GENERAL PRINCIPLES Criterion to determine whether corporation is public or private:
CORPORATION
-is an artificial being created by operation of law, having the right of succession and the
powers, attributes and properties expressly authorized by law or incident to its existence
PUBLIC CORPORATION
-are those formed and organized for the government of a portion of the State
Purpose: the general good & welfare
-is one created by the state either by general or special act for purposes of administration of
local government or rendering service in the public interest (Rodriguez, 2003)
PRIVATE CORPORATION
-are those one formed for some private purpose, aim, benefit, or end; as distinguished from
public corporation which have for their purpose the general good & welfare
Purpose: main objective is to earn profit
Significance of knowing whether or not an entity is a private or public
corporation:
 PUBLIC ACCOUNTABILITY
-you could demand public accountability if it is public corporation
ARTICLE XI; Section 1. Public office is a public trust. Public officers and
employees must, at all times, be accountable to the people, serve them with
utmost responsibility, integrity, loyalty, and efficiency; act with patriotism
and justice, and lead modest lives. (1987 Constitution; Accountability of
Public Officers)
Land bank- PC
Boy Scout- PC
MMDA- PC
Baguio Water District- PC
TRANSCO- PC
BENECO- not PC; not governed by officials appointed by the government
CASES:
BOY SCOUT OF THE PHILIPPINES VS. COA
BSP: we are not under jurisdiction of COA; nothing in our charter qualify us to be a public
corporation
SC: No, BSP is under jurisdiction of COA; BSP’s funds is subject to audit because it is a public
corporation
PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS VS. COA
-Quasi-public corporations are private corporations that render public service, supply
public wants & pursue other exemplary objectives.
-The mere fact that a corporation has been created by a special law doesn’t
necessarily qualify it as a public corporation.
-The fact that a public corporation is impressed with public interest does not make
the entity a public corporation.
-PSPCA> it is a quasi-public corporation despite created by special law
-The true criterion to determine whether a corporation is public or private is found in the
totality of the relationship of the corporation to the State, i.e., if created by the State as its
own agency or instrumentality to help the State in carrying out its governmental functions,
then it is public; otherwise, it is private
FELICIANO VS. COA
Issue: whether or not Local Water Districts are private or public corporation
Held:
“Local Water Districts are not private corporation because they are not created under the
Corporation Code. LWDs are not registered with Security & Exchange Commission”.
Local Water Districts exists by virtue of PD 198, which constitutes their special charter.
Since under the Constitution only GOCC may have Special Charters, Local Water Districts
can validly exist only if they are GOCC.
Unlike Private Corporation, which derive their legal existence & power from the
Corporation Code, Local Water Districts derived their existence under PD 198.
REPUBLIC ACT No. 10149
GOCC Governance Act of 2011l
Section 3: Definition of Terms
Government Agency
-refers to any of the various units of the Government of the Republic of the Philippines,
including a department, bureau, office, instrumentality or GOCC, or a local government or a
distinct unit therein
Government Financial Institutions (GFls)
-refer to financial institutions or corporations in which the government directly or
indirectly owns majority of the capital stock and which are either: (1) registered with or
directly supervised by the Bangko Sentral ng Pilipinas; or (2) collecting or transacting funds
or contributions from the public and places them in financial instruments or assets such as
deposits, loans, bonds and equity including, but not limited to, the Government Service
Insurance System and the Social Security System
Government-Owned or -Controlled Corporation (GOCC)
-refers to any agency organized as a stock or nonstock corporation, vested with functions
relating to public needs whether governmental or proprietary in nature, and owned by the
Government of the Republic of the Philippines directly or through its instrumentalities
either wholly or, where applicable as in the case of stock corporations, to the extent of at
least a majority of its outstanding capital stock: Provided, however, That for purposes of
this Act, the term "GOCC" shall include GlCP/GCE and GFI as defined herein
Government Instrumentalities with Corporate Powers (GICP)/Government Corporate
Entities (GCE)
-refer to instrumentalities or agencies of the government, which are neither corporations
nor agencies integrated within the departmental framework, but vested by law with special
functions or jurisdiction, endowed with some if not all corporate powers, administering
special funds, and enjoying operational autonomy usually through a charter including, but
not limited to, the following: the Manila International Airport Authority (MIAA), the
Philippine Ports Authority (PPA), the Philippine Deposit Insurance Corporation (PDIC), the
Metropolitan Waterworks and Sewerage System (MWSS), the Laguna Lake Development
Authority (LLDA), the Philippine Fisheries Development Authority (PFDA), the Bases
Conversion and Development Authority (DCDA), the Cebu Port Authority (CPA), the
Cagayan de Oro Port Authority, the San Fernando Port Authority, the Local Water Utilities
Administration (LWUA) and the Asian Productivity Organization (APO) (all public
corporation)
DECENTRALIZATION & DEVOLUTION: STRENGTHENING THE ROLE OF LOCAL GOV’T
LOCAL AUTONOMY
ARTICLE II, SECTION 25. The State shall ensure the autonomy of local
governments.
 Lead to enactment of RA 7160: Local Government Code of 1991
ARTICLE X: LOCAL GOVERNMENT
Section 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities, and barangays. There shall be
autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter
provided.
Section 2. The territorial and political subdivisions shall enjoy local autonomy.
Section 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.
Limbona vs. Mangelin:
-SC has jurisdiction over the case because before was a decentralization of
administration (before 1987 Constitution)
-after 1987 Constitution: Decentralization of power (wider autonomous)
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".
-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.
-RA 11054: Organic Law for the Bangsamoro Autonomous Region in Muslim
Mindanao> decentralization of power>with titular head (wali); has its own
partliment
FISCAL AUTONOMY
ARTICLE X, Section 5. Each local government unit shall have the power to create its own
sources of revenues and to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of local autonomy.
Such taxes, fees, and charges shall accrue exclusively to the local governments.
 FISCAL AUTONOMY means that local governments have the power to create their
own sources of revenue in addition to their equitable share in the national taxes
released by the national government, as well as the power to allocate their resources
in accordance with their own priorities.
 Extends to the preparation of LGU’s budgets and local officials in turn to have
worked the constraint thereof.
 They are not formulated at the national level & imposed on local governments,
whether they are relevant to local needs & resources or not.
Pimentel vs. Aguirre:
-Asian financial crisis of 1997
-Pres. Ramos want that LGU will spend less and orders that LGU must spend less
-HELD: President Ramos cannot lawfully withhold LGU’s IRA without violating fiscal
autonomy
-withholding IRA is violative of fiscal autonomy
REASON:
ARTICLE X, Section 5. Local government units shall have a just share, as
determined by law, in the national taxes which shall be automatically released to
them.
Mandahas vs Romulo:
-President cannot withhold part if LGU’s IRA & imposed conditions before releasing it to the
LGUs
Basco vs. PAGCOR:
-PD 1869 is a national legislature which will prevail over Charter of Manila
Demaala vs. COA:
-COA cannot force LGU to collect deficiency which is not authorized (.5 is valid> part of
fiscal autonomy)
ARTICLE X, Section 7. Local governments shall be entitled to an equitable share in the
proceeds of the utilization and development of the national wealth within their respective
areas, in the manner provided by law, including sharing the same with the inhabitants by
way of direct benefits.