some burdens or penalties by reason of the statute complained
of.—Legal standing or locus standi is defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act
that is being challenged. The term “interest” means a material interest, an interest in issue
affected by the decree, as distinguished from a mere interest in the question involved, or a mere
incidental interest. A party challenging the constitutionality of a law, act, or statute must show
“not only that the law is invalid, but also that he has sustained or is in immediate, or imminent
danger of sustaining some direct injury as a result of its enforcement, and not merely that he
suffers thereby in some indefinite way.” He must show that he has been, or is about to be,
denied some right or privilege to which he is lawfully entitled, or that he is about to be subjected
to some burdens or penalties by reason of the statute complained of.
Same; Same; Court is inclined to take cognizance of a suit although it does not satisfy the
requirement of legal standing when paramount interests are involved.—Following the new trend,
this Court is inclined to take cognizance of a suit although it does not satisfy the requirement of
legal standing when paramount interests are involved. In several cases, the Court has adopted a
liberal stance on the locus standi of a petitioner where the petitioner is able to craft an issue of
transcendental significance to the people.
Same; Same; Petitioners can legitimately challenge the validity of the enactments subject
of the instant case.—As the two offices have apparently been endowed with functions almost
identical to those of DPWH-ARMM First Engineering District in Lanao del Sur, it is likely that
petitioners are in imminent danger of being eased out of their duties and, not remotely, even
their jobs. Their material and substantial interests will definitely be prejudiced by the
enforcement of D.O. 119 and R.A. 8999. Such injury is direct and immediate. Thus, they can
legitimately challenge the validity of the enactments subject of the instant case.
Same; Statutes; The organic acts are more than ordinary statutes hence the provisions
thereof cannot be amended by an ordinary statute such as R.A. 8999.—The ARMM Organic
Acts are deemed a part of the regional autonomy scheme. While they are classified as statutes,
the Organic Acts are more than ordinary statutes because they enjoy affirmation by a plebiscite.
Hence, the provisions thereof cannot be amended by an ordinary statute, such as R.A. 8999 in
this case. The amendatory law has to be submitted to a plebiscite.
TINGA, J.:
At stake in the present case is the fate of regional autonomy for Muslim Mindanao
which is the epoch-making, Constitution-based project for achieving national unity in
diversity.
Challenged in the instant petition for certiorari, prohibition and mandamus with
prayer for a temporary restraining order and/or writ of preliminary injunction (Petition)
are the constitutionality and validity of Republic Act No. 8999 (R.A. 8999), entitled “An
Act Establishing An Engineering District in the First District of the Province of Lanao
del Sur and Appropriating Funds Therefor,” and Department of Public Works and
Highways (DPWH) Department Order No. 119 (D.O. 119) on the subject, “Creation of
Marawi Sub-District Engineering Office.”
The Background
The uncontested legal and factual antecedents of the case follow.
For the first time in its history after three Constitutions, the Philippines ordained
the establishment of regional autonomy with the adoption of the 1987 Constitution.
Sections 1 and 15, Article X mandate the creation of autonomous regions in Muslim
Mindanao and in the Cordilleras. Section 15 specifically provides that “[t]here shall be
created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of
provinces, cities, municipalities, and geographical areas sharing common and
distinctive historical and cultural heritage, economic and social structures, and other
relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.” To
effectuate this mandate, the Charter devotes a number of provisions under Article X.
 Pursuant to the constitutional mandate, Republic Act No. 6734 (R.A. 6734),
entitled “An Act Providing for An Organic Act for the Autonomous Region in Muslim
Mindanao,” was enacted and signed into law on 1 August 1989. The law called for the
holding of a plebiscite in the provinces of Basilan, Cotabato, Davao del Sur, Lanao
del Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan Kudarat,
Sulu, Tawi-Tawi, Zamboanga del Norte, and Zamboanga del Sur, and the cities of
Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto
Princesa and Zamboanga. In the ensuing plebiscite held on 19 November 1989, only
four (4) provinces voted for the creation of an autonomous region, namely: Lanao del
Sur, Maguindanao, Sulu and Tawi-Tawi. These provinces became the Autonomous
Region in Muslim Mindanao (ARMM). The law contains elaborate provisions on the
powers of the Regional Government and the areas of jurisdiction which are reserved
for the National Government.
In accordance with R.A. 6734, then President Corazon C. Aquino issued on 12
October 1990, Executive Order No. 426 (E.O. 426), entitled “Placing the Control and
Supervision of the Offices of the Department of Public Works and Highways within the
Autonomous Region in Muslim Mindanao under the Autonomous Regional
Government, and for other purposes.” Sections 1 to 3 of the Executive Order are its
operative provisions.
ARMM was formally organized on 6 November 1990. President Corazon C.
Aquino flew to Cotabato, the seat of the Regional Government, for the inauguration.
At that point, she had already signed seven (7) Executive Orders devolving to ARMM
the powers of seven (7) cabinet departments, namely: (1) local government; (2) labor
and employment; (3) science and technology; (4) public works and highways; (5)
social welfare and development; (6) tourism; and (7) environment and national
resources.
Nearly nine (9) years later, on 20 May 1999, then Department of Public Works
and Highways (DPWH) Secretary Gregorio R. Vigilar issued D.O. 119 which reads,
thus:
Subject: Creation of Marawi Sub-District Engineering Office
Pursuant to Sections 6 and 25 of Executive Order No. 124 dated 30
January 1987, there is hereby created a DPWH Marawi Sub-District
Engineering Office which shall have jurisdiction over all national
infrastructure projects and facilities under the DPWH within Marawi City and
the province of Lanao del Sur. The headquarters of the Marawi Sub-District
Engineering Office shall be at the former quarters of the Marawi City Engineering
Office.
Personnel of the above-mentioned Sub-District Engineering Office shall be
made up of employees of the National Government Section of the former Marawi
City Engineering Office who are now assigned with the Iligan City Sub-District
Engineering Office as may be determined by the DPWH Region XII Regional
Director. (Emphasis supplied)
Almost two (2) years later, on 17 January 2001, then President Joseph E. Estrada
approved and signed into law R.A. 8999. The text of the law reads:
AN ACT ESTABLISHING AN ENGINEERING DISTRICT IN THE FIRST
DISTRICT OF THE PROVINCE OF LANAO DEL SUR AND APPROPRIATING
FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:
SECTION 1. The City of Marawi and the municipalities comprising the First
District of the Province of Lanao del Sur are hereby constituted into an engineering
district to be known as the First Engineering District of the Province of Lanao del
Sur.
SEC. 2. The office of the engineering district hereby created shall be
established in Marawi City, Province of Lanao del Sur.
SEC. 3. The amount necessary to carry out the provisions of this Act
shall be included in the General Appropriations Act of the year following its
enactment into law. Thereafter, such sums as may be necessary for the
maintenance and continued operation of the engineering district office shall
be included in the annual General Appropriations Act.
SEC. 4. This Act shall take effect upon its approval. (Emphasis supplied)
Congress later passed Republic Act No. 9054 (R.A. 9054), entitled “An Act to
Strengthen and Expand the Organic Act for the Autonomous Region in Muslim
Mindanao, Amending for the Purpose Republic Act No. 6734, entitled An Act
Providing for the Autonomous Region in Muslim Mindanao, as Amended.” Like its
forerunner, R.A. 9054 contains detailed provisions on the powers of the Regional
Government and the retained areas of governance of the National Government.
R.A. 9054 lapsed into law on 31 March 2001. It was ratified in a plebiscite held on 14
August 2001. The province of Basilan and the City of Marawi also voted to join ARMM
on the same date. R.A. 6734 and R.A. 9054 are collectively referred to as the ARMM
Organic Acts.
On 23 July 2001, petitioners Arsadi M. Disomangcop (Disomangcop) and Ramir
M. Dimalotang (Dimalotang) addressed a petition to then DPWH Secretary Simeon A.
Datumanong, seeking the revocation of D.O. 119 and the non-implementation of R.A.
8999. No action, however, was taken on the petition.
Consequently, petitioners Disomangcop and Dimalotang filed the instant petition,
in their capacity as Officer-in-Charge and District Engineer/Engineer II, respectively,
of the First Engineering District of the Department of Public Works and Highways,
Autonomous Region in Muslim Mindanao (DPWH-ARMM) in Lanao del Sur.
Petitioners seek the following principal reliefs: (1) to annul and set aside D.O.
119; (2) to prohibit respondent DPWH Secretary from implementing D.O. 119 and
R.A. 8999 and releasing funds for public works projects intended for Lanao del Sur
and Marawi City to the Marawi Sub-District Engineering Office and other
administrative regions of DPWH; and (3) to compel the Secretary of the Department
of Budget and Management (DBM) to release all funds for public works projects
intended for Marawi City and the First District of Lanao del Sur to the DPWH-ARMM
First Engineering District in Lanao del Sur only; and to compel respondent DPWH
Secretary to let the DPWH-ARMM First Engineering District in Lanao del Sur
implement all public works projects within its jurisdictional area.
The petition includes an urgent application for the issuance of a temporary
restraining order (TRO) and, after hearing, a writ of preliminary injunction, to enjoin
respondent DBM Secretary from releasing funds for public works projects in Lanao
del Sur to entities other than the DPWH-ARMM First Engineering District in Lanao del
Sur, and also to restrain the DPWH Secretary from allowing others besides the
DPWH-ARMM First Engineering District in Lanao del Sur to implement public works
projects in Lanao del Sur.
To support their petition, petitioners allege that D.O. 119 was issued with grave
abuse of discretion and that it violates the constitutional autonomy of the ARMM.
They point out that the challenged Department Order has tasked the Marawi Sub-
District Engineering Office with functions that have already been devolved to the
DPWH-ARMM First Engineering District in Lanao del Sur.
Petitioners also contend that R.A. 8999 is a piece of legislation that was not
intelligently and thoroughly studied, and that the explanatory note to House Bill No.
995 (H.B. 995) from which the law originated is questionable. Petitioners assert as
well that prior to the sponsorship of the law, no public hearing nor consultation with
the DPWH-ARMM was made. The House Committee on Public Works and Highways
(Committee) failed to invite a single official from the affected agency. Finally,
petitioners argue that the law was skillfully timed for signature by former President
Joseph E. Estrada during the pendency of the impeachment proceedings.
In its resolution of 8 October 2001, the Court required respondents to file their
comment. In compliance, respondents DPWH Secretary and DBM Secretary, through
the Solicitor General, filed on 7 January 2002, their Comment.
In their Comment, respondents, through the Office of the Solicitor General,
maintain the validity of D.O. 119, arguing that it was issued in accordance with
Executive Order No. 124 (E.O. 124). In defense of the constitutionality of R.A. 8999,
they submit that the powers of the autonomous regions did not diminish the legislative
power of Congress. Respondents also contend that the petitioners have no locus
standi or legal standing to assail the constitutionality of the law and the department
order. They note that petitioners have no personal stake in the outcome of the
controversy.
Asserting their locus standi, petitioners in their Memorandum point out that they
will suffer actual injury as a result of the enactments complained of.
Jurisdictional Considerations
First, the jurisdictional predicates.
The 1987 Constitution is explicit in defining the scope of judicial power. It
establishes the authority of the courts to determine in an appropriate action the
validity of acts of the political departments. It speaks of judicial prerogative in terms of
duty.
Jurisprudence has laid down the following requisites for the exercise of judicial
power: First, there must be before the Court an actual case calling for the exercise of
judicial review. Second, the question before the Court must be ripe for
adjudication. Third, the person challenging the validity of the act must have standing
to challenge. Fourth, the question of constitutionality must have been raised at the
earliest opportunity. Fifth, the issue of constitutionality must be the very lis mota of the
case.
In seeking to nullify acts of the legislature and the executive department on the
ground that they contravene the Constitution, the petition no doubt raises a justiciable
controversy. As held in Tañada v. Angara, “where an action of the legislative branch
is seriously alleged to have infringed the Constitution, it becomes not only the right
but in fact the duty of the judiciary to settle the dispute.” But in deciding to take
jurisdiction over this petition questioning acts of the political departments of
government, the Court will not review the wisdom, merits, or propriety thereof, but will
strike them down only on either of two grounds: (1) unconstitutionality or illegality and
(2) grave abuse of discretion.
For an abuse to be grave, the power must be exercised in an arbitrary or despotic
manner by reason of passion or personal hostility. The abuse of discretion must be
patent and gross as to amount to an evasion of a positive duty, or a virtual refusal to
perform the duty enjoined or to act in contemplation of law. There is grave abuse of
discretion when respondent acts in a capricious or whimsical manner in the exercise
of its judgment as to be equivalent to lack of jurisdiction.
The challenge to the legal standing of petitioners cannot succeed. Legal standing
or locus standi is defined as a personal and substantial interest in the case such that
the party has sustained or will sustain direct injury as a result of the governmental act
that is being challenged. The term “interest” means a material interest, an interest in
issue affected by the decree, as distinguished from a mere interest in the question
involved, or a mere incidental interest.
A party challenging the constitutionality of a law, act, or statute must show “not
only that the law is invalid, but also that he has sustained or is in immediate, or
imminent danger of sustaining some direct injury as a result of its enforcement, and
not merely that he suffers thereby in some indefinite way.” He must show that he has
been, or is about to be, denied some right or privilege to which he is lawfully entitled,
or that he is about to be subjected to some burdens or penalties by reason of the
statute complained of.

But following the new trend, this Court is inclined to take cognizance of a suit
although it does not satisfy the requirement of legal standing when paramount
interests are involved. In several cases, the Court has adopted a liberal stance on
the locus standi of a petitioner where the petitioner is able to craft an issue of
transcendental significance to the people.
In the instant case, petitioner Disomangcop holds the position of Engineer IV.
When he filed this petition, he was the Officer-in-Charge, Office of the District
Engineer of the First Engineering District of DPWH-ARMM, Lanao del Sur. On the
other hand, petitioner Dimalotang is an Engineer II and President of the rank and file
employees also of the First Engineering District of DPWH-ARMM in Lanao del Sur.
Both are charged with the duty and responsibility of supervising and implementing all
public works projects to be undertaken and being undertaken in Lanao del Sur which
is the area of their jurisdiction.
It is thus not far-fetched that the creation of the Marawi Sub-District Engineering
Office under D.O. 119 and the creation of and appropriation of funds to the First
Engineering District of Lanao del Sur as directed under R.A. 8999 will affect the
powers, functions and responsibilities of the petitioners and the DPWH-ARMM. As the
two offices have apparently been endowed with functions almost identical to those of
DPWH-ARMM First Engineering District in Lanao del Sur, it is likely that petitioners
are in imminent danger of being eased out of their duties and, not remotely, even their
jobs. Their material and substantial interests will definitely be prejudiced by the
enforcement of D.O. 119 and R.A. 8999. Such injury is direct and immediate. Thus,
they can legitimately challenge the validity of the enactments subject of the instant
case.
Points of Contention
In the petition before us, petitioners contend that R.A. 8999 and D.O. 119 are
unconstitutional and were issued with grave abuse of discretion.
We agree in part.
Republic Act No. 8999
At the outset, let it be made clear that it is not necessary to declare R.A. No. 8999
unconstitutional for the adjudication of this case. The accepted rule is that the Court
will not resolve a constitutional question unless it is the lis mota of the case, or if the
case can be disposed of or settled on other grounds.
The plain truth is the challenged law never became operative and was
superseded or repealed by a subsequent enactment.
The ARMM Organic Acts are deemed a part of the regional autonomy scheme.
While they are classified as statutes, the Organic Acts are more than ordinary
statutes because they enjoy affirmation by a plebiscite. Hence, the provisions thereof
cannot be amended by an ordinary statute, such as R.A. 8999 in this case. The
amendatory law has to be submitted to a plebiscite.
We quote excerpts of the deliberations of the Constitutional Commission:
FR. BERNAS. Yes, that is the reason I am bringing this up. This thing involves
some rather far-reaching consequences also in relation to the issue raised by
Commissioner Romulo with respect to federalism. Are we, in effect, creating new
categories of laws? Generally, we have statutes and constitutional provisions. Is
this organic act equivalent to a constitutional provision? If it is going to be
equivalent to a constitutional provision, it would seem to me that the formulation of
the provisions of the organic act will have to be done by the legislature, acting as
a constituent assembly, and therefore, subject to the provisions of the Article on
Amendments. That is the point that I am trying to bring up. In effect, if we opt for
federalism, it would really involve an act of the National Assembly or Congress
acting as a constituent assembly and present amendments to this
Constitution, and the end product itself would be a constitutional provision which
would only be amendable according to the processes indicated in the Constitution.
MR. OPLE. Madam President, may I express my personal opinion in this
respect.
I think to require Congress to act as a constituent body before enacting an
organic act would be to raise an autonomous region to the same level as the
sovereign people of the whole country. And I think the powers of the Congress
should be quite sufficient in enacting a law, even if it is now exalted to the level of
an organic act for the purpose of providing a basic law for an autonomous region
without having to transform itself into a constituent assembly. We are dealing still
with one subordinate subdivision of the State even if it is now vested with certain
autonomous powers on which its own legislature can pass laws.
FR. BERNAS. So the questions I have raised so far with respect to this organic
act are: What segment of the population will participate in the plebiscite? In what
capacity would the legislature be acting when it passes this? Will it be a constituent
assembly or merely a legislative body? What is the nature, therefore, of this
organic act in relation to ordinary statutes and the Constitution? Finally, if we are
going to amend this organic act, what process will be followed?
MR. NOLLEDO. May I answer that, please, in the light of what is now
appearing in our report.
First, only the people who are residing in the units composing the regions
should be allowed to participate in the plebiscite. Second, the organic act has the
character of a charter passed by the Congress, not as a constituent assembly, but
as an ordinary legislature and, therefore, the organic act will still be subject to
amendments in the ordinary legislative process as now constituted, unless the
Gentlemen has another purpose.
FR. BERNAS. But with plebiscite again.
MR. NOLLEDO. Those who will participate in the plebiscite are those who are
directly affected, the inhabitants of the units constitutive of the region. (Emphasis
supplied)
Although R.A. 9054 was enacted later, it reaffirmed the imperativeness of the
plebiscite requirement. In fact, R.A. 9054 itself, being the second or later ARMM
Organic Act, was subjected to and ratified in a plebiscite.
 The first ARMM Organic Act, R.A. 6074, as implemented by E.O. 426, devolved
the functions of the DPWH in the ARMM which includes Lanao del Sur (minus Marawi
City at the time) to the Regional Government. By creating an office with previously
devolved functions, R.A. 8999, in essence, sought to amend R.A. 6074. The
amendatory law should therefore first obtain the approval of the people of the ARMM
before it could validly take effect. Absent compliance with this requirement, R.A. 8999
has not even become operative.
From another perspective, R.A. 8999 was repealed and superseded by R.A.
9054. Where a statute of later date clearly reveals an intention on the part of the
legislature to abrogate a prior act on the subject, that intention must be given effect.
Of course, the intention to repeal must be clear and manifest. Implied repeal by
irreconcilable inconsistency takes place when the two statutes cover the same
subject matter; they are clearly inconsistent and incompatible with each other that
they cannot be reconciled or harmonized; and both cannot be given effect, that is,
that one law cannot be enforced without nullifying the other.
The Court has also held that statutes should be construed in light of the objective
to be achieved and the evil or mischief to be suppressed, and they should be given
such construction as will advance the object, suppress the mischief and secure the
benefits intended.
R.A. 9054 is anchored on the 1987 Constitution. It advances the constitutional
grant of autonomy by detailing the powers of the ARG covering, among others, Lanao
del Sur and Marawi City, one of which is its jurisdiction over regional urban and rural
planning. R.A. 8999, however, ventures to reestablish the National Government’s
jurisdiction over infrastructure programs in Lanao del Sur. R.A. 8999 is patently
inconsistent with R.A. 9054, and it destroys the latter law’s objective.
Clearly, R.A. 8999 is antagonistic to and cannot be reconciled with both ARMM
Organic Acts, R.A. 6734 and R.A. 9054. The kernel of the antagonism and
disharmony lies in the regional autonomy which the ARMM Organic Acts ordain
pursuant to the Constitution. On the other hand, R.A. 8999 contravenes true
decentralization which is the essence of regional autonomy.
Regional Autonomy Under R.A. 6734 and R.A. 9054
The 1987 Constitution mandates regional autonomy to give a bold and unequivocal
answer to the cry for a meaningful, effective and forceful autonomy. According to
Commissioner Jose Nolledo, Chairman of the Committee which drafted the
provisions, it “is an indictment against the status quo of a unitary system that, to my
mind, has ineluctably tied the hands of progress in our country . . . our varying
regional characteristics are factors to capitalize on to attain national strength through
decentralization.”
The idea behind the Constitutional provisions for autonomous regions is to allow
the separate development of peoples with distinctive cultures and traditions. These
cultures, as a matter of right, must be allowed to flourish.
Autonomy, as a national policy, recognizes the wholeness of the Philippine
society in its ethnolinguistic, cultural, and even religious diversities. It strives to free
Philippine society of the strain and wastage caused by the assimilationist approach.
Policies emanating from the legislature are invariably assimilationist in character
despite channels being open for minority representation. As a result, democracy
becomes an irony to the minority group.
Several commissioners echoed the pervasive sentiment in the plenary sessions in
their own inimitable way. Thus, Commissioner Blas Ople referred to the recognition
that the Muslim Mindanao and the Cordilleras “do not belong to the dominant national
community” as the justification for conferring on them a “measure of legal self-
sufficiency, meaning self-government, so that they will flourish politically,
economically and culturally,” with the hope that after achieving parity with the rest of
the country they would “give up their own autonomous region in favor of joining the
national mainstream.” For his part, the Muslim delegate, Commissioner Ahmad
Alonto, spoke of the diversity of cultures as the framework for nation-building. Finally,
excerpts of the poignant plea of Commissioner Ponciano Bennagen deserve to be
quoted verbatim:
. . . They see regional autonomy as the answer to their centuries of struggle against
oppression and exploitation. For so long, their names and identities have been
debased. Their ancestral lands have been ransacked for their treasures, for their
wealth. Their cultures have been defiled, their very lives threatened, and worse,
extinguished, all in the name of national development; all in the name of public
interest; all in the name of common good; all in the name of the right to property;
all in the name of Regalian Doctrine; all in the name of national security. These
phrases have meant nothing to our indigenous communities, except for the
violation of their human rights.
...
Honorable Commissioners, we wish to impress upon you the gravity of the
decision to be made by every single one of us in this Commission. We have the
overwhelming support of the Bangsa Moro and the Cordillera Constitution. By this
we mean meaningful and authentic regional autonomy. We propose that we have
a separate Article on the autonomous regions for the Bangsa Moro and Cordillera
people clearly spelled out in this Constitution, instead of prolonging the agony of
their vigil and their struggle. This, too is a plea for national peace. Let us not pass
the buck to the Congress to decide on this. Let us not wash our hands of our
responsibility to attain national unity and peace and to settle this problem and
rectify past injustices, once and for all.
The need for regional autonomy is more pressing in the case of the Filipino Muslims
and the Cordillera people who have been fighting for it. Their political struggle
highlights their unique cultures and the unresponsiveness of the unitary system to
their aspirations. The Moros’ struggle for self-determination dates as far back as the
Spanish conquest in the Philippines. Even at present, the struggle goes on.
Perforce, regional autonomy is also a means towards solving existing serious
peace and order problems and secessionist movements. Parenthetically, autonomy,
decentralization and regionalization, in international law, have become politically
acceptable answers to intractable problems of nationalism, separatism, ethnic conflict
and threat of secession.
However, the creation of autonomous regions does not signify the establishment
of a sovereignty distinct from that of the Republic, as it can be installed only “within
the framework of this Constitution and the national sovereignty as well as territorial
integrity of the Republic of the Philippines.”
Regional autonomy is the degree of self-determination exercised by the local
government unit vis-à-vis the central government.
In international law, the right to self-determination need not be understood as a
right to political separation, but rather as a complex net of legal-political relations
between a certain people and the state authorities. It ensures the right of peoples to
the necessary level of autonomy that would guarantee the support of their own
cultural identity, the establishment of priorities by the community’s internal decision-
making processes and the management of collective matters by themselves.
If self-determination is viewed as an end in itself reflecting a preference for
homogeneous, independent nation-states, it is incapable of universal application
without massive disruption. However, if self-determination is viewed as a means to an
end—that end being a democratic, participatory political and economic system in
which the rights of individuals and the identity of minority communities are
protected—its continuing validity is more easily perceived.
Regional autonomy refers to the granting of basic internal government powers to
the people of a particular area or region with least control and supervision from the
central government.
The objective of the autonomy system is to permit determined groups, with a
common tradition and shared social-cultural characteristics, to develop freely their
ways of life and heritage, exercise their rights, and be in charge of their own business.
This is achieved through the establishment of a special governance regime for certain
member communities who choose their own authorities from within the community
and exercise the jurisdictional authority legally accorded to them to decide internal
community affairs.
In the Philippine setting, regional autonomy implies the cultivation of more positive
means for national integration. It would remove the wariness among the Muslims,
increase their trust in the government and pave the way for the unhampered
implementation of the development programs in the region. Again, even a glimpse of
the deliberations of the Constitutional Commission could lend a sense of the urgency
and the inexorable appeal of true decentralization:
MR. OPLE. . . . We are writing a Constitution, of course, for generations to come,
not only for the present but for our posterity. There is no harm in recognizing
certain vital pragmatic needs for national peace and solidarity, and the writing
of this Constitution just happens at a time when it is possible for this
Commission to help the cause of peace and reconciliation in Mindanao and
the Cordilleras, by taking advantage of a heaven-sent opportunity. . . .
...
MR. ABUBAKAR. . . . So in order to foreclose and convince the rest of the of the
Philippines that Mindanao autonomy will be granted to them as soon as
possible, more or less, to dissuade these armed men from going outside while
Mindanao will be under the control of the national government, let us establish
an autonomous Mindanao within our effort and capacity to do so within the
shortest possible time. This will be an answer to the Misuari clamor, not only
for autonomy but for independence.
...
MR. OPLE. . . . The reason for this abbreviation of the period for the consideration
of the Congress of the organic acts and their passage is that we live in
abnormal times. In the case of Muslim Mindanao and the Cordilleras, we
know that we deal with questions of war and peace. These are momentous
issues in which the territorial integrity and the solidarity of this country are
being put at stake, in a manner of speaking.
We are writing a peace Constitution. We hope that the Article on Social
Justice can contribute to a climate of peace so that any civil strife in the
countryside can be more quickly and more justly resolved. We are providing
for autonomous regions so that we give constitutional permanence to the just
demands and grievances of our own fellow countrymen in the Cordilleras and
in Mindanao. One hundred thousand lives were lost in that struggle in
Mindanao, and to this day, the Cordilleras is being shaken by an armed
struggle as well as a peaceful and militant struggle.
...
Rather than give opportunity to foreign bodies, no matter how
sympathetic to the Philippines, to contribute to the settlement of this issue, I
think the Constitutional Commission ought not to forego the opportunity to put
the stamp of this Commission through definitive action on the settlement of
the problems that have nagged us and our forefathers for so long.
A necessary prerequisite of autonomy is decentralization.
Decentralization is a decision by the central government authorizing its
subordinates, whether geographically or functionally defined, to exercise authority in
certain areas. It involves decision-making by subnational units. It is typically a
delegated power, wherein a larger government chooses to delegate certain authority
to more local governments. Federalism implies some measure of decentralization, but
unitary systems may also decentralize. Decentralization differs intrinsically from
federalism in that the sub-units that have been authorized to act (by delegation) do
not possess any claim of right against the central government.
Decentralization comes in two forms—deconcentration and devolution.
Deconcentration is administrative in nature; it involves the transfer of functions or the
delegation of authority and responsibility from the national office to the regional and
local offices. This mode of decentralization is also referred to as administrative
decentralization.
Devolution, on the other hand, connotes political decentralization, or the transfer
of powers, responsibilities, and resources for the performance of certain functions
from the central government to local government units. This is a more liberal form of
decentralization since there is an actual transfer of powers and responsibilities. It aims
to grant greater autonomy to local government units in cognizance of their right to
self-government, to make them self-reliant, and to improve their administrative and
technical capabilities.
This Court elucidated the concept of autonomy in Limbona v. Mangelin, thus:
“Autonomy is either decentralization of administration or decentralization of power.
There is decentralization of administration when the central government delegates
administrative powers to political subdivisions in order to broaden the base of
government power and in the process to make local governments “more
responsive and accountable,” and “ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress.” At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate
on national concerns. The President exercises “general supervision” over them,
but only to “ensure that local affairs are administered according to law.” He has no
control over their acts in the sense that he can substitute their judgments with his
own.
“Decentralization of power, on the other hand, involves an abdication of
political power in the favor of local government units declared to be autonomous.
In that case, the autonomous government is free to chart its own destiny and shape
its future with minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to “self-immolation,” since
in that event the autonomous government becomes accountable not to the central
authorities but to its constituency.”
In the case, the Court reviewed the expulsion of a member from the Sangguniang
Pampook, Autonomous Region. It held that the Court may assume jurisdiction as the
local government unit, organized before 1987, enjoys autonomy of the former
category. It refused, though, to resolve whether the grant of autonomy to Muslim
Mindanao under the 1987 Constitution involves, truly, an effort to decentralize power
rather than mere administration.
A year later, in Cordillera Broad Coalition v. Commission on Audit, the Court, with
the same composition, ruled without any dissent that the creation of autonomous
regions contemplates the grant of political autonomy—an autonomy which is greater
than the administrative autonomy granted to local government units. It held that “the
constitutional guarantee of local autonomy in the Constitution (Art. X, Sec. 2) refers to
administrative autonomy of local government units or, cast in more technical
language, the decentralization of government authority. . . On the other hand, the
creation of autonomous regions in Muslim Mindanao and the Cordilleras, which is
peculiar to the 1987 Constitution, contemplates the grant of political autonomy and
not just administrative autonomy to these regions.”
And by regional autonomy, the framers intended it to mean “meaningful and
authentic regional autonomy.” As articulated by a Muslim author, substantial and
meaningful autonomy is “the kind of local self-government which allows the people of
the region or area the power to determine what is best for their growth and
development without undue interference or dictation from the central government.”
To this end, Section 16, Article X limits the power of the President over
autonomous regions. In essence, the provision also curtails the power of Congress
over autonomous regions. Consequently, Congress will have to re-examine national
laws and make sure that they reflect the Constitution’s adherence to local autonomy.
And in case of conflicts, the underlying spirit which should guide its resolution is the
Constitution’s desire for genuine local autonomy.
The diminution of Congress’ powers over autonomous regions was confirmed
in Ganzon v. Court of Appeals, wherein this Court held that “the omission (of “as may
be provided by law”) signifies nothing more than to underscore local governments’
autonomy from Congress and to break Congress’ ‘control’ over local government
affairs.”
This is true to subjects over which autonomous regions have powers, as specified
in Sections 18 and 20, Article X of the 1987 Constitution. Expressly not included
therein are powers over certain areas. Worthy of note is that the area of public works
is not excluded and neither is it reserved for the National Government. The key
provisions read, thus:
SEC. 18. The Congress shall enact an organic act for each autonomous region
with the assistance and participation of the regional consultative commission
composed of representatives appointed by the President from a list of nominees
from multisectoral bodies. The organic act shall define the basic structure of
government for the region consisting of the executive department and
legislative assembly, both of which shall be elective and representative of
the constituent political units. The organic acts shall likewise provide for special
courts with personal, family and property law jurisdiction consistent with the
provisions of the Constitution and national laws.
The creation of the autonomous region shall be effective when approved by
majority of the votes cast by the constituent units in a plebiscite called for the
purpose, provided that only provinces, cities, and geographic areas voting
favorably in such plebiscite shall be included in the autonomous region.
 SEC. 20. Within its territorial jurisdiction and subject to the provisions of this
Constitution and national laws, the organic act of autonomous regions shall provide
for legislative powers over:
(1)Administrative organization;
(2)Creation of sources of revenues;
(3)Ancestral domain and natural resources;
(4)Personal, family and property relations;
(5)Regional urban and rural planning development;
(6)Economic, social, and tourism development;
(7)Educational policies;
(8)Preservation and development of the cultural heritage; and
(9)Such other matters as may be authorized by law for the promotion of
general welfare of the people of the region. (Emphasis supplied)
E.O. 426 officially devolved the powers and functions of the DPWH in ARMM to the
Autonomous Regional Government (ARG). Sections 1 and 2 of E.O. 426 provide:
SECTION 1. Transfer of Control and Supervision.—The offices of the
Department of Public Works and Highways (DPWH) within the Autonomous
Region in Muslim Mindanao (ARMM) including their functions, powers and
responsibilities, personnel, equipment, properties, budgets and liabilities
are hereby placed under the control and supervision of the Autonomous
Regional Government.
In particular, these offices are identified as the four (4) District
Engineering Offices (DEO) in each of the four provinces respectively and the
three (3) Area Equipment Services (AES) located in Tawi-Tawi, Sulu and
Maguindanao (Municipality of Sultan Kudarat).
SEC. 2. Functions Transferred.—The Autonomous Regional Government
shall be responsible for highways, flood control and water resource development
systems, and other public works within the ARMM and shall exercise the following
functions:
1.Undertake and evaluate the planning, design, construction and works
supervision for the infrastructure projects whose location and impact are
confined within the ARMM;
2.Undertake the maintenance of infrastructure facilities within the ARMM
and supervise the maintenance of such local roads and other infrastructure
facilities receiving financial assistance from the National Government;
3.Ensure the implementation of laws, policies, programs, rules and
regulations regarding infrastructure projects as well as all public and
private physical structures within the ARMM;
4.Provide technical assistance related to their functions to other agencies
within the ARMM, especially the local government units;
5.Coordinate with other national and regional government departments,
agencies, institutions and organizations, especially the local government
units within the ARMM in the planning and implementation of infrastructure
projects;
6.Conduct continuing consultations with the local communities, take
appropriate measures to make the services of the Autonomous Regional
Government responsive to the needs of the general public and recommend
such appropriate actions as may be necessary; and
7.Perform such other related duties and responsibilities within the ARMM
as may be assigned or delegated by the Regional Governor or as may be
provided by law. (Emphasis supplied)
More importantly, Congress itself through R.A. 9054 transferred and devolved the
administrative and fiscal management of public works and funds for public works to the
ARG. Section 20, Article VI of R.A. 9054 provides:
ARTICLE VI
THE LEGISLATIVE DEPARTMENT
...
SEC. 20. Annual Budget and Infrastructure Funds.—The annual budget of the
Regional Government shall be enacted by Regional Assembly. Funds for
infrastructure in the autonomous region allocated by the central government or
national government shall be appropriated through a Regional Assembly Public
Works Act.
Unless approved by the Regional Assembly, no public works funds allocated
by the central government or national government for the Regional Government or
allocated by the Regional Government from its own revenues may be disbursed,
distributed, realigned, or used in any manner.
The aim of the Constitution is to extend to the autonomous peoples, the people of
Muslim Mindanao in this case, the right to self-determination—a right to choose their
own path of development; the right to determine the political, cultural and economic
content of their development path within the framework of the sovereignty and
territorial integrity of the Philippine Republic. Self-determination refers to the need for
a political structure that will respect the autonomous peoples’ uniqueness and grant
them sufficient room for self-expression and self-construction.
In treading their chosen path of development, the Muslims in Mindanao are to be
given freedom and independence with minimum interference from the National
Government. This necessarily includes the freedom to decide on, build, supervise and
maintain the public works and infrastructure projects within the autonomous region.
The devolution of the powers and functions of the DPWH in the ARMM and transfer of
the administrative and fiscal management of public works and funds to the ARG are
meant to be true, meaningful and unfettered. This unassailable conclusion is
grounded on a clear consensus, reached at the Constitutional Commission and
ratified by the entire Filipino electorate, on the centrality of decentralization of power
as the appropriate vessel of deliverance for Muslim Filipinos and the ultimate unity of
Muslims and Christians in this country.
With R.A. 8999, however, this freedom is taken away, and the National
Government takes control again. The hands, once more, of the autonomous peoples
are reined in and tied up.
The challenged law creates an office with functions and powers which, by virtue
of E.O. 426, have been previously devolved to the DPWH-ARMM, First Engineering
District in Lanao del Sur.
 E.O. 426 clearly ordains the transfer of the control and supervision of the offices
of the DPWH within the ARMM, including their functions, powers and responsibilities,
personnel, equipment, properties, and budgets to the ARG. Among its other
functions, the DPWH-ARMM, under the control of the Regional Government shall be
responsible for highways, flood control and water resource development systems,
and other public works within the ARMM. Its scope of power includes the planning,
design, construction and supervision of public works. According to R.A. 9054, the
reach of the Regional Government enables it to appropriate, manage and disburse all
public work funds allocated for the region by the central government.
The use of the word “powers” in E.O. 426 manifests an unmistakable case of
devolution.
In this regard, it is not amiss to cite Opinion No. 120, S. 1991 of the Secretary of
Justice on whether the national departments or their counterpart departments in the
ARG are responsible for implementation of roads, rural water supply, health,
education, women in development, agricultural extension and watershed
management. Referring to Section 2, Article V of R.A. 6734 which enumerates the
powers of the ARG, he states:
It is clear from the foregoing provision of law that except for the areas of executive
power mentioned therein, all other such areas shall be exercised by the
Autonomous Regional Government (“ARG”) of the Autonomous Region in Muslim
Mindanao. It is noted that programs relative to infrastructure facilities, health,
education, women in development, agricultural extension and watershed
management do not fall under any of the exempted areas listed in the abovequoted
provision of law. Thus, the inevitable conclusion is that all these spheres of
executive responsibility have been transferred to the ARG.
Reinforcing the aboveview (sic) are the various executive orders issued by the
President providing for the devolution of the powers and functions of specified
executive departments of the National Government to the ARG. These are E.O.
Nos. 425 (Department of Labor and Employment, Local Government, Tourism,
Environment and Natural Resources, Social Welfare and Development and
Science and Technology), 426 (Department of Public Works and Highways), 459
(Department of Education, Culture and Sports) and 460 (Department of
Agriculture). The execution of projects on infrastructure, education, women,
agricultural extension and watershed management within the Autonomous Region
of Muslim Mindanao normally fall within the responsibility of one of the
aforementioned executive departments of the National Government, but by virtue
of the aforestated EOs, such responsibility has been transferred to the ARG.
E.O. 426 was issued to implement the provisions of the first ARMM Organic Act, R.A.
6734—the validity of which this Court upheld in the case of Abbas v. Commission on
Elections. In Section 4, Article XVIII of said Act, “central government or national
government offices and agencies in the autonomous region which are not excluded
under Section 3, Article IV of this Organic Act, shall be placed under the control and
supervision of the Regional Government pursuant to a schedule prescribed by the
oversight committee.”
Evidently, the intention is to cede some, if not most, of the powers of the national
government to the autonomous government in order to effectuate a veritable
autonomy. The continued enforcement of R.A. 8999, therefore, runs afoul of the
ARMM Organic Acts and results in the recall of powers which have previously been
handed over. This should not be sanctioned, elsewise the Organic Acts’ desire for
greater autonomy for the ARMM in accordance with the Constitution would be
quelled. It bears stressing that national laws are subject to the Constitution one of
whose state policies is to ensure the autonomy of autonomous regions. Section 25,
Article II of the 1987 Constitution states:
Sec. 25. The State shall ensure the autonomy of local governments.
R.A. 8999 has made the DPWH-ARMM effete and rendered regional autonomy
illusory with respect to infrastructure projects. The Congressional Record shows, on
the other hand, that the “lack of an implementing and monitoring body within the area”
has hindered the speedy implementation, of infrastructure projects. Apparently, in the
legislature’s estimation, the existing DPWH-ARMM engineering districts failed to
measure up to the task. But if it was indeed the case, the problem could not be solved
through the simple legislative creation of an incongruous engineering district for the
central government in the ARMM. As it was, House Bill No. 995 which ultimately
became R.A. 8999 was passed in record time on second reading (not more than 10
minutes), absolutely without the usual sponsorship speech and debates. The
precipitate speed which characterized the passage of R.A. 8999 is difficult to
comprehend since R.A. 8999 could have resulted in the amendment of the first
ARMM Organic Act and, therefore, could not take effect without first being ratified in a
plebiscite. What is more baffling is that in March 2001, or barely two (2) months after
it enacted R.A. 8999 in January 2001, Congress passed R.A. 9054, the second
ARMM Organic Act, where it reaffirmed the devolution of the DPWH in ARMM,
including Lanao del Sur and Marawi City, to the Regional Government and effectively
repealed R.A. 8999.
DPWH Department Order No. 119
Now, the question directly related to D.O. 119.
D.O. 119 creating the Marawi Sub-District Engineering Office which has
jurisdiction over infrastructure projects within Marawi City and Lanao del Sur is
violative of the provisions of E.O. 426. The Executive Order was issued pursuant to
R.A. 6734—which initiated the creation of the constitutionally-mandated autonomous
region and which defined the basic structure of the autonomous government. E.O.
426 sought to implement the transfer of the control and supervision of the DPWH
within the ARMM to the Autonomous Regional Government. In particular, it identified
four (4) District Engineering Offices in each of the four (4) provinces, namely: Lanao
del Sur, Maguindanao, Sulu and Tawi-Tawi. Accordingly, the First Engineering District
of the DPWH-ARMM in Lanao del Sur has jurisdiction over the public works within the
province.

The office created under D.O. 119, having essentially the same powers, is a
duplication of the DPWH-ARMM First Engineering District in Lanao del Sur formed
under the aegis of E.O. 426. The department order, in effect, takes back powers
which have been previously devolved under the said ex-ecutive order. D.O. 119 runs
counter to the provisions of E.O. 426. The DPWH’s order, like spring water, cannot
rise higher than its source of power—the Executive.
The fact that the department order was issued pursuant to E.O. 124—signed and
approved by President Aquino in her residual legislative powers—is of no moment. It
is a finely-imbedded principle in statutory construction that a special provision or law
prevails over a general one. Lex specialis derogant generali. As this Court expressed
in the case of Leveriza v. Intermediate Appellate Court, “another basic principle of
statutory construction mandates that general legislation must give way to special
legislation on the same subject, and generally be so interpreted as to embrace only
cases in which the special provisions are not applicable, that specific statute prevails
over a general statute and that where two statutes are of equal theoretical application
to a particular case, the one designed therefor specially should prevail.”
E.O. No. 124, upon which D.O. 119 is based, is a general law reorganizing the
Ministry of Public Works and Highways while E.O. 426 is a special law transferring
the control and supervision of the DPWH offices within ARMM to the Autonomous
Regional Government. The latter statute specifically applies to DPWH-ARMM offices.
E.O. 124 should therefore give way to E.O. 426 in the instant case.
In any event, the ARMM Organic Acts and their ratification in a plebiscite in effect
superseded E.O. 124. In case of an irreconcilable conflict between two laws of
different vintages, the later enactment prevails because it is the later legislative will.
Further, in its repealing clause, R.A. 9054 states that “all laws, decrees, orders,
rules and regulations, and other issuances or parts thereof, which are inconsistent
with this Organic Act, are hereby repealed or modified accordingly.” With the repeal of
E.O. 124 which is the basis of D.O. 119, it necessarily follows that D.O. 119 was also
rendered functus officio by the ARMM Organic Acts.
Grave abuse of discretion
Without doubt, respondents committed grave abuse of discretion. They implemented
R.A. 8999 despite its inoperativeness and repeal. They also put in place and
maintained the DPWH Marawi Sub-District Engineering Office in accordance with
D.O. 119 which has been rendered functus officio by the ARMM Organic Acts.
Still, on the issue of grave abuse of discretion, this Court, however, cannot uphold
petitioners’ argument that R.A. 8999 was signed into law under suspicious
circumstances to support the assertion that there was a capricious and whimsical
exercise of legislative authority. Once more, this Court cannot inquire into the
wisdom, merits, propriety or expediency of the acts of the legislative branch.
Likewise, the alleged lack of consultation or public hearing with the affected
agency during the inception of the law does not render the law infirm. This Court
holds that the Congress did not transgress the Constitution nor any statute or House
Rule in failing to invite a resource person from the DPWH-ARMM during the
Committee meeting. Section 27, Rule VII of the Rules of the House only requires that
a written notice be given to all the members of a Committee seven (7) calendar days
before a regularly scheduled meeting, specifying the subject matter of the meeting
and the names of the invited resource persons. And it must be emphasized that the
questions of who to invite and whether there is a need to invite resource persons
during Committee meetings should be addressed solely to Congress in its plenary
legislative powers.
Conclusion
The repeal of R.A. 8999 and the functus officio state of D.O. 119 provide the
necessary basis for the grant of the writs of certiorari and prohibition sought by the
petitioners. However, there is no similar basis for the issuance of a writ of mandamus
to compel respondent DBM Secretary to release funds appropriated for public works
projects in Marawi City and Lanao del Sur to the DPWH-ARMM First Engineering
District in Lanao del Sur and to compel respondent DPWH Secretary to allow the
DPWH-ARMM, First Engineering District in Lanao del Sur to implement all public
works projects within its jurisdictional area. Section 20, Article VI of R.A. 9054 clearly
provides that “(f)unds for infrastructure in the autonomous region allocated by the
central government or national government shall only be appropriated through a
Regional Assembly Public Works Act” passed by the Regional Assembly. There is no
showing that such Regional Assembly Public Works Act has been enacted.
WHEREFORE, considering that Republic Act No. 9054 repealed Republic Act No.
8999 and rendered DPWH Department Order No. 119 functus officio, the petition
insofar as it seeks the writs of certiorari and prohibition is GRANTED. Accordingly, let
a writ of prohibition ISSUE commanding respondents to desist from implementing
R.A. 8999 and D.O. 119, and maintaining the DPWH Marawi Sub-District Engineering
Office and the First Engineering District of the Province of Lanao del Sur comprising
the City of Marawi and the municipalities within the First District of Lanao del Sur.
However, the petition insofar as it seeks a writ of mandamus against respondents is
DENIED.
No costs.
SO ORDERED.
Note.—A citizen acquires standing only if he can establish that he has suffered some actual
or threatened injury as a result of the allegedly illegal conduct of the government; the injury is
fairly traceable to the challenged action; and the injury is likely to be redeemed by a favorable
action. (Gonzales vs. Narvasa, 337 SCRA 733 [2000])
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