01 Midterms Reviewer

A REVIEWER IN LOCAL GOVERNMENT LAW PROF.
GISELLA DIZON-REYES
I. HISTORICAL BACKGROUND OF LOCAL GOVERNMENTS IN THE PHILIPPINES
“History and Evolution of “The Evolution of Local

Philippine Local Government Government in the
and Administration” Philippines”
By Proserpina Tapales By De Guzman, et al.
Pre-Spanish Period Barangays were the socio- Barangays were indigenous
economic and political units. political institutions, roughly
They are class societies. The equivalent to the Greek city-
basis of the barangay was the states. They are generally
family, enlarged into the kinship composed of 30-100
group, the clan. households, based largely on
kinship.
Each barangay is a state, which
has all four elements of a state
(people, government,
sovereignty and territory) and is
akin to city-states in Europe.
Clusters of barangays Barangays established
sometimes grouped together confederations (i.e., sultanates
(ex. Manila, under Rajah in Mindanao) which have
Soliman, Lakandula and Rajah external relations with the
Matanda) neighboring countries in SE
Asia.
There were also
“superbarangay political
institutions” (ex., Islamic
sultanates of Sulu and
Maguindanao)
A barangay was headed by a A barangay was headed by a
datu, sometimes called hari, datu, also referred to as rajah,
(who acted as legislator, judge gat or lakan. The datu exercised
and executioner) with the executive, legislative, judicial,
assistance of the council of military and religious powers.
elders, the babaylan (presides He is assisted by a council of
over religious ceremonies; also elders known as maginoos,
acts as doctor and astrologer), who served as advisers.
and the panday (responsible
over technology).
Datu’s post was not always Datuship was attained through
hereditary. It often passed on to inheritance, physical prowess,
the best, the most courageous wealth, wisdom or virtue, or a
or the brightest male in the combination of two or more of
community. But sometimes, these traits.
women ascended the tribal
throne (ex., Princess Urduja)
Spanish Period The residents of the barangays The Spaniards substituted
were portioned off to whomever barrios for barangays while
encomendero was entrusted a many of the datus became
portion of land. The Spaniards cabezas de barangay, whose
substituted barrios for task was to collect taxes.
barangays while many of the
datus became cabezas de
barangay, whose task was to
collect taxes.
Through the Royal Decree of 1583, the country was later
organized into provincias (provinces), pueblos
(municipalities), cabildos (cities) and barrios (converted
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A REVIEWER IN LOCAL GOVERNMENT LAW PROF. GISELLA DIZON-REYES
barangays).
The pueblo was headed by a The pueblo was headed by a

gobernadorcillo, which was gobernadorcillo, who exercised
later changed to Capitan executive and judicial functions,
Municipal in 1893. assisted by an assessor and a
notary.
The cabildo had 2 alcaldes, 8 The cabildos were municipal
regidores, a registrar and a corporations set up in fairly
constable. urban areas and given
legislative authority. The
cabildo had 2 alcaldes, 8
regidores (elder-men), a
registrar and a constable.
The provincias had the Alcalde The provincias were set up for
Mayor, who also presides over the convenience of
the provincial court (composed administration and constituted
of the assessor and the notary) the immediate agencies
through which the central
government can extend its
authority on numerous villages.
The alcaldes mayores
(governors) were appointed by
the Spanish Gov.-Gen.
A system of indirect elections Even the smallest item of local

was initially utilized, where the business required approval from
electoral college (principalias, Manila (the capital). The local
the learned taxpayers) selected inhabitants were not allowed to
the local leaders. The parish choose their officials and these
priest (the colonizer’s chief and officials, were allowed little
often only representative in the discretion.
locality) presides over these
elections with the head of the
local government. Under the Maura Law of 1893,
local citizens were allowed to
The Maura Law of 1893 sought select some of their officers.
to confer upon the towns and Once selected however, these
provinces of Luzon and Visayas officials were subjected to
greater measure of local supervision by insular
autonomy authorities and had no authority
to act on purely local matters.
Revolutionary Period The Malolos Constitution The main features of the local
provided for: government established by the
Malolos Constitution are:
(1) the creation of municipal
assemblies to administer the (1) popular and direct elections;
affairs of towns and provincial
assemblies for the provinces; (2)publicity of sessions;
and
(3) publication of budgets,
(2) autonomous local units, over accounts, and important
which the central government ordinances;
exercises a certain degree of
supervision or intervention (4)intervention of the central
government, in certain cases;
and
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(5) determination of their

taxation powers.
The town principalias elected a The distinguished inhabitants of
President, and an official for freed towns were asked to elect
police and internal order, one the chief of town, the headman
for justice and civil registry and for each barrio and three
another for collection of taxes officials. (same as Tapales).
and management of real These officials constituted the
property. popular assembly.
At the provincial level, the chief Together, these 4 officials
(president) was elected by the compose the provincial council.
town heads and there were also
three councilors for each of the
3 services, as in the case of a
town. There is also a military
commander, who has no
jurisdiction over civil affairs
except during war.
While the Malolos Constitution

provided for autonomous local
units, such local autonomy was
still curtailed given the
precarious times the
revolutionary government was
in.
American Period Local governments had to be The pueblo was now called a
created for ease of municipality and the cabildo
administration. Under Gen. was now called a city. Both are
Orders No. 43 and Act No. 82, headed by a mayor.
town (pueblo) government was
the first form of local
government established.
Eventually, town government
was composed of an elected
President, a secretary, a
treasurer, and a Chief of Police.
The organization of provinces The province is headed by the

was effected by Act. No. 83, governor.
which provided for the office of
the elected provincial governor,
treasure and supervisor of
schools. These officials served
as supervisors of the
municipalities.
The Americans maintained a While supervision was different
system of hierarchy and in character from that exercised
centralization that was attuned during the Spanish period but
to Philippine experience. This the tradition of centralism was
was because centralization was not radically changed.
so difficult to reduce.
The Executive Bureau (and
The most notable feature of later, the Department of the
Interior) was in direct control of
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local government under the the various LGU’s. It issued
American regime was the fact orders and circulars, reviewed
that the local governments ordinances and resolutions,
were under the supervision of examined local budgets, and
the Executive Bureau until it served as a centre for
was transferred to the assistance to local officials.
Department of the Interior.
Commonwealth Period The 1935 CONSTI mentioned Among the significant change in
local government only in the administration of national
connection with the President’s control over the local units was
power of general supervision. the transfer of financial
supervision from the Interior
Dept. to the Finance Dept.
Under Pres. Quezon, central

supervision rapidly increased
and was personally exercised by
him to a degree previously
unheard of. (ex. Appointments
of some mayors from 1936 to
1940, presidential power to
define territorial limits and to
alter, merge, divide LGU’s,
nationalization of the police
service)
Third Republic That the Philippines became The trend from 1946 to 1972
independent did not alter the was towards decentralization.
centralist relationship between The SC moved away from its
the national and local liberal interpretation of
governments. But some notable presidential supervision and
changes happened during this went to a narrower approach.
period. Congress passed several laws:
Exercising its constitutional (1) RA 2370, amended by RA

authority to determine the 3590 (The Barrio Charter) –
parameters of presidential recognized the barrio as a legal
supervision, Congress passed entity.
several laws:
(2) RA 2264 (Local Autonomy
(1) RA 2259 (Omnibus Law on Act) – also reorganized the
Cities) – provided electivity of structure of the provincial
the position of mayors, vice- government and, in doing so,
mayors, and councilors; diminished national control over
both provincial budgeting and
(2) RA 2370, amended by RA the planning and
3590 (The Barrio Charter) – implementation of public
provided for the electivity of improvements.
barrio officials;
(3) RA 5185 (Decentralization
(3) RA 2264 (Local Autonomy Act) – also removed national
Act) – pertained to greater approval over a number of local
taxing powers to cities and actions and increased the
municipalities; shares of provinces in the
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(4) RA 5185 (Decentralization internal revenue collections
Act) – authorized local
governments to supplement the
national government in
agricultural extension and rural
health work.
Under Martial Law The 1973 CONSTI provided for a The 1973 CONSTI allowed the
separate Article on Local President to continue the
Government, mandating exercise of legislative power,
Congress to pass a local including the power to create,
government code. divide, merge, abolish and later
the boundaries of LGU’s.
An Integrated Reorganization
Plan was accomplished (through The martial law regime also
the first martial law presidential renamed some of the LGU’s:
decree) resulting into the barangays for barrios and
delineation of the Philippines sanggunian for council.
into 11 regions and the
establishment of the Dept. of
Local Government and
Community Development. To
the DLGCD was delegated the
President’s power of general
supervision over local
governments.
Added functions to the DLGCD

include the management of
cooperatives and the training of
local officials.
Barrios were renamed into

barangays and councils were
renamed into sanggunians.
As chief legislator, Marcos The Sangguniang Bayan of the

issued quite a number of provinces is composed of the
decrees affecting local members of the provincial
government: board, the vice-governor,
representatives of each of the
(1) PD 824 – the integration of municipalities within the
Metro Manila into a political province, and the president of
region under the governance of the Katipunan ng mga
the Metropolitan Manila Kabataang Barangay in the
Commission with Imelda as province.
governor.
The Sangguniang Bayan of the
(2) PD 826 – brought about the cities and municipalities is
expansion of the membership of composed of the members of
local councils (inclusion of the councils, including the vice-
sectoral representatives and mayor, and as many barangay
youth leaders), making several captains and representatives
Metro Manila councils too big
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and unwieldy. from other sectors as there
were presidential appointee-
(3) The creation of special members.
regions out of the Muslim areas
of Regions IX and XII. The local chief executives were
the presiding officers of the
sangguniang bayan.
Several organizations of these

sanggunians were also created:
Katipunan ng mga Sanggunian
(composed of all sangguniang
bayan in provinces and cities;
and the Pampook na Katipunan
ng mga Sanggunian (at the
regional level, composed of the
sangguniang panlalawigan
members)
The Kabataang Barangay was

also created, composed of all
residents under 18 years (later
increased to 21) of age,
administered by a barangay
youth chairman and 6 youth
leaders (15-17 years old). The
barangay youth chairman is an
ex-officio member of the
barangay council.
New Republic The Batasang Pambansa Among the significant

enacted the Local Government provisions in the newly-enacted
Code codifying several PD’s LGC was the principle of liberal
affecting local government interpretation of local
(including the old Local Tax government powers and a
Code). Among the changes system of recall.
brought about by this Code was
the creation of LGU’s based on
income and population; the
classification cites into highly
urbanized and component
cities.
Aquino Administration The new Local Government (De Guzman’s article ends with
Code was enacted in 1991. the drafting of the 1987
While somewhat a watered- CONSTI)
down version of its author’s
original proposal, it still
considered as a landmark piece
of legislation.
The Code’s most important

feature is the decentralization
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of five basic services – health,
agriculture, social welfare,
public works, and environment
and natural resources.
Other important features

include a modified sectoral
representation in legislative
councils, a system of plebiscite,
recall and referendum, and
involvement in the planning and
implementation of development
programs
II. NATURE AND STATUS highly centralized in Manila, is thereby

deconcentrated, enabling especially the
A. Definitions peripheral local government units to
develop not only at their own pace and
1. Municipal Corporation - A body discretion but also with their own
politic and corporate constituted by the resources and assets. (Alvarez vs.
incorporation of the inhabitants for the Guingona, Basco vs. PAGCOR)
purpose of local government thereof. It
is established by law partly as an 3. National Government – refers to the
agency of the state to assist in the civil entire machinery of the central
government of the country but chiefly government, as distinguished from the
to regulate and administer the local or different forms of local governments.
internal affairs of the city, town, or (PIMENTEL, citing the Admin Code,
district which is incorporated. Sec. 2, par. 2). It oversees the local
(MARTIN) governments.
2. Local Government - is a political Local government interchangeable with

subdivision of the State which is municipal corporations.
constituted by law and possessed of
substantial control over its own affairs. GD-R: They are interchangeable because a
Remaining to be an intra sovereign local government is in fact a corporation for
subdivision of one sovereign nation, but public purpose.
not intended, however, to be an
imperium in imperio, the local Alvarez vs. Guingona
government unit is autonomous in the (1996)
sense that it is given more powers,
authority, responsibilities and FACTS: HB No. 8817, entitled "An Act
resources. Power which used to be Converting the Municipality of Santiago into an
7
Independent Component City to be known as The filing in the Senate of a substitute bill
the City of Santiago," was filed in the HOR. in anticipation of its receipt of the bill from
the House, does not contravene the
Meanwhile, a counterpart of HB No. 8817, constitutional requirement that a bill of
Senate Bill No. 1243, entitled, "An Act local application should originate in the
Converting the Municipality of Santiago into an House of Representatives, for as long as
Independent Component City to be Known as the Senate does not act thereupon until it
the City of Santiago," was filed in the Senate receives the House bill. (Tolentino vs. Sec.
just after the House of Representatives had of Finance)
conducted its first public hearing on HB No.
8817. • Internal Revenue Allotments form part of
the income of Local Government Units. The
These two bills eventually became RA 7720. IRAs are items of income because they
form part of the gross accretion of the
Petitioners contend that RA 7720 is funds of the local government unit. The
unconstitutional since: IRAs regularly and automatically accrue to
• The Act did not originate exclusively the local treasury without need of any
from in the House as mandated by Sec. further action on the part of the local
24, Art. VI of the 1987 Constitution. government unit. They thus constitute
• Santiago has not met the minimum income which the local government can
average annual income required under invariably rely upon as the source of much
Sec. 450 of the LGC for it to be needed funds.
converted into a component city. (The
petitioners argued that the income of The acquisition of resources necessary to
an LGU does not include the IRA. The discharge its powers and effectively carry
average annual income of Santiago was out its functions is effected through the
more than P20M. It is reduced to only vesting in every LGU of:
P13M, however, if the IRA is excluded
from the computation) 1. The right to create and broaden its own
source of revenue;
WON RA 7720 is unconstitutional. 2. The right to be allocated a just share in
national taxes, such share being in the
HELD: NO. RA 7720 is constitutional. form of Internal Revenue Allotments
(IRAs); and
• A bill of local application like HB No. 8817 3. The right to be given its equitable share
should, by constitutional prescription, in the proceeds of the utilization and
originate exclusively in the HOR. In this development of the national wealth, if
case, it cannot be denied that HB No. 8817 any, within its territorial boundaries.
was filed in the HOR first before SB No.
1243 was filed in the Senate. The filing of The funds generated from local taxes, IRAs
HB No. 8817 was thus precursive not only and National wealth utilization proceeds
of the said Act in question but also of SB accrue to the general fund of the LGU and
No. 1243. Thus, HB No. 8817, was the bill are used to finance its operations, subject
that initiated the legislative process that to specified modes of spending the same
culminated in the enactment of Republic as provided for in the LGC and its
Act No. 7720. No violation of Section 24, implementing rules and regulations.
Article VI, of the 1987 Constitution is
perceptible under the circumstances Income- all revenues and receipts collected
attending the instant controversy. or received forming the gross accretions of
funds of the LGU.
Basco vs. PAGCOR

8
(1991) should be stressed that "municipal
corporations are mere creatures of
FACTS: PAGCOR was created under P.D. 1896 Congress" which has the power to
to enable the Government to regulate and "create and abolish municipal
centralize all games of chance authorized by corporations" due to its "general
existing franchise or permitted by law. To legislative powers".
attain these objectives PAGCOR is given
territorial jurisdiction all over the Philippines. 3. The City of Manila's power to impose
Under its Charter's repealing clause, all laws, license fees on gambling, has long
decrees, executive orders, rules and been revoked. As early as 1975, the
regulations, inconsistent therewith, are power of local governments to regulate
accordingly repealed, amended or modified. gambling thru the grant of "franchise,
licenses or permits" was withdrawn by
Petitioners, are questioning the validity of P.D. P.D. No. 771 and was vested
No. 1869. They allege that the same is "null exclusively on the National
and void" for being "contrary to morals, public Government.
policy and public order," monopolistic and
tends toward "crony economy", and is violative 4. Local governments have no power to
of the equal protection clause and local tax instrumentalities of the National
autonomy as well as for running counter to the Government. PAGCOR is a government
state policies enunciated in Sections 11 owned or controlled corporation with an
(Personal Dignity and Human Rights), 12 original charter. All of its shares of
(Family) and 13 (Role of Youth) of Article II, stocks are owned by the National
Section 1 (Social Justice) of Article XIII and Government. In addition to its
Section 2 (Educational Values) of Article XIV of corporate powers, it also exercises
the 1987 Constitution. Moreover, it constitutes regulatory powers.
a waiver of a right prejudicial to a 3rd person
with a right recognized by law. (Allegedly, it WON PD 1896 violates local autonomy.
waived the Manila City government’s right to
impose taxes and license fees, thus violating HELD: NO. The principle of local autonomy
local autonomy) under the 1987 Constitution simply means
"decentralization". As to what state powers
WON PD 1896 constitutes a waiver of the should be "decentralized" and what may be
right of the City of Manila to impose delegated to local government units remains a
taxes and legal fees. matter of policy, which concerns wisdom. It is
therefore a political question. What is settled is
that the matter of regulating, taxing or
HELD: NO. This doctrine emanates from the otherwise dealing with gambling is a State
“supremacy” of the National Government over concern and hence, it is the sole prerogative of
local governments. the State to retain it or delegate it to local
governments.
1. The City of Manila, being a mere B. Nature and Status of Municipal

Municipal corporation has no inherent Corporations
right to impose taxes. Its "power to tax"
therefore must always yield to a MARTIN:
legislative act which is superior having
It is a subordinate branch of the government
been passed upon by the state itself
of the State, and municipal administration as
which has the "inherent power to tax”.
an instrumentality of state administration. It
exercises delegated powers of government. Its
2. The Charter of the City of Manila is
charter is granted for the better government of
subject to control by Congress. It
the particular areas or districts.
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It is a political division of the state and variedly Art. 46. Juridical persons may acquire and
described as an arm of the state, a miniature possess property of all kinds, as well as incur
state, an instrumentality of the state, a mere obligations and bring civil or criminal actions,
creature of the same, an agent of the state, in conformity with the laws and regulations of
and the like. their organization. (38a)
Elements of a municipal corporation: Art. 47. Upon the dissolution of corporations,

institutions and other entities for public
1. A legal corporation or incorporation; interest or purpose mentioned in No. 2 of
Article 44, their property and other assets shall
2. A corporate name by which the artificial
be disposed of in pursuance of law or the
personality is known and in which all
charter creating them. If nothing has been
corporate acts are done;
specified on this point, the property and other
3. Inhabitants constituting the population, assets shall be applied to similar purposes for
who are invested with the political and the benefit of the region, province, city or
corporate powers which are executed municipality which during the existence of the
through duly constituted officers and institution derived the principal benefits from
agents; the same. (39a)
4. A territory within which local civil MARTIN:

government / corporate functions are
A corporation is an artificial being created by
exercised.
operation of law, having the right of
C. Kinds of Municipal Corporations succession and the powers, attributes, and
properties expressly authorized by law or
Civil Code incident to its existence (Act 1459, Sec. 2). It is
described as “an artificial being, invisible,
Art. 44. The following are juridical persons: intangible, and existing only in contemplation
of law”.
(1) The State and its political subdivisions;
Private corporations are those formed for
(2) Other corporations, institutions and entities some private purpose, benefit, aim, or end and
for public interest or purpose, created by law; are organized wholly for the profit and
their personality begins as soon as they have advantage of their own members, and cannot
been constituted according to law; constitutionally be granted governmental
powers. They are governed by the Corporation
(3) Corporations, partnerships and associations
Code.
for private interest or purpose to which the law
grants a juridical personality, separate and Public corporations are those formed or
distinct from that of each shareholder, partner organized for the government of a portion of
or member. (35a) the State, for the accomplishment of its own
public works. (examples: governments of
Art. 45. Juridical persons mentioned in Nos. 1
provinces, chartered cities, barangays). They
and 2 of the preceding article are governed by
are created by their charters and other laws.
the laws creating or recognizing them.
They are further classified into:
Private corporations are regulated by laws of
general application on the subject. 1. Municipal Corporation Proper –
generally refers to incorporated
Partnerships and associations for private cities, towns, or villages invested
interest or purpose are governed by the with the power of local legislation
provisions of this Code concerning and administration.
partnerships. (36 and 37a)
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2. Quasi-Municipal Corporation - Criteria to determine whether a
another term for a Quasi- corporation is municipal or quasi-
corporation; they are created as municipal:
agencies of the State for a narrow
and limited purpose. They are • Voluntary or involuntary nature of the
sometimes “involuntary” corporation
corporations and are only local
organizations which, for purpose of • Existence or nonexistence of a charter
civil administration, are invested
• Whether the purpose of the corporation is
with few characteristics of corporate
solely as a governmental agency or one for
existence. They consist of various
self-government
local government areas established
to aid in the administration of public Distinction between municipal
functions. (examples: counties corporation proper and public
school districts, fire districts, corporation
hospital districts water districts,
etc.) All municipal corporations are public
corporations but not all public corporations are
municipal corporations. (“Public corporation” is
a broader category)
D. Dual Nature
1. Dual nature and functions of

municipal corporations
Distinction between municipal
corporation proper and quasi-municipal LGC, Sec. 15. Every local government unit
corporation created or recognized under this Code is a
body politic and corporate endowed with
Municipal Quasi-municipal powers to be exercised by it in conformity with
Corporation corporation law. As such, it shall exercise powers as a
political subdivision of the National
It is governed by its It operates directly as
Government and as a corporate entity
charter. an agency of the state
representing the inhabitants of its territory.
to help in the
administration of
MARTIN:
public functions.
They have powers They don’t have Every municipal corporation has a two-fold
and liabilities of self- powers and liabilities character:
government. of self-government. • Public / Governmental – The
They are called into They are local corporation acts as an agent of the
existence either at subdivisions of the State for the government of the
direct solicitation or state, created by territory and the people within the
by the free consent of sovereign legislative municipal limits. It exercises a part of
the persons power of its own the sovereignty of the state by
composing them. sovereign will and delegation (i.e., police power, taxation,
without particular eminent domain)
solicitation, consent or
concurrent action of • Private – The corporation acts in a
the people who similar category as a business
inhabit them. corporation, doing functions not strictly
governmental or political. It stands for
the community in the administration of
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local affairs, beyond the sphere of the Municipal laws that regulate private and
public purposes for which its domestic rights continue in force until
government powers are conferred. abrogated or changed by the new ruler. Only
laws of a political character are totally
Villas vs. City of Manila abrogated or changed by the new ruler. The
(1911) property rights relinquished by Spain are
limited to those which belong to the public
FACTS: The petitioner in this case was a domain. The juristic identity of the corporation
creditor of the Ayuntamiento of Manila as it has been in no wise affected, and, in law, the
existed before the cession of the Philippine present city is, in every legal sense, the
Islands to the United States by the Treaty of successor of the old. As such it is entitled to
Paris of December 10, 1898. The action was the property and property rights of the
brought upon the theory that the city, under predecessor corporation, and is, in law, subject
its present charter from the Government of the to all of its liabilities.
Philippine Islands, was the same juristic
person, and liable upon the obligations of the Absent any express legislative declaration,
old city. there is no reason to suppose that
reincorporation intended to permit an escape
The City of Manila argued that its charter has from the obligations of the old city.
no reference to obligations or contracts of the
old city; that their case is analogous to a Lidasan vs. COMELEC
principal and agent, where the sovereign gets (1967)
changed, the city, as agent of the State, could
no longer be held accountable for debts of the FACTS: The President signed into law RA
previous sovereign; that the city of Manila has 4790, creating the new municipality of
been reincorporated under Act 183 of the Dianaton, Lanao del Sur. Some of the barrios
Philippine Commission and thus not liable for included in the new municipality came from
the said obligations. municipalities of Cotabato. Prompted by the
coming elections, COMELEC adopted a
The Philippine SC held that the present resolution which affirms the new municipality.
municipality is a totally different corporate As the law stood, twelve barrios - in two
entity and in no way liable for the debts of the municipalities in the province of Cotabato —
Spanish municipality. The case was appealed are transferred to the province of Lanao del
to the US SC. Sur. This brought about a change in the
boundaries of the two provinces. Apprised of
WON the city of Manila is still liable for this development, the Office of the President,
the obligations of the city incurred prior through the Assistant Executive Secretary,
to the cession to the US. recommended to Comelec that the operation
of the statute be suspended until "clarified by
HELD: YES. Municipal corporations exercise correcting legislation."
powers which are governmental and powers
which are of a private or business character. In The COMELEC, stood by its own interpretation,
the one character a municipal corporation is a and declared that the statute "should be
governmental subdivision, and for that implemented unless declared unconstitutional
purpose exercises by delegation a part of the by the Supreme Court." Lidasan argues that
sovereignty of the state. In the other character the law is unconstitutional for violating the one
it is a mere legal entity or juristic person. In bill, one subject rule.
the latter character it stands for the
community in the administration of local WON RA 4790 is unconstitutional for
affairs wholly beyond the sphere of the public violating the one bill, one subject rule.
purpose for which its governmental powers are
conferred.
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HELD: YES. In the CAB, the title — "An Act sufficient income, the SC may not now say that
Creating the Municipality of Dianaton, in the Congress intended to create Dianaton with
Province of Lanao del Sur" — projects the only nine—of the original twenty-one—barrios,
impression that solely the province of Lanao with a seat of government still left to be
del Sur is affected by the creation of Dianaton. conjectured. For, this unduly stretches judicial
Not the slightest intimation is there that interpretation of congressional intent beyond
communities in the adjacent province of credibility point. To do so, indeed, is to pass
Cotabato are incorporated in this new Lanao the line which circumscribes the judiciary and
del Sur town. The transfer of a sizeable portion tread on legislative premises
of territory from one province to another of
necessity involves reduction of area, Republic vs. City of Davao
population and income of the first and the (2002)
corresponding increase of those of the other.
This is as important as the creation of a FACTS: The City of Davao filed an application
municipality. And yet, the title did not reflect for a Certificate of Non-Coverage (CNC) for its
this fact. proposed project, the Davao City Sports Dome
with the Environmental Management Bureau
WON RA 4790 may still be salvaged with (EMB) with the required documents. EMB
reference to the 9 barrios in Lanao del denied the application after finding that the
Sur, with the mere nullification of the proposed project was w/in an environmentally
portion thereof which took away the critical area. It also held that Davao must
twelve barrios in the municipalities of undergo the environmental impact assessment
Cotabato. (EIA) to secure Environmental Compliance
Certificate (ECC) before it can proceed with
HELD: NO. Municipal corporations perform construction of its project pursuant to Sec 2 of
twin functions. Firstly, they serve as an PD 1586, Environmental Impact Statement
instrumentality of the State in carrying out the System, in relation to Sec 4 PD 1151,
functions of government. Secondly, they act as Philippine Environment Policy. Davao argues
an agency of the community in the that its proposed project was neither an
administration of local affairs. It is in the latter environmentally critical project nor within an
character that they are a separate entity environmentally critical area; thus it was
acting for their own purposes and not a outside the scope of the EIA system.
subdivision of the State.
The TC ruled in favor of Davao, holding that
Consequently, several factors come to the fore only agencies and instrumentalities of the
in the consideration of whether a group of national government, including government
barrios is capable of maintaining itself as an owned or controlled corporations, as well as
independent municipality. Amongst these are private corporations, firms and entities are
population, territory, and income. When the mandated to go through the EIA process for
foregoing bill was presented in Congress, their proposed projects which have significant
unquestionably, the totality of the 21barrios— effect on the quality of the environment. An
not 9 barrios—was in the mind of the LGU, not being an agency or instrumentality of
proponent thereof. That this is so, is plainly the National Government, is deemed excluded
evident by the fact that the bill itself, under the principle of expressio unius est
thereafter enacted into law, states that the exclusio alterius.
seat of the government is in Togaig, which is a
barrio in Cotabato. And then the reduced area WON the City of Davao was within the
poses a number of questions, to which the SC scope of the EIA.
may not supply the answers. With the known
premise that Dianaton was created upon the HELD: YES. An LGU is a body politic and
basic considerations of progressive corporate endowed with powers to be
community, large aggregate population and
13
exercised inconformity with law. It has dual
functions:
• Governmental – concerns health, 2. Purposes
safety, advancement, of public good
and welfare. It acts as an agency of MARTIN:
national government; and Municipal corporations are created for a two-
• Proprietary – seeks to obtain special fold purpose:
corporate benefits or earn pecuniary
profit and intended for private • To serve as an agency or instrument of
advantage and benefit. Acts as agent of the state in carrying on the functions of
community. government which the state cannot
conveniently exercise; and
As a body politic endowed with governmental
functions, LGU has the duty to promote the • To act as an agency of the inhabitants
people’s right to a balanced ecology (Sec. 16, of the community in the regulation of
LGC) and to ensure quality of environment. municipal franchises and public utilities
Pursuant to this, Davao cannot claim promotion, management, of local affairs,
exemption from the coverage of EIS law which maintenance of water system, ferries,
has same the objectives. wharves, etc.
Civil Code defines a person as either natural or 3. General Powers and Attributes
juridical. The state and its subdivisions i.e.
LGU’s are juridical persons. Thus, LGU’s are (See Secs. 6-24 of the LGC; they will be
not excluded from EIS law. thoroughly discussed later in the
syllabus)
Section 1 of EIS law intends to implement
state policy to achieve a balance between
socio-economic development and III. GENERAL PRINCIPLES AND POLICIES
environmental protection. The Whereas clause
of the same law stresses that this balance can 1987 CONSTI, Art. X, Section 1. The
only be achieved through a comprehensive territorial and political subdivisions of the
and integrated program where all the sectors Republic of the Philippines are the provinces,
of the community – government and private – cities, municipalities, and barangays. There
are involved. Thus, LGU’s as part of the shall be autonomous regions in Muslim
machinery of the government cannot be Mindanao and the Cordilleras as hereinafter
deemed outside the scope of the EIS law. provided.
PIMENTEL:
HOWEVER, since it is clear that the said
• Congress cannot simply pass a law to
project is not classified as environmentally
create another territorial and political
critical nor within critical area, DENR has no
subdivision other than those exclusively
choice but to issue the CNC. It is a ministerial
listed in this provision. A constitutional
duty that can be compelled by a writ of
amendment is required to do so.
mandamus.
GD-R: Ma’am believes that Environmental • NOTE: Only the ARMM (RA 6734) was
protection is still not fully devolved therefore successfully created and approved in a
Congress still oversees it closely. Hence, the plebiscite. The proposed CAR (RA 6766)
title of the case: “Republic vs. City of Davao”. was rejected in the plebiscite held in the
said region.
1987 CONSTI, Art. X, Section 3. The

Congress shall enact a local government code
14
which shall provide for a more responsive and PIMENTEL:
accountable local government structure • Special metropolitan political subdivisions
instituted through a system of decentralization created under this provision do not
with effective mechanisms of recall, initiative, comprise another territorial and political
and referendum, allocate among the different subdivision similar to that created in
local government units their powers, Section 1 of this Article.
responsibilities, and resources, and provide for
the qualifications, election, appointment and • NOTE: RA 7924 created the MMDA, the
removal, term, salaries, powers and functions agency that administers the metro-wide
and duties of local officials, and all other basic services affecting the LGU’s of Metro
matters relating to the organization and Manila.
operation of the local units.
• “Metro-wide services” - those services
which have metro-wide impact and
transcend local political boundaries or
PIMENTEL:
entail huge expenditures such that it would
• The following are the notable features of not be viable for said services to be
the LGC passed by Congress: provided by the individual local
− System of decentralization government units (LGUs) comprising
− Power of recall of abusive officers Metropolitan Manila. Its scope cover the
vested in the people following:
− Power of independent initiation and − Development planning
approval of local legislation vested − Transport and traffic management
in the people − Solid waste disposal and
− Power of voicing out the people’s management
stand on local issues through − Flood control and sewerage
referenda management
− Qualifications of local elective − Urban renewal, zoning, and land use
officials planning, and shelter services
− Manner of election of local officials − Health and sanitation, urban
− Term of office, salaries and protection and pollution control
emoluments of local officials − Public safety
− Appointment and discipline of local
government officials
• HOWEVER, the powers of the MMDA are
limited to the following acts: formulation,
• NOTE: The LGC did not impliedly repeal the coordination, regulation, implementation,
PAGCOR Charter (Magtajas vs.Pryce preparation, management, monitoring,
Properties Corp.) setting of policies, installation of a system
and administration. There is no syllable
1987 CONSTI, Art. X, Section 11. The in R.A. No. 7924 that grants the MMDA
Congress may, by law, create special police power, let alone legislative
metropolitan political subdivisions, subject to a power. All its functions are administrative
plebiscite as set forth in Section 10 hereof. The in nature and these are actually summed
component cities and municipalities shall up in the charter itself. (MMDA vs. Bel-Air
retain their basic autonomy and shall be Village Association)
entitled to their own local executive and
legislative assemblies. The jurisdiction of the 1987 CONSTI, Art. X, Section 12. Cities
metropolitan authority that will thereby be that are highly urbanized, as determined by
created shall be limited to basic services law, and component cities whose charters
requiring coordination. prohibit their voters from voting for provincial
15
elective officials, shall be independent of the communities and make them more effective
province. The voters of component cities partners in the attainment of national goals.
within a province, whose charters contain no Toward this end, the State shall provide for a
such prohibition, shall not be deprived of their more responsive and accountable local
right to vote for elective provincial officials. government structure instituted through a
system of decentralization whereby local
PIMENTEL: government units shall be given more powers,
• This system of classification is based upon authority, responsibilities, and resources. The
the cities’ regular annual income, which process of decentralization shall proceed from
would tend to show WON a city is capable the national government to the local
of existence and development as a government units.
relatively independent social, economic,
and political unit. It would also show (b) It is also the policy of the State to ensure
whether the city has sufficient economic or the accountability of local government units
industrial activity as to warrant its through the institution of effective
independence from the province where it is mechanisms of recall, initiative and
geographically situated. Cities with smaller referendum.
income need the continued support of the
provincial government thus justifying the (c) It is likewise the policy of the State to
continued participation of the voters in the require all national agencies and offices to
election of provincial officials in some conduct periodic consultations with
instances. (Ceniza vs. COMELEC) appropriate local government units, non-
governmental and people's organizations, and
other concerned sectors of the community
• The practice of allowing voters in one
before any project or program is implemented
component city to vote for provincial
in their respective jurisdictions.
officials and denying the same privilege to
voters in another component city is a
matter of legislative discretion which PIMENTEL:
violates neither the Constitution (equal • This is basically a reiteration of the most
protection) nor the voter's right of suffrage. important policies on local autonomy
(supra) enshrined in the CONSTI:
− Genuine and meaningful local

autonomy – even barangays are
meant to possess this so that they
may develop fully as self-reliant
communities (De Leon vs. Esguerra)
− Accountable local officials –
gives rise to people empowerment
through the vesting in the
LGC, SEC 1. Title. - This Act shall be known constituents the powers of initiative,
and cited as the "Local Government Code of referendum and recall to effectively
1991". express their will.
− Mandatory annual periodic
LGC, SEC. 2. Declaration of Policy. – consultation - this promotes
smoother and harmonious
(a) It is hereby declared the policy of the State relationships not only between the
that the territorial and political subdivisions of central government and the LGU’s
the State shall enjoy genuine and meaningful but also between the government
local autonomy to enable them to attain their (local and central) and the people.
fullest development as self-reliant
16
(To prevent the Chico Dam fiasco efforts, services, and resources for purposes
from happening again) commonly beneficial to them;
(g) The capabilities of local government units,

especially the municipalities and barangays,
LGC, SEC. 3. Operative Principles of shall be enhanced by providing them with
Decentralization. - The formulation and opportunities to participate actively in the
implementation of policies and measures on implementation of national programs and
local autonomy shall be guided by the projects;
following operative principles:
(h) There shall be a continuing mechanism to
(a) There shall be an effective allocation enhance local autonomy not only by legislative
among the different local government units of enabling acts but also by administrative and
their respective powers, functions, organizational reforms;
responsibilities, and resources;
(i) Local government units shall share with the
(b) There shall be established in every local national government the responsibility in the
government unit an accountable, efficient, and management and maintenance of ecological
dynamic organizational structure and balance within their territorial jurisdiction,
operating mechanism that will meet the subject to the provisions of this Code and
priority needs and service requirements of its national policies;
communities;
(j) Effective mechanisms for ensuring the
(c) Subject to civil service law, rules and accountability of local government units to
regulations, local officials and employees paid their respective constituents shall be
wholly or mainly from local funds shall be strengthened in order to upgrade continually
appointed or removed, according to merit and the quality of local leadership;
fitness, by the appropriate appointing
authority; (k) The realization of local autonomy shall be
facilitated through improved coordination of
(d) The vesting of duty, responsibility, and national government policies and programs
accountability in local government units shall and extension of adequate technical and
be accompanied with provision for reasonably material assistance to less developed and
adequate resources to discharge their powers deserving local government units;
and effectively carry out their functions;
hence, they shall have the power to create and (l) The participation of the private sector in
broaden their own sources of revenue and the local governance, particularly in the delivery of
right to a just share in national taxes and an basic services, shall be encouraged to ensure
equitable share in the proceeds of the the viability of local autonomy as an
utilization and development of the national alternative strategy for sustainable
wealth within their respective areas; development; and
(e) Provinces with respect to component cities (m) The national government shall ensure
and municipalities, and cities and that decentralization contributes to the
municipalities with respect to component continuing improvement of the performance of
barangays, shall ensure that the acts of their local government units and the quality of
component units are within the scope of their community life.
prescribed powers and functions;
PIMENTEL:
(f) Local government units may group • These provisions are meant to:
themselves, consolidate or coordinate their
17
− guide the national government in
formulating and implementing • The national officials, offices or agencies
policies and measures on local mentioned in this provision refers to those
autonomy and decentralization whose personnel and functions are
− give leverage to local officials to devolved and discharged to appropriate
enable them to monitor and, to LGU’s (example: DSWD, DOH, DA, DOT,
some extent, demand the DILG, DENR – to the extent that its shares
implementation of decentralization. with the LGU’s functions relating to
ecology)
• Section 12, Article X of the Constitution is
explicit in that aside from highly-urbanized LGC, SEC. 5. Rules of Interpretation. - In
cities, component cities whose charters the interpretation of the provisions of this
prohibit their voters from voting for Code, the following rules shall apply:
provincial elective officials are independent
of the province. In the same provision, it (a) Any provision on a power of a local
provides for other component cities within government unit shall be liberally interpreted
a province whose charters do not provide a in its favor, and in case of doubt, any question
similar prohibition. (Abella vs. COMELEC) thereon shall be resolved in favor of devolution
Hence, cities are classified into highly of powers and of the lower local government
urbanized, component and independent unit. Any fair and reasonable doubt as to the
component. existence of the power shall be interpreted in
favor of the local government unit concerned;
• Before the effectivity of the LGC, the
protection of the environment was lodged (b) In case of doubt, any tax ordinance or
in the DENR. Now, this duty is shared by revenue measure shall be construed strictly
the national government with the LGU’s against the local government unit enacting it,
(example: mandatory consultations) and liberally in favor of the taxpayer. Any tax
exemption, incentive or relief granted by any
HOWEVER, the LGU’s must not supplant or local government unit pursuant to the
negate the national government policies on provisions of this Code shall be construed
environment. strictly against the person claiming it.
• Modernization and development of the (c) The general welfare provisions in this Code
nation must be tempered with a concern shall be liberally interpreted to give more
for sound ecology and wholesome powers to local government units in
environment. accelerating economic development and
upgrading the quality of life for the people in
the community;
LGC, SEC. 4. Scope of Application. - This
Code shall apply to all provinces, cities,
(d) Rights and obligations existing on the date
municipalities, barangays, and other political
of effectivity of this Code and arising out of
subdivisions as may be created by law, and, to
contracts or any other source of prestation
the extent herein provided, to officials, offices,
involving a local government unit shall be
or agencies of the national government.
governed by the original terms and conditions
of said contracts or the law in force at the time
PIMENTEL:
such rights were vested; and
• “Other political subdivisions” – refers to
special metropolitan areas and (e) In the resolution of controversies arising
autonomous political units. (NOTE: The under this Code where no legal provision or
ARMM is covered by the LGC until they jurisprudence applies, resort may be had to
shall have enacted their own Local the customs and traditions in the place where
Government Code) the controversies take place.
18
consists of the Supreme Court and the
PIMENTEL: lower courts which have been established
• Interpretation comes into play only when by law.
the law does not speak in clear and
categorical language. (Saculdito vs.
Montejo)
• Every LGU shall exercise the powers

expressly granted, those necessarily
implied therefrom, as well as powers A. Local Autonomy
necessary, appropriate, or incidental for its
efficient and effective governance, and PIMENTEL:
those which are essential to the promotion • Autonomy – comes from the Greek word
of the general welfare. (LGC, Sec. 16) “autonomos” (to live under one’s laws); it
is the state of independence and self-
• Custom - a rule of conduct formed by government.
repetition of acts, uniformly observed
(practiced) as a social rule, legally binding • In Philippine context, local autonomy is
and obligatory". The law requires that "a the shift of the responsibilities and powers
custom must be proved as a fact, of governance (albeit limited in character)
according to the rules of evidence". A local from the national government to the LGU’s.
custom as a source of right cannot be It means a more responsive and
considered by a court of justice unless such accountable local government structure
custom is properly established by instituted through a system of
competent evidence like any other fact. decentralization. HOWEVER, it does not
(Yao Kee vs. Sy-Gonzales) make local governments sovereign within
the state. (Alvarez vs. Guingona, Basco vs.
According to Gorospe, Filipino customary Batanes)
law (adat) synthesizes morality, legality
and religion. Hence, in case of conflict 1987 CONSTI
between the adat and any exterior law
(i.e., civil law, externally imposed religious Art. II, Section 25. The State shall ensure
law) the adat prevails. the autonomy of local governments.
• Tradition – an inherited principle, Art. X, Section 2. The territorial and political

standard or practice or bodies of these, subdivisions shall enjoy local autonomy.
serving as the established guide of an
individual or group; a cultural feature PIMENTEL:
preserved or evoked from the past of a • NOTE: While local autonomy is meant to
tribe or cultural community. break up the monopoly of the national
government over the affairs of local
HOWEVER, in Badua vs. Cordillera Bodong governments, it is not meant to usher
Administration, the SC held that since the federalism.
creation of the Cordillera Autonomous
Region was rejected the Cordillera Pimentel vs. Aguirre
Autonomous Region did not come to be. (2000)
Hence, the indigenous and special courts
nor the tribal courts for the indigenous FACTS: President Ramos issued AO 372
cultural communities of the Cordillera entitled “Adoption of Economy Measures for FY
region, do not legally exist. They are not a 1998”, which includes the following provisions:
part of the Philippine judicial system which
19
• Section 1 directed all government is merely temporary (pending assessment &
departments and agencies, including LGUs, evaluation by DBCC), it is equivalent to a
to reduce total expenditures for the year holdback, which means “something held back
by at least 25%. or withheld, often temporarily.” Hence, the
temporary nature of the retention by the
• Section 4 provided that the amount national government does not matter. Any
equivalent to 10% of the internal revenue retention is prohibited.
allotment to LGUs shall be withheld
pending the assessment and evaluation by Moreover, there are several requisites before
the Development Budget Coordinating the President may interfere in local fiscal
Committee of the emerging fiscal situation. matters: (1) an unmanaged public sector
deficit of the national government; (2)
AO 43 was issued by President Estrada when consultations with the presiding officers of the
he assumed office. This reduced the amount Senate and the HOR and the presidents of the
withheld to 5%. various local leagues; and (3) the
corresponding recommendation of the
Pimentel sought to annul Sections 1 & 4 of secretaries of the Department of Finance,
Administrative Order No. 372. He argues that Interior and Local Government, and Budget
the president would in effect exercise the and Management. Furthermore, any
power of control over LGU’s, when only adjustment in the allotment shall in no case be
supervision is allowed by the CONSTI. less than thirty percent (30%) of the collection
of national internal revenue taxes of the third
The Solicitor General contended that this was fiscal year preceding the current one.
issued to alleviate economic difficulties, that
Under the Philippine concept of local
the AO merely “directs” LGUs to reduce their
autonomy, only administrative powers over
expenditures and that the 10% withholding is
local affairs are delegated to political
only temporary.
subdivisions. To enable the country to develop
as a whole, the programs and policies effected
WON the said sections of the AO are valid
locally must be integrated and coordinated
exercises of the President's power of
towards a common national goal. Thus, policy-
general supervision over local
setting for the entire country still lies in the
governments.
President and Congress. Municipal
governments are still agents of the national
HELD: YES for Section 1. While the
government.
wordings of Sec. 1 have a rather commanding
San Juan vs. CSC
tone, and while the requirements of the LGC
(1991)
(Sec. 284) have not been satisfied, the
directive to implement measures that will
FACTS: Gov. San Juan appointed Santos as
reduce total expenditures by 25% is merely
Acting PBO (Provincial Budget Officer) of Rizal
advisory in character, and does not constitute
Province and informed DBM Region IV Director,
a mandatory or binding order that interferes
asking him to endorse the appointment.
with local autonomy. All concerned could do
However, the Director recommended the
well to heed this advisory. It is understood,
appointment of Almajose as PBO since she is
however, that no legal sanction may be
the only CPA among the contenders. DBM
imposed upon LGUs and their officials who do
Usec. signed the appointment papers of
not follow such advice.
Almajose without the knowledge of Gov. San
Juan. The new Reg. IV Director informed Gov.
NO for Section 4. A basic feature of local
San Juan that Santos was not qualified and
fiscal autonomy is the automatic release of the
asked that he submit 3 other nominees.
shares of the LGUs in the national revenue.
However, Gov. San Juan learned of Almajoses’s
This is mandated by the Constitution and the
appointment by the Usec and filed a letter-
LGC. Although what is provided for in Section 4
20
protest with the DBM Secretary. DBM ruled 1987 CONSTI, Art. X, Section 4. The
that letter-protest is not meritorious. MFR was President of the Philippines shall exercise
denied. Thus, Gov. San Juan appealed to Civil general supervision over local governments.
Service Commission (CSC) which issued a Provinces with respect to component cities and
resolution dismissing Gov. San Juan’s claim. municipalities, and cities and municipalities
with respect to component barangays, shall
WON the DBM can appoint another ensure that the acts of their component units
person if the governor recommend an are within the scope of their prescribed powers
unqualified person to the position of and functions.
Provincial Budget Officer.
PIMENTEL:
HELD: NO. The DBM cannot appoint anyone it
• NOTE: Supervision, not control! The
wants when the recomendee of the Governor President even has to exercise such power
is unqualified.
through the larger LGU’s WRT their
component LGU’s. This power is part of the
The issue involves the application of a most
system of checks and balances.
important constitutional policy and principle,
− Supervision means overseeing or
that of local autonomy. The clear mandate on
the authority of an officer to see
local autonomy must be obeyed. Where a law
that the subordinate officers
is capable of two interpretations, one in
perform their duties. The
favor of centralized power in Malacañang
President's power of general
and the other beneficial to local
supervision means no more than
autonomy, the scales must be weighed in
the power of ensuring that laws are
favor of autonomy.
faithfully executed, or that
subordinate officers act within the
When CSC interpreted the recommending
law. Supervision is not incompatible
power of the Provincial Governor as purely
with discipline. (Joson vs. Executive
directory, it went against the letter and spirit
Secretary)
of the constitutional provisions on local
autonomy. If the DBM Secretary jealously − Supervision is not a meaningless
hoards the entirety of budgetary powers and thing. It is an active power. It is
ignores the right of local governments to certainly not without limitation, but
develop self-reliance and resoluteness in the it at least implies authority to
handling of their own funds, the goal of inquire into facts and conditions
meaningful local autonomy is frustrated and (investigation) in order to render
set back. the power real and effective. If
supervision is to be conscientious
The DBM may appoint only from the list of and rational, and not automatic and
qualified recommendees nominated by the brutal, it must be founded upon a
Governor. If none is qualified, he must return knowledge of actual facts and
the list of nominees to the Governor explaining conditions disclosed after careful
why no one meets the legal requirements and study and investigation. (Planas vs.
ask for new recommendees who have the Gil)
necessary eligibilities and qualifications. − Control, on the other hand, "means
the power of an officer to alter or
Our national officials should not only comply modify or nullify or set aside what a
with the constitutional provisions on local subordinate had done in the
autonomy but should also appreciate the performance of their duties and to
spirit of liberty upon which these provisions substitute the judgment of the
are based. former for that of the latter.”
(Pimentel vs. Aguirre, San Juan vs.
CSC)
21
deprive the legislature of all authority over
Ganzon vs. CA municipal corporations, in particular,
(1991) concerning discipline. the deletion of "as may
be provided by law" was meant to stress, sub
FACTS: A series of administrative complaints, silencio, the objective of the framers to
ten in number, was filed against Mayor Ganzon strengthen local autonomy by severing
by various city officials, on various charges, congressional control of its affairs, as observed
among them, abuse of authority, oppression, by the Court of Appeals, like the power of local
grave misconduct, disgraceful and immoral legislation. The Constitution did nothing more,
conduct, intimidation, culpable violation of the however, and insofar as existing legislation
Constitution, and arbitrary detention. authorizes the President (through the
Secretary of Local Government) to proceed
Finding probable grounds and reasons, the against local officials administratively, the
DILG Secretary issued a preventive suspension Constitution contains no prohibition.
order for a period of sixty days. In the other
case, he ordered Guanzon's second preventive It is noteworthy that under the Charter, "local
suspension for another sixty (60) days. autonomy" is not instantly self-executing, but
subject to, among other things, the passage of
Amidst the two successive suspensions, Mayor a local government code, a local tax law,
Ganzon instituted an action for prohibition income distribution legislation, and a national
against the respondent in the RTC. Presently, representation law, and measures designed
he instituted an action for prohibition, in the to realize autonomy at the local level. It is also
respondent CA. Meanwhile, the DILG Secretary noteworthy that in spite of autonomy, the
issued another order, preventively suspending Constitution places the local government
Mayor Ganzon for another sixty days, the third under the general supervision of the
time in twenty months, and designating Executive. It is noteworthy finally, that the
meantime the Vice-Mayor as acting mayor. Charter allows Congress to include in the local
Undaunted, Mayor Ganzon commenced before government code provisions for removal of
the CA, a petition for prohibition. However, the local officials, which suggest that Congress
CA dismissed all the cases. Ganzon cries foul, may exercise removal powers, and as the
arguing that he was denied due process and existing Local Government Code has done,
that the President has no power to investigate delegate its exercise to the President.
or suspend local officials because of the
deletion of a clause in the present CONSTI. In resume the Court is laying down the
following rules:
Whether or not the DILG Secretary, as 1. Local autonomy, under the
the President's alter ego, can suspend Constitution, involves a mere
and/or remove local officials. decentralization of administration, not
of power, in which local officials remain
HELD: YES. Notwithstanding the change in accountable to the central government
the constitutional language, the charter did in the manner the law may provide;
not intend to divest the legislature of its right 2. The new Constitution does not
or the President of her prerogative as prescribe federalism;
conferred by existing legislation to provide 3. The change in constitutional language
administrative sanctions against local officials. (with respect to the supervision clause)
It is our opinion that the omission (of "as may was meant but to deny legislative
be provided by law") signifies nothing more control over local governments; it did
than to underscore local governments' not exempt the latter from legislative
autonomy from congress and to break regulations provided regulation is
Congress' "control" over local government consistent with the fundamental
affairs. The Constitution did not, however, premise of autonomy;
intend, for the sake of local autonomy, to
22
4. Since local governments remain within a province, whose charters contain no
accountable to the national authority, such prohibition, shall not be deprived of their
the latter may, by law, and in the right to vote for elective provincial officials.
manner set forth therein, impose
disciplinary action against local Tan v COMELEC
officials; and (1986)
5. "Supervision" and "investigation" are
not inconsistent terms; "investigation" FACTS: BP 885 was passed (“An Act Creating
does not signify "control" (which the the Province of Negros del Norte.”) Tan et al.,
President does not have). who are residents of the Province of Negros
Occidental, filed with the SC a case for
HOWEVER: While the President, through the Prohibition for the purpose of stopping
DILG Secretary is not precluded from respondents COMELEC from conducting the
exercising a legal power, it appears that the plebiscite, required by the said law. The BP
DILG is exercised such power oppressively and provided that the plebiscite was to be
with a grave abuse of discretion. What bothers conducted 120 days from the approval of the
the Court, and what indeed looms very large, Act and that the President was to appoint the
is the fact that since the Mayor is facing ten first officials.
administrative charges, the Mayor is in fact
facing the possibility of 600 days of Tan et al. contend that BP 885 is
suspension, in the event that all ten cases unconstitutional and it is not in complete
yield prima facie findings. The Court is not of accord with the Local Government Code. The
course tolerating misfeasance in public office Constitution states that no province, city,
(assuming that Ganzon is guilty of municipality, or barrio may be created,
misfeasance) but it is certainly another divided, merged, abolished, or its boundaries
question to make him serve 600 days of substantially altered, except in accordance
suspension, which is effectively, to suspend with the criteria established in the Local
him out of office. Government Code, subject to approval by a
majority of votes cast in a plebiscite. The LGC
1987 CONSTI, Art. X, Section 11. The set as a standard that a province must have at
Congress may, by law, create special least 3,500 square kilometers as its territory.
metropolitan political subdivisions, subject to a
plebiscite as set forth in Section 10 hereof. The The Solicitor General argued that BP 885
component cities and municipalities shall enjoys a presumption of legality and that the
retain their basic autonomy and shall be question is moot since the province of Negros
entitled to their own local executive and del Norte had already been proclaimed after
legislative assemblies. The jurisdiction of the the plebiscite which was held (notwithstanding
metropolitan authority that will thereby be the case) confined only to the inhabitants of
created shall be limited to basic services the territory of Negros del Norte, to the
requiring coordination. exclusion of the voters from the rest of the
province of Negros Occidental (parent
province).
WON the province of Negros del Norte

was validly created.
1987 CONSTI, Art. X, Section 12. Cities HELD: NO. Considering that the legality of the
that are highly urbanized, as determined by plebiscite itself is challenged for non-
law, and component cities whose charters compliance with constitutional requisites, the
prohibit their voters from voting for provincial fact that such plebiscite had been held and a
elective officials, shall be independent of the new province proclaimed and its officials
province. The voters of component cities
23
appointed, this case cannot truly be viewed as square kilometers. The Court rejected the
already moot and academic. suggestion of the Solicitor General that even
the area of the EEZ should be considered in
It can be plainly seen from Section 3 of Article determining the territorial requirement.
XI of the 1973 CONSTI makes it imperative
that there be first obtained "the approval of a Cordillera Broad Coalition v. COA
majority of votes in the plebiscite in the unit or (1990)
units affected" whenever a province is
created, divided or merged and there is FACTS: After the 1996 EDSA Revolution,
substantial alteration of the boundaries. It is Balweg, broke off on ideological grounds from
thus inescapable to conclude that the the CPP-NPA. After President Aquino was
boundaries of the existing province of Negros installed into office, she advocated a policy of
Occidental would necessarily be substantially national reconciliation. The Cordillera People’s
altered by the division of its existing Liberation Army (CPLA) heeded this call.
boundaries in order that there can be created Aqiuno and Balweg arrived at a joint
the proposed new province of Negros del agreement to draft an Executive Order to
Norte. Plain and simple logic will demonstrate create a preparatory body that could perform
that two political units would be affected. The policy-making and administrative functions
first would be the parent province of Negros and undertake consultations and studies
Occidental because its boundaries would be leading to a draft organic act for the
substantially altered. The other affected entity Cordilleras. Pursuant to the joint agreement,
would be composed of those in the area E.O. 220, creating the Cordillera Administrative
subtracted from the mother province to Region (CAR) was signed into law.
constitute the proposed province of Negros del
Norte. During the pendency of this case, R.A. No.
6766 (Organic Act of CAR) was enacted and
The Court noted that the case of Paredes vs. signed into law. The Act recognizes the CAR
Executive Secretary, which involved the and the offices and agencies created under
creation of a new municipality where the E.O. 220 and its transitory nature is reinforced.
parent unit was not involved, could not be Cordillera Broad Coalition assailed E.O. 220 on
considered as a precedent. The reasons in this the primary ground that the President pre-
case invoked by respondents herein were empts the enactment of an organic act by
formerly considered acceptable because of the Congress and the approval of such act through
views then taken that local autonomy would a plebiscite.
be better promoted. However, even this
consideration no longer retains persuasive WON E.O. 220 was invalid based on the
value. That case involved a barangay while grounds stated.
this case involves a province.
HELD: NO. EO 220 does not create the
Almost half of the sugar plantations would be autonomous region contemplated in the
dismembered form the parent province and Constitution. It merely provides for transitory
some of its most important cities. Hence, the measures in anticipation of the enactment of
remaining portion of the parent province is as an organic act and the creation of an
much an area affected. The substantial autonomous region. In short, it prepares the
alteration of the boundaries of the parent ground for autonomy. This does not
province, not to mention the other adverse necessarily conflict with the provisions of the
economic effects it might suffer, eloquently Constitution on autonomous regions. The
argue the points raised by the petitioners. complex procedure for the creation of an
autonomous region in the Cordilleras will take
The SC also considered the new province as time. The President, in 1987 still exercising
lacking in the territory requirement since the legislative powers, as the first Congress had
land mass of the new territory was only 2,856 not yet convened, saw it fit to provide for
24
some measures to address the urgent needs of
the Cordilleras in the meantime that the On the other hand, the creation of autonomous
organic act had not yet been passed and the regions in Muslim Mindanao and the
autonomous region created. These measures Cordilleras, which is peculiar to the 1987
are in E.O. No. 220, and they do not violate the Constitution contemplates the grant of political
Constitution. autonomy and not just administrative
autonomy these regions. Thus, the provision in
The bodies created by E.O. 220 do not the Constitution for an autonomous regional
supplant the existing local governmental government with a basic structure consisting
structure, nor are they autonomous of an executive department and a legislative
government agencies. They merely constitute assembly and special courts with personal,
the mechanism for an "umbrella" that brings family and property law jurisdiction in each of
together the existing local governments, the the autonomous regions
agencies of the National Government, the
ethno-linguistic groups or tribes, and NGOs in GD-R: In relation to the ARMM, what does
a concerted effort to spur development in the the CONSTI envision, when it refers to
Cordilleras. local autonomy and decentralization? The
following are excerpts from Disomangcop vs.
Neither did E.O. 220 contravene the Datumanong (2004):
Constitution by creating a new territorial and
political subdivision. The CAR is not a public In Cordillera Broad Coalition v. Commission on
corporation or a territorial and political Audit, the Court, with the same composition,
subdivision. It does not have a separate ruled without any dissent that the creation of
juridical personality, unlike provinces, cities autonomous regions contemplates the grant of
and municipalities. Neither is it vested with the political autonomy—an autonomy which is
powers that are normally granted to public greater than the administrative autonomy
corporations (the power to sue and be sued, granted to local government units. It held that
the power to own and dispose of property, the "the constitutional guarantee of local
power to create its own sources of revenue, autonomy in the Constitution (Art. X, Sec. 2)
etc.). The CAR was created primarily to refers to administrative autonomy of local
coordinate the planning and implementation of government units or, cast in more technical
programs and services in the covered areas. language, the decentralization of government
authority…. On the other hand, the creation of
The CAR is in the same genre as the autonomous regions in Muslim Mindanao and
administrative regions created under the the Cordilleras, which is peculiar to the 1987
Reorganization Plan, albeit under E.O. No. 220. Constitution, contemplates the grant of
The operation of the CAR requires the political autonomy and not just administrative
participation not only of the line departments autonomy to these regions.”
and agencies of the National Government but And by regional autonomy, the framers
also the local governments, ethno-linguistic intended it to mean "meaningful and authentic
groups and NGOs in bringing about the desired regional autonomy." As articulated by a
objectives and the appropriation of funds Muslim author, substantial and meaningful
solely for that purpose. autonomy is "the kind of local self-government
which allows the people of the region or area
Nor is E.O. 220 diminished the local autonomy the power to determine what is best for their
of the covered provinces and city. It must be growth and development without undue
clarified that the constitutional guarantee of interference or dictation from the central
local autonomy in the Constitution refers to government.”
the administrative autonomy of local
government units or, cast in more technical To this end, Section 16, Article X, limits the
language, the decentralization of government power of the President over autonomous
authority. regions. In essence, the provision also curtails
25
the power of Congress over autonomous decision-making by sub-national units.
regions. Consequently, Congress will have to It is typically a delegated power,
re-examine national laws and make sure that wherein a larger government chooses
they reflect the Constitution's adherence to to delegate certain authority to more
local autonomy. And in case of conflicts, the local governments.
underlying spirit which should guide its
resolution is the Constitution's desire for Decentralization differs intrinsically
genuine local autonomy. from federalism in that the sub-units
that have been authorized to act (by
The aim of the Constitution is to extend to the delegation) do not possess any claim of
autonomous peoples, the people of Muslim right against the central government.
Mindanao in this case, the right to self-
determination—a right to choose their own Decentralization comes in two forms—
path of development; the right to determine deconcentration and devolution.
the political, cultural and economic content of Deconcentration is administrative in
their development path within the framework nature; it involves the transfer of
of the sovereignty and territorial integrity of functions or the delegation of authority
the Philippine Republic. Self-determination and responsibility from the national
refers to the need for a political structure that office to the regional and local offices.
will respect the autonomous peoples' This mode of decentralization is also
uniqueness and grant them sufficient room for referred to as administrative
self-expression and self-construction. decentralization.
In treading their chosen path of development, Devolution, on the other hand,

the Muslims in Mindanao are to be given connotes political decentralization, or
freedom and independence with minimum the transfer of powers, responsibilities,
interference from the National Government. and resources for the performance of
This necessarily includes the freedom to certain functions from the central
decide on, build, supervise and maintain the government to local government units.
public works and infrastructure projects within This is a more liberal form of
the autonomous region. The devolution of the decentralization since there is an actual
powers and functions of the DPWH in the transfer of powers and responsibilities.
ARMM and transfer of the administrative and It aims to grant greater autonomy to
fiscal management of public works and funds local government units in cognizance of
to the ARG are meant to be true, meaningful their right to self-government, to make
and unfettered. This unassailable conclusion is them self-reliant, and to improve their
grounded on a clear consensus, reached at the administrative and technical
Constitutional Commission and ratified by the capabilities. (Disomangcop vs.
entire Filipino electorate, on the centrality of Datumanong)
decentralization of power as the appropriate
vessel of deliverance for Muslim Filipinos and 1987 CONSTI, Art. X, Section 3. The
the ultimate unity of Muslims and Christians in Congress shall enact a local government code
this country. which shall provide for a more responsive and
accountable local government structure
B. Decentralization instituted through a system of decentralization
with effective mechanisms of recall, initiative,
PIMENTEL: and referendum, allocate among the different
• Decentralization is a decision by the local government units their powers,
central government, authorizing its responsibilities, and resources, and provide for
subordinates, whether geographically the qualifications, election, appointment and
or functionally defined, to exercise removal, term, salaries, powers and functions
authority in certain areas. It involves and duties of local officials, and all other
26
matters relating to the organization and
operation of the local units. If the Sangguniang Pampook is
autonomous in this sense, it comes
unarguably under the Court’s
1987 CONSTI, Art. X, Section 14. The jurisdiction.
President shall provide for regional
development councils or other similar bodies (2) in decentralization of power – an
composed of local government officials, autonomous government is subject alone to
regional heads of departments and other the decree of the organic act creating it and
government offices, and representatives from accepted principles on the effects and limits of
non-governmental organizations within the autonomy.
regions for purposes of administrative
decentralization to strengthen the autonomy If the Sangguniang Pampook is
of the units therein and to accelerate the autonomous in this sense, its acts are
economic and social growth and development beyond the domain of the court in the
of the units in the region. same way that internal acts, say, of the
Congress are beyond its jurisdiction.
PIMENTEL:
• This provision is a very clear illustration of An examination of PD No. 1618 creating the
local autonomy as a means for autonomous governments of Mindanao shows
development. that they were never meant to exercise
autonomy in the second sense, that is, in
Limbona vs. Mangelin which the central government commits an act
(1989) of self-immolation.
FACTS: The Sangguniang Pampook, in − The P.D. mandates that the President shall
defiance of their Speaker’s (Limbona) advice, have the power of general supervision and
held a session and voted to declare the control over Autonomous Regions
position of Speaker vacant. Limbona filed an − The Sangguniang Pampook, their
action in the Court. Pending said action, legislative arm, is made to discharge
Limbona was expelled from the Sangguniang chiefly administrative services.
Pampook on the ground that he authorized the
payment of salaries and emoluments to a Upon the facts presented, the SC held that the
certain Abdula without authority from the November 2 and 5, 1987 sessions were invalid
Assembly. The Sanggunian members assail the since at the time the petitioner called the
jurisdiction of the SC, relying on their "recess," it was not a settled matter whether
autonomy. or not he could. do so. In the second place, the
invitation tendered by the Committee on
WON the so-called autonomous Muslim Affairs of the House of Representatives
governments of Mindanao, as they are provided a plausible reason for the
now constituted, subject to the intermission sought. Thirdly, assuming that a
jurisdiction of the national courts. valid recess could not be called, it does not
appear that the respondents called his
HELD: YES. Autonomy is either attention to this mistake. What appears is that
decentralization of administration or instead, they opened the sessions themselves
decentralization of power. behind his back in an apparent act of mutiny.
Under the circumstances, we find equity on his
(1) in decentralization of administration – side. For this reason, the SC upheld the
an autonomous government is under the "recess" called on the ground of good faith.
supervision of the national government acting
through the president (and the DILG)
27
IV. CREATION OF MUNICIPAL WON the Executive Orders were valid.
CORPORATIONS
HELD: NO. When Republic Act No. 2370
A. Nature of the Power to Create became effective, barrios may "not be created
Municipal Corporations or their boundaries altered nor their names
changed" except by Act of Congress or of the
MARTIN: corresponding provincial board "upon petition
• It is essentially legislative, exclusive of a majority of the voters in the areas
and practically unlimited. In the absence of affected" and the "recommendation of the
any constitutional restriction, Congress council of the municipality or municipalities in
may create any kind of corporation it which the proposed barrio is situated."
deems essential for the more efficient
administration of civil government. The Auditor General claims that a new
municipality can be created without creating
• In the absence of a constitutional new barrios, such as, by placing old barrios
provision permitting it, such power cannot under the jurisdiction of the new municipality.
be delegated by Congress to any inferior
and subordinate tribunal or board. − This theory overlooks, that the
statutory denial of the presidential
HOWEVER: There is no undue delegation of authority to create a new barrio implies
legislative power when Congress passes a a negation of the bigger power to
general law for the incorporation of create municipalities, each of which
municipal corporations, giving conditions consists of several barrios. Founded
on which they may be created, and upon logic and experience, it cannot be
determining whether such conditions exist. offset except by a clear manifestation
of the intent of Congress to the
Pelaez vs. Auditor General contrary, and no such manifestation,
(1965) subsequent to the passage of Republic
Act No. 2370 has been brought to our
FACTS: From Sept 4 - Oct 29,1964 the attention.
President of the Philippines, purporting to act
pursuant to Sec 68 of the Revised The Auditor General alleges that the power of
Administrative Code of 1917, issued EO’s 93 to the President to create municipalities under
121, 124 and 126 to 129, creating 33 section 68 of the Revised Administrative Code
municipalities. Soon after V.P. Pelaez instituted does not amount to an undue delegation of
an action against the Auditor General, to legislative power, relying upon the allegedly
restrain him from passing in audit any settled case of Municipality of Cardona vs.
expenditure of public funds in implementation Municipality of Binañgonan (36 Phil. 547).
of said executive orders and/or any − Such claim is untenable, for said case
disbursement by said municipalities. Pelaez involved, not the creation of a new
alleges that the EOs are null and void, upon municipality, but a mere transfer of
the ground that said Section 68 has been territory — from an already existing
impliedly repealed by RA 2370 (Barrio Charter municipality (Cardona) to another
Act) and constitutes an undue delegation of municipality (Binañgonan), likewise,
legislative power. He contends that according existing at the time of and prior to said
to the said law, barrios may not be created transfer in consequence of the fixing
except upon Act of Congress or of the and definition, pursuant to Act No.
corresponding provincial board upon petition 1748, of the common boundaries of two
of a majority of the voters in the areas municipalities.
affected. Hence, logically, the president cannot
create municipalities, too. It is obvious, however, that the power to fix
such common boundary, in order to avoid or
28
settle conflicts of jurisdiction between the ground of lack of legal personality of the
adjoining municipalities, may partake of an Municipality of Sto. Tomas.
administrative nature but the authority to
create municipal corporations is essentially WON the Municipality of Sto. Tomas
legislative in nature. legally exists.
Although Congress may delegate to another HELD: NO. Rule 3, Section 1 of the Rules of
branch of the government the power to fill in Court expressly provides that only "entities
the details in the execution, enforcement or authorized by law may be patties in a civil
administration of a law, it is essential, to action." Now then, as ruled in the Pelaez case,
forestall a violation of the principle of the President has no power to create a
separation of powers, that said law: (a) be municipality. Since private respondent has no
complete in itself — it must set forth therein legal personality, it can not be a party to any
the policy to be executed, carried out or civil action, and as such, the case should have
implemented by the delegate — and (b) fix a been dismissed, since further proceedings
standard — the limits of which are sufficiently would be pointless.
determinate or determinable — to which the
delegate must conform in the performance of B. Creation of Municipal Corporations
his functions. Section 68 of the Revised
Administrative Code does not meet these 1. Constitutional provisions
requirements for a valid delegation of the
power to fix the details in the enforcement of a 1987 CONSTI, Art. X
law. Even if it did not entail an undue
Section 1. The territorial and political
delegation of legislative powers, as it certainly
subdivisions of the Republic of the Philippines
does, said Section 68, as part of the Revised
are the provinces, cities, municipalities, and
Administrative Code, approved on March 10,
barangays. There shall be autonomous regions
1917, must be deemed repealed by the
in Muslim Mindanao and the Cordilleras as
subsequent adoption of the Constitution, in
hereinafter provided.
1935, which is utterly incompatible and
inconsistent with said statutory enactment. Section 10. No province, city, municipality, or
barangay may be created, divided, merged,
Municipality of Kapalong vs. Moya abolished, or its boundary substantially
(1988) altered, except in accordance with the criteria
established in the local government code and
FACTS: From portions of the Municipality of subject to approval by a majority of the votes
Kapalong, President Carlos P. Garcia created cast in a plebiscite in the political units directly
respondent Municipality of Sto.Tomas, and the affected.
latter now asserts jurisdiction over eight (8)
barrios of Kapalong. For many years and on
several occasions, this conflict of boundaries Section 11. The Congress may, by law, create
between the two municipalities was brought, special metropolitan political subdivisions,
at the instance of private respondent, to the subject to a plebiscite as set forth in Section
Provincial Board of Davao for it to consider and 10 hereof. The component cities and
decide. However, it appears that no action was municipalities shall retain their basic
taken on the same. The Municipality of Sto. autonomy and shall be entitled to their own
Tomas eventually filed a complaint with the local executive and legislative assemblies. The
then Court of First Instance of Davao, presided jurisdiction of the metropolitan authority that
over by herein public respondent Judge Felix L. will thereby be created shall be limited to
Moya against the Municipality of Kapalong, for basic services requiring coordination.
settlement of the municipal boundary dispute.
The Municipality of Kapalong filed a MTD on 1987 CONSTI, Art. X
29
Section 15. There shall be created

autonomous regions in Muslim Mindanao and Alvarez vs. Guingona
in the Cordilleras consisting of provinces, (supra)
cities, municipalities, and geographical areas
sharing common and distinctive historical and RA 7720 is constitutional.
cultural heritage, economic and social
structures, and other relevant characteristics • It is true that for a municipality to be
within the framework of this Constitution and converted into a component city, it must,
the national sovereignty as well as territorial among others, have an average annual
income of at least Twenty Million Pesos for
integrity of the Republic of the Philippines.
the last two (2) consecutive years based on
1991 constant prices.1 Such income must
Section 18. The Congress shall enact an be duly certified by the Department of
organic act for each autonomous region with Finance.
the assistance and participation of the regional
consultative commission composed of Internal Revenue Allotments form part of
representatives appointed by the President the income of Local Government Units. The
from a list of nominees from multi-sectoral IRAs are items of income because they
bodies. The organic act shall define the basic form part of the gross accretion of the
structure of government for the region funds of the local government unit. The
consisting of the executive department and IRAs regularly and automatically accrue to
legislative assembly, both of which shall be the local treasury without need of any
elective and representative of the constituent further action on the part of the local
political units. The organic acts shall likewise government unit. They thus constitute
provide for special courts with personal, income which the local government can
family, and property law jurisdiction consistent invariably rely upon as the source of much
with the provisions of this Constitution and needed funds.
national laws.
The acquisition of resources necessary to
The creation of the autonomous region shall discharge its powers and effectively carry
be effective when approved by majority of the out its functions is effected through the
votes cast by the constituent units in a vesting in every LGU of:
plebiscite called for the purpose, provided that
only provinces, cities, and geographic areas 1. The right to create and broaden its own
voting favorably in such plebiscite shall be source of revenue;
included in the autonomous region. 2. The right to be allocated a just share in
national taxes, such share being in the
Section 19. The first Congress elected under form of Internal Revenue Allotments
this Constitution shall, within eighteen months (IRAs); and
from the time of organization of both Houses, 3. The right to be given its equitable share
pass the organic acts for the autonomous in the proceeds of the utilization and
regions in Muslim Mindanao and the development of the national wealth, if
Cordilleras. any, within its territorial boundaries.
The funds generated from local taxes, IRAs

and National wealth utilization proceeds
accrue to the general fund of the LGU and
are used to finance its operations, subject
to specified modes of spending the same
as provided for in the LGC and its
implementing rules and regulations.
30
2. Statutory provisions verifiable indicators of viability and projected
capacity to provide services, to wit:
LGC, SEC. 6. Authority to Create Local
Government Units. - A local government unit (a) Income. - It must be sufficient, based on
may be created, divided, merged, abolished, acceptable standards, to provide for all
or its boundaries substantially altered either essential government facilities and services
by law enacted by Congress in the case of a and special functions commensurate with the
province, city, municipality, or any other size of its population, as expected of the local
political subdivision, or by ordinance passed by government unit concerned;
the sangguniang panlalawigan or sangguniang
panlungsod concerned in the case of a (b) Population. - It shall be determined as the
barangay located within its territorial total number of inhabitants within the
jurisdiction, subject to such limitations and territorial jurisdiction of the local government
requirements prescribed in this Code. unit concerned; and
PIMENTEL:
• Congress is lodged with the power to (c) Land Area. - It must be contiguous, unless
create LGU’s but it is not authorized to add it comprises two or more islands or is
to the list enumerated in Section 1 of separated by a local government unit
Article X of the CONSTI by mere legislation. independent of the others; properly identified
by metes and bounds with technical
• The Sangguniang Panlalawigan and the descriptions; and sufficient to provide for such
Sangguniang Panlungsod are granted basic services and facilities to meet the
authority to create, divide, merge or requirements of its populace. Compliance with
abolish barangays in their respective the foregoing indicators shall be attested to by
jurisdictions; but not the Sangguiniang the Department of Finance (DOF), the National
Bayan nor the barangay council! Statistics Office (NSO), and the Lands
Management Bureau (LMB) of the Department
of Environment and Natural Resources (DENR).
• The absence of the Local Government
Code at the time of the enactment of an
Act creating a municipality did not curtail PIMENTEL:
nor was it intended to cripple legislative Annual Populati Land
competence to create municipal Income on (this Area (this
requireme requireme
corporations. It contains no requirement
nt is in the nt is in the
that the Local Government Code is a
alternative alternative
condition sine qua non for the creation of a with the with the
municipality, in much the same way that land area population
the creation of a new municipality does not requireme requireme
preclude the enactment of a LGC. nt in nt in
provinces provinces
Hence, before the enactment of such Code, and cities) and cities)
the legislative power remains plenary Province Php 20M 250000 2000
except that the creation of the new local km2
government unit should be approved by City Php 150000 100 km2
the people concerned in a plebiscite called 100M
for the purpose. (Torralba vs. Municipality (RA
of SIbagat) 9009)
Municipa Php 25000 50 km2
lity 2.5M
LGC, SEC. 7. Creation and Conversion. - As
Baranga No 5000 (in No
a general rule, the creation of a local
y require Metro requirem
government unit or its conversion from one
ment (its Manila ent
level to another level shall be based on
viability and other
31
becomes metropoli − Interested LGU’s shall submit a
the tan petition, in the form of a resolution,
obligation subdivisio to their respective sanggunians
of the ns); or requesting the creation of a new
body 2000 (in LGU to Congress, and furnish a copy
creating others) thereof to the sanggunian of the
it) affected LGU’s.
− The sanggunian of the affected
• “Average annual income” includes any LGU’s shall submit to Congress its
income accruing to the general fund but is comments and recommendations
exclusive of special funds, special accounts on the petition for the creation of a
transfers and nonrecurring income. new LGU.
− The following documents shall be
Special funds refer to those that are attached to the petition for creation:
created for a special purpose or object and  DOF certification regarding
used to meet specified expenditures or income
classes of expenditures.
 NSO certification regarding
Fund transfers refer to those that are
population. In the case of
transferred from one item to another,
cities and municipalities, the
usually to the general fund.
NSO must also certify as to
the number and nature of
Nonrecurring items refer to those that
existing industrial and
cover particular purposes and are not
commercial establishments
regularly included in the normal
in the proposed LGU.
expenditures of an LGU.
 LMB certification regarding
land area. In case of cities
• The word “land area” replaced the word
and municipalities, the LMB
“territory” in the old LGC, to emphasize
must also certify as to
that the area required of an LGU does not
adequacy of disposable and
include the sea for purposes of compliance
alienable public lands in the
with the requirements of the Code for its
proposed LGU to meet the
creation. (Tan vs. COMELEC)
needs of the population and
the existence of:
• GEN RULE: The land area must be 1. Government center
contiguous. 2. Market site
3. Plaza or park
EXCEPT: (1) when it comprises of two or 4. School site
more islands; and (2) when another LGU is 5. Cemetery site
located in between parts of the LGU  Map of the original LGU/s
concerned. indicating the areas to be
created into a new LGU
• ALSO, the creation of a new province, city  Such other information as
or municipality must not so reduce the the petitioners may deem
income, population, or land area of the relevant.
original political subdivision as to render
 In case of cities and
such parent LGU ineffectual in the delivery
municipalities, a LWUA or
of essential governmental functions.
MWSS certification regarding
sources of potable water
• PROCEDURE FOR CREATION OF supply and a local engineer’s
PROVINCES, CITIES, MUNICIPALITIES plans as to sewerage and
(LGC IRR)
32
waste disposal are also within 30 days before the proposed
required. plebiscite.
− Upon effectivity of the law creating − The COMELEC shall conduct an
the new LGU, the COMELEC shall intensive information campaign in
conduct an intensive information the LGU’s concerned at least 10
campaign in the LGU’s concerned at days prior to the date of the
least 20 days prior to the date of plebiscite.
the plebiscite, as scheduled by the
COMELEC. • The Sanggunian of the different LGU’s may
− Upon effectivity of the law creating send petitions to Congress to propose the
the new LGU, plebiscite in the LGU/s creation of provinces, cities, or
directly affected within 120 days or municipalities.
within the period specified in the
law. HOWEVER, such petitions are not
requirements, EXCEPT where barangays
• PROCEDURE FOR CREATION OF are sought to be created by the
BARANGAYS (LGC IRR) Sangguniang Panlalawigan.
− A written petition of a majority of
registered voters, or resolutions of • Barangays may be merged or consolidated
the Sanggunian Barangays desiring by an ordinance based on a merger or
to be merged, as the case may be, consolidation plan prepared by the
shall be presented to the governor or mayor as the case may be.
Sanggunian Panlalawigan (upon
recommendation of the Sanggunian • Conversion is the elevation of an LGU
Bayan) or the Sanggunian from one level to another. The requirement
Panlungsod, for appropriate action. for conversion is the same as the
In case of municipalities in MM, such requirements for creation.
petitions or resolutions are to be
submitted to Congress. LGC, SEC. 385. Manner of Creation [of
− The following documents shall be Barangays] - A barangay may be created, divided,
attached to the petition for creation: merged, abolished, or its boundary substantially
altered, by law or by an ordinance of the
 NSO certification regarding
sangguniang panlalawigan or sangguniang
population. panlungsod, subject to approval by a majority of the
 Map of the original LGU/s votes cast in a plebiscite to be conducted by the
indicating the areas to be Comelec in the local government unit or units
created into a new LGU directly affected within such period of time as may
− The Sanggunian Barangay of the be determined by the law or ordinance creating said
barangay. In the case of the creation of barangays
affected barangays shall submit to
by the sangguniang panlalawigan, the
the Sanggunian Bayan its
recommendation of the sangguniang bayan
comments and recommendations concerned shall be necessary.
on the petition for the creation of a
new LGU within 20 days after
LGC
receipt thereof.
− The Sangguniang Panlalawigan or SEC. 441. Manner of Creation [of
Panlungsod shall, within 15 days Municipalities]. - A municipality may be created,
from submission of the petition, divided, merged, abolished, or its boundary
substantially altered only by an Act of Congress and
take action granting (2/3 votes) or subject to the approval by a majority of the votes
denying the petition. The COMELEC cast in a plebiscite to be conducted by the
must be furnished a copy of the COMELEC in the local government unit or units
ordinance creating the barangay directly affected. Except as may otherwise be
provided in the said Act, the plebiscite shall be held
33
within one hundred twenty (120) days from the date Act, the plebiscite shall be held within one
of its effectivity. hundred twenty (120) days from the date of its
effectivity.
SEC. 442. Requisites for Creation [of
Municipalities]. –
SEC. 450. Requisites for Creation. –
(a) A municipality may be created if it has an
average annual income, as certified by the (a) A municipality or a cluster of barangays
provincial treasurer, of at least Two million five may be converted into a component city if it
hundred thousand pesos (Php 2,500,000.00) for the
has an average annual income, as certified by
last two (2) consecutive years based on the 1991
constant prices; a population of at least twenty-five the Department of Finance, of at least Twenty
thousand (25,000) inhabitants as certified by the million pesos (P20,000,000.00) for the last two
National Statistics Office; and a contiguous territory (2) consecutive years based on 1991 constant
of at least fifty (50) square kilometers as certified prices, and if it has either of the following
by the Lands Management Bureau: Provided, That requisites:
the creation thereof shall not reduce the land area,
population or income of the original municipality or
(i) a contiguous territory of at least one
municipalities at the time of said creation to less
than the minimum requirements prescribed herein.
hundred (100) square kilometers, as certified
by the Lands Management Bureau; or,
(b) The territorial jurisdiction of a newly-created
municipality shall be properly identified by metes (ii) a population of not less than one hundred
and bounds. The requirement on land area shall not fifty thousand (150,000) inhabitants, as
apply where the municipality proposed to be certified by the National Statistics Office:
created is composed of one (1) or more islands. The
Provided, That, the creation thereof shall not
territory need not be contiguous if it comprises two
(2) or more islands.
reduce the land area, population, and income
of the original unit or units at the time of said
(c) The average annual income shall include the creation to less than the minimum
income accruing to the general fund of the requirements prescribed herein.
municipality concerned, exclusive of special funds,
transfers and non-recurring income. (b) The territorial jurisdiction of a newly-
created city shall be properly identified by
(d) Municipalities existing as of the date of the
effectivity of this Code shall continue to exist and
metes and bounds. The requirement on land
operate as such. Existing municipal districts area shall not apply where the city proposed to
organized pursuant to presidential issuances or be created is composed of one (1) or more
executive orders and which have their respective islands. The territory need not be contiguous if
set of elective municipal officials holding office at it comprises two (2) or more islands.
the time of the effectivity of this Code shall
henceforth be considered as regular municipalities. (c) The average annual income shall include
the income accruing to the general fund,
PIMENTEL: exclusive of special funds, transfers, and non-
• The requisites for the creation of recurring income.
municipalities shall not apply retroactively.
• Section 442 (d) has the effect of declaring PIMENTEL:
as regular and de jure those municipal • RA 9009 increased the income
districts described therein. requirement (from Php 20M to Php
100M) so as to prevent the apparent
LGC ease of converting of all of our
municipalities into cities.
SEC. 449. Manner of Creation. - A city may
be created, divided, merged, abolished, or its • The requirement that the territorial
boundary substantially altered, only by an Act jurisdiction of a newly-created city shall
of Congress, and subject to approval by a be properly identified by metes and
majority of the votes cast in a plebiscite to be bounds is not absolute, particularly in
conducted by the Comelec in the local cases of LGU’s with unsettled boundary
government unit or units directly affected. disputes.
Except as may otherwise be provided in such
34
The existence of a boundary dispute exclusive of special funds, trust funds,
does not per se present an transfers, and non-recurring income.
insurmountable difficulty which will
prevent Congress from defining with
reasonable certitude the territorial
jurisdiction of a local government unit.
(Mariano, Jr. vs. COMELEC)
LGC
SEC. 460. Manner of Creation. - A province Cawaling vs. COMELEC

may be created, divided, merged, abolished, (2001)
or its boundary substantially altered, only by
an Act of Congress and subject to approval by FACTS: Pres. Estrada signed into law R.A. No.
a majority of the votes cast in a plebiscite to 8806, an (Act Creating The City Of Sorsogon).
be conducted by the Comelec in the local Pursuant to Section 10, Article X of the
government unit or units directly affected. The Constitution, COMELEC conducted a plebiscite
plebiscite shall be held within one hundred in the Municipalities of Bacon and Sorsogon
twenty (120) days from the date of effectivity and submitted the matter for ratification. The
of said Act, unless otherwise provided therein. Plebiscite City Board of Canvassers (PCBC)
proclaimed the creation of the City of
SEC. 461. Requisites for Creation. – Sorsogon as having been ratified and
approved by the majority of the votes cast in
(a) A province may be created if it has an the plebiscite. Cawaling, filed on 2 petitions
average annual income, as certified by the seeking the annulment of the plebiscite and
Department of Finance, of not less than seeking to enjoin the further implementation
Twenty million pesos (Php 20,000,000.00) of R.A. No. 8806 for being unconstitutional,
based on 1991 constant prices and either of contending that under Section 450(a) of the
the following requisites: Code, a component city may be created only
by converting "a municipality or a cluster of
(i) a contiguous territory of at least two barangays," not by merging two
thousand (2,000) square kilometers, as municipalities, as what R.A. No. 8806 has
certified by the Lands Management Bureau; or, done.
(ii) a population of not less than two hundred During the pendency of these cases (May 2001
fifty thousand (250,000) inhabitants as elections), the newly-created Sorsogon City
certified by the National Statistics Office: had the first election of its officials. Since then,
the City Government of Sorsogon has been
Provided, That, the creation thereof shall not regularly discharging its corporate and political
reduce the land area, population, and income powers pursuant to its charter, R.A. No. 8806.
of the original unit or units at the time of said
creation to less than the minimum WON the creation of the city of Sorsogon was
requirements prescribed herein. valid.
(b) The territory need not be contiguous if it Held: YES. RA 8806 is constitutional and
comprises two (2) or more islands or is plebiscite valid. Petitioner's constricted
separated by a chartered city or cities which reading of Section 450(a) of the Code is
do not contribute to the income of the erroneous. The phrase "A municipality or a
province. cluster of barangays may be converted into a
component city" is not a criterion but simply
(c) The average annual income shall include one of the modes by which a city may be
the income accruing to the general fund, created. Section 10, Article X of the
35
Constitution, allows the merger of local the effectivity of the law, not from its approval.
government units to create a province city, While the same provision allows a law or
municipality or barangay in accordance with ordinance to fix "another date" for conducting
the criteria established by the Code. a plebiscite, still such date must be reckoned
from the date of the effectivity of the law.
Cawaling’s argument that the Municipality of
Sorsogon alone already qualifies to be 3. The Revised Administrative Code of
upgraded to a component city goes into the 1917
wisdom of R.A. No. 8806, is a matter which the
SC is not competent to rule. It is clear that "the The (Governor-General) President of the Philippines
judiciary does not pass upon questions of may by executive order define the boundary, or
wisdom, justice or expediency of legislation." boundaries, of any province, subprovince,
In the exercise of judicial power, the SC is municipality, [township] municipal district, or other
political subdivision, and increase or diminish the
allowed only "to settle actual controversies
territory comprised therein, may divide any
involving rights which are legally demandable
province into one or more subprovinces, separate
and enforceable," and "may not annul an act any political division other than a province, into
of the political departments simply because such portions as may be required, merge any of
the SC feels it is unwise or impractical”. such subdivisions or portions with another, name
any new subdivision so created, and may change
Contrary to petitioner's assertion, there is only the seat of government within any subdivision to
one subject embraced in the title of the law, such place therein as the public welfare may
that is, the creation of the City of Sorsogon. require: Provided, That the authorization of the
The abolition / cessation of the corporate (Philippine Legislature) Congress of the Philippines
shall first be obtained whenever the boundary of
existence of the Municipalities of Bacon and
any province or subprovince is to be defined or any
Sorsogon due to their merger is not a subject
province is to be divided into one or more
separate and distinct from the creation of subprovinces. When action by the (Governor-
Sorsogon City. Such abolition / cessation was General) President of the Philippines in accordance
but the logical, natural and inevitable herewith makes necessary a change of the territory
consequence of the merger. It is well-settled under the jurisdiction of any administrative officer
that the "one title-one subject" rule does not or any judicial officer, the (Governor-General)
require the Congress to employ in the title of President of the Philippines, with the
the enactment language of such precision as recommendation and advice of the head of the
Department having executive control of such
to mirror, fully index or catalogue all the
officer, shall redistrict the territory of the several
contents and the minute details therein. The
officers affected and assign such officers to the new
rule is sufficiently complied with if the title is districts so formed.
comprehensive enough as to include the
general object which the statute seeks to Upon the changing of the limits of political divisions
effect, and where, as here, the persons in pursuance of the foregoing authority, an
interested are informed of the nature, scope equitable distribution of the funds and obligations of
and consequences of the proposed law and its the divisions thereby affected shall be made in such
operation. Moreover, this Court has invariably manner as may be recommended by the (Insular
Auditor) Auditor General and approved by the
adopted a liberal rather than technical
(Governor-General) President of the Philippines.
construction of the rule "so as not to cripple or
impede legislation."
Pelaez vs. Auditor General
(supra)
The 120-day period within which to conduct
the plebiscite starts from the date of Act’s
HELD: Section 68 of the RAC is VOID. The
effectivity (i.e., after publication in at least two
Auditor General alleges that the power of the
(2) newspapers of general and local
President to create municipalities under
circulation). Quite plainly, the last sentence of
section 68 of the Revised Administrative Code
Section 10 mandates that the plebiscite shall
does not amount to an undue delegation of
be conducted within 120 days from the date of
36
legislative power, relying upon the allegedly 4. Municipal corporation by
settled case of Municipality of Cardona vs. prescription
Municipality of Binañgonan (36 Phil. 547).
− Such claim is untenable, for said case MARTIN: (See also Sec. 442, par. d)
involved, not the creation of a new • Municipal corporations may exist by
municipality, but a mere transfer of prescription. Its existence shall be
territory — from an already existing presumed where it is presumed that the
municipality (Cardona) to another community claimed and exercised
municipality (Binañgonan), likewise, corporate functions, with knowledge and
existing at the time of and prior to said acquiescence of legislature, without
transfer in consequence of the fixing interruption or objection over a period long
and definition, pursuant to Act No. enough to afford title by prescription.
1748, of the common boundaries of two
municipalities. 5. De facto municipal corporations
It is obvious, however, that the power to fix MARTIN:

such common boundary, in order to avoid or • A de facto municipal corporation is one
settle conflicts of jurisdiction between that exists in fact although not in point of
adjoining municipalities, may partake of an law as there is a certain defect in some
administrative nature but the authority to essential feature of its organization, so
create municipal corporations is essentially long as it has met the following
legislative in nature. requirements:
1. Valid law authorizing incorporation;
Although Congress may delegate to another 2. Attempt in good faith to organize it;
branch of the government the power to fill in 3. Colorable compliance with the law;
the details in the execution, enforcement or 4. Assumption of corporate powers.
administration of a law, it is essential, to
forestall a violation of the principle of Municipality of Candijay v CA
separation of powers, that said law: (a) be (1995)
complete in itself — it must set forth therein
the policy to be executed, carried out or FACTS: The Municipality of Candijay claimed
implemented by the delegate — and (b) fix a that the barrio of Pagahat is within its
standard — the limits of which are sufficiently territorial jurisdiction and that it is not a part of
determinate or determinable — to which the the Municipality of Alicia. After presentation of
delegate must conform in the performance of evidence, the Municipality of Candijay asked
his functions. Section 68 of the Revised the TC to bar the respondent from presenting
Administrative Code does not meet these evidence on the ground that it had no juridical
requirements for a valid delegation of the personality. Candijay argued that EO 265
power to fix the details in the enforcement of a issued by Pres. Quirino is null and void ab initio
law. It does not enunciate any policy to be since Sec. 68 of the RAC constituted an undue
carried out or implemented by the President. delegation of legislative power to the
Neither does it give a standard sufficiently President. The TC ruled for Candijay but this
precise to avoid the evil effects above referred was reversed by the CA. The CA found that the
to. Even if it did not entail an undue delegation plans submitted by the two municipalities are
of legislative powers, as it certainly does, said inadequate insofar as identifying the
Section 68, as part of the Revised monuments of the boundary line between the
Administrative Code, approved on March 10, petitioner and the Muncipality of Mabini. The
1917, must be deemed repealed by the CA ruled that in cases of equiponderance of
subsequent adoption of the Constitution, in evidence, the courts must find for the
1935, which is utterly incompatible and defendant. Hence, the Municipality of Candijay
inconsistent with said statutory enactment. appeals to the SC.
37
WON a municipality, created under a void
executive order, can be considered as HOWEVER, it is admitted that, where the
having no juridical personality. corporation is an absolute nullity, it is
subject to collateral attack by any person
HELD: NO. The petitioner commenced its whose rights or interests are affected
collateral attack on the juridical personality of thereby, including the citizens of the
the respondent on 19 January 1984 (35 yrs territory incorporated UNLESS they are
after its creation in 1949). The Municipality of estopped by their conduct from doing so.
Alicia was created by EO 265, or ten years
ahead of the Municipality of San Andres, and • A person, who dealt with a municipal
had been in existence for 16 years when corporation and acquiesced in the exercise
Pelaez decision was promulgated. Various of it corporate functions or entered into a
governmental acts through the years all contract with said corporation, may be
indicate the State’s recognition and estopped to deny its corporate existence.
acknowledgement of its existence. For
instance, under Administrative Order No. 33 7. Beginning of corporate existence
above-mentioned, the Municipality of Alicia of municipal corporations
was covered by the 7th Municipal Circuit Court
of Alicia-Mabini for the province of Bohol. LGC, SEC. 14. Beginning of Corporate
Likewise, under the Ordinance appended to Existence. - When a new local government
the 1987 Constitution, the Municipality of unit is created, its corporate existence shall
Alicia is one of twenty municipalities commence upon the election and qualification
comprising the Third District of Bohol. Alicia of its chief executive and a majority of the
must benefit from the effects of Sec. 422 (d) of members of its sanggunian, unless some other
the LGC and should be considered a regular, time is fixed therefor by the law or ordinance
de jure municipality. creating it.
According to Sec. 442 (d) of the LGC, PIMENTEL:

municipal districts “organized pursuant to
• “Upon election”, in this provision, refers
presidential issuances or executive orders and
to the date of the proclamation as the chief
which have their respective sets of elective
executive or majority of the sanggunian
municipal officials holding office at the time of
members.
the effectivity of the Code shall henceforth be
• “Upon qualification” refers to the date of
considered as regular municipalities.”
their assumption to office.
“Curative laws, which in essence are
retrospective, and aimed at giving validity to
MARTIN:
acts done that would have been invalid under
• The legal existence of a municipal
existing laws, as if existing laws have been
corporation is to be determined by the law
complied with, are validly accepted in this
creating it, usually from the effectivity of
jurisdiction, subject to the usual qualification
the law creating it, or upon the
against impairment of vested rights.”
organization of the government, or upon
the qualification of its officers.
6. Attack against invalidity of
incorporation
• The organization of the government of a
municipal corporation presupposes the
MARTIN:
previous existence of the said corporation
• The validity of incorporation and the
at the time its government was organized.
corporate existence of de jure or de facto
(Mejia vs. Balolong)
municipal corporations may not be
attacked collaterally. It may challenged
only by the State in a direct proceeding
(i.e., quo warranto)
38
V. ALTERATION AND DISSOLUTION OF is necessary that its boundaries are fixed,
MUNICIPAL CORPORATIONS defined, ascertained and identified for
everybody’s knowledge.
A. Nature of Power
• Hence, it is essential that such boundaries
MARTIN: are made part of a municipal corporation’s
• The power to fix, change, alter and charter. Otherwise, such incorporation is
prescribe territorial limits and boundaries void.
of a municipal corporation is essentially
legislative. B. Manner or Mode
• REMEMBER: Sec. 68 of the old LGC

Administrative Code is repealed for being SEC. 7. Creation and Conversion. - As a
an undue delegation of this legislative general rule, the creation of a local
power. government unit or its conversion from one
level to another level shall be based on
• In absence of any constitutional provision, verifiable indicators of viability and projected
Congress can alter and dissolve municipal capacity to provide services, to wit:
corporations in any of the following ways:
− Fixing, altering, changing the (a) Income. - It must be sufficient, based on
boundaries of municipal acceptable standards, to provide for all
corporations, thus enlarging or essential government facilities and services
decreasing its territory; or and special functions commensurate with the
− Dividing a municipal corporation size of its population, as expected of the local
into 2 or more separate government unit concerned;
municipalities; or
− Merging or consolidating 2 or more
(b) Population. - It shall be determined as the
municipal corporations into one; or
total number of inhabitants within the
− Annexing one municipality to
territorial jurisdiction of the local government
another; or
− Repealing its charter. unit concerned; and
1. Necessity for defining territorial (c) Land Area. - It must be contiguous, unless
boundaries it comprises two or more islands or is
separated by a local government unit
1987 CONSTI, ARTICLE I independent of the others; properly identified
The national territory comprises the Philippine by metes and bounds with technical
archipelago, with all the islands and waters descriptions; and sufficient to provide for such
embraced therein, and all other territories over basic services and facilities to meet the
which the Philippines has sovereignty or requirements of its populace. Compliance with
jurisdiction, consisting of its terrestrial, fluvial the foregoing indicators shall be attested to by
and aerial domains, including its territorial sea, the Department of Finance (DOF), the National
the seabed, the subsoil, the insular shelves, Statistics Office (NSO), and the Lands
and other submarine areas. The waters Management Bureau (LMB) of the Department
around, between, and connecting the islands of Environment and Natural Resources (DENR).
of the archipelago, regardless of their breadth
and dimensions, form part of the internal SEC. 8. Division and Merger. - Division and
waters of the Philippines. merger of existinglocal government units shall
comply with the same requirements herein
MARTIN:
prescribed for their creation: Provided,
• Since municipal corporations cannot,
however, That such division shall not reduce
without legal authorization, exercise its
the income, population, or land area of the
powers beyond its own corporate limits, it
local government unit or units concerned to
39
less than the minimum requirements • Abolition may be done through an act of
prescribed in this Code: Provided, further, That Congress (in the case of a province, city,
the income classification of the original local municipality, barangay in Metro Manila or
government unit or units shall not fall below its in cultural areas or any other political
current income classification prior to such subdivision) or by the Sangguniang
division. Panlalawigan or Sangguniang Panlungsod
(in the case of barangays)
The income classification of local government
units shall be updated within six (6) months LGC, SEC. 10. Plebiscite Requirement. -
from the effectivity of this Code to reflect the No creation, division, merger, abolition, or
changes in their financial position resulting substantial alteration of boundaries of local
from the increased revenues as provided government units shall take effect unless
herein. approved by a majority of the votes cast in a
plebiscite called for the purpose in the political
PIMENTEL: unit or units directly affected. Said plebiscite
• The requirements for division and merger shall be conducted by the Commission on
of LGU’s are essentially the same as the Elections (Comelec) within one hundred twenty
requirements for their creation. The (120) days from the date of effectivity of the
bottomline of these requirements is that law or ordinance effecting such action, unless
the LGU’s created, divided or merged are said law or ordinance fixes another date.
able to deliver the essential services to
their constituents.
1987 CONSTI, Art. X, Section 10. No
• The updating of the financial classification province, city, municipality, or barangay may
of the LGU’s is necessary to guide the be created, divided, merged, abolished, or its
government in determining changes in the boundary substantially altered, except in
staffing patterns and salary scales of such accordance with the criteria established in the
LGU’s. local government code and subject to approval
by a majority of the votes cast in a plebiscite
NOTE: Upgrading theses financial in the political units directly affected.
classifications are essential, since an LGU’s
taxation powers increase as its MARTIN:
classification rises. • The Court does not have the power to
dissolve municipal corporations. However,
LGC, SEC. 9. Abolition of Local it may declare an Act creating municipal
Government Units. - A local government unit corporations as unconstitutional.
may be abolished when its income, population,
or land area has been irreversibly reduced to • The power to dissolve them still lies in the
less than the minimum standards prescribed Legislature. (GD-R: It is not automatic!)
for its creation under Book III of this Code, as
certified by the national agencies mentioned in C. Effects
Section 17 hereof to Congress or to the
sanggunian concerned, as the case may be. 1. Effects of annexation or
consolidation of municipal
The law or ordinance abolishing a local corporations
government unit shall specify the province,
city, municipality, or barangay with which the MARTIN:
local government unit sought to be abolished a) Unless otherwise provided by law, it
will be incorporated or merged. dissolves the annexed territory, and it shall
fall under the jurisdiction of the annexing
PIMENTEL: territory;
40
civilly dead, since its dormant functions
b) Unless otherwise provided by law, laws or may be revived without action on the part
ordinances of annexed corporation is of the sovereignty.
subjected to all laws or ordinances by
which annexing corporation is governed; 2. Failure to elect municipal officers
c) Unless otherwise provided by the MARTIN:

legislature, officers or employees of the
annexed or consolidated territory shall • Unless otherwise provided by law, a
terminate their official relation with offices. municipal corporation is not dissolved
by the mere failure to elect or appoint
d) Unless otherwise provided by law, the its officers. REMEMBER: It is the
annexing territory shall acquire title to inhabitants of the designated locality
property of the annexed territory without which are the incorporators, NOT the
compensation. But, if the annexed territory officers!
forms part of a municipality from which it is
taken, Congress may provide for payment
of compensation for the indebtedness 3. Change of sovereignty
incurred on account of the property taken.
Villas vs. City of Manila
e) Debt or obligations of the annexed territory (supra)
contracted before its annexation shall be
assumed by the annexing territory. HELD: The city of Manila is still liable for the
obligations of the city incurred prior to the
2. Effects of division of a municipal cession to the US. Municipal corporations
corporation exercise powers which are governmental and
powers which are of a private or business
MARTIN: character. In the one character a municipal
a) The legal existence of original municipal corporation is a governmental subdivision, and
corporation is extinguished. for that purpose exercises by delegation a part
b) Unless otherwise provided by law, each
of the sovereignty of the state. In the other
new municipality acquires title to the
properties, powers, rights, and obligations character it is a mere legal entity or juristic
falling within its newly defined territorial person. In the latter character it stands for the
limits. community in the administration of local
affairs wholly beyond the sphere of the public
purpose for which its governmental powers are
D. When There is No Dissolution conferred.
1. Non-user or surrender of charter Municipal laws that regulate private and

domestic rights continue in force until
MARTIN: abrogated or changed by the new ruler. Only
• Since Congress created them for public laws of a political character are totally
good, the municipal corporations cannot abrogated or changed by the new ruler. The
bring about their own dissolution by mere property rights relinquished by Spain are
surrender of their charter. limited to those which belong to the public
domain. The juristic identity of the corporation
• A municipal corporation is also not has been in no wise affected, and, in law, the
dissolved by non-user of its powers in present city is, in every legal sense, the
whole or in part, or for its failure to successor of the old. As such it is entitled to
exercise the functions of a municipality. the property and property rights of the
predecessor corporation, and is, in law, subject
to all of its liabilities.
In such a case, such corporation would be
suspended for the time but would not be
41
Absent any express legislative declaration, requiring a plebiscite in the merger of local
there is no reason to suppose that government units because the requirement
reincorporation intended to permit an escape of a plebiscite in a merger expressly
from the obligations of the old city. applies only to provinces, cities,
municipalities or barangays, not to
VI. PLEBISCITE REQUIREMENTS administrative regions. (Abbas vs.
COMELEC)
1987 CONSTI, Art. X, Section 10. No
province, city, municipality, or barangay may
be created, divided, merged, abolished, or its
boundary substantially altered, except in Padilla vs. COMELEC
accordance with the criteria established in the (1992)
local government code and subject to approval
by a majority of the votes cast in a plebiscite FACTS: The COMELEC promulgated a
in the political units directly affected. Resolution pursuant to RA 7155 approving the
creation of the Municipality of Tulay-na-Lupa in
LGC, SEC. 10. Plebiscite Requirement. - Camarines Norte to be composed of 12
No creation, division, merger, abolition, or barangays in the Municipality of Labo subject
substantial alteration of boundaries of local to the approval by a majority of votes cast
government units shall take effect unless pursuant to Sec 10, Art X of 1987 Constitution,
approved by a majority of the votes cast in a and LGC.
plebiscite called for the purpose in the political
unit or units directly affected. Said plebiscite The plebiscite held in the barangays
shall be conducted by the Commission on comprising the proposed municipality and the
Elections (COMELEC) within one hundred remaining areas of the mother municipality
twenty (120) days from the date of effectivity Labo. Only 2,890 favored the creation of the
of the law or ordinance effecting such action, new municipality while 3,439 voted against it.
unless said law or ordinance fixes another The Plebiscite Board of Canvassers declared
date. the rejection and disapproval of the proposed
municipality after the turn-out where a
PIMENTEL: majority voted against the creation.
• This requirement is mandatory. It serves as
a check on the power of Congress or of the Governor Padilla files an action to set aside the
LGU concerned to carry out such actions. plebiscite conducted and to undertake a new
one, arguing that the plebiscite should have
been conducted only in the 12 barangays
• There is no need for a plebiscite in the case
comprising the proposed municipality.
of merging administrative regions.
Administrative regions are not territorial
WON the term “political units directly
and political subdivisions like provinces,
affected” only comprises those areas in
cities, municipalities and barangays. While
the proposed LGU and not those from the
the power to merge administrative regions
mother LGU.
is not expressly provided for in the
Constitution, it is a power which has
HELD: NO. Padilla’s contention that Art X,
traditionally been lodged with the
Section 10 has deleted the words “unit or” in
President to facilitate the exercise of the
Section 3, Art XI of the 1973 Constitution is
power of general supervision over local
untenable. As explained by CONCOM
governments.
Commissioner Davide during the 1986
CONCOM debates, the deletion of the said
There is no conflict between the power of
words was done precisely because in the
the President to merge administrative
plebiscite to be conducted, it must involve all
regions with the constitutional provision
the units affected. When the law states that
42
the plebiscite shall be conducted “in the parent unit was not involved, could not be
political units directly affected,” it means that considered as a precedent. The reasons in this
residents of the political entity who would be case invoked by respondents herein were
economically dislocated by the separation of a formerly considered acceptable because of the
portion thereof have a right to vote in said views then taken that local autonomy would
plebiscite. be better promoted. However, even this
consideration no longer retains persuasive
It stands to reason that when the law states value. That case involved a barangay while
that the plebiscite shall be conducted “in the this case involves a province.
political units directly affected,” it means that
residents of the political entity who would be Almost half of the sugar plantations would be
economically dislocated by the separation dismembered form the parent province and
have a right to vote. The phrase “political units some of its most important cities. Hence, the
directly affected” contemplates the plurality of remaining portion of the parent province is as
political units which would participate in the much an area affected. The substantial
exercise. alteration of the boundaries of the parent
province, not to mention the other adverse
economic effects it might suffer, eloquently
argue the points raised by the petitioners.
The SC also considered the new province as

lacking in the territory requirement since the
land mass of the new territory was only 2,856
Tan vs. COMELEC square kilometers. The Court rejected the
(supra) suggestion of the Solicitor General that even
the area of the EEZ should be considered in
HELD: It can be plainly seen from Section 3 of determining the territorial requirement.
Article XI of the 1973 CONSTI makes it
imperative that there be first obtained "the Miranda vs. Aguirre
approval of a majority of votes in the plebiscite (1999)
in the unit or units affected" whenever a
province is created, divided or merged and FACTS: RA 7720 converted the municipality of
there is substantial alteration of the Santiago, Isabela, into an independent
boundaries. It is thus inescapable to conclude component city. Subsequently, RA 8528 was
that the boundaries of the existing province of enacted, amending RA 7720, changing the
Negros Occidental would necessarily be status of Santiago from an independent
substantially altered by the division of its component city to a component city.
existing boundaries in order that there can be Petitioners assailed the constitutionality of RA
created the proposed new province of Negros 8528, arguing that it lacked a provision
del Norte. Plain and simple logic will submitting the law for ratification by the
demonstrate that two political units would be people of Santiago City in a plebiscite.
affected. The first would be the parent
province of Negros Occidental because its Respondent provincial officials of Isabela
boundaries would be substantially altered. The defended the constitutionality of R.A. No. 8528
other affected entity would be composed of by assailing the standing of petitioners to file
those in the area subtracted from the mother the petition at bar. They also contend that the
province to constitute the proposed province petition raises a political question over which
of Negros del Norte. this Court lacks jurisdiction.
The Court noted that the case of Paredes vs. The Solicitor General argued that the RA
Executive Secretary, which involved the merely reclassified Santiago City from an
creation of a new municipality where the independent component city to a component
43
city. It allegedly did not involve any “creation, It is markworthy that when R.A. No. 7720
merger, abolition, or substantial alteration of upgraded the status of Santiago City from a
boundaries of local government units.” municipality to an independent component
city, it required the approval of its people thru
WON R.A. No. 8528 is unconstitutional for a plebiscite called for the purpose. There is
its failure to provide that the conversion neither rhyme nor reason why this plebiscite
of the city of Santiago from an should not be called to determine the will of
independent component city to a the people of Santiago City when R.A. No.
component city should be submitted to 8528 downgrades the status of their city.
its people in a proper plebiscite. Indeed, there is more reason to consult the
people when a law substantially diminishes
HELD: YES. A close analysis of the their right.
constitutional provision (Sec. 10 of Art. X) will
reveal that the creation, division, merger, Moreover, Rule II, Article 6, paragraph (f) (1) of
abolition or substantial alteration of the Implementing Rules and Regulations of the
boundaries of local government units involve a Local Government Code is in accord with the
common denominator — material change in Constitution when it provides that:
the political and economic rights of the local
government units directly affected as well as (f) Plebiscite — (1) no creation, conversion,
the people therein. It is precisely for this division, merger, abolition, or substantial
reason that the Constitution requires the alteration of boundaries of LGUS shall take
approval of the people "in the political units effect unless approved by a majority of the
directly affected." Thus, the consent of the votes cast in a plebiscite called for the purpose
people of the local government unit directly in the LGU or LGUs affected. The plebiscite
affected was required to serve as a checking shall be conducted by the Commission on
mechanism to any exercise of legislative Elections (COMELEC) within one hundred
power creating, dividing, abolishing, merging twenty (120) days from the effectivity of the
or altering the boundaries of local government law or ordinance prescribing such action,
units. It is one instance where the people in unless said law or ordinance fixes another
their sovereign capacity decide on a matter date.
that affects them — direct democracy of the
people as opposed to democracy thru people's xxx xxx xxx
representatives. This plebiscite requirement is
also in accord with the philosophy of the The rules cover all conversions, whether
Constitution granting more autonomy to local upward or downward in character, so long as
government units. they result in a material change in the local
government unit directly affected, especially a
The changes that will result from the change in the political and economic rights of
downgrading of the city of Santiago from an its people.
independent component city to a component
city are many and cannot be characterized as Tobias vs. Abalos
insubstantial. For one, the independence of the (1994)
city as a political unit will be diminished. The
city mayor will be placed under the FACTS: The municipalities of Mandaluyong
administrative supervision of the provincial and San Juan belonged to only one legislative
governor. The resolutions and ordinances of district. Cong. Zamora, the incumbent
the city council of Santiago will have to be congressional representative of this legislative
reviewed by the Provincial Board of Isabela. district, sponsored the bill which eventually
Taxes that will be collected by the city will now became R.A. No. 7675, converting the
have to be shared with the province. municipality of Mandaluyong into a highly
urbanized city. The people of Mandaluyong
approved of the conversion of the Municipality
44
of Mandaluyong into a highly urbanized city in bereft of merit since the principal subject
a plebiscite only 14.41% of the voting involved in the plebiscite was the conversion
population voted. Nevertheless, 18,621 voted of Mandaluyong into a highly urbanized city.
"yes" whereas 7,911 voted "no." By virtue of The matter of separate district representation
these results, R.A. No. 7675 was deemed was only ancillary thereto. Thus, the
ratified and in effect. inhabitants of San Juan were properly excluded
from the said plebiscite as they had nothing to
Petitioners allege that the law isnembracing do with the change of status of neighboring
two principal subjects, namely: (1) the Mandaluyong.
conversion of Mandaluyong into a highly
urbanized city; and (2) the division of the VII. GENERAL POWERS OF LOCAL
congressional district of San Juan / GOVERNMENTS
Mandaluyong into two separate districts. This,
in effect, has resulted in an increase in the A. Police Power
composition of the House of Representatives
beyond that provided in Article VI, Sec. 5(1) of General Welfare
the Constitution.
LGC, SEC. 16. General Welfare. - Every
Petitioners also contend that the people of San local government unit shall exercise the
Juan should have been made to participate in powers expressly granted, those necessarily
the plebiscite on R.A. No. 7675 as the same implied therefrom, as well as powers
involved a change in their legislative district. necessary, appropriate, or incidental for its
efficient and effective governance, and those
WON RA 7657 is unconstitutional. which are essential to the promotion of the
general welfare. Within their respective
HELD: NO. The creation of a separate territorial jurisdictions, local government units
congressional district for Mandaluyong is not a shall ensure and support, among other things,
subject separate and distinct from the subject the preservation and enrichment of culture,
of its conversion into a highly urbanized city promote health and safety, enhance the right
but is a natural and logical consequence of its of the people to a balanced ecology,
conversion into a highly urbanized city. encourage and support the development of
appropriate and self-reliant scientific and
As to the contention that the assailed law technological capabilities, improve public
violates the present limit on the number of morals, enhance economic prosperity and
representatives as set forth in the social justice, promote full employment among
Constitution, a reading of the applicable their residents, maintain peace and order, and
provision, Article VI, Section 5(1), as preserve the comfort and convenience of their
aforequoted, shows that the present limit of inhabitants.
250 members is not absolute. The Constitution
clearly provides that the House of PIMENTEL:
Representatives shall be composed of not
• This provision is known as the General
more than 250 members, "unless otherwise Welfare Clause. Pursuant to this rule, LGU’s
provided by law." The inescapable import of
have the power to exercise just about any
the latter clause is that the present act that will benefit their constituencies.
composition of Congress may be increased, if
This clause has two branches:
Congress itself so mandates through a
− General legislative power -
legislative enactment. Therefore, the increase
authorizes the municipal council to
in congressional representation mandated by
enact ordinances not repugnant to
R.A. No. 7675 is not unconstitutional.
law, as may be necessary to carry
The contention that the people of San Juan into effect and discharge the
should have beein included in the plebiscite is powers and duties conferred upon
the municipal council by law.
45
− Police power proper - authorizes reasonably necessary for the attainment of
the municipal council to enact the object sought to be accomplished and
ordinances as may be necessary not unduly oppressive. The first
and proper for the health and requirement refers to the equal protection
safety, prosperity, morals, peace, clause and the second, to the due process
good order, comfort, and clause of the Constitution. (Parayno vs.
convenience of the municipality and Municipality of Calasiao)
its inhabitants, and for the
protection of their property. (Rural • In sum, the valid use of police power of
Bank of Makati vs. Makati) LGU’s are as follows:
− Promotion of the general welfare
• The State, through the legislature, has and public interest (US vs. Torribio);
delegated the exercise of police power to − Promotion of public health, morals,
local government units, as agencies of the safety and the general welfare of
State, in order to effectively accomplish each inhabitant (US vs. Gomez
and carry out the declared objects of their Jesus);
creation. This delegation of police power is − Preservation of public order and
embodied in the general welfare clause of prevention of offenses against the
the LGC. State and the establishment of rules
of good manners and prevention of
Police power as an inherent attribute of conflict of rights among neighbors
sovereignty is the power to prescribe (US vs. Pompeya);
regulations to promote the health, morals, − Prohibition of all things harmful to
peace, education, good order or safety and the comfort, safety, and welfare of
general welfare of the people. (Acebedo society (Rubi vs. Provincial Board);
Optical vs. CA) and
− Abatement of nuisance (Tatel vs.
• The exercise of police power, however, is Municipality of Virac).
subject to the due process clause of the
CONSTI and to the test of reasonableness. • NOTE: The abatement of a nuisance
without judicial proceedings is possible
Hence, while property may be regulated in only if it is a nuisance per se, or one
the interest of the general welfare, and in affecting the immediate safety of persons
its pursuit, the State may prohibit and property. (Parayno vs. Municipality of
structures offensive to the sight, the State Calasiao)
may not, under the guise of police power,
permanently divest owners of the • The operation of theaters, cinematographs
beneficial use of their property and and other places of public exhibition are
practically confiscate them solely to subject to regulation by the municipal
preserve or assure the aesthetic council in the exercise of delegated police
appearance of the community… without power by the local government… However,
just compensation and an opportunity to while it is true that a business may be
be heard. (People vs. Fajardo) regulated, it is equally true that such
regulation must be within the bounds of
A local government is considered to have reason, that is, the regulatory ordinance
properly exercised its police powers only must be reasonable, and its provisions
when the following requisites are met: cannot be oppressive amounting to an
(1) the interests of the public generally, as arbitrary interference with the business or
distinguished from those of a particular calling subject of regulation. A lawful
class, require the interference of the State; business or calling may not, under the
and (2) the means employed are guise of regulation, be unreasonably
46
interfered with even by the exercise of of such establishments. The lower court also
police power. (Balacuit vs. CFI of Agusan argues that under RA 938, as amended, “the
del Norte) municipal or city board or council of each
chartered city shall have the power to regulate
• A public plaza is beyond the commerce of and prohibit by ordinance, the establishment,
man and so cannot be the subject of lease maintenance and operation of night clubs,
or any other contractual undertaking. cabarets..”
Hence, the lease of a public plaza of the
said municipality in favor of a private WON a municipal corporation can prohibit
person is null and void Even assuming a the operation of night clubs and the
valid lease of the property in dispute, the employment of hostesses.
resolution could have effectively
terminated the agreement for it is settled HELD: NO. It cannot be said that such a
that the police power cannot be sweeping exercise of a lawmaking power by
surrendered or bargained away through Bocaue could qualify under the term
the medium of a contract. (Villanueva vs. reasonable. The objective of fostering public
Castañeda, Cavite vs. Rojas) morals, a worthy and desirable end can be
attained by a measure that does not
• While the ordinance which regulates the encompass too wide a field. Certainly the
exhumation and/or transfer of corpses from ordinance on its face is characterized by
other burial grounds to those located in the overbreadth. The purpose sought to be
City of Caloocan is within the legislative achieved could have been attained by
power of the respondent city government reasonable restrictions rather than by an
to enact, the imposition of the transfer fees absolute prohibition. The admonition in
under such ordinance, on the interment of Salaveria should be heeded: "The Judiciary
the respective dead relatives in the La should not lightly set aside legislative action
Loma cemetery, was not justified (Viray vs. when there is not a clear invasion of personal
City of Caloocan) or property rights under the guise of police
regulation." 16 It is clear that in the guise of a
police regulation, there was in this instance a
• An ordinance prohibiting pinball machines
clear invasion of personal or property rights,
was also held to be valid under the general
personal in the case of those individuals
welfare clause (Uy Ha vs. City of Manila)
desirous of patronizing those night clubs and
property in terms of the investments made
• The sanggunian of a municipality does not
and salaries to be earned by those therein
have contempt powers nor the power to
employed.
issue subpoena against non-members of
the sanggunian under the General Welfare
WRT RA 938, when such law was amended
clause. (Negros Oriental II Electric
(including the word “prohibit”) the title of the
Cooperative vs. Sangguniang Panlungsod
original law was not changed (AN ACT
of Dumaguete)
GRANTING MUNICIPAL OR CITY BOARDS AND
COUNCILS THE POWER TO REGULATE THE
Dela Cruz vs. Paras
ESTABLISHMENT, MAINTENANCE AND
(1983)
OPERATION OF CERTAIN PLACES OF
AMUSEMENT WITHIN THEIR RESPECTIVE
FACTS: The petitioners are assailing the
TERRITORIAL JURISDICTIONS). The Constitution
validity of an ordinance in Bocaue, Bulacan
mandates: "Every bill shall embrace only one
prohibiting the operation of night clubs and
subject which shall be expressed in the title
their employment of hostesses. The lower
thereof. " Since there is no dispute as the title
court, however, upheld the validity of such
limits the power to regulating, not prohibiting,
ordinances, arguing that by virtue of police
it would result in the statute being invalid if, as
power, the municipality can order the closure
was done by the Municipality of Bocaue, the
47
operation of a night club was prohibited. There It received a letter from acting mayor ordering
is a wide gap between the exercise of a full cessation of operation of its Sta. Maria
regulatory power "to provide for the health plant and requesting Plant Managaer to bring
and safety, promote the prosperity, improve to the office of the mayor several permits
the morals, in the language of the (Building Permit, Mayor’s Permit, and Pollution
Administrative Code, such competence of Environment and Natural Resources Anti-
extending to all "the great public needs, to Pollution Permit).
quote from Holmes, and to interdict any
calling, occupation, or enterprise. In As to the Anti-Pollution Permit, TDI tried to
accordance with the well-settled principle of secure it although it had previously secured
constitutional construction that between two before its operation a “Temporary Permit to
possible interpretations by one of which it will Operate Air Pollution Installation” issued by
be free from constitutional infirmity and by the Environmental Management Bureau (EMB).
other tainted by such grave defect, the former EMB is at a stage trying to determine correct
is to be preferred. A construction that would kind of anti-pollution device to be installed for
save rather than one that would affix the seal TDI’s renewal of its permit.
of doom certainly commends itself.
TDI didn’t have a mayor’s permit so it tried to
Reference is also made by respondents to secure one but it was not entertained. Mayor
Ermita-Malate Hotel and Motel Operators ordered padlocking of TDI’s plant premises
Association, Inc. v. City Mayor of Manila. There without previous and reasonable notice upon
is a misapprehension as to what was decided TDI.
by this Court. That was a regulatory measure.
Necessarily, there was no valid objection on TDI instituted an action with RTC. The
due process or equal protection grounds. It did provincial prosecutor submitted the following
not prohibit motels. It merely regulated the evidence:
mode in which it may conduct business in - Investigation report of the petitioner
order precisely to put an end to practices made by Marivic Guina recommending
which could encourage vice and immorality. that the manufacturing process and
This is an entirely different case. What was raw materials used by the factory
involved is a measure not embraced within the produced fumes that are hazardous to
regulatory power but an exercise of an health so the company must shut down
assumed power to prohibit. Moreover, while it until the proper air pollution device is
was pointed out in the aforesaid Ermita-Malate installed.
Hotel and Motel Operators Association, Inc. - Signatures of residents complaining
decision that there must be a factual about the pollution.
foundation of invalidity, it was likewise made - Letter addressed to Gov. Pagdanganan
clear that there is no need to satisfy such a complaining about the smoke.
requirement if a statute were void on its face.
That it certainly is if the power to enact such RTC ruled in favor of mayor. The CA affirmed.
ordinance is at the most dubious and under
the present Local Government Code non- WON the mayor validly acted within the
existent. limits of his police power.
HELD: YES. The mayor can deny application

for a permit to operate a business or close it
Technology Developers vs. CA by his police power unless appropriate
(1991) measures are taken to control or avoid injury
to the health of the residents of the
FACTS: Technology Developers, Inc. (TDI) is a community from emissions in the operation of
domestic private corporation engaged in the the business.
manufacture and export of charcoal briquette.
48
While determination whether there is pollution WON Chua Huar et, al. have a valid
of the environment that requires control (if not grievance for the remedy of certiorari
prohibition) of the operation of a business is under Rule 65 of the Rules of Court to be
essentially addressed to the EMB (National available to them.
Pollution Control Commission before) of DENR,
the mayor of a town has as much HELD: NO. It is explicitly clear from Section 1
responsibility to protect its inhabitants from of Rule 65 of the Rules of Court that for
pollution. certiorari to be available: (a) a tribunal, board
or office exercising judicial function acted
It must be noted that his action of the Acting without or in excess of its or his jurisdiction, or
Mayor was in response to the complaint of the with grave abuse of discretion, and (b) that
residents of Barangay Guyong, Sta. Maria, there is no appeal, nor any plain, speedy, and
Bulacan, directed to the Provincial Governor adequate remedy in the ordinary course of
through channels. law. Petitioners failed to show the presence of
both elements. The power to condemn
Petitioner takes note of the plea of petitioner buildings and structures in the City of Manila
focusing on its huge investment in this dollar- falls within the exclusive jurisdiction of the City
earning industry. It must be stressed however, Engineer, who is at the same time the Building
that concomitant with the need to promote Official. He has the authority to order the
investment and contribute to the growth of the condemnation and demolition of buildings
economy is the equally essential imperative of which are found to be in a dangerous or
protecting the health, nay the very lives of the ruinous condition. It is also clear from the
people, from the deleterious effect of the Compilation of Ordinances of the City of Manila
pollution of the environment. that the Mayor has the power to confirm or
deny the action taken by the Building Officials,
Chua Huat vs CA with respect to the dangerous or ruinous
(1991) buildings.
FACTS: Manuel Uy & Sons, Inc. requested There is no grave abuse of discretion on the
Romulo del Rosario (city engineer of Manila) to part of the respondent City Engineer because
condemn the dilapidated structures located the orders were made only after thorough
Pedro Gil St. and Paz St., Paco, Manila, all ocular inspections were conducted by the
occupied by Chua Huat, et al (petitioners). The City's Building Inspectors. The results of the
city engineer issued notices of condemnation inspections were set forth in a memorandum
addressed to the petitioners. It stated that the dated 16 November 1982 where it was shown
buildings were found to be in dangerous that all the buildings had architectural,
condition and are therefore condemned. It also structural, sanitary, plumbing and electrical
said that the notice is not a demolition order defects of up to 80%.
since it is still subject to the approval of the
mayor. The orders were based on the The respondent Mayor's act of approving the
inspection reports made by Evaluation condemnation orders was likewise done in
Committee of the Office of the City Engineer. accordance with law. The protest made by
Petitioners protested such condemnation petitioners was submitted only on 22 February
notices, pointing to a certification by a private 1983, or three months after the notices of
civil engineer that the buildings are still condemnation were issued, and clearly beyond
structurally sound and have remaining the seven days prescribed under Section 276
economic life of up to eight years. The mayor of the Compilation of Ordinances of the City of
eventually ordered the demolition of the said Manila.
buildings. Hence, Chua Huat, et al. filed a
complaint in the court. Moreover, appeal was likewise available to
petitioners (fifteen-day period to the Secretary
of Public Works), which they did not do. Hence,
49
certiorari will not lie for failure to exhaust of the creation of the corporation, and as a
administrative remedies. general rule, municipal corporations may
exercise police powers within the fair intent
Binay vs. Domingo and purpose of their creation which are
(1991) reasonably proper to give effect to the powers
expressly granted, and statutes conferring
FACTS: The Municipal Council of Makati issued powers on public corporations have been
a Resolution confirming and/or ratifying the construed as empowering them to do things
ongoing burial assistance program initiated by essential to the enjoyment of life and desirable
the Office of the Mayor. Said resolution for the safety of the people.
provided for a burial assistance program
where qualified beneficiaries, who are Police power is the power to prescribe
bereaved families whose gross monthly regulations to promote the health, morals,
income does not exceed Php 2000 per month, peace, education, good order or safety and
are given 500 pesos cash relief. It will be general welfare of the people. It is the most
funded by the unappropriated available funds essential, insistent, and illimitable of powers.
in the municipal treasury. In a sense it is the greatest and most powerful
attribute of the government. It is elastic and
The Metro Manila Commission (MMC) approved must be responsive to various social
Resolution No. 60. Thereafter, the municipal conditions. On it depends the security of social
secretary certified a disbursement fund of order, the life and health of the citizen, the
P400, 000 for the implementation of the Burial comfort of an existence in a thickly populated
Assistance Program. The resolution was then community, the enjoyment of private and
referred to the Commission on Audit (COA) for social life, and the beneficial use of property,
its expected allowance in audit. However, COA, and it has been said to be the very foundation
after its preliminary findings, disapproved on which our social system rests.
Resolution No. 60 and disallowed in audit the
disbursement of funds for the implementation COA, in saying that there is no perceptible
thereof. Mayor Binay filed two letters for connection, tries to redefine the scope of
reconsideration. police power by circumscribing its exercise to
“public safety, general welfare, etc of the
COA denied both letters for reconsideration. inhabitants of Makati.” The police power of a
COA argues that there is no relation between municipal corporation is broad, and has been
the objective sought to be attained under said to be commensurate with, but not to
Resolution No. 60 and the alleged public safety exceed, the duty to provide for the real needs
and general welfare of the people of Makati. of the people in their health, safety, comfort,
Moreover, it is not for a public purpose. It only and convenience as consistently as may be
seeks to benefit a few individuals. with private rights. It extends to all the great
public needs, and, in a broad sense includes all
WON Resolution No. 60, re-enacted under legislation and almost every function of the
Resolution No. 243, of the Municipality of municipal government. It covers a wide scope
Makati is a valid exercise of police power of subjects, and, while it is especially occupied
under the general welfare clause. with whatever affects the peace, security,
health, morals, and general welfare of the
HELD: YES. Police power is inherent in the community, it is not limited thereto, but is
state but not in municipal corporations. Before broadened to deal with conditions which exists
a municipal corporation may exercise such so as to bring out of them the greatest welfare
power, there must be a valid delegation of of the people by promoting public convenience
such power by the legislature which is the or general prosperity, and to everything
repository of the inherent powers of the State. worthwhile for the preservation of comfort of
A valid delegation may arise from express the inhabitants of the corporation (62 C.J.S.
delegation, or be inferred from the mere fact Sec. 128). Thus, it is deemed inadvisable to
50
attempt to frame any definition which shall the exercise of its police power. It is a settled
absolutely indicate the limits of police power. principle of law that municipal corporations are
agencies of the State for the promotion and
As regards COA’s additional objection, it shows maintenance of local self-government and as
that it is not attuned to the changing of times. such are endowed with the police powers in
Public purpose is not unconstitutional merely order to effectively accomplish and carry out
because it incidentally benefits a limited the declared objects of their creation. Its
number of persons. The care for the poor is authority emanates from the general welfare
general recognized as a public duty. The clause.
support for the poor has long been an
accepted exercise of police power in the For an ordinance to be valid, it must not only
promotion of common good. There is no be within the corporate powers of the
violation of the equal protection clause in municipality to enact but must also be passed
classifying paupers as subject of legislation. according to the procedure prescribed by law,
Paupers may be reasonably classified. and must be in consonance with certain well
established and basic principles of substantive
Tatel v Municipality of Virac
nature:
(1992)
1) must not contravene the Constitution or

FACTS: In 1966, complaints were received
any statue
from the residents of barrio Sta. Elena against
2) must not be unfair or oppressive
disturbance caused by operation of the abaca
3) must not be partial or discriminatory
bailing machine inside the warehouse of Tatel.
4) must not prohibit but may regulate
A committee was appointed by the municipal
trade
council of Virac to investigate on the matter.
5) must be general and consistent with
The committee noted the crowded nature of
public policy, and
the neighborhood with narrow roads and the
6) must not be unreasonable
surrounding residential houses so much so
that accidental fire from the continued
Section 1 and 2 of Ordinance No. 13 reads:
operations of the warehouse and storing of
inflammable materials created danger to the
Sec. 1. It is strictly prohibited to
lives and properties of the people.
construct warehouses in any form to
any person, persons, entity, corporation
Based on this report, the Municipal Council of
or merchants, wherein to keep or store
passed a Resolution declaring the warehouse a
copra, hemp, gasoline, petroleum,
nuisance within purview of Art 694 of the Civil
alcohol, crude oil, oil of turpentine and
Code. It also argued that Tatel’s warehouse
the like products or materials if not
violated Ordinance No. 13 which prohibited the
within the distance of 200 meters from
construction of warehouses within 200 meters
a block of houses either in the
from a block of houses either in the poblacion
poblacion or barrios to avoid great
or barrios.
losses of properties inclusive lives by
fire accident.
Tatel counters that the said Ordinance is
unconstitutional, contrary to due process and
Sec. 2. Owners of warehouses in any
equal protection clause of the Constitution.
form, are hereby given advice to
remove their said warehouses this
WON Ordinance No. 13 of the
ordinance by the Municipal Council,
Municipality of Virac is unconstitutional
provided however, that if those
and void.
warehouses now in existence should no
longer be utilized as such warehouse
HELD: NO. Ordinance No. 13, series of 1952,
for the above-described products in
was passed by the Municipal Council of Virac in
Section 1 of this ordinance after a lapse
51
of the time given for the removal of the bodegas concerned without the municipal
said warehouses now in existence, authorities doing anything about it.
same warehouses shall be exempted
from the spirit of the provision of Judge Tamin vs. CA
section 1 of this ordinance, provided (1992)
further, that these warehouses now in
existence, shall in the future be FACTS: Municipality of Dumingag alleges that
converted into non-inflammable it leased an area of 1,350 sq meters to the
products and materials warehouses. Medina and Rosellon (defendants), subject to
the condition that they should vacate the
A casual glance of the ordinance at once place in case it is needed for public purposes.
reveals a manifest disregard of the elemental Medina and Roselllon paid rentals until 1967,
rules of syntax. Experience, however, will show but they refused to pay after that period and
that this is not uncommon in law making refused to leave the lots. (The lot was
bodies in small towns where local authorities eventually declared as a public plaza).
and in particular the persons charged with the Meanwhile, the national government had
drafting and preparation of municipal allotted funds for the construction of a
resolutions and ordinances lack sufficient municipal gym but it could not continue due to
education and training and are not well the presence of the buildings of the
grounded even on the basic and fundamental defendants. Hence, the Municipality of
elements of the English language commonly Dumingag filed an ejectment case against the
used throughout the country in such matters. defendants. It further argued that the funds
might revert back to the national government
In spite of its fractured syntax, basically, what and such would result to “irreparable damage,
is regulated by the ordinance is the injury, and prejudice” to the municipality and
construction of warehouses wherein its people who are expected to derive benefit
inflammable materials are stored where such from the accomplishment of the project.
warehouses are located at a distance of 200
meters from a block of houses and not the The defendants argue that the subject parcel
construction per se of a warehouse. The of land has been owned, occupied and possess
purpose is to avoid the loss of life and property by respondent Vicente Medina since 1947
in case of fire which is one of the primordial when he bought the subject parcel from a
obligation of the government. Subanan native; that the other respondent
Fortunata Rosellon leased from Medina a
As to the third assignment of error, that portion of the parcel of land; that the
warehouses similarly situated as that of the respondents were never lessees of the
petitioner were not prosecuted, suffice it to petitioner municipality; that Proclamation No-
say that the mere fact that the municipal 365 issued on March 15, 1968 recognized
authorities of Virac have not proceeded "private rights"; and, that a case is pending
against other warehouses in the municipality before the Cadastral court between Medina
allegedly violating Ordinance No. 13 is no and petitioner municipality as regards the
reason to claim that the ordinance is ownership of the subject parcel of land.
discriminatory. A distinction must be made
between the law itself and the manner in WON the petitioner municipality is
which said law is implemented by the agencies entitled to a writ of possession and a writ
in charge with its administration and of demolition even before the trial of the
enforcement. There is no valid reason for the case starts.
petitioner to complain, in the absence of proof HELD: NO. While the complaint alleges
that the other bodegas mentioned by him are factual circumstances of a complaint for
operating in violation of the ordinance and that abatement of public nuisance, the municipality
the complaints have been lodged against the municipality had three remedies from which to
select its cause of action. It chose to file a civil
52
action for the recovery of possession of the petitioner Judge in the ejectment proceedings
parcel of land occupied by the private was premature. What the petitioner should
respondents. Obviously, petitioner municipality have done was to stop the proceedings in the
was aware that under the then Local instant case and wait for the final outcome of
Government Code (B.P. Blg. 337) the the cadastral proceedings.
Sangguniang Bayan has to first pass an
ordinance before the municipality may Faced with these alternative possibilities, and
summarily abate a public nuisance. in the interest of justice, we rule that the
petitioner municipality must put up a bond to
However, if, the allegations in the complaint be determined by the trial court to answer for
are true and that the parcel of land being just compensation to which the private
occupied by the private respondents is indeed respondents may be entitled in case the
a public plaza, then the writ of possession and demolition of their buildings is adjudged to be
writ of demolition would have been justified. In illegal.
fact, under such circumstances, there would Patalinghug v CA
have been no need for a writ of possession in (1994)
favor of the petitioner municipality since the
private respondents' occupation over the FACTS: The Sangguinang Panlungsod of
subject parcel of land cannot be recognized by Davao enacted Ordinance No. 363 (Expanded
any law, since a public plaza is outside the Zoning Ordinance of Davao City). It provided
commerce of man. A writ of demolition would that funeral homes must be established not
have been sufficient to eject the private less than 50 meters from any residential
respondents. structures, churches, and other institutional
buildings.
However, not only did the municipality avoid
the use of abatement without judicial Upon approval and certification of zoning
proceedings, but the status of the subject compliance by the zoning administrator, the
parcel of land has yet to be decided. building officer issued a building permit in
favor of Patalinghug for the construction of the
It is to be noted that even before the Metropolitan Funera Parlor at Cabaguio Ave.
Proclamation, the parcel of land was the
subject of cadastral proceedings before Residents of Barangay Agdao complained that
another branch of the Regional Trial Court of it violated the ordinance since it was within a
Zamboanga del Sur. At the time of the filing of 50-meter radius from the INC Chapel and
the instant case, the cadastral proceedings several residential structures. The Sanggunian
intended to settle the ownership over the found out that the nearest residential structure
questioned portion of the parcel of land under (owned by Tepoot) was only 8 inches to the
Proclamation No. 365 were still pending. south.
Under the cadastral system, the government Notwithstanding the findings of the
through the Director of Lands initiates the Sangguniang Panlungsod, Patalinghug
proceedings by filing a petition in court after continued to construct his funeral parlor which
which all owners or claimants are compelled to was soon finished.
act and present their answers otherwise they
lose their right to their own property. The The residents then filed a case for declaration
purpose is to serve the public interests by of nullity of a building permit. The trial court
requiring that the titles to any lands "be dismissed the complaint saying that:
settled and adjudicated." Hence, it is a
prejudicial question in the present case. 1. The residential building owned by
Cribillo and Iglesia ni Kristo chapel are
Parenthetically, the issuance of the writ of 63.25 meters and 55.95 meters away,
possession and writ of demolition by the respectively from the funeral parlor.
53
real estate taxation purposes vis-a-vis the
2. Although the residential building owned determination of a property for zoning
by certain purposes.
Mr. Tepoot is adjacent to the funeral
parlor, and is only separated therefrom On the other hand, the findings of the trial
by a concrete fence, said residential court are supported by the fact that the
building is being rented by a certain Mr. Sanggunian declared the area as commercial
Asiaten who actually devotes it to his or C-2. Once a local government has
laundry business with machinery reclassified an area as commercial, that
thereon. determination, for zoning purposes, must
prevail. While the commercial character of the
3. Private respondent's suit is premature vicinity was declared through ordinance, the
as they failed to exhaust the respondents have failed to substantiate their
administrative remedies provided by arguments that Cabaguio Avenue was still a
Ordinance No. 363. residential zone.
The CA reversed the trial court and ruled that The declaration of an area as a commercial
Tepoot’s land is a residential lot as reflected in zone thru a municipal ordinance is an exercise
the tax declaration. of police power to promote the good order and
general welfare of the people in a locality.
WON Tepoot’s land is residential. Corollary thereto, the state, in order to
promote the general welfare, may interfere
HELD: NO. The question of whether Mr. with personal liberty, with property, and with
Tepoot’s building is residential or not is a business and occupations. Persons may be
factual determination which appellate courts subjected to certain kinds of restraints and
should not disturb. Although the general rule is burdens to secure the general welfare of the
that factual findings of the Court of Appeals state.
are conclusive on us, this admits of exceptions
as when the findings or conclusions of the Greater Balanga Development
Court of Appeals and the trial court are Corporation vs. Municipality of Balanga
contrary to each other. While the trial court (1994)
ruled that Tepoot's building was commercial,
the Appellate Court ruled otherwise. Thus we FACTS: GBDC applied with the Office of the
see the necessity of reading and examining Balanga Mayor for a business permit its
the pleadings and transcripts submitted before property, certain portions of which has been
the trial court. "unlawfully usurped and invaded" by Balanga,
which had "allowed/tolerated/abetted" the
The testimony of City Councilor Vergara shows construction of shanties and market stalls
that Mr. Tepoot’s buillding was used for a dual while charging market fees and market
purpose: dwelling and for business. While its entrance fees from the occupants and users of
commercial aspect has been established by the area. Mayor issued a Mayor's Permit
the presence of machineries and laundry granting GBDC the privilege of a "real estate
equipment, its use as a residence was not fully dealer/privately-owned public market
substantiated. operator" under the registered trade name of
Balanga Public Market.
A tax declaration is not conclusive of the
nature of the property for zoning purposes. A However, the Sangguniang Bayan passed a
property may have been declared by its owner Resolution annulling the Mayor's permit issued
as residential for real estate taxation purposes to GBDC and advising the Mayor to revoke the
but it may well be within a commercial zone. A permit. Mayor revoked the permit insofar as it
discrepancy may thus exist in the authorized the operation of a public market.
determination of the nature of property for
54
GBDC filed this petition claiming that it had not strictissimi juris (strictly in its legal terms) and
violated any law or ordinance, thus there’s no any doubt or ambiguity must be construed
reason to revoke the Mayor's permit. It further against the municipality. Granting, however,
alleged that he EO and the resolution in that separate permits are actually required,
question were quasi-judicial acts and not mere the application form does not contain any
exercises of police power and that the Mayor entry as regards the number of businesses the
also failed to observe due process in revoking applicant wishes to engage in.
the permit.
The question of ownership over Lot 261-B had
Balanga argues that Mayor may issue, deny or already been settled with finality by the
revoke municipal licenses and permits and Supreme Court in 1983. Entry of judgment was
that the resolution and EO were legitimate likewise, made in the same year. When the
exercise of local legislative authority. It further Mayor's permit was revoked, five years had
argues that GBDC violated Section 3A-06(b) of already elapsed since the case was decided.
the Balanga Revenue Code when it failed to GBDC was able to survey the land and have
inform the Mayor that the lot in controversy the survey approved. GBDC also obtained in
was the subject of adverse claims for which a its name TCT No. 120152 "without any
civil case was filed and when it failed to apply memorandum of encumbrance or
for two separate permits for the two lines of encumbrances pertaining to any decision
business it proposed to engage in. rendered in any civil case. Clearly, for all
intents and purposes, Greater Balanga
WON there has been a valid revocation of appeared to be the true owner of Lot 261-B-6-
the permit. A-3 when respondents revoked its permit to
engaged in business on its own land.
HELD: NO. The authority of the Mayor to
revoke a permit he issued is premised on a Of course, the Sangguniang Bayan has the
violation by the grantee of any of the duty in the exercise of its police powers to
conditions for which the permit had been regulate any business subject to municipal
granted. license fees and prescribe the conditions
under which a municipal license already issued
The application for Mayor's permit requires the may be revoked. But the "anxiety, uncertainty,
applicant to state what type of business, restiveness" among the stallholders and
profession, occupation and/or calling privileges traders cannot be a valid ground for revoking
is being applied for. Petitioner left this entry the permit of petitioner. After all, the
blank in its application form. The permit should stallholders and traders were doing business
not have been issued without the required on property not belonging to the Municipal
information given in the application form itself. government. Indeed, the claim that the
Leaving an entry blank is not equal to false executive order and resolution were measures
statement. There must be proof of willful "designed to promote peace and order and
misrepresentation and deliberate intent to protect the general welfare of the people of
make a false statement. Good faith is always Balanga" is too amorphous and convenient an
presumed, and as it happened, petitioner did excuse to justify respondents' acts.
not make any false statement in the pertinent
entry. Moreover, the manner by which the Mayor
revoked the permit transgressed petitioner's
Applying for two businesses in one permit is right to due process. The alleged violation of
also not a ground for revocation. Par 2 Section Section 3A-06(b) of the Balanga Revenue Code
3A-06(b) does not expressly require two was not stated in the order of revocation, and
permits for their conduct of two or more neither was petitioner informed of this specific
businesses in one place, but only that separate violation until the Rejoinder was filed in the
fees be paid for each business. The powers of instant case. In fact, with all the more reason
municipal corporations are to be construed in should due process have been observed in
55
view of the questioned Resolution of the claim to be "fishermen," without any
Sangguniang Bayan. qualification, however, as to their status.
Tano vs. Socrates Since the Constitution does not specifically

(1997) provide a definition of the terms "subsistence"
or "marginal" fishermen, they should be
FACTS: Sangguniang Panlunsod of Puerto construed in their general and ordinary sense.
Princesa enacted an Ordinance banning the A marginal fisherman is an individual
shipment of all live fish and lobster outside engaged in fishing whose margin of return or
Puerto Princesa for 5 years. reward in his harvest of fish as measured by
existing price levels is barely sufficient to yield
To implement this, Acting City Mayor issued a profit or cover the cost of gathering the fish,
Office Order No. 23, allowing inspections of while a subsistence fisherman is one whose
cargoes to determine whether the shipper catch yields but the irreducible minimum for
possessed the required Mayor's Permit issued his livelihood. Section 131(p) of the LGC (R.A.
by this Office and the shipment is covered by No. 7160) defines a marginal farmer or
invoice or clearance issued by the local office fisherman as "an individual engaged in
of the Bureau of Fisheries and Aquatic subsistence farming or fishing which shall be
Resources and as to compliance with all other limited to the sale, barter or exchange of
existing rules and regulations on the matter. agricultural or marine products produced by
himself and his immediate family." It bears
Next, the Sangguniang Panlalawigan of repeating that nothing in the record supports a
Palawan enacted SR No. 33 and Ordinance No. finding that any petitioner falls within these
2 series of 1993 prohibiting the catching, definitions. Besides, Section 2 of Article XII
gathering, possessing, buying, selling and aims primarily not to bestow any right to
shipment of live marine coral dwelling aquatic subsistence fishermen, but to lay stress on the
organisms in and coming from Palawan waters duty of the State to protect the nation's
for 5 years. marine wealth. What the provision merely
recognizes is that the State may allow, by law,
Petitioners, alleged violators of the ordinaces cooperative fish farming, with priority to
and the Airline Shippers’ Associatin, went to subsistence fishermen and fishworkers in
the SC arguing that the respondents rivers, lakes, bays and lagoons.
implemented the said ordinances depriving all
the fishermen of the whole province of Moreover, the ordinances in question are
Palawan and the City of Puerto Princesa of meant precisely to protect and conserve our
their only means of livelihood and the marine resources to the end that their
petitioners Airline Shippers Association of enjoyment may be guaranteed not only for the
Palawan and other marine merchants from present generation, but also for the
performing their lawful occupation and trade. generations to come. Section 5(c) of the LGC
explicitly mandates that the general welfare
WON the resolutions and ordinances provisions of the LGC "shall be liberally
issued were valid exercises of police interpreted to give more powers to the local
power. government units in accelerating economic
development and upgrading the quality of life
HELD: YES. There is absolutely no showing for the people of the community."
that any of the petitioners qualifies as a
subsistence or marginal fisherman. In their The LGC vests municipalities with the power to
petition, petitioner Airline Shippers Association grant fishery privileges in municipal waters
of Palawan is self-described as "a private and impose rentals, fees or charges therefor;
association composed of Marine Merchants;" to penalize, by appropriate ordinances, the use
petitioners Robert Lim and Virginia Lim, as of explosives, noxious or poisonous
"merchants;" while the rest of the petitioners substances, electricity, muro-ami, and other
56
deleterious methods of fishing; and to conveyed for any purpose for which other real
prosecute any violation of the provisions of property belonging to the local government
applicable fishery laws. unit concerned may be lawfully used or
The centerpiece of LGC is the system of conveyed: Provided, however, That no
decentralization as expressly mandated by the freedom park shall be closed permanently
Constitution. Indispensable to decentralization without provision for its transfer or relocation
is devolution and the LGC expressly provides to a new site.
that "any provision on a power of a local
government unit shall be liberally interpreted (c) Any national or local road, alley, park, or
in its favor, and in case of doubt, any question square may be temporarily closed during an
thereon shall be resolved in favor of devolution actual emergency, or fiesta celebrations,
of powers and of the lower local government public rallies, agricultural or industrial fairs, or
unit. Any fair and reasonable doubt as to the an undertaking of public works and highways,
existence of the power shall be interpreted in telecommunications, and waterworks projects,
favor of the local government unit concerned." the duration of which shall be specified by the
local chief executive concerned in a written
In light then of the principles of order: Provided, however, That no national or
decentralization and devolution enshrined in local road, alley, park, or square shall set
the LGC and the powers granted therein to temporarily closed for athletic, cultural, or civic
local government units under Section 16 (the activities not officially sponsored, recognized,
General Welfare Clause), and under Sections or approved by the
149, 447(a) (1) (vi), 458 (a) (1) (vi) and 468 (a) local government unit concerned.
(1) (vi), which unquestionably involve the
exercise of police power, the validity of the (d) Any city, municipality, or barangay may, by
questioned Ordinances cannot be doubted. a duly enacted ordinance, temporarily close
and regulate the use of any local street, road,
GD-R: Not all DENR powers were devolved to thoroughfare, or any other public place where
the LGU’s. The LGU’s merely implemented the shopping malls, Sunday, flea or night markets,
programs of the DENR. or shopping areas may be established and
where goods, merchandise, foodstuffs,
Closure and Opening of Roads commodities, or articles of commerce may be
sold and dispensed to the general public.
LGC, SEC. 21. Closure and Opening of
Roads. – PIMENTEL:
• The mayor cannot unilaterally close a road
(a) A local government unit may, pursuant to or a street even if it is for public welfare
an ordinance, permanently or temporarily except if the closure is only temporary and
close or open any local road, alley, park, or only during the circumstances mentioned
square falling within its jurisdiction: Provided, in Sec. 21 (c). In other cases, an ordinance
however, That in case of permanent closure, is needed to close such road or street.
such ordinance must be approved by at least
two-thirds (2/3) of all the members of the • When a subdivision road is withdrawn from
sanggunian, and when necessary, an adequate the commerce of man as the open space
substitute for the public facility that is subject required by law to be devoted for the use
to closure is provided. of the general public, its ownership is
automatically vested in the municipal/city
(b) No such way or place or any part thereof government and/or the Republic of the
shall be permanently closed without making Philippines, without need of paying any
provisions for the maintenance of public safety compensation to the owner/developer of
therein. A property thus permanently the said road, although it is still registered
withdrawn from public use may be used or in the latter's name. Its donation by the
57
owner/developer to the government is a Accordingly, it was deemed necessary by the
mere formality. Indeed, the standard Municipality of Makati in the interest of the
practice and requirement is that a general public to open to traffic Amapola,
developer must, among its mandatory Mercedes, Zodiac, Jupiter, Neptune, Orbit and
obligations, develop the road lots in its Pasco de Roxas streets. As a result, the gates
subdivision at its own expense, before it owned by BAVA at Jupiter and Orbit were
can turn over the same to the government ordered demolished.
by way of a donation. (White Plains
Association vs. Legaspi) Mayor Yabut justified the opening of the
streets on the following grounds:
• The last sentence of Sec. 21(b) is proof of 1) Some time ago, Ayala Corporation
Congress’ intent to preserve the sanctity of donated Jupiter and Orbit Streets to
freedom parks and their large role as a Bel-Air on the condition that, under
mechanism of preserving democracy. certain reasonable conditions and
restrictions, the general public shall
Freedom parks are places where public always be open to the general public.
gatherings, meetings, and rallies may be These conditions were evidenced by a
held, especially in cases when the main deed of donation executed between
plaza of a city or municipality is not Ayala and Bel-Air.
available. 2) The opening of the streets was justified
by public necessity and the exercise of
However, only a few LGU’s have the police power.
designated freedom parks, as provided by 3) Bel-Air Village Association’s (BAVA)
Sec. 15 of BP 880. Hence, the SC held in a articles of incorporation recognized
case that no permit may be required for Jupiter Street as a mere boundary to
the people’s exercise of their right to the southwest – thus it cannot be said
peacefully assemble and petition in any to be for the exclusive benefit of Bel-Air
public park or plaza of a city or residents.
municipality until that city or municipality 4) BAVA cannot hide behind the non-
designates a freedom park. The Sc said impairment clause on the ground that
that without such alternative forum, to is constitutionally guaranteed. The
deny the permit would be in effect to deny reason is that it is not absolute, since it
the right (Bayan vs. Ermita) has to be reconciled with the legitimate
exercise of police power.
Sangalang vs. IAC BAVA, on the other hand, contended:

(1989) 1) Rufino Santos, president of BAVA, never
agreed to the opening of the said
FACTS: As far back in 1977, Makati, has streets
always been plagued by traffic. For this 2) BAVA has always kept the streets
reason, during that time, Mayor Nemesio voluntarily open anyway
Yabut of Makati ordered that studies be made 3) The demolition of the gates
on ways on how to alleviate the traffic abovementioned was a deprivation of
problem, particularly in the areas along the property without process of law or
public streets adjacent to Bel-Air Village. The expropriation without just
studies revealed that the subdivision plan of compensation.
Bel-Air was approved by the Court of First.
Distance of Rizal on the condition, among WON Mayor Yabut validly exercised
others, that its major thoroughfares police power.
connecting to public streets and highways
shall be opened to public traffic. HELD: YES. The Mayor is correct, for the
reasons mentioned above. Also, the demolition
58
of the gates is justified under Art. 436 of the HELD: YES. Resolution No. 158 clearly says
Civil Code. that “it is hereby resolved to close the old
road.” The closure is as plain as day except
“When any property is condemned or that the petitioner, with the blindness of those
seized by competent authority in the who will not see, refuses to acknowledge it.
interest of health, safety or security, The Court has little patience with such puerile
the owner thereof shall not be entitled arguments. They border dangerously on a
to compensation, unless he can show trifling with the administration of justice and
that such condemnation or seizure is can only prejudice the pleader's cause.
unjustified.”
In the case of Cebu Oxygen and Acetylene Co.,
In this case, BAVA has the burden of showing Inc. v. Bercilles and Favis vs. City of Baguio the
that the seizure of the gates is unjustified Court held the closure of a city street as within
because police power can be exercised the powers of the city council, who is the
without provision for just compensation. The authority competent to determine whether or
Court is of the opinion that the Mayor did not not a certain property is still necessary for
act unreasonably nor was the opening of the public use.
gates unjustified. In fact, the gates could even
be considered public nuisances, of which While it is true that the above cases dealt with
summary abatement, as decreed under Art. city councils and not the provincial board,
701 of the Civil Code, may be carried out by there is no reason for not applying the doctrine
the Mayor. announced therein to the provincial board in
connection with the closure of provincial roads.
Cabrera vs. CA The provincial board has, after all, the duty of
(1991) maintaining such roads for the comfort and
convenience of the inhabitants of the province.
FACTS: The Provincial Board of Catanduanes Moreover, this authority is inferable from the
issued Resolution No. 158 for the closure of a grant by the national legislature of the funds
road leading to the Capitol Building to the Province of Catanduanes for the
construction of provincial roads.
Owners of the properties traversed by the new
road were given portions of the old road in Also, Cabrera is not entitled to damages. One
exchange for their properties. Deeds of whose property does not abut on the closed
exchange were executed under which the section of the street has no right of
province conveyed to several persons the compensation for its closure if he still has
portions of the closed road in exchange for reasonable access to the general system of
their own respective properties on which was streets.
subsequently laid a new concrete road. To warrant recovery, the property owner must
show that the situation is such that he has
Cabrera, upon learning about the resolution, sustained special damage differing in kind, and
filed a complaint for the abatement of not merely in degree, from those sustained by
nuisance and annulment of resolutions and the public generally.
documents with damages. He alleged that
Resolution No. 158 is not an order for a closure The Constitution does not undertake to
of the road but an authority to barter, and guarantee to a property owner the public
since the land fronting his house was a public maintenance of the most convenient route to
road owned by the province in its his door. The law will not permit him to be cut
governmental capacity it is beyond the off from the public thoroughfares, but he must
commerce of man. content himself with such route for outlet as
WON the closure of the said road was the regularly constituted public authority may
valid. deem most compatible with the public welfare.
59
His acquisition of city property is a tacit the public street, the City Government,
recognition of these principles. contrary to law, has been leasing portions of
the streets to them. Such leases or licenses
Dacanay vs. Asistio are null and void for being contrary to law. The
(1992) right of the public to use the city streets may
not be bargained away through contract. The
FACTS: MMC Ordinance No. 79-02 was interests of a few should not prevail over the
enacted by the MMC, designating certain good of the greater number in the community
streets, roads and open spaces as sites for flea whose health, peace, safety, good order and
markets. The Caloocan city mayor Robles, general welfare, the respondent city officials
pursuant to the Ordinance, opened up 7 flea are under legal obligation to protect.
markets in the city. He and the city engineer
issued licenses for the conduct of vending The Executive Order issued by Acting Mayor
activities upon application of some vendors. Robles authorizing the use of Heroes del '96
Street as a vending area for stallholders who
In 1987, OIC mayor Martinez caused the were granted licenses by the city government
demolition of market stalls on certain streets. contravenes the general law that reserves city
Stall-owners filed an action for prohibition streets and roads for public use. Mayor Robles'
praying that the court issue a writ of Executive Order may not infringe upon the
preliminary injunction. RTC issued writ prayed vested right of the public to use city streets for
for but later dismissed the petition and lifted the purpose they were intended to serve: i.e.,
the writ of preliminary injunction it had issued as arteries of travel for vehicles and
earlier. It found that the streets were of public pedestrians. As early as 1989, the public
dominion and hence, outside the commerce of respondents bad started to look for feasible
man. alternative sites for flea markets. They have
had more than ample time to relocate the
Shortly after the decision came out, the city street vendors.
administration changed hands. However, the
new city mayor Asistio Jr. did not pursue the Macasiano vs. Diokno
prior administration's policy of clearing and (1992)
cleaning up the city streets. Petitioner wrote a
letter to Asistio asking for the demolition of the FACTS: Municipality of Paranaque passed
illegally constructed stalls and invoking the Ordinance No. 86 which authorized the (1)
decision in prior civil case. His letters closure of certain streets at Baclaran and (2)
however, were not acted on. the establishment of a flea market thereon.
Such was passed pursuant to an MMC
WON public streets or thoroughfares may Ordinance authorizing and regulating the use
be leased or licensed to market of certain city streets, roads and open spaces
stallholders by virtue of a city ordinance within Metro Manila as sites for flea markets or
or resolution of the Metro Manila vending areas. Ordinance was later approved
Commission by the Metro Manila Authority subject to the
certain conditions.
HELD: NO. There is no doubt that the
disputed areas from which the private Paranaque mayor entered into an agreement
respondents' market stalls are sought to be with Palanyag, a service cooperative, for the
evicted are public streets. A public street is establishment and operation of the flea
property for public use hence outside the market. PNP Superintendent Macasiano
commerce of man (Arts. 420, 424, Civil Code). ordered the confiscation of stalls put up by
Being outside the commerce of man, it may Palanyag and the discontinuation of the
not be the subject of lease or other contracts. operation of the flea market. The TC upheld
As the stallholders pay fees to the City validity of Ordinance No. 86 and enjoined
Government for the right to occupy portions of Macasiano from enforcing his letter-order.
60
Even assuming that the municipality has the
WON an ordinance or resolution issued authority to pass the disputed ordinance, it
by a municipal council authorizing the cannot be considered approved by the Metro
lease and use of public streets as sites Manila Authority due to non-compliance with
for flea markets is valid. the imposed conditions:
HELD: NO. The ordinance by Paranaque 1) That the aforenamed streets are not
authorizing the lease and use of public streets used for vehicular traffic, and that the
or thoroughfares as sites for flea market is majority of the residents does not
invalid. oppose the establishment of the flea
market/vending areas thereon;
Streets are local roads used for public service 2) That the 2-meter middle road to be
and are therefore considered public properties. used as flea market/vending area shall
Properties of the local government which are be marked distinctly, and that the 2
devoted to public service are deemed public meters on both sides of the road shall
and are under the absolute control of be used by pedestrians;
Congress. Hence, local governments have no 3) That the time during which the vending
authority whatsoever to control or regulate the area is to be used shall be clearly
use of public properties unless specific designated;
authority is vested upon them by Congress. 4) That the use of the vending areas shall
be temporary and shall be closed once
Sec 10 Chapter II of the LGC, although the reclaimed areas are developed and
authorizing LGUs to close roads and similar donated by the Public Estate Authority.
public places, should be deemed limited by Art
424 CC which provides that properties of The municipality of Paranaque has not shown
public dominion devoted to public use and any iota of proof that it has complied with the
made available to the public in general are foregoing conditions precedent to the approval
outside the commerce of man and cannot be of the ordinance. The allegations of
disposed of or leased by the LGC to private respondent municipality that the closed
persons. streets were not used for vehicular traffic and
that the majority of the residents do not
Closure should also be done for the sole oppose the establishment of a flea market on
purpose of withdrawing the road or other said streets are unsupported by any evidence
public property from public use when that will show that this first condition has been
circumstances show that such property is no met. Likewise, the designation by respondents
longer intended or necessary for public use or of a time schedule during which the flea
service. When the property is already market shall operate is absent.
withdrawn from public use, it becomes
patrimonial property of the LGU which it can Further, it is of public notice that the streets
then lawfully use or convey. However, those along Baclaran area are congested with
roads and streets which are available to the people, houses and traffic brought about by
public in general and ordinarily used for the proliferation of vendors occupying the
vehicular traffic are still considered public streets. To license and allow the establishment
property devoted to public use. In such case, of a flea market along J. Gabriel, G.G. Cruz,
the local government has no power to use it Bayanihan, Lt. Garcia Extension and Opena
for another purpose or to dispose of or lease it streets in Baclaran would not help in solving
to private persons. the problem of congestion.
The right of the public to use the city streets The local government should refrain from
may not be bargained away through contract. acting towards that which might prejudice or
adversely affect the general welfare.
61
As what the SC have said in the Dacanay case,
the general public have a legal right to WON the Municipality of Liloan’s camino
demand the demolition of the illegally vecinal should traverse the property of
constructed stalls in public roads and streets the Pilapils.
and the officials of respondent municipality
have the corresponding duty arising from HELD: NO. A camino vecinal is a municipal
public office to clear the city streets and road. It is also property for public use.
restore them to their specific public purpose. Pursuant to the powers of a local government
unit, the Municipality of Liloan had the
Pilapil v. CA unassailable authority to (a) prepare and
(1992) adopt a land use map, (b) promulgate a zoning
ordinance which may consider, among other
FACTS: Spouses Pilapil own a parcel of land in things, the municipal roads to be constructed,
Bahak, Poblacion, Liloan, Cebu. Spouses maintained, improved or repaired and (c) close
Colomida, on the other hand, bought a parcel any municipal road.
of land located also in Bahak. The Colomidas
claim that they had acquired from Sesenando The SC said that it didn’t matter what opinion
Longkit a road right of way which leads the Colomidas or the engineer gave regarding
towards the National Road; this road right of the existence of the camino vecinal. To the SC,
way, however, ends at that portion of the the issue of their credibility has been rendered
property of the Pilapils where a camino vecinal moot by the unrebutted evidence which shows
(barrio road) exists all the way to the said that the Municipality of Liloan, through its
National Road. Sangguniang Bayan, had approved a zoning
plan, otherwise called an Urban Land Use Plan.
The Colomidas "tried to improve the road of This plan indicates the relative location of the
"camino vecinal", for the convenience of the camino vecinal in sitio Bahak
public," but the Pilapils harassed and
threatened them with "bodily harm from It is beyond dispute that the establishment,
making said improvement." The Pilapils also closure or abandonment of the camino vecinal
threatened to fence off the camino vecinal. is the sole prerogative of the Municipality of
Thus, the Colomidas filed a complaint against Liloan. No private party can interfere with such
the Pilapils. a right. Hence, the decision of the Municipality
of Liloan with respect to the said camino
The Pilapils denied the existence of the camino vecinal in sitio Bahak must prevail. It is thus
vecinal. They presented several witnesses. pointless to concentrate on the testimonies of
Among them was Engineer Epifanio Jordan, both witnesses since the same have, for all
Municipal Planning and Development intents and purposes, become irrelevant.
Coordinator of Liloan. Engineer Jordan testified
on Liloan's Urban Land Use Plan 19 or zoning And as per the zoning map, as further declared
map which he prepared upon the instruction of by Engineer Jordan, this camino vecinal in sitio
then Municipal Mayor Cesar Butai and which Bahak "passes the side of the land of Socrates
was approved by the Sangguniang Bayan of Pilapil. This is the proposed road leading to the
Liloan. Per the said plan, the camino vecinal in national highway." Hence, said road should not
sitio Bahak does not traverse, but runs along traverse the Pikapil’s property.
the side 20 of the Pilapil property
NOTE: What invested the zoning map with
The Colomidas, on the other hand, relied on legal effect was neither the authority of the
old-timers as witnesses – witnesses such as person who ordered its preparation nor the
Florentino Pepito, who attested to the authority of the person who actually prepared
existence of the Camino vecinal and its it, but its approval by the Sangguniang Bayan.
availability to the general public since Furthermore, with or without the order of the
practically time immemorial. Mayor or Sangguniang Bayan, Engineer Jordan,
62
as the then Municipal Planning and statutes and ordinances, either with penalties
Development Coordinator, had the authority to or without, not repugnant to the Constitution,
prepare the plan and admit it to the as they shall judge to be for the good and
Sangguniang Bayan for approval. Among his welfare of the commonwealth, and for the
functions under the governing law at the time subjects of the same. The power is plenary and
was to formulate an integrated economic, its scope is vast and pervasive, reaching and
social, physical and other development justifying measures for public health, public
objectives and policies for the consideration safety, public morals, and the general welfare.
and approval of the sangguniang bayan and
the municipal mayor, and prepare municipal It bears stressing that police power is lodged
comprehensive plans and other development primarily in the National Legislature. It cannot
planning document. be exercised by any group or body of
individuals not possessing legislative power.
MMDA v Bel-Air Village Assn., Inc. The National Legislature, however, may
(2000) delegate this power to the President and
administrative boards as well as the
FACTS: Neptune Street is owned by lawmaking bodies of municipal corporations or
respondent Bel-Air Village Associaiton (BAVA). local government units. Once delegated, the
It is a private road inside Bel-Air Village, a agents can exercise only such legislative
private residential subdivision in the heart of powers as are conferred on them by the
the financial and commercial district of Makati national lawmaking body.
City. It runs parallel to Kalayaan Avenue, a
national road open to the general public. The MMDA is, as termed in the charter itself, a
Dividing the two (2) streets is a concrete “development authority.” It is an agency
perimeter wall approximately fifteen (15) feet created for purpose of laying down policies
high. The western end of Neptune Street and coordinating with the various national
intersects Nicanor Garcia, formerly Reposo government agencies, people’s organizations,
Street, a subdivision road open to public non-governmental organizations and the
vehicular traffic, while its eastern end private sector for the efficient and expeditious
intersects Makati Avenue, a national road. deliver of basic services in the vast
Both ends of Neptune Street are guarded by metropolitan area. All its functions are
iron gates. ADMINISTRATIVE in nature.
BAVA received from MMDA a notice requesting The powers of the MMDA under RA 7924 are
it to open Neptune Street to public vehicular limited to the following acts: formulation,
traffic. BAVA was also apprised that the coordination, regulation, implementation,
perimeter wall separating the subdivision from preparation, management, monitoring, setting
the adjacent Kalayaan Avenue would be of policies, installation of a system and
demolished. administration. There is nothing in RA NO.
7924 that grants MMDA police power, let alone
BAVA institued a petition for injunction with legislative power.
TRO and preliminary writ of injunction against
MMDA. The MMDA is not the same entity as the MMC
in Sangalang. Although the MMC is the
WON MMDA is endowed with police forerunner of the present MMDA, the charter of
power to open such roads. the MMC shows that the latter possessed
greater powers which were not bestowed on
HELD: NO. Police power is an inherent the present MMDA.
attribute of sovereignty. It has been defined as
the power vested by the Constitution in the The legislative debates would show that the
legislature to make, ordain, and establish all MMDA was not intended as a political unit of
manner of wholesome and reasonable laws, the government or a public corporation
63
endowed with legislative power. It is not even
a “special metropolitan political subdivision”. 1987 CONSTI, Section 9. Private property
• no plebiscite was conducted for its shall not be taken for public use without just
creation compensation.
• the chairman of the MMDA is not an
official elected by the people, but GD-R: Property, whether real or personal, may
appointed by the president with the be subject of eminent domain!
rank and privileges of a cabinet
member. PIMENTEL:
• Part of the chairman’s functions is to • Eminent domain, which is the power of a
perform such other duties as may be sovereign state to appropriate private
assigned to him by the President, property to particular uses to promote
whereas in LGUs, the president merely public welfare, is essentially lodged in the
exercises supervisory authority. This legislature. While such power may be
emphasizes the administrative validly delegated to local government units
character of the MMDA. (LGUs), other public entities and public
utilities the exercise of such power by the
Clearly, the MMC is not the same entity as delegated entities is not absolute. In fact,
MMDA. Unlike the MMC, the MMDA has no the scope of delegated legislative power is
power to enact ordinances for the welfare of narrower than that of the delegating
the community. It is the LGUs, acting through authority and such entities may exercise
their legislative councils, that possess the power to expropriate private property
legislative power and police power. only when authorized by Congress and
subject to its control and restraints
B. Eminent Domain imposed through the law conferring the
power or in other legislations. Indeed, LGUs
LGC, SEC. 19. Eminent Domain. - A local by themselves have no inherent power of
government unit may, through its chief eminent domain.
executive and acting pursuant to an
ordinance, exercise the power of eminent Thus, strictly speaking, the power of
domain for public use, or purpose, or welfare eminent domain delegated to an LGU is in
for the benefit of the poor and the landless, reality not eminent but "inferior" since it
upon payment of just compensation, pursuant must conform to the limits imposed by the
to the provisions of the Constitution and delegation and thus partakes only of a
pertinent laws: Provided, however, That the share in eminent domain. The national
power of eminent domain may not be legislature is still the principal of the LGUs
exercised unless a valid and definite offer has and the latter cannot go against the
been previously made to the owner, and such principal’s will or modify the same. (Beluso
offer was not accepted: Provided, further, That vs. Municipality of Panay)
the local government unit may immediately
take possession of the property upon the filing • LGU’s do not possess unbridled authority to
of the expropriation proceedings and upon exercise their power of eminent domain…
making a deposit with the proper court of at There are two legal provisions which limit
least fifteen percent (15%) of the fair market the exercise of this power: (1) no person
value of the property based on the current tax shall be deprived of life, liberty, or property
declaration of the property to be expropriated: without due process of law, nor shall any
Provided, finally, That, the amount to be paid person be denied the equal protection of
for the expropriated property shall be the laws; and (2) private property shall not
determined by the proper court, based on the be taken for public use without just
fair market value at the time of the taking of compensation. Thus, the exercise by local
the property. government units of the power of eminent
64
domain is not absolute. In fact, Section 19 • The burden is on the LGU to prove that the
of RA 7160 itself explicitly states that such mandatory requirement of a valid and
exercise must comply with the provisions definite offer to the owner of the property
of the Constitution and pertinent laws. before filing its complaint and the rejection
thereof by the latter. It is incumbent upon
• The power of eminent domain may now be the condemnor to exhaust all reasonable
exercised by an LGU without the need of efforts to obtain the land it desires by
approval by any national government agreement. Failure to prove compliance
authority or body. with the mandatory requirement will result
in the dismissal of the complaint.
HOWEVER, the ordinance authorizing the
local chief executive must still be approved A reasonable offer in good faith, not merely
by the provincial board (in the case of perfunctory or pro forma offer, to acquire
municipalities) the property for a reasonable price must be
made to the owner or his privy. A single
• NOTE: A mere resolution is not sufficient to bona fide offer that is rejected by the
comply with the requirement of the LGC. owner will suffice.
• Theoretically, barangays can exercise A mere letter of intent to acquire property

eminent domain, but the payment of just or an invitation for one of the co-owners, to
compensation may constitute too big a a conference to discuss the project and the
drain in their resources. price that may be mutually acceptable to
both parties is not a valid and definite offer
• NOTE: Eminent domain may now be used to purchase a specific portion of a property
to provide low-cost land for mass housing for a price certain. (Jesus Is Lord Christian
for the poor and the landless (“public School Foundation, Inc vs. Municipality of
welfare”). This may also be justified under Pasig)
its “general welfare powers” in Sec. 21 of
the LGC. • LGU’s can expropriate agricultural lands
without prior authority from the DAR since
• Specific examples of public purposes are the determination of the public use of the
the construction of artesian wells or water property subject to expropriation is
systems, cemeteries or crematoriums, considered an expression of public policy.
abattoirs, research buildings, and animal
dispersal centers. • Republic Act No. 1899 authorized
municipalities and chartered cities to
• "Compensation" means an equivalent for reclaim foreshore lands, not submerged
the value of the land (property) taken. lands. Under Commonwealth Act No. 141,
Anything beyond that is more and anything "foreshore and lands under water were not
short of that is less than compensation. To to be alienated and sold to private parties,"
compensate is to render something which and that such lands "remained property of
is equal to that taken or received. The
the State." Justice Puno emphasized that
word "just" is used to intensify the
meaning of the word "compensation;" to "Commonwealth Act No. 141 has remained
convey the idea that the equivalent to be in effect at present." (Chavez vs. PEA)
rendered for the property taken shall be
real, substantial, full, ample. RULES OF COURT
RULE 67 – EXPROPRIATION
"Just compensation," (reasonable (a.k.a. CONDEMNATION)
compensation) therefore… means a fair
and full equivalent for the loss sustained."
(City of Manila vs. Estrada) A. COMPLAINT FOR EXPROPRIATION
65
Section 1: The complaint. The right of report thereof to the court with service of
eminent domain shall be exercised by the copies to the parties.
filing of a verified complaint which shall:
− state with certainty the right and purpose GD-R: Assessed value is the value given by
of expropriation, the owner himself. But the full “just
− describe the real or personal property compensation” is still an issue to be tried in
sought to be expropriated the expropriation proceedings.
− join as defendants all persons owning or
claiming to own, or occupying, any part Section 9: Uncertain ownership;
thereof or interest therein, showing, so far conflicting claims. If there is uncertainty as
as practicable, their separate interest. to ownership of the property, the court may
order any sum or sums awarded as
In cases applicable, it must also be averred compensation for the property to be paid to
clearly in the complaint if: the court for the benefit of the person
− property is owned by the Republic but adjudged in the same proceeding to be
occupied by private individuals, or entitled thereto.
− the title is otherwise obscure or doubtful so
that the plaintiff cannot with accuracy or C. THE ANSWER
certainty specify who are the real owners.
Sec3: Defenses and objections.
B. ENTRY OF PLAINTIFF IN THE PROPERTY Defendant has no Defendant has any
objection or objection or
defense to the defense to the
Section 2: Entry of plaintiff upon
action or the taking filing of complaint:
depositing value with authorized
of his property:
government depositary. The plaintiff shall
He shall file and serve He shall serve his
have the right to take or enter upon the
a notice of answer within the
possession of the real property involved, upon:
appearance and a time stated in the
− filing of the expropriation complaint; with
manifestation to that summons containing-
− service of notice to the defendant; and effect, specifically specific designation or
− deposit with the authorized government designating or identification of the
depositary an amount equivalent to the identifying the property in which he
assessed value of the property for property in which he claims to have an
purposes of taxation to be held by such claims to be interest, nature and
bank subject to the orders of the court. interested, within the extent of the interest
time stated in the claimed, all his
NOTE: The deposit shall be in money, unless in summons. Thereafter, objections and
lieu thereof the court authorizes the deposit of he shall be entitled to defenses to the taking
a certificate of deposit of a government bank notice of all of his property. No
of the Republic of the Philippines. proceedings affecting counterclaim, cross-
the same. claim or third-party
If personal property is involved, its value shall complaint shall be
be provisionally ascertained and the amount to alleged or allowed in
be deposited shall be promptly fixed by the the answer or any
court. subsequent pleading.
− GEN RULE: A defendant waives all
After such deposit is made the court shall defenses and objections not so alleged.
order the sheriff or other proper officer to
forthwith place the plaintiff in possession of
− EXCEPT: But the court, in the interest
the property involved and promptly submit a
of justice, may permit amendments to the
66
answer to be made not later than ten (10) Copies of the order shall be served on the
days from the filing thereof. parties. Objections to the appointment filed
with the court within ten (10) days from
However, at the trial of the issue of just service, and shall be resolved within thirty (30)
compensation, whether or not a defendant has days after all the commissioners shall have
previously appeared or answered, he may received copies of the objections.
present evidence as to the amount of the
compensation to be paid for his property, and Section 6: Proceedings by commissioners.
he may share in the distribution of the award. 1. Before entering upon the performance of
their duties, the commissioners shall take
D. ORDER OF EXPROPRIATION and subscribe an oath that they will faithfully
perform their duties as commissioners, which
Section 4: Order of expropriation. The oath shall be filed in court with the other
court may issue an order of expropriation: proceedings in the case.
(declaring that the plaintiff has a lawful right 2. Evidence may be introduced by either party
to take the property sought to be before the commissioners who are authorized
expropriated, for the public use or purpose to administer oaths on hearings before them;
described in the complaint, upon the payment 3. The commissioners shall after due notice to
of just compensation to be determined as of the parties to attend, view and examine the
property sought to be expropriated and its
the date of the taking of the property or the
surroundings, and may measure the same
filing of the complaint, whichever came first)
UNLESS the parties consent to the contrary.
4. The commissioners shall assess the
− if the objections to and the defenses consequential damages to the property not
against the right of the plaintiff to taken and deduct from such consequential
expropriate the property are overruled, or damages the consequential benefits to be
− when no party appears to defend as derived by the owner from the public use or
required by this Rule. purpose of the property taken, the operation
of its franchise by the corporation or the
A final order sustaining the right to expropriate carrying on of the business of the corporation
the property may be appealed by any party or person taking the property. But in no case
aggrieved thereby. Such appeal, however, shall the consequential benefits assessed
shall not prevent the court from determining exceed the consequential damages assessed,
or the owner be deprived of the actual value
the just compensation to be paid.
of his property so taken.
After the rendition of such an order, the

plaintiff shall not be permitted to dismiss or Section 7: Report by commissioners and
discontinue the proceeding except on such judgment thereupon. The court may order
terms as the court deems just and equitable. the commissioners to report when any
particular portion of the real estate shall have
E. COMPENSATION been passed upon by them, and may render
judgment upon such partial report, and direct
the commissioners to proceed with their work
Section 5: Ascertainment of
as to subsequent portions of the property
compensation. Upon the rendition of the
sought to be expropriated, and may from time
order of expropriation, the court shall appoint
to time so deal with such property.
not more than three (3) competent and
disinterested persons as commissioners to
The commissioners shall make a full and
ascertain and report to the court the just
accurate report to the court of all their
compensation for the property sought to be
proceedings, and such proceedings shall not
taken
be effectual until the court shall have accepted
their report and rendered judgment in
accordance with their recommendations.
67
situated, and its effect shall be to vest in the
Except as otherwise expressly ordered by the plaintiff the title to the real estate so described
court, such report shall be filed within sixty for such public use or purpose.
(60) days from the date the commissioners
were notified of their appointment, which time Section 10: Rights of plaintiff after
may be extended in the discretion of the court. judgment and payment.
Upon payment by the plaintiff to the defendant
Upon the filing of such report, the clerk of the of the compensation fixed by the judgment,
court shall serve copies thereof on all with legal interest thereon from the taking of
interested parties, with notice that they are the possession of the property, or after tender
allowed ten (10) days within which to file to him of the amount so fixed and payment of
objections to the findings of the report, if they the costs, the plaintiff shall have the right to
so desire. (7a) enter upon the property expropriated and to
appropriate it for the public use or purpose
Section 8: Action upon commissioners’ defined in the judgment, or to retain it should
report. he have taken immediate possession thereof
Upon the expiration of the period of ten (10) under the provisions of section 2 hereof.
days referred to in the preceding section, or
even before the expiration of such period but If the defendant and his counsel absent
after all the interested parties have filed their themselves from the court, or decline to
objections to the report or their statement of receive the amount tendered, the same shall
agreement therewith, the court may, after be ordered to be deposited in court and such
hearing: deposit shall have the same effect as actual
− accept the report and render judgment in payment thereof to the defendant or the
accordance therewith; or, person ultimately adjudged entitled thereto.
− for cause shown, it may recommit the
same to the commissioners for further Section 11: Entry not delayed by appeal;
report of facts; or effect of reversal.
− it may set aside the report and appoint The right of the plaintiff to enter upon the
new commissioners; or property of the defendant and appropriate the
− it may accept the report in part and reject same for public use or purpose shall NOT be
it in part; and delayed by an appeal from the judgment. But
− it may make such order or render such if the appellate court determines that plaintiff
judgment as shall secure to the plaintiff the has no right of expropriation, judgment shall
property essential to the exercise of his be rendered ordering the Regional Trial Court
right of expropriation, and to the defendant to forthwith enforce the restoration to the
just compensation for the property so defendant of the possession of the property,
taken. and to determine the damages which the
defendant sustained and may recover by
F. JUDGMENT reason of the possession taken by the plaintiff.
Section 13: Recording judgment, and its Section 12: Costs, by whom paid. The fees
effect. The judgment entered in expropriation of the commissioners shall be taxed as a part
proceedings shall state definitely, by an of the costs of the proceedings. All costs,
adequate description, the particular property except those of rival claimants litigating their
or interest therein expropriated, and the claims, shall be paid by the plaintiff, unless an
nature of the public use or purpose for which it appeal is taken by the owner of the property
is expropriated. When real estate is and the judgment is affirmed, in which event
expropriated, a certified copy of such the costs of the appeal shall be paid by the
judgment shall be recorded in the registry of owner.
deeds of the place in which the property is
68
Section 14: Power of guardian in such domain and institute condemnation
proceedings. The guardian or guardian ad proceedings for public use or purpose.”
litem of a minor or of a person judicially
declared to be incompetent may, with the Section 153 of BP 337, grants the Sangguniang
approval of the court first had, do and perform Panlalawigan the power to declare a municipal
on behalf of his ward any act, matter, or thing resolution invalid on the sole ground that it is
respecting the expropriation for public use or beyond the power of the Sangguniang Bayan
purpose of property belonging to such minor or the Mayor to issue. Absolutely no other
or person judicially declared to be ground is recognized by the law. The provincial
incompetent, which such minor or person (board's) disapproval of any resolution,
judicially declared to be incompetent could do ordinance, or order must be premised
in such proceedings if he were of age or specifically upon the fact that such resolution,
competent. ordinance, or order is outside the scope of the
legal powers conferred by law. If a provincial
board passes these limits, it usurps the
Moday vs. CA legislative function of the municipal council or
(1997) president. Such has been the consistent
course of executive authority.
FACTS: The Sangguniang Bayan of the
Thus, the Sangguniang Panlalawigan was
Municipality of Bunawan in Agusan del Sur
without the authority to disapprove Municipal
passed Resolution No. 43-89, authorizing the
Resolution No. 43-89 for the Municipality of
mayor to initiate the petition for expropriation
Bunawan clearly has the power to exercise the
of a 1-hectare land along the national highway
right of eminent domain and its Sangguniang
owned by Moday for the site of Bunawan
Bayan the capacity to promulgate said
Farmers Center and Other Government Sports
resolution, pursuant to the earlier-quoted
Facilities. The resolution was approved by
Section 9 of B.P. Blg. 337. Perforce, it follows
Mayor Bustillo but subsequently disapproved
that Resolution No. 43-89 is valid and binding
by the Sangguniang Panlalawigan upon finding
and could be used as lawful authority to
that expropriation is unnecessary considering
petition for the condemnation of petitioners'
that there are still other available lots in
property.
Bunawan for the establishment of the
government center. The Municipality, however, Province of Camarines Sur vs. CA
still filed a petition for eminent domain and its (1993)
motion to take or enter upon the possession of
subject matter was subsequently granted by FACTS: The Sangguniang Panlalawigan
the RTC. passed resolution No. 129, authorizing the
Provincial Governor to purchase or expropriate
WON a municipality may expropriate property contiguous to the provincial capital
private property by virtue of a municipal site, in order to establish a pilot farm and a
resolution which was disapproved by the housing project for provincial government
Sangguniang Panlalawigan. employees. Governor Villafuerte filed two
separate cases for expropriation against
HELD: YES. The Municipality of Bunawan's Ernesto & Efren San Joaquin. The San Joaquins
power to exercise the right of eminent domain moved to dismiss the complaints on the
is not disputed as it is expressly provided for in ground of inadequacy of the price offered for
BP 337, the LGC in force at the time their property.
expropriation proceedings were initiated.
Section 9 of the law (BP 337) states that “a The Province of Camarines Sur claims that it
local government unit may, through its head has the authority to initiate the expropriation
and acting pursuant to a resolution of its proceedings under Sections 4 and 7 of Local
sanggunian, exercise the right of eminent
69
Government Code (BP 337) and that the
expropriations are for a public purpose. NO. Section 9 of BP 337 does not intimate in
the least that LGUs must first secure the
The TC allowed the Province of Camarines Sur approval of the Department of Land reform for
to take possession of private respondents' the conversion of lands before they can
lands. So, they appealed. The CA ordered the institute the necessary expropriation
trial court to suspend the expropriation proceedings. Moreover, there is no provision in
proceedings until after the Province of the CARL which subjects the expropriation of
Camarines Sur shall have submitted the agricultural lands by LGUs to the control of the
requisite approval of the Department of DAR.
Agrarian
The rules on conversion of agricultural lands
The Solicitor General is of the opinion that found in Section 4 (k) and 5 (1) of Executive
under Section 9 of the LGC, there was no need Order No. 129-A, Series of 1987 cannot be the
for the approval by the Office of the President source of the authority of the DAR to
of the exercise by the Sangguniang determine the suitability of a parcel of
Panlalawigan of the right of eminent domain agricultural land for the purpose to which it
but the Province must first secure the approval would be devoted by the expropriating
of the DAR of the plan to expropriate the lands authority. Said rules merely vest on the DAR
of petitioners for use as a housing project the exclusive authority to approve or
(Section 65 of RA 6657: Comprehensive disapprove conversions of agricultural lands
Agrarian Reform Law requires the approval of for residential, commercial or industrial uses,
the DAR before a parcel of land can be such authority is limited to the applications for
reclassified from an agricultural to a non- reclassification submitted by the land
agricultural land.) owners or tenant beneficiaries.
WON the expropriation is for a public Ordinarily, it is the legislative branch of the
purpose or public use. local government unit that shall determine
whether the use of the property sought to be
YES. The old concept of public use is that the expropriated shall be public, the same being
condemned property must actually be used by an expression of legislative policy. Hence, the
the general public (roads, bridges, public courts must defer to such legislative
plazas) before the taking thereof could satisfy determination and will intervene only when a
the constitutional requirement of public use. particular undertaking has no real or
substantial relation to the public use.
But now, the new concept of public use means
public advantage, convenience or benefit, The fears of private respondents that they will
which tends to contribute to the general be paid on the basis of the valuation declared
welfare and the prosperity of the whole in the tax declarations of their property, are
community, like a resort complex for tourists unfounded. This Court has declared as
or housing projects. (Sumulong vs. Guerrero) unconstitutional the Presidential Decrees fixing
the just compensation in expropriation cases
The establishment of pilot development center to be the value given to the condemned
would inure to the direct benefit and property either by the owners or the assessor,
advantage of the people of the province whichever was lower. The rules for
determining just compensation are those laid
down in Rule 67 of the Rules of Court, which
WON the expropriation of agricultural allow private respondents to submit evidence
lands by LGUs is subject to the prior on what they consider shall be the just
approval of the Secretary of Agrarian compensation for their property.
Reform, as the implementor of the
agrarian reform program. Municipality of Meycauayan vs. IAC
70
(1988) the other available roads in the vicinity maybe
at lesser costs without causing harm to an
FACTS: In 1975, PPMC filed with the Office of establishment doing legitimate business
the Municipal Mayor of Meycauayan, Bulacan, therein.
an application for a permit to fence a parcel of
land to enable the storage of their heavy It must be remembered that the foundation of
equipment and various finished products such the right to exercise the power of eminent
as large diameter steel pipes, pontoon pipes domain is genuine necessity (GD-R: i.e., there
for ports, wharves, and harbors, bridge is an existing need at the time of the taking)
components, pre-stressed girders and piles, and that necessity must be of a public
large diameter concrete pipes, and parts for character. Consequently, the courts have the
low cost housing. In the same year, the power to inquire into the legality of the
Municipal Council of Meycauayan, headed by exercise of the right of eminent domain and to
then Mayor Legaspi, passed Resolution No. determine whether there is a genuine
258, manifesting the intention to expropriate necessity therefor.
the same parcel of land. Such resolution was
disapproved by the Provincial Board of Quezon City vs. Ericta
Bulacan. So, PPMC reiterated its application. (1983)
However, in 1983, the Municipal Council of FACTS: QC passed an Ordinance regulating

Meycauayan, now headed by Mayor Daez, the establishment, maintenance and operation
passed Resolution No. 21 for the purpose of of private memorial type cemetery or burial
expropriating anew the PPMC's land, and ground within the jurisdiction of QC. Section 9
convert the same into a public road, which of the Ordinance provides that at least 6% of
would provide a connecting link between the total area of a memorial park cemetery
Malhacan Road and Bulac Road in Valenzuela shall be set aside for charity burial of deceased
and thereby ease the traffic in the area of persons who are paupers and have been
vehicles coming from MacArthur Highway.. The residents of QC for at least 5 yrs prior to their
Provincial Board of Bulacan, this time, death.
approved the aforesaid resolution.
For several years, the said section of the
WON there is a necessity for the Ordinance was not enforced by city authorities
expropriation of the land. but seven years after the enactment of the
Ordinance, the QC Council passed a resolution
HELD: NO. The records reveal that there are requesting the City Engineer to stop any
four other connecting links between the further selling of memorial parks in QC where
aforementioned roads. The petitioner itself the owners have failed to donate the required
admits to this fact. And as found by the CA, 6% cemetery space. The City Engineer
there is also another available vacant lot notified Himlayang Pilipino, Inc. that the
offered for sale situated similarly as the lot in Ordinance would be enforced, so Himlayan
question and lying Idle, unlike the lot sought to filed a petition with the CFI seeking to annul
be expropriated which was found by the Section 9 of the Ordinance. CFI declared
Committee to be badly needed by the Section 9 null and void.
company as a site for its heavy equipment
after it is fenced together with the adjoining WON the said Ordinance was authorized
vacant lot, the justification to condemn the under the QC Charter and thus, a valid
same does not appear to be very imperative exercise of police power.
and necessary and would only cause
unjustified damage to the firm. The desire of NO. An examination of the Charter does not
the Municipality of Meycauayan to build a reveal any provision that would justify the
public road to decongest the volume of traffic ordinance in question except the provision
can be fully and better attained by acquiring granting police power to the City. Police power
71
is the most essential of government powers, at
times the most insistent, and always one of WON it is a valid exercise of
the least limitable of the powers of expropriation powers.
government. It is usually exercised in the form
of mere regulation or restriction in the use NO. Expropriation requires payment of just
of liberty or property for the promotion of the compensation. The questioned ordinance is
general welfare. It does NOT involve the different from laws and regulations requiring
taking or confiscation of property with the owners of subdivisions to set aside certain
exception of a few cases where there is areas for streets, parks, playgrounds, and
necessity to confiscate private property in other public facilities from the land they sell to
order to destroy it [not to devote it to public buyers of subdivision lots. The necessities of
use] (i.e., in the case of confiscation of opium public safety, health, and convenience are
& firearms). very clear from said requirements which are
intended to insure the development of
In this case, Section 9 of the Ordinance is not a communities with salubrious and wholesome
mere police regulation but an outright environments. The beneficiaries of the
confiscation. It deprives a person of his private regulation, in turn, are made to pay by the
property w/o due process…even w/o subdivision developer when individual lots are
compensation. sold to home-owners.
There is no reasonable relation between the As a matter of fact, the petitioners rely solely
setting aside of at 6% of the total area of on the general welfare clause or on implied
private cemeteries for charity burial grounds powers of the municipal corporation, not on
of deceased paupers and the promotion of any express provision of law as statutory basis
health, morals, good order, safety, or the of their exercise of power. The clause has
general welfare of the people. The ordinance is always received broad and liberal
actually a taking without compensation of a interpretation but we cannot stretch it to cover
certain area from a private cemetery to benefit this particular taking. Moreover, the
paupers who are charges of the municipal questioned ordinance was passed after
corporation. Instead of building or maintaining Himlayang Pilipino, Inc. had incorporated.
a public cemetery for this purpose, the city received necessary licenses and permits and
passes the burden to private cemeteries. commenced operating. The sequestration of
six percent of the cemetery cannot even be
The expropriation without compensation of a considered as having been impliedly
portion of private cemeteries is not covered by acknowledged by the private respondent when
Section 12(t) of Republic Act 537, the Revised it accepted the permits to commence
Charter of Quezon City, which empowers the operations.
city council to prohibit the burial of the dead
within the center of population of the city and NAPOCOR vs. Jocson
to provide for their burial in a proper place (1992)
subject to the provisions of general law
regulating burial grounds and cemeteries. FACTS: NAPOCOR filed seven (7) eminent
When the Local Government Code, BP 337 domain cases before the RTC against several
provides in Section 177 (q) that a Sangguniang persons for the acquisition of a right-of-way
panlungsod may "provide for the burial of the easement over portions of the parcels of land
dead in such place and in such manner as described (GD-R: Remember real rights may
prescribed by law or ordinance" it simply also be expropriated!) in the complaints for its
authorizes the city to provide its own city Negros-Panay Interconnection Project, and to
owned land or to buy or expropriate private enable it to construct its tower and
properties to construct public cemeteries. This transmission line in a manner that is
has been the law and practise in the past. It compatible with the greatest good while at the
continues to the present. same time causing the least private injury.
72
NAPOCOR further alleged that the purpose for the exercise of the right of
which the lands are principally devoted will not condemnation (or the propriety thereof)
be impaired by the transmission lines as it will shall be filed or heard."
only acquire a right-of-way-easement thereon.
− The second phase of the eminent
Eventually, the RTC issued several orders, domain action is concerned with the
fixing the provisional values of the subject determination by the Court of the "just
areas, on the basis of the market value and compensation for the property sought
the daily opportunity profit petitioner may to be taken." This is done by the Court
derive and another order directing the with the assistance of not more than
NAPOCOR to deposit the amounts in escrow three (3) commissioners. The order
pending decision on the merits. NAPOCOR fixing the just compensation on the
complied with such order and asked for a writ basis of the evidence before, and
of possession. However, the RTC ordered that findings of, the commissioners would
the writ of possession be issued in these cases be final, too. It would finally dispose of
after the property owners "have duly received the second stage of the suit, and leave
the amounts." nothing more to be done by the Court
regarding the issue. . . .
NAPOCOR questioned such order, arguing that
it violates Section 2 of Rule 67 of the ROC and
HOWEVER, P.D. No. 42 repealed the
that the issuance then of the writ of
"provisions of Rule 67 of the Rules of Court
possession was an unqualified ministerial duty
and of any other existing law contrary to or
which respondent Judge failed to perform.
inconsistent" with it. Accordingly, it repealed
WON the RTC acted in GADALEJ. Section 2 of Rule 67 insofar as the
determination of the provisional value, the
HELD: YES. There are two (2) stages in every form of payment and the agency with which
action of expropriation: the deposit shall be made, are concerned. P.D.
No. 42 effectively removes the discretion of
the court in determining the provisional value.
− The first is concerned with the
What is to be deposited is an amount
determination of the authority of the
equivalent to the assessed value for taxation
plaintiff to exercise the power of
purpose. No hearing is required for that
eminent domain and the propriety of its
purpose. All that is needed is notice to the
exercise in the context of the facts
owner of the property sought to be
involved in the suit. It ends with an
condemned.
order, if not of dismissal of the action,
"of condemnation declaring that the
In any event, NAPOCOR deposited the
plaintiff has a lawful right to take the
provisional value fixed by the court. As a
property sought to be condemned, for
matter of right, it was entitled to be placed in
the public use or purpose described in
possession of the property involved in the
the complaint, upon the payment of
complaints at once, pursuant to both Section 2
just compensation to be determined as
of Rule 67 and P.D. No. 42. The RTC had the
of the date of the filing of the
corresponding duty to order the sheriff or any
complaint." An order of dismissal, if this
other proper officer to forthwith place the
be ordained, would be a final one, of
petitioner in such possession.
course, since it finally disposes of the
action and leaves nothing more to be
The RTC Judge's Order (directing the
done by the Court on the merits. 43 So,
defendants to state in writing within twenty-
too, would an order of condemnation be
four hours whether or not they would accept
a final one, for thereafter as the Rules
and withdraw the amounts deposited by the
expressly state, in the proceedings
petitioner for each of them " as final and full
before the Trial Court, "no objection to
satisfaction of the value of their respective
73
properties affected by the expropriation" and City of Manila vs. Arellano College
stating at the same time that the writ will be (1950)
issued after such manifestation and
acceptance and receipt of the amounts) has FACTS: An action to condemn several parcels
absolutely no legal basis even as it also of land in Legarda St. was initiated in the CFI
unjustly, oppressively and capriciously for the purpose of subdividing such lots and
compels the petitioner to accept the reselling it to private persons. Section 1 of
respondent Judge's determination of the Republic Act No. 267 provides:
provisional value as the just compensation
after the defendants shall have manifested Cities and municipalities are authorized
their conformity thereto. He thus subordinated to contract loans from the
his own judgment to that of the defendants' Reconstruction Finance Corporation,
because he made the latter the final authority the Philippine National Bank, and/or
to determine such just compensation, in other entity or person at the rate of
violation of the principle that the interest not exceeding eight per cent
determination of just compensation in eminent annum for the purpose of purchasing or
domain cases is a judicial function. If the expropriating homesites within their
legislature or the executive department cannot respective territorial jurisdiction and
even impose upon the court how just reselling them at cost to residents of
compensation should be determined, it would the said cities and municipalities.
be far more objectionable and impermissible
for respondent Judge to grant the defendants The CFI ruled that this provision empowers
in an eminent domain case such power and cities to purchase but not to expropriate lands
authority. for the purpose of subdivision and resale.
There is also a complete disregard by WON the condemnation is proper.

respondent Judge of the provisions of Rule 67
as to the procedure to be followed after the HELD: NO. No fixed line of demarcation
petitioner has deposited the provisional value between what taking is for public use and what
of the property. It must be recalled that three is not can made; each case has to be judged
(3) sets of defendants filed motions to dismiss according to its peculiar circumstances. It
53 pursuant to Section 3, Rule 67 of the Rules suffices to say for the purpose of this decision
of Court; Section 4 of the same rule provides that the case under consideration is far
that the court must rule on them and in the wanting in those elements which make for
event that it overrules the motions or, when public convenience or public use. It is
any party fails to present a defense as patterned upon an ideology far removed from
required in Section 3, it should enter an order the majority of the citizens of this country.
of condemnation declaring that the petitioner
has a lawful right to take the property sought In Guido and De Borja, the SC held that “the
to be condemned. expropriation of large estates, trusts in
perpetuity, and land that embraces a whole
Accordingly, considering that the parties town, or large section of a town or city, bears
submitted neither a compromise agreement as direct relation to the public welfare. The size of
to the just compensation nor a stipulation to the land expropriated, the large number of
dispense with the appointment of people benefited, and the extent of social and
commissioners and to leave the determination economic reform secured by the
of just compensation to the court on the basis condemnation, clothes the expropriation with
of certain criteria, respondent Judge was duty public interest and public use. The
bound to set in motion the procedure in expropriation in such cases tends to abolish
Section 5 of Rule 67 (the appointment of economic slavery, feudalistic practices,
commissioners) endless conflicts between landlords and
tenants, and other evils inimical to community
74
prosperity and contentment and public peace construction ready and would have completed
and order. Although courts are not in the project a long time ago had it not been
agreement as to the tests to applied in stopped by the city authorities. And again,
determining whether the use is public or not, while a handful of people stand to profit by the
some go so far in the direction of a liberal expropriation, the development of a university
construction as to hold that public use is that has a present enrollment of 9,000
synonymous with public benefit, public utility, students would be sacrificed. Any good that
or public advantage, and to authorize the would accrue to the public from providing
exercise of the power of eminent domain to homes to a few families fades into
promote such public benefit, etc., especially insignificance in comparison with the
where the interest involved are of considerable preparation of young men and young women
magnitude.” for useful citizenship and for service to the
government and the community, a task which
The SC noted that in all these cases and of the government alone is not in a position to
similar nature extensive areas were involved undertake. “The necessity of the Arellano Law
and numerous people and the general public College to acquire a permanent site of its own
benefited by the action taken. is imperative not only because denial of the
same would hamper the objectives of that
In the first place, the land that is the subject of educational institution, but it would likewise be
the present expropriation is only one-third of taking a property intended already for public
the land sought to be taken in the Guido case, benefit." The Mayor of the City of Manila
and about two-thirds of that involved in the himself confessed that he believes the plaintiff
Borja condemnation proceeding. In the second is entitled to keep this land.
place, the Arellano Colleges' land is situated in
a highly commercial section of the city and is
occupied by persons who are not bona fide
tenants. Lastly, this land was brought by the City of Manila vs. Chinese Community of
defendant for a university site to take the Manila
place of rented buildings that are unsuitable (1919)
for schools of higher learning.
FACTS: In 1916, the City of Manila presented
The very foundation of the right to exercise a petition in the CFI of Manila praying that for
eminent domain is a genuine necessity, and the purpose of constructing a public
that necessity must be of a public character. improvement, namely the extension of Rizal
The ascertainment of the necessity must Avenue, Manila, it is necessary for the City of
precede or accompany, and not follow, the Manila to acquire ownership in fee simple of
taking of the land. certain parcels of land situated in the district
of Binondo of said city within Block 83 of said
Necessity within the rule that the particular district. The proposed extension of Rizal
property to be expropriated must be Avenue however will take a part of the Chinese
necessary, does not mean an absolute but cemetery, a public cemetery.
only a reasonable or practical necessity, such
as would combine the greatest benefit to the The Chinese Community of Manila opposed the
public with the least inconvenience and petition contending that 1) the City of Manila
expense to the condemning party and cannot appropriate the cemetery or a portion
property owner consistent with such benefits. thereof as said cemetery is public property,
But measured even by this standard, and only private property may be expropriated and
forgetting for a moment the private character 2) there is no necessity for the improvement
of the intended use, necessity for the as a whole in the first place.
condemnation has not been shown. Arellano
College, not only has invested a considerable Whether expropriation is a legislative
amount for its property but had the plans for function exclusively, and hence the
75
courts cannot intervene except for the the Court has authority to inquire on whether
purpose of determining the value of the the exercise of such expropriation by the City
land in question. of Manila is indeed public- in other words, the
Court may inquire into the necessity of the
This contention is partly meritorious. expropriation.
There is no question that the court has
authority to fix the values of the land question. WON there is public necessity to
As to the authority of determining whether a expropriate in this case.
law granting the expropriation exists, a
distinction must be made between a) laws NONE. The ascertainment of the necessity
granting special purpose and b) laws grating a must precede, and not follow, the taking of the
general authority. property. The general power to exercise the
right of eminent domain must not be confused
If the law in question grants expropriation of a with the right to exercise it in a particular
particular parcel of land and for a specific case.
public purpose, then the courts would be
without jurisdiction to inquire into the purpose It is axiomatic that the taking of private
of that legislation, regardless of WON the land property for public use is not justified unless
in question is private or public. there is a genuine public necessity for the
taking. In the present case, even if granting
But if the Legislature should grant general that a necessity exists for the opening of the
authority to a municipal corporation then to street in question, the record contain no proof
expropriate private lands, for public purpose, of the necessity of opening the same through
the courts would have authority to make the cemetery. The records show that adjoining
inquiry and to hear proof, upon an issue and adjacent lands have been offered to the
properly presented concerning WON the land city free of charge, which will answer every
in question was private and whether the purpose of the city.
purpose was in fact, public.
Where a cemetery is open to the public, it is a
The right of expropriation is not an inherent public use and no part of the ground can be
power in a municipal corporation, and before it taken for other public uses under a general
can exercise the right some law must exist authority.
conferring the power upon it. When the courts
come to determine the question, they must WON public property may be subject of
only find (a) that a law or authority exists for expropriation.
the exercise of the right of eminent domain,
but (b) also that the right or authority is being YES. As mentioned above public property may
exercised in accordance with the law. be expropriated provided a special grant of
Authority for a particular parcel of land was
In the present case there are two conditions passed by the Legislature. However, in this
imposed upon the authority conceded to the case the City of Manila was not granted such a
City of Manila: First, the land must be private; special authority. Hence, the City of Manila is
and, second, the purpose must be public. If the not authorized to expropriate public property.
court, upon trial, finds that neither of these Since the city of Manila is only permitted to
conditions exists or that either one of them condemn private property for public use and
fails, certainly it cannot be contended that the since the Chinese Cemetery in the city of
right is being exercised in accordance with Manila is a public cemetery (GD-R: It is a
law. community cemetery!) already devoted to a
public use, the city of Manila cannot condemn
In the instant case, since the City of Manila a portion of the cemetery for a public street.
was given a general grant of authority to
expropriate private lands under its Charter,
76
modify or violate it The power of eminent
domain is lodged in Congress. An LGU may
exercise the power to expropriate private
property only when authorized by Congress
and subject to the latter’s control and
restraints, imposed “through the law
Municipality of Parañaque vs. V.M. Realty conferring the power or in other legislations.”
Corp.
(1998) Under Sec. 19 of the LGC, the following
essential requisites must concur before an LGU
FACTS: Pursuant to SB Resolution No. 93-95, can exercise the power of eminent domain:
the Municipality of Parañaque filed a complaint 1. An ordinance enacted by the local
for expropriation against VM Realty legislative council authorizing the local
Corporation over 2 parcels of land. The chief executive to exercise the power of
purpose was to alleviate the living conditions eminent domain or pursue
of the poor by providing homes through expropriation proceedings;
socialized housing projects. The RTC of Makati 2. The power is exercised for public use,
issued an order giving it due course. It purpose, or welfare, or for the benefit
authorized the petitioner to take possession of of the poor and the landless;
the property upon deposit of an amount 3. There is payment of just compensation,
equivalent to 15% of its fair market value as required under Sec. 9 Art. III of the
based on its current tax declaration. Constitution and other pertinent laws;
4. A valid and definite offer has been
VM Realty filed a motion to dismiss, on the previously made to the owner of the
ground that the complaint failed to state a property sought to be expropriated but
cause of action since it was filed pursuant to a that it was rejected.
resolution and not to an ordinance as required
by RA 7160. In the case at bar, the local chief executive
sought to exercise the power of eminent
The then municipality of Parañaque argues domain pursuant to a resolution of the
that a resolution substantially complies with municipal council. Thus, there was no
the requirements of the law since the terms compliance with the first requisite that the
“ordinance” and “resolution” are synonymous mayor be authorized through an ordinance.
for the “purpose of bestowing authority on the Petitioner cites Camarines Sur vs. Court of
LGU through its chief executive to initiate the Appeals 28 to show that a resolution may
expropriation proceedings in court in the suffice to support the exercise of eminent
exercise of the power of eminent domain.” domain by an LGU. This case, however, is not
in point because the applicable law at that
WON a resolution duly approved by the time was BP 337, the previous Local
municipal council has the same force and Government Code, which had provided that a
effect as an ordinance so as not to mere resolution would enable an LGU to
deprive an expropriation case of a valid exercise eminent domain. In contrast, RA
cause of action. 7160, the present Local Government Code
which was already in force when the Complaint
NO. Strictly speaking, the power of eminent for expropriation was filed, explicitly required
domain delegated to an LGU is in reality not an ordinance for this purpose.
eminent but "inferior" domain, since it must
conform to the limits imposed by the A municipal ordinance is different from a
delegation, and thus partakes only of a share resolution.
in eminent domain. Indeed, "the national
legislature is still the principal of the local Ordinance Resolution
government units, which cannot defy its will or It is a law It is merely a
77
declaration of the government under this tacit agreement or
sentiment or opinion implied reservation. Notwithstanding the grant
of a lawmaking body to individuals, the eminent domain, the
on a specific matter highest and most exact idea of property,
It possesses a general It is temporary in remains in the government, or in the
and permanent nature aggregate body of the people in their
character sovereign capacity; and they have the right to
A third reading is A third reading is not resume the possession of the property
necessary for an required, unless whenever the public interest requires it." Thus,
ordinance to be decided otherwise by the State or its authorized agent cannot be
passed. a majority of all the forever barred from exercising said right by
Sanggunian members. reason alone of previous non-compliance with
any legal requirement.
If Congress intended to allow LGUs to exercise
the power through a resolution, it would have While the principle of res judicata does not
said so. Moreover, the power of eminent denigrate the right of the State to exercise
domain necessarily involves a derogation of a eminent domain, it does apply to specific
fundamental or private right of the people. issues decided in a previous case. For
Accordingly, the manifest change in the example, a final judgment dismissing an
legislative language — from "resolution" under expropriation suit on the ground that there
BP 337 to "ordinance" under RA 7160 — was no prior offer precludes another suit
demands a strict construction. "No species of raising the same issue; it cannot, however, bar
property is held by individuals with greater the State or its agent from thereafter
tenacity, and is guarded by the Constitution complying with this requirement, as prescribed
and laws more sedulously, than the right to by law, and subsequently exercising its power
the freehold of inhabitants. When the of eminent domain over the same property. By
legislature interferes with that right and, for the same token, our ruling that petitioner
greater public purposes, appropriates the land cannot exercise its delegated power of
of an individual without his consent, the plain eminent domain through a mere resolution will
meaning of the law should not be enlarged by not bar it from reinstituting similar
doubtful interpretation proceedings, once the said legal requirement
and, for that matter, all others are properly
Also, Article 36, Rule VI of the IRR which complied with. Parenthetically and by parity of
requires only a resolution could not prevail reasoning, the same is also true of the
over the law. principle of "law of the case."
WON the principle of res judicata is City of Cebu vs. Spouses Apolonio
applicable to the present case. (2002)
NO. The principle of res judicata, which finds FACTS: The City of Cebu filed a complaint for
application in generally all cases and eminent domain against the Dedamo spouses.
proceedings, cannot bar the right of the State The Dedamos filed a MTD, alleging that there
or its agent to expropriate private property. is no public purpose; that the City can just buy
The very nature of eminent domain, as an their lot; that the price offered was too low and
inherent power of the State, dictates that the that they have no other land in Cebu.
right to exercise the power be absolute and
unfettered even by a prior judgment or res The parties then submitted to the court an
judicata. The scope of eminent domain is agreement wherein they declared that they
plenary and, like police power, can "reach have partially settled the case (to cut the
every form of property which the State might proceedings short, there was no more
need for public use." "All separate interests of determination of WON the City has authority
individuals in property are held of the nor of WON there is public necessity). The trial
78
court appointed 3 commissioners to determine between the parties. It has the force of law
the just compensation of the lots. The between them and should be complied with in
commissioners submitted their report on the good faith.
basis of which the TC rendered its decision.
Furthermore, during the hearing, the City of
The City of Cebu interposed objections to the Cebu did not interpose a serious objection. It
assessment made by the commissioners, is therefore too late for the city to question the
arguing that the just compensation should be valuation now without violating the principle of
based on the prevailing market price of the equitable estoppel.
property at the commencement of the Republic of the Philippines vs. Court of
expropriation proceedings. Appeals
(2002)
WON just compensation in eminent
domain cases by an LGU should be FACTS: The Republic instituted expropriation
determined as of the date of the filing of proceedings covering a parcel of land situated
the complaint along MacArthur Highway, Malolos, Bulacan, to
be utilized for the continued broadcast
NO. The applicable law as to the point of operation and use of radio transmitter facilities
reckoning for the determination of just for the “Voice of the Philippines” project. PIA
compensation is Sec. 19, LGC, which expressly took over the premises after the previous
provides that just compensation shall be lessee, the “Voice of America,” had ceased its
determined as of the time of actual taking. operations thereat. Petitioner made a deposit
of P517,558.80, the sum provisionally fixed as
The City of Cebu has misread the ruling in being the reasonable value of the property. In
Napocor vs. CA. It was not categorically ruled 1979, or more than nine years after the
in that case that just compensation should be institution of the expropriation proceedings,
determined as of the filing of the complaint. It the trial court issued this order condemning
was there stated that although the general the property and ordering the plaintiff to pay
rule in determining just compensation in the defendants the just compensation for the
eminent domain is the value of the property as property. However, it would appear that the
of the date of the filing of the complaint, the national government failed to pay to herein
rule admits of an exception: where the SC respondents the compensation pursuant to the
fixed the value of the property as of the date it foregoing decision, such that a little over five
was taken and not at the date of the years later, respondents filed a manifestation
commencement of the expropriation with a motion seeking payment for the
proceedings. expropriated property. RTC issued a writ of
execution in 1984.
While Sec. 4, Rule 67 provides that just
compensation shall be determined at the time In the meantime, President Estrada issued
of the filing of the complaint for expropriation, Proclamation No. 22, transferring 20 hectares
such law cannot prevail over the LGC, which is of the expropriated property to the Bulacan
a substantive law. State University for the expansion of its
facilities and another 5 hectares to be used
WON the city is bound by the exclusively for the propagation of the
compensation fixed by the Philippine carabao. The remaining portion was
commissioners. retained by the PIA. This fact notwithstanding,
and despite the 1984 court order, the Santos
YES. More than anything else, the parties, by heirs remained unpaid, and no action was
a solemn document freely and voluntarily taken on their case until 1999 when petitioner
agreed upon by them, agreed to be bound by filed its manifestation and motion to permit
the report of the commission and approved by the deposit in court of the amount of
the trial court. The agreement is a contract P4,664,000.00 by way of just compensation for
79
the expropriated property of the late Luis strictly speaking, a power of eminent, but only
Santos subject to such final computation as of inferior, domain or only as broad or confined
might be approved by the court. as the real authority would want it to be.
This time, the Santos heirs, opposing the Thus, what applies in the case at bar is the
manifestation and motion, submitted a decision in Valdehueza vs. Republic, where the
counter-motion to adjust the compensation private landowners had remained unpaid ten
from P6.00 per square meter previously fixed years after the termination of the
in the 1979 decision to its current zonal expropriation proceedings, this Court ruled -
valuation pegged at P5,000.00 per square “The points in dispute are whether such
meter or, in the alternative, to cause the payment can still be made and, if so, in what
return to them of the expropriated property. amount. Said lots have been the subject of
expropriation proceedings. By final and
RTC ruled in favor of respondents and issued executory judgment in said proceedings, they
the assailed order, vacating its decision 1979 were condemned for public use, as part of an
and declaring it to be unenforceable on the airport, and ordered sold to the government. x
ground of prescription. The CA denied the x x It follows that both by virtue of the
appeal (for failure to file during the judgment, long final, in the expropriation suit,
reglementary period). as well as the annotations upon their title
certificates, plaintiffs are not entitled to
WON there is still public purpose despite recover possession of their expropriated lots -
the fact that the expropriated property’s which are still devoted to the public use for
present use differs from the purpose which they were expropriated - but only to
originally contemplated in the 1969 demand the fair market value of the same.”
expropriation proceedings.
The judgment rendered by the Bulacan RTC in
YES. The property has assumed a public 1979 on the expropriation proceedings
character upon its expropriation. Surely, provides not only for the payment of just
petitioner, as the condemnor and as the owner compensation to herein respondents but
of the property, is well within its rights to alter likewise adjudges the property condemned in
and decide the use of that property, the only favor of petitioner over which parties, as well
limitation being that it be for public use, which, as their privies, are bound.
decidedly, it is. (GD-R: Shouldn’t it be
“actual” necessity?) The constitutional limitation of “just
compensation” is considered to be the sum
WON the decision in Provincial equivalent to the market value of the property,
Government of Sorsogon vs. Vda. de broadly described to be the price fixed by the
Villaroya applies in this case. seller in open market in the usual and ordinary
course of legal action and competition or the
NO. The case cited involved the municipal fair value of the property as between one who
government of Sorsogon, to which the power receives, and one who desires to sell, it fixed
of eminent domain is not inherent, but merely at the time of the actual taking by the
delegated and of limited application. The government. Thus, if property is taken for
grant of the power of eminent domain to local public use before compensation is deposited
governments under RA 7160 cannot be with the court having jurisdiction over the
understood as being the pervasive and all- case, the final compensation must include
encompassing power vested in the legislative interests on its just value to be computed from
branch of government. For local governments the time the property is taken to the time
to be able to wield the power, it must, by when compensation is actually paid or
enabling law, be delegated to it by the deposited with the court. In fine, between the
national legislature, but even then, this taking of the property and the actual payment,
delegated power of eminent domain is not, legal interests accrue in order to place the
80
owner in a position as good as (but not better
than) the position he was in before the taking (b) Taxes, fees, charges and other impositions
occurred. shall:
(1) be equitable and based as far as
C. Taxation and Fiscal Administration practicable on the taxpayer's ability to
pay;
NOTE: I don’t think that the nitty-gritty of local (2) be levied and collected only for Public
taxation will come out in the exam. Ang haba purposes;
ng provisions! (3) not be unjust, excessive, oppressive, or
confiscatory;
I just included the following excerpts from the (4) not be contrary to law, public policy,
BAROPS Reviewer, just in case. national economic policy, or in the
restraint of trade;
1. Local Taxation
(c) The collection of local taxes, fees, charges
1987 CONSTI, Art. X, Section 5. Each local and other impositions shall not be let to any
government unit shall have the power to private person;
create its own sources of revenues and to levy
taxes, fees and charges subject to such (d) The revenue collected pursuant to the
guidelines and limitations as the Congress may provisions of this Code shall inure solely to the
provide, consistent with the basic policy of benefit of, and be subject to the disposition by,
local autonomy. Such taxes, fees, and charges the local government unit levying the tax, fee,
shall accrue exclusively to the local charge or other imposition unless otherwise
governments. specifically provided herein; and
LGC (e) Each local government unit shall, as far as

practicable, evolve a progressive system of
SEC. 128. Scope. - The provisions herein taxation. (SEC. 130, LGC)
shall govern the exercise by provinces, cities,
municipalities, and barangays of their taxing LOCAL TAXING AUTHORITY – it shall be
and other revenue-raising powers. exercised by the SANGGUNIAN of the LGU
concerned through an appropriate ordinance.
SEC. 129. Power to Create Sources of (SEC. 132, LGC)
Revenue. - Each local government unit shall
exercise its power to create its own sources of NOTE: HOWEVER, the local chief executive of
revenue and to levy taxes, fees, and charges the LGUs (except the punong barangay)
subject to the provisions herein, consistent possesses veto powers, as laid out in Sec. 55
with the basic policy of local autonomy. Such of the LGC.
taxes, fees, and charges shall accrue
exclusively to the local government units. COMMON LIMITATIONS ON THE TAXING
POWERS OF LOCAL GOVERNMENT UNITS
FUNDAMENTAL PRINCIPLES – The following (SEC 133, LGC)
fundamental principles shall govern the Unless otherwise provided, the exercise of the
exercise of the taxing and other revenue- taxing powers of provinces, cities,
raising powers of local government units: municipalities, and barangays shall NOT
EXTEND to the levy of the following:
(a) Taxation shall be Uniform in each local
government unit; 1. Income tax, except when levied on
banks and other financial institutions;
NOTE: the uniformity required is only within 2. Documentary stamp tax;
the territorial jurisdiction of an LGU. (IRR) 3. Taxes on Estates, inheritance, gifts,
legacies and other acquisitions mortis
81
causa, except as otherwise provided TAX PRO MU CIT BRG
herein; V. N. Y Y.
4. Customs duties, registration fees of Tax on
vessel and wharfage on wharves, Transfer of
tonnage dues, and all other kinds of Real Property
customs fees, charges and dues except Ownership
wharfage on wharves constructed and (Sec. 135) - tax
x x
maintained by the LGU concerned; on sale,
5. Taxes, fees, and charges and other donation or on
impositions upon goods carried into or any other mode
out of, or passing through, the of transferring
territorial jurisdictions of local ownership.
government units in the guise of Tax on
charges for wharfage, tolls for bridges Business of
or otherwise, or other taxes, fees, or Printing and
charges in any form whatsoever upon Publication
such goods or merchandise; (Sec. 136) -
6. Taxes, fees or charges on Agricultural imposed on
and aquatic products when sold by business of
marginal farmers or fishermen; persons
7. Taxes on business enterprises certified engaged in the
to by the Board of Investments as printing and/or x x
Pioneer or non-pioneer for a period of publication of
six (6) and four (4) years, respectively books, cards,
from the date of registration; posters, leaflets,
8. Excise taxes on articles enumerated handbills,
under the NIRC, as amended, and certificates,
taxes, fees or charges on petroleum receipts,
products; pamphlets, and
9. Percentage or VAT on sales, barters or others of similar
exchanges or similar transactions on nature.
goods or services except as otherwise Franchise Tax
provided herein; (Sec. 137) -
10. Taxes on the Gross receipts of imposed on
transportation contractors and persons businesses
engaged in the transportation of enjoying a
passengers or freight by hire and franchise,
common carriers by air, land or water, notwithstanding x x
except as provided in this Code; any exemption
11. Taxes on Premiums paid by way or granted by any
reinsurance or retrocession; law or other
12. Taxes, fees or charges for the special law.
registration of motor vehicles and for
the issuance of all kinds of licenses or
permits for the driving thereof, except TAX PRO MU CIT BRG
tricycles; V. N. Y Y.
13. Taxes, fees, or other charges on Tax on Sand,
Philippine products actually Exported, Gravel and
except as otherwise provided herein; Other Quarry
x x
14. Taxes, fees, or charges, on countryside Resources
and barangay business enterprises and (Sec. 138)
cooperatives duly registered under the
"Cooperative Code of the Philippines"; Professional x x
and Tax (Sec. 139) -
15. Taxes, fees or charges of any kind on on each person
the National Government, its agencies engaged in the
and instrumentalities, and local exercise or
government units. practice of his
profession
82
requiring consumers,
government whether directly
examination or indirectly,
(i.e. exam within the
conducted by province
PRC)
Professionals
EXCLUSIVELY
employed in the TAX PRO MU CIT BRG
government V. N. Y Y.
shall be Tax on
EXEMPT. Business (Sec.
Amusement 143) – imposed
Tax (Sec. 140) - on business x x
collected from enterprises.
the proprietors, (See. Sec. 143
lessees, or after table)
operators of Fees and
theaters, x x Charges on
cinemas, regulation/lice
concert halls, nsing of
circuses, boxing business &
stadia, and occupation
other places of (Sec. 147) –
amusement except as
Annual Fixed reserved to the
Tax For Every province in
Delivery Truck Section 139 of
or Van of this Code,
x x
Manufacturers commensurate
or Producers, with the cost of
Wholesalers regulation,
of, Dealers, or inspection and
Retailers in, licensing before
Certain any person may
Products (Sec. engage in such
141) - for every business or
truck, van or occupation, or
any vehicle practice such
used by profession or
manufacturers, calling.
producers, Fees for
x x
wholesalers, Sealing and
dealers or Licensing of
retailers in the x x
Weights and
delivery or Measures (Sec.
distribution of 148)
distilled spirits, Fishery
fermented Rentals, Fees
liquors, soft x x
and Charges
drinks, cigars (Sec. 149)
and cigarettes, Tax on Gross
and other Sales or
products as may Receipts of
be determined Small-Scale x
by the Stores /
sanggunian Retailers (Sec.
panlalawigan, to 152(a)
sales outlets, or Service Fees x
83
on the use of (Sec. 155)
Barangay- Community
owned Tax (Sec. 156) –
properties imposed on
(Sec. 152(b)) every inhabitant
Barangay of the
Clearance Philippines
x
(Sec. 152(c)) eighteen (18)
years of age or
Other Fees over who has
and Charges been regularly
on commercial employed on a
breeding of wage or salary
fighting cocks, basis for at least
cockfights, thirty (30)
cockpits; consecutive
x
places of working days
recreation during any
x x
which charge calendar year,
admission or who is
fees; outside engaged in
ads (Sec. business or
152(d) ) occupation, or
Service Fees who owns real
and Charges property with an
(Sec. 153) aggregate
x x x x assessed value
of One thousand
pesos (Php
1,000.00) or
TAX PRO MU CIT BRG more, or who is
V. N. Y Y. required by law
Public Utility to file an
Charges – income tax
imposed for the return
operation of Real Property (MM
x x
public utilities Tax (Sec. 232 )
owned,
x x x x BUSINESS TAX (Sec. 143) - taxes imposed on
operated and
maintained by the following businesses:
them within • On manufacturers, assemblers, repackers,
their
processors, brewers, distillers, rectifiers,
jurisdiction.
(Sec. 154 ) and compounders of liquors, distilled
Toll Fees or x x x x spirits, and wines or manufacturers of any
Charges – article of commerce of whatever kind or
imposed for the nature;
use of any • On wholesalers, distributors, or dealers in
public road, pier
any article of commerce of whatever kind
or wharf,
waterway, or ;
bridge, ferry or • On exporters, and on manufacturers,
telecommunicat millers, producers, wholesalers,
ion system distributors, dealers or retailers of essential
funded and
commodities:
constructed by
the local (1) Rice and corn;
government (2) Wheat or cassava flour, meat, dairy
unit concerned products, locally manufactured,
84
processed or preserved food, sugar, of January of each year. However, new
salt and other agricultural, marine, taxes, fees or charges, or changes in the
and fresh water products, whether rates thereof, shall accrue on the first (1st)
in their original state or not; day of the quarter next following the
(3) Cooking oil and cooking gas; effectivity of the ordinance imposing such
(4) Laundry soap, detergents, and new levies or rates. (Sec. 166, LGC)
medicine;
(5) Agricultural implements, equipment
and post- harvest facilities,
Time of Payment -- All local taxes, fees,
fertilizers, pesticides, insecticides,
and charges shall be paid within the first
herbicides and other farm inputs;
twenty days of January or of each
(6) Poultry feeds and other animal
subsequent quarter, as the case may be.
feeds;
(Jan 20, Apr 20, July 20, and Oct 20). The
(7) School supplies; and
sanggunian concerned may, for a
(8) Cement.
justifiable reason or cause, extend the time
• On retailers; for payment of such taxes, fees, or charges
• On contractors and other independent without surcharges or penalties, but only
contractors; for a period not exceeding six (6) months.
• On banks and other financial (Sec. 167, LGC)
institutions, from interest, commissions
and discounts from lending activities,
income from financial leasing,
Surcharges and Penalties
dividends, rentals on property and
profit from exchange or sale of • 25% surcharge on taxes, fees or charges
property, insurance premium; NOT paid on time, AND interest at the rate
• On peddlers engaged in the sale of any NOT exceeding 2% per month of the
merchandise or article of commerce; unpaid taxes, fees or charges INCLUDING
and surcharges, until the amount is fully paid.
• On any business, not otherwise
specified in the preceding paragraphs,
which the sanggunian concerned may
NOTE: in no case shall the total interest
deem proper to tax.
exceed 36 months. (Sec. 168, LGC)
COLLECTION OF TAXES
Collecting Authority – All local taxes,
fees and charges shall be collected by the
Tax Period -- unless otherwise provided in provincial, city, municipal, or barangay
this Code, the tax period of all local taxes, treasurer, or their duly authorized
fees and charges shall be the calendar deputies. (Sec. 170, LGC)
year. (Sec. 165, LGC)
Examination of Books – The local

Manner of Payment -- Such taxes, fees treasurer or his deputy duly authorised in
and charges may be paid in quarterly writing, may examine the books, accounts
installments. (Sec. 165, LGC) and other pertinent records of any person,
partnership, corporation, or association in
order to ascertain, assess and collect the
correct amount of tax. Such examination
Accrual of Tax -- All local taxes, fees, and shall be made during the regular business
charges shall accrue on the first (1st) day hours, ONLY ONCE for every tax period,
85
and shall be certified to by the examining PERIODS OF ASSESSMENT AND
official. (Sec. 171, LGC) COLLECTION OF LOCAL TAXES
CIVIL REMEDIES (BOTH LGU AND GEN RULE: Assessment shall be made
TAXPAYER) within 5 years from the date they become
due, and collection shall be made within 5
years from the date of assessment by
administrative or judicial action.
Personal Property Exempt from Distraint or
Levy – the following property shall be
EXEMPT from distraint or levy for
delinquency in the payment of any LOCAL EXCEPTION: In case of FRAUD, or INTENT
tax, fee or charge: TO EVADE PAYMENT OF TAX, the same
may be assessed within 10 years from
discovery of fraud or intent to evade
payment. (Sec. 194, LGC)
• tools and implements necessarily used
by the delinquent taxpayer in his trade
or employment
When Running of Prescription of Above
• one horse, cow, carabao, or other beast Periods is Suspended – The running of the
of burden, such as the delinquent periods of prescription above shall be
taxpayer may select and necessarily suspended for the time during which:
used by him in his ordinary occupation
• the treasurer is legally prevented from
• his necessary clothing, and that of all making the assessment or collection
his family
• the taxpayer requests for a
• household furniture and utensils reinvestigation and executes a waiver
necessary for housekeeping and used in writing before expiration of the
for that purpose by the delinquent period within which to assess or collect
taxpayer, such as he may select, of a
value not exceeding P10,000 • the taxpayer is out of the country or
otherwise cannot be located (Sec. 194
• provisions, including crops, actually (d), LGC)
provided for individual or family use
sufficient for 4 months
• the professional libraries of doctors, CLAIM FOR REFUND OR TAX CREDIT

engineers, (ehem) lawyers and judges
• No case or proceeding shall be
• one fishing boat and net, not exceeding maintained in any court for the
the total value of P10,000 by the lawful
recovery of any tax, fee, or charge
use of which a fisherman earns his
erroneously or illegally collected until a
livelihood
WRITTEN CLAIM for refund or credit has
been filed with the local treasurer.
• any material or article forming part of a
house or improvement of any real • No case or proceeding shall be
property (Sec. 185, LGC) entertained in any court AFTER the
expiration of 2 years from the date of
payment of such tax, or from the date the
86
taxpayer is entitled to a refund or credit. Requirements for a Valid Tax
(Sec. 196, LGC) Ordinance
1. the ordinance shall only be enacted if

there is a prior public hearing conducted
REMEDY FOR ILLEGAL OR for the purpose (Sec. 187)
UNCONSTITUTIONAL TAX ORDINANCE
2. within 10 days after the approval of the

STEP 1: Any question on the ordinance, it must be published in full for 3
constitutionality or legality of tax consecutive days in a newspaper of local
ordinances or revenue measures may be circulation, or if no such newspaper, it
raised on appeal within 30 days from the must be posted in at least 2 conspicuous
effectivity thereof to the Sec of Justice. and publicly accessible places. (Sec. 188)
STEP 2: The Sec of Justice shall decide Authority to Adjust Rates – LGU shall
within 60 days from the date of receipt of have the authority to adjust the tax rates
the appeal. However, this appeal shall not prescribed in LGC NOT oftener than once
have the effect of suspending the every 5 years, but in no case shall such
effectivity of the ordinance and the accrual adjustment exceed 10% of the rates fixed.
and payment of the tax levied therein. (Sec. 191, LGC)
STEP 3: Within 30 days after receipt of the Authority to Grant Exemption – LGU
decision or the lapse of the 60-day period may, through ordinances, grant tax
without the Sec of Justice acting upon the exemptions, incentives or reliefs under
appeal, the aggrieved party may file such terms and conditions as they may
appropriate proceedings with a court of deem necessary. (Sec. 192, LGC)
competent jurisdiction. (Sec 187, LGC)
Hagonoy Market Vendor Association vs.

Municipality of Hagonoy
MISCELLANEOUS PROVISIONS
(2002)
FACTS: In 1996, the Sangguniang Bayan (SB)

Power to Levy Taxes, Fees or Charges of Hagonoy, Bulacan, enacted an ordinance,
which increased the stall rentals of the market
GEN RULE: LGU may exercise the power to vendors in Hagonoy. It also provided that it
levy taxes, fees or charges on ANY BASE shall take effect upon approval. The said
OR SUBJECT not otherwise specifically ordinance was also duly posted.
enumerated in LGC or NIRC.
In the last week of November 1997, the Market
Association’s members were given copies of
EXCEPTION: It must NOT be unjust, the approved ordinance and were informed
excessive, oppressive, confiscatory or that it will be enforced in January 1998. The
contrary to declared national policy. association filed an appeal with the Sec. of
Justice, assailing the constitutionality of the
(Sec. 186, LGC) ordinance
87
The DOJ Sec. dismissed the appeal on the services to its inhabitants are largely derived
ground that it was filed out of time, i.e. beyond from its revenues and collections.
30 days from the effectivity of the ordinance,
as prescribed under the LGC. The date of Also, petitioner’s bold assertion that there was
effectivity of the subject ordinance retroacted no public hearing conducted prior to the
to the date of its approval in October 1996, passage of Kautusan Blg. 28 is belied by its
after the required publication or posting has own evidence. In petitioner’s two (2)
been complied with, pursuant to Section 3 of communications with the Secretary of Justice,
said ordinance. it enumerated the various objections raised by
its members before the passage of the
The Market Association contends that its ordinance in several meetings called by the
period to appeal should be counted not from Sanggunian for the purpose. These show
the time the ordinance took effect in 1996 but beyond doubt that petitioner was aware of the
from the time its members were personally proposed increase and in fact participated in
given copies of the approved ordinance in the public hearings therefor. The respondent
November 1997. It insists that it was unaware municipality likewise submitted the Minutes
of the approval and effectivity of the subject and Report of the public hearings conducted
ordinance in 1996 on two (2) grounds: first, no by the Sangguniang Bayan’s Committee on
public hearing was conducted prior to the Appropriations and Market.
passage of the ordinance and, second, the
approved ordinance was not posted. The record is also bereft of any evidence to
prove petitioner’s negative allegation that the
WON the action has already prescribed. subject ordinance was not posted as required
by law. In contrast, the respondent
HELD: YES. The appeal of the petitioner with Sangguniang Bayan of the Municipality of
the Secretary of Justice is already time-barred. Hagonoy, Bulacan, presented evidence which
Section 187 (Procedure for Approval and clearly shows that the procedure for the
Effectivity of Tax Ordinances and Revenue enactment of the assailed ordinance was
Measures; Mandatory Public Hearings) of the complied with. After its approval, copies of the
LGC requires that an appeal of a tax ordinance Ordinance were given to the Municipal
or revenue measure should be made to the Treasurer on the same day. The Ordinance
Secretary of Justice within 30 days from was posted during the period from November
effectivity of the ordinance and even during its 4 - 25, 1996 in three (3) public places, validly
pendency, the effectivity of the assailed made in lieu of publication as there was no
ordinance shall not be suspended. newspaper of local circulation in the
municipality of Hagonoy. This fact was known
In the case at bar, Municipal Ordinance No. 28 to and admitted by petitioner.
took effect in Oct. 1996. Petitioner filed its
appeal only in Dec. 1987, more than a year Estanislao vs. Costales
after the effectivity of the ordiance in 1996. (1991)
Clearly, the Secretary of Justice correctly
dismissed it for being time-barred. FACTS: An Ordinance, imposing a P0.01 tax
per liter of softdrinks produced, manufactured,
The periods stated in Section 187 of the Local and/or bottled within the territorial jurisdiction
Government Code are mandatory. Ordinance of the City of Zamboanga was passed by the
No. 28 is a revenue measure adopted by the Sangguniang Panglungsod of Zamboanga City.
municipality of Hagonoy to fix and collect The Sanggunian sent a copy of the Ordinance
public market stall rentals. Being its lifeblood, to the then Minister of Finance by registered
collection of revenues by the government is of mail.
paramount importance. The funds for the
operation of its agencies and provision of basic The Minister of Finance upon his review
pursuant to P.D. No. 231 (Local Tax Code) sent
88
the letter addressed to the Sanggunian, Moreover, the conclusion that since the
suspending the effectivity of Ordinance No. 44 Minister of Finance failed to act or otherwise
on the ground that it contravenes Section suspend the effectivity of the tax ordinance
19(a) of the Local Tax Code. within 120 days from receipt of a copy thereof,
said Ordinance is valid and remains in force is
The RTC rendered a decision finding that the mistaken. There is no authority under Section
tax levied under said Ordinance is not among 44 of the Local Tax Code for this conclusion.
those that the Sanggunian may impose under All that is provided therein is that if the
the Local Tax Code, but nonetheless, it upheld Secretary of Finance "takes no action as
its validity on the ground that the Minister of authorized in this section, the tax ordinance
Finance did not take appropriate action on the shall remain in force."
matter within the prescribed period of 120
days after receipt of a copy thereof. Even if the Secretary of Finance failed to
review or act on the Ordinance within the
WON the tax subject of the ordinance prescribed period of 120 days it does not
was valid. follow as a legal consequence thereof that an
otherwise invalid ordinance is thereby
HELD: NO. It is clear that a city, like public validated.
respondent Zamboanga City may impose, in
lieu of the graduated fixed tax prescribed Much less can it be interpreted to mean that
under Section 19 of the Local Tax Code, a the Secretary of Finance can no longer act by
percentage tax on the gross sales for the suspending and/or revoking an invalid
preceding calendar year of non-essential ordinance even after the lapse of the 120-day
commodities at the rate of not exceeding two period. All that the law says is that after said
per cent and on the gross sales of essential period the tax ordinance shall remain in force.
commodities at the rate of not exceeding one The prescribed period for review is only
per cent. directory and the Secretary of Finance may
still review the ordinance and act accordingly
Ordinance No. 44 of the respondent even after the lapse of the said period
Zamboanga City imposes P0.01 per liter of provided he acts within a reasonable time.
softdrinks produced, manufactured, and/or
bottled within the territorial jurisdiction of the Philippine Petroleum Corporation vs.
City of Zamboanga. No doubt this Ordinance is Municipality of Pililia
ultra vires as it is not within the authority of (1991)
the City to impose said tax. The authority of
the City is limited to the imposition of a FACTS: PPC manufactured lubricated oil
percentage tax on the gross sales or receipts basestock which is a petroleum product with
of said product which, being non-essential, its refinery plant in Malaya, Pililia, Rizal. The
shall be at the rate of not exceeding 2% of the said Municipality enacted the Tax Code of
gross sales or receipts of the softdrinks for the Pililia, imposing a tax on business, except for
preceding calendar year. The tax being those for which fixed taxes are provided in the
imposed under said Ordinance is based on the Local Tax Code on manufacturers, importers,
output or production and not on the gross or producers of any article of commerce of
sales or receipts as authorized under the Local whatever kind or nature, including brewers,
Tax Code. (THE Husband: Not the case distillers, rectifiers, repackers, and
anymore in the LGC) compounders of liquors, distilled spirits and/or
wines in accordance with the schedule found
Also, the ruling in Pepsi-Cola Bottling Company in the Local Tax Code, as well as mayor's
vs. Municipality of Tanauan is not applicable permit, sanitary inspection fee and storage
anymore since the law in that case has already permit fee for flammable, combustible or
been superseded by the Local Tax Code. explosive substances, while Section 139 of the
89
disputed ordinance imposed surcharges and producers of any article of commerce of
interests on unpaid taxes, fees or charges. whatever kind or nature. A tax on business is
distinct from a tax on the article itself. Thus, if
Enforcing the provisions of the above- the imposition of tax on business of
mentioned ordinance, the Municipality filed a manufacturers, etc. in petroleum products
complaint against PPC for the collection of the contravenes a declared national policy, it
business tax from 1979 to 1986; storage should have been expressly stated in P.D. No.
permit fees from 1975 to 1986; mayor's permit 436.
and sanitary inspection fees from 1975 to
1984. PPC argues that, pursuant to the the The exercise by local governments of the
Provincial Circular issued by the DOF, it is power to tax is ordained by the present
contrary to national economic policy to impose Constitution. To allow the continuous
local taxes on the manufacture of petroleum effectivity of the prohibition set forth in PC No.
products as they are already subject to 26-73 (1) would be tantamount to restricting
specific tax under the NIRC and that it also their power to tax by mere administrative
covers all ordinances. issuances.
WON PPC is liable to pay the said
impositions. However, since the Local Tax Code does not
provide the prescriptive period for collection of
HELD: PPC is liable to pay those from local taxes, Article 1143 of the Civil Code
1976 to 1986. There is no question that applies. Said law provides that an action upon
Pililla's Municipal Tax Ordinance No. 1 an obligation created by law prescribes within
imposing the assailed taxes, fees and charges ten (10) years from the time the right of action
is valid especially Section 9 (A) which accrues. The Municipality of Pililla can
according to the trial court "was lifted in toto therefore enforce the collection of the tax on
and/or is a literal reproduction of Section 19 business of petitioner PPC due from 1976 to
(a) [Now Sec. 133(h)] of the Local Tax Code as 1986, and NOT the tax that had accrued prior
amended by P.D. No. 426." It conforms with to 1976.
the mandate of said law.
Floro Cement Corporation v. Gorospe
But P.D. No. 426 amending the Local Tax Code (1991)
is deemed to have repealed Provincial Circular
Nos. 26-73 and 26 A-73 issued by the FACTS: The Municipality of Lugait (Misamis
Secretary of Finance when Sections 19 and 19 Oriental) filed a complaint for collection of
(a), were carried over into P.D. No. 426 and no taxes against Floro Cement Corporation. The
exemptions were given to manufacturers, taxes are “manufacturers” and “exporter’s”
wholesalers, retailers, or dealers in petroleum taxes for 1 Jan 1974- 30 Sept 1975 amounting
products. to P161,875.00 plus 25% surcharge.
They based it on Municipal Ordinance No. 5,
Well-settled is the rule that administrative passed pursuant to PD 231; and Ordinance No.
regulations must be in harmony with the 10.
provisions of the law. In case of discrepancy
between the basic law and an implementing Floro Cement opposed the imposition of the
rule or regulation, the former prevails. tax, arguing that it is not liable since the
plaintiff’s powers to levy fees on “Mines,
Furthermore, while Section 2 of P.D. 436 Mining Corporations and Mineral Products” was
prohibits the imposition of local taxes on limited by Sec. 52 of PD 463. Secretary of
petroleum products, said decree did not Agriculture and Natural Resources granted us
amend Sections 19 and 19 (a) of P.D. 231 as a certificate of tax exemption for a period of 5
amended by P.D. 426, wherein the years.
municipality is granted the right to levy taxes
on business of manufacturers, importers,
90
WON Ordinance Nos. 5 and 10 apply to that thresher-owner-operator
petitioner Floro Corporation voluntarily agree to donate 1% of all
notwithstanding the limitation provided palay threshed within jurisdiction of
for in Sec. 5(m) of PD 231 and Sec. 52 of municipality… and agree to report
PD 463. weekly the total number of palay
threshed…
HELD: YES. The Municipality’s power to levy
taxes on manufacturers and importers is Jurado sent his agent to municipal treasurer’s
provided in Art. 2, Sec. 19 of PD 231: office to pay license fee of Php 285 for
Municipality may impose a tax on business thresher operators but Mapagu refused to
except those for which fixed taxes are accept payment and required him to secure a
provided for in this Code. mayor’s permit first. Mayor Tuzon said that he
should first comply with Resolution9 and sign
Cement is not a mineral product but rather a the agreement before permit could be issued.
manufactured product. It is the result of a
definite process—crushing of minerals, Jurado ignored requirement and sent the Php
grinding, mixing, etc. Its minerals had already 285 license fee by postal money order to the
undergone a chemical change before cement office of municipal treasurer. Mapago returned
reaches its saleable form. amount because of failure to comply with
Resolution No.9.
The power of taxation is a high prerogative of
sovereignty. Its relinquishment is never Hence, a special civil action for mandamus
presumed. The general rule is that any claim with damages to compel issuance of mayor’s
for exemption from the tax statute should be permit and license was filed with the CFI and
strictly construed against the taxpayer. He also a petition for a declaratory judgment
who claims an exemption must be able to against the resolution and implementing
point out some provision of law creating the agreement for being illegal either as a
right; it cannot be allowed to exist upon a donation or as a tax measure.
mere implication or inference.
The exemptions mentioned in Sec. 52 of PD WON the “donation” was a valid exercise
463 only refers to machineries, equipment, of the LGU’s taxing power.
tools, for production, etc., as provided in Sec.
53 of the same decree. The manufacture and The Court did not concern itself with the
export of cement do not fall under it since it is validity of the Resolution since the issue
not a mineral product. was not raised in the petition as an
assigned error of the CA. While it would
Tuzon and Mapagu vs. CA appear from the wording of the resolution that
(1992) the municipal government merely intends to
"solicit" the 1% contribution from the
FACTS: The Sangguniang Bayan of threshers, the implementing agreement seems
Camalaniugan, Cagayan unanimously adopted to make the donation obligatory and a
Resolution No.9 where 1% donation from condition precedent to the issuance of the
thresher operators who will apply for a permit mayor's permit. This goes against the nature
to thresh within its jurisdiction will be solicited of a donation, which is an act of liberality and
to help finance construction of Sports and is never obligatory.
Nutrition Center.
The municipal treasurer Mapagu prepared a If, on the other hand, it is to be considered a
document for signature of all thresher applying tax ordinance, then it must be shown in view
for a mayor’s permit to implement the of the challenge raised by the private
resolution: respondents to have been enacted in
accordance with the requirements of the Local
Tax Code. These would include the holding of a
91
public hearing on the measure and its interpretation of the resolution. In the absence
subsequent approval by the Secretary of of a judicial decision declaring it invalid, the
Finance, in addition to the usual requisites for legality of challenged measures would have to
publication of ordinances in general. be presumed. As executive officials of the
municipality, they had the duty to enforce it as
WON the Mayor and Treasurer are liable long as it had not been repealed by
for damages. Sangguniang Bayan or annulled by the courts.
NO. The Civil Code provision (Art. 27) has Drilon vs. Lim
been remarked: (1994)
- To have a purpose to end the bribery
system, where public official, for some FACTS: Pursuant to Sec 187 of the LGC, the
flimsy excuse, delays or refuses the Secretary of Justice had, on appeal to him of
performance of his duty until he gets some four oil companies and a taxpayer, declared
kind of pabagsak” (Paras on Civil Code) Ordinance No. 7794, otherwise known as the
- To presuppose that the refusal or omission Manila Revenue Code, null and void for non-
of a public official to perform his official compliance with the prescribed procedure in
duty is attributable to malice or the enactment of tax ordinances and for
inexcusable negligence (Phil. Match Co. vs. containing certain provisions contrary to law
City of Cebu) and public policy.
- In any event, the erring public functionary
is justly punishable under it for whatever In Manila’s petition for certiorari, the Manila
loss or damage complainant has RTC sustained the ordinance. It also declared
sustained. Section 187 of the LGC as unconstitutional
since it vests in the Justice Secretary the
In the CAB, it has not been alleged that power of control over LGUs in violation of the
Mayor’s refusal to act on his application was policy of local autonomy mandated in the
an attempt to compel him to resort to bribery Constitution.
to obtain approval of his application.
The Secretary argues that the annulled Section
It cannot be said also that mayor and treasurer 187 is constitutional and that the procedural
were motivated by personal spite or were requirements for the enactment of tax
grossly negligent in refusing to issue permit ordinances as specified in the Local
and license to Jurado. Government Code has indeed not been
observed.
No evidence has been offered to show that WON Sec. 187 of the LGC is
they singled out Jurado for persecution. constitutional.
Neither does it appear that they stood to gain HELD: YES. Every court, including the SC, is
personally from refusing to issue to Jurado the charged with the duty of a purposeful
permit and license he needed. They were not hesitation before declaring a law
his business competitors nor has it been unconstitutional, on the theory that the
established that they intended to favor his measure was first carefully studied by the
competitors. executive and the legislative departments and
determined by them to be in accordance with
On the contrary, record discloses that the fundamental law before it was finally
resolution was uniformly applied to all approved.
threshers in the municipality without
discrimination or preference. To doubt is to sustain. The presumption of
constitutionality can be overcome only by the
Petitioners acted within scope of their clearest showing that there was indeed an
authority and in consonance with their honest infraction of the Constitution, and only when
92
such a conclusion is reached by the requipped
majority may the Court pronounce, in the Mactan Cebu International Airport
discharge of the duty it cannot escape, that Authority vs. Marcos (1996)
the challenged act must be struck down.
FACTS: The MCIAA is mandated to control,
In CAB, the RTC was rather hasty in manage and supervise the Mactan
invalidating the provision. Section 187 International Airport and other airports in
authorizes the Secretary of Justice to review Cebu. City Treasurer demanded payment for
only the constitutionality or legality of the tax realty taxes on lands belonging to MCIAA.
ordinance and, if warranted, to revoke it on Petitioner claimed in its favor the provision in
either or both of these grounds. When he its charter which exempts it from payment of
alters or modifies or sets aside a tax realty taxes. It also claimed that it is an
ordinance, he is not also permitted to instrumentality of the government performing
substitute his own judgment for the judgment governmental functions, citing Sec. 133 of
of the local government that enacted the LGC.
measure.
WON the MCIAA is exempt from payment
Secretary Drilon did set aside the Manila of realty taxes.
Revenue Code, but he did not replace it with
his own version of what the Code should be. HELD: NO. Reading together Secs. 133, 232
He did not pronounce the ordinance unwise or and 234 of the LGC, the SC concluded that:
unreasonable as a basis for its annulment. He
did not say that in his judgment it was a bad As a general rule, the taxing powers of LGUs
law. What he found only was that it was illegal. cannot extend to the levy of “taxes, fees and
All he did in reviewing the said measure was charges of any kind on the National
determine if the petitioners were performing Government, its agencies and
their functions is accordance with law, that is, instrumentalities, and LGUs.” (Sec. 133)
with the prescribed procedure for the
enactment of tax ordinances and the grant of However, provinces, cities and municipalities
powers to the city government under the Local in the Metropolitan Manila Area may impose
Government Code. As we see it, that was an the real property tax except on “real property
act not of control but of mere supervision. owned by the Republic of the Philippines or
any of its political subdivisions (Sec. 232),
An officer in control lays down the rules in the except when the beneficial use thereof has
doing of an act. It they are not followed, he been granted, for consideration or otherwise,
may, in his discretion, order the act undone or to a taxable person.” (Sec. 234)
re-done by his subordinate or he may even As to tax exemptions or incentives granted to
decide to do it himself. Supervision does not or presently enjoyed by natural or judicial
cover such authority. The supervisor or persons, including GOCC’s:
superintendent merely sees to it that the rules
are followed, but he himself does not lay down The general rule is that they are withdrawn
such rules, nor does he have the discretion to upon the effectivity of the LGC, except those
modify or replace them. If the rules are not granted to local water districts, cooperatives
observed, he may order the work done or re- duly registered under RA 6938, non-stock and
done but only to conform to the prescribed non-profit hospitals and educational
rules. He may not prescribe his own manner institutions, and unless otherwise provided in
for the doing of the act. He has no judgment the LGC.
on this matter except to see to it that the rules
are followed. In the opinion of the Court, “Unless otherwise provided in the LGC” could
Secretary Drilon did precisely this, and no refer to Sec. 234, which enumerates the
more nor less than this, and so performed an properties exempt from real property tax.
act not of control but of mere supervision.
93
But the last paragraph of Sec. 234 further CONFLICTING CASES: Mactan Airport
qualifies the retention of the exemption insofar Authority vs. Pres. Marcos (September 11,
as real property taxes are concerned by 1996) and Manila Int’l Airport Authority vs.
limiting the retention only to those CA (July 20, 2006)
enumerated herein; all others not included in
the enumeration lost the privilege upon the
effectivity of the LGC.
Both cases involves the following
provisions:
But even as to real property owned by the
Republic or any of its political subdivisions Sec 133(o), LGC: Unless otherwise
covered by item (a) of the first paragraph of provided herein, the LGUs are not allowed
Section 234, the exemption is withdrawn if the to levy… (o) taxes, fees or charges of any
beneficial use of such property has been kind on the national gov’t, its agencies,
granted to a taxable person for consideration instrumentalities and LGUs.
or otherwise.
MCIAA is a GOCC. It necessarily follows that its

exemption from real property tax granted it in Sec 234(a), LGC: Properties exempt from
its Charter has been withdrawn. PPT (a) real properties owned by the
Republic or any of its political
As to MCIAA’s contention that it is an subdivisions…
instrumentality of the gov’t, it fails to consider
the fact that the legislature used the phrase
"National Government, its agencies and MACTAN Case: The SC held that since
instrumentalities" in Section 133(o), but only Mactan Airport Authority is a GOCC and
the phrase "Republic of the Philippines or any GOCCs are not among those enumerated
of its political subdivisions" in Section 234(a). as exempt, it is not exempted from RPT.
“Republic of the Philippines” is a broader term. Legislature in amending the law has
specifically deleted GOCCS from the
It is clear that Congress did not wish to expand enumeration in Sec 234(a).
the scope of the exemption in Section 234(a)
to include real property owned by other
instrumentalities or agencies of the
government including GOCCs. MIAA Case: SC held that MIAA is not a
GOCC since it is neither a stock corporation
Also, the parcels of land in this case do not nor a non-stock corporation as defined in
belong to the Republic whose beneficial use the Administrative Code. Although not
has been granted to MCIAA. This "transfer" is covered by the enumeration in Sec 234,
actually an absolute conveyance of the MIAA is a public utility which falls under the
ownership thereof because the petitioner's term “instrumentality” outside the scope of
authorized capital stock consists of "the value LGS’s local taxing powers under Sec
of such real estate owned and/or administered 133(o).
by the airports." Hence, the petitioner is now
the owner of the land and the exception in
Sec. 234(c) of the LGC is inapplicable. NOTE: The MIAA Case may be argued to
have superseded the previous case, being
(See the following notes on this case) a more recent ruling decided by SC en
banc.
2. Real Property Taxation
94
NOTE: I don’t think that the nitty-gritty of real 1. Real property shall be appraised at its
property taxation will come out in the exam. current and fair market value.
Ang haba ng provisions! I just included the
following excerpts from the BAROPS Reviewer, 2. Real property shall be classified for
just in case. assessment purposes on the basis of its
actual use.
BASIC CONCEPTS
3. Real property shall be assessed on the
basis of a Uniform classification within
each local government unit.
Definition: Real property tax has been
defined as “a direct tax on the ownership 4. The appraisal, assessment, levy and
of lands and buildings or other collection of real property tax shall not
improvements thereon not specially be let to any private person.
exempted, and is payable regardless of
whether the property is used or not, 5. The appraisal and assessment of real
although the value may vary in accordance property shall be Equitable. [Section
with such factor.” 197, Local Government Code]
NOTE: Real property tax is a fixed Real properties subject to tax

proportion of the assessed value of the
property being taxed and requires, Generally, Real Property Tax is imposed on
therefore, the intervention of assessors. lands, buildings, machineries and other
improvements. The Local Government
Code contains no definition of “real
property”; however, the following terms
Characteristics of real property tax are defined:
→ It is a direct tax on the ownership or use

of real property.
§ Improvement: It is a valuable addition
→ It is an ad valorem tax. Value is the tax made to a property or an amelioration in
base. its condition amounting to more than a
repair or replacement of parts involving
→ It is proportionate because the tax is
capital expenditures and labor which is
calculated on the basis of a certain
intended to enhance its value, beauty, or
percentage of the value assessed.
utility or to adopt it for new or further
→ It creates a single, indivisible obligation. purposes. [Section 199(m), Local
Government Code]
→ It attaches on the property (i.e., a lien)
and is enforceable against it.
§ Machinery: Machinery embraces
machines, equipment, mechanical
Nature and scope of power to impose contrivances, instruments, appliances or
realty tax apparatus, which may or may not be
attached, permanently or temporarily, to
The taxing power of local governments in the real property. It includes the physical
real property taxation is a delegated facilities for production, the installations
power. Fundamental principles governing and appurtenant service facilities, those
real which are mobile, self-powered or self-
propelled, and those not permanently
property taxation
95
attached to the real property which are
actually, directly, and exclusively used to
meet the needs of the particular industry, Properties EXEMPT from real property
business or activity and which by their very taxes
nature and purpose are designed for, or
necessary to its manufacturing, mining,
logging, commercial, industrial or 1. Real property owned by the Republic of
agricultural purposes. [Section 199(o), the Philippines or any of its political
Local Government Code] subdivisions except when the beneficial
use thereof has been granted for
consideration or otherwise to a taxable
§ NOTE: this definition of machinery is too person.
all-encompassing and broad in that
Q: Are GOCCs covered by the exemption?
everything that is used even indirectly for
the needs of the industry can be classifies No. The tax exemption of “property owned
as machinery which is REAL property, by the Republic of the Philippines” refers to
which in turn means that it is subject to properties owned by the government and
RPT; example would be a SCREWDRIVER by its agencies which do not have separate
being used in an office – since this is used and distinct personalities, as distinguished
by the office and indirectly contributes the from GOCCs which have separate and
to smooth functioning of the general distinct personalities. [National
business then this can be treated as real Development Company v. Cebu City]
property
Q: What is the scope of the exemption?

§ This was solved by the LGC IRR on sec
290 (o) that now limits and qualifies this: The exemption from tax of property owned
this is known as the GENERAL PURPOSE by the government obtains even as to
RULE. This rule states that if it used in line properties owned in a private, proprietary
or for the general purpose of the business or patrimonial character. The law makes no
but only indirectly, then it is NOT to be distinction between property held in
treated as real property. This means that a governmental capacity and those
typewriter being used in the main office of possessed in a proprietary capacity. [Board
a firm that manufactures cars is NOT real of Assessment Appeals of Laguna v. CTA]
property as the typewriter is NOT used to
actually make the car which is the main
purpose of the company.
2. Charitable institutions, churches,
parsonages, or convents appurtenant
thereto, mosques, non-profit or religious
Generally the SC has held that Art 415 CC cemeteries, and all lands, buildings, and
(which enumerates the kinds of real improvements actually, directly and
property) is an exclusive list as to what exclusively used for religious, charitable, or
constitutes real property. BUT FOR TAX educational purposes.
PURPOSES ONLY, it is common that certain
properties be classified as real property
even if according to the general principles
3. All machineries and equipment that are
of the CC, they would only be classified as
actually, directly and exclusively used by
personal property. LESSON: the NIRC and
local water utilities and government-owned
the LGC code prevail in classifying property
or controlled corporations engaged in the
for tax purposes.
supply and distribution of water and/or
96
generation and transmission of electric
power. Cabaluna, Jr. now questions the validity of the
said issuances.
WON the said issuances are valid.

4. All real property owned by duly
registered Cooperatives as provided for
HELD: NO. The subject Regulations must be
under Republic Act No. 6938.
struck down for being repugnant to Section 66
of P.D. No. 464 or the Real Property Tax Code,
which is the law prevailing at the time material
5. Machinery and equipment used for to this case.
Pollution control and environmental
protection. [Section 234, Local Government Under Section 66 of P.D. No. 464, the
Code] maximum penalty for delinquency in the
payment of real property tax shall in no case
exceed twenty-four per centum of the
delinquent tax. Upon the other hand,
NOTE: A taxpayer claiming exemption must
Section 4(c) of the challenged Joint
submit sufficient documentary evidence to
Assessment Regulations No. 1-85 and Local
the local assessor within thirty (30) days
Treasury Regulations No. 2-85 issued by
from the date of the declaration of real
respondent Secretary (formerly Minister) of
property; otherwise, it shall be listed as
Finance provides that “the penalty of two
taxable in the Assessment Roll. (Sec. 206,
percent (2%) per month of delinquency or
LGC)
twenty-four percent (24%) per annum as the
Secretary of Finance vs. Ilarde case may be, shall continue to be imposed
(2005) on the unpaid tax from the time the
delinquency was incurred up to the time that
FACTS: Cabaluna, Jr., the Regional Director of the delinquency is paid for in full.” As adeptly
Regional Office No. VI of the Department of observed by the trial court, the penalty
Finance in Iloilo City failed to pay the land imposed under the assailed Regulations has no
taxes on his parcels of land for the years 1986 limit inasmuch as the 24% penalty per
to 1992. Soon after Cabaluna, Jr. retired from annum shall be continuously imposed on the
his post, he filed a formal letter of protest with unpaid tax until it is paid for in full unlike that
the City Treasurer of Iloilo City wherein he imposed under Section 66 of the Real Property
contends that the City Treasurer’s Tax Code where the total penalty is limited
computation of penalties was erroneous since only to twenty-four percent of the delinquent
the rate of penalty applied exceeded twenty- tax.
four percent (24%) in contravention of Section
66 of P.D. No. 464, otherwise known as the Assuming argumenti that E.O. No. 73 has
Real Property Tax Code, as amended. authorized the petitioner to issue the objected
Regulations, such conferment of powers is void
The City Treasurer turned down Cabaluna Jr.’s for being repugnant to the well-encrusted
protest citing Sec. 4(c) of Joint Assessment doctrine in political law that the power of
Regulations No. 1-85 and Local Treasury taxation is generally vested with the
Regulations No. 2-85 of the then Ministry (now legislature. Yes, President Corazon Aquino, at
Department) of Finance, which provides that that time, was exercising both executive and
the penalty of two percent (2%) per month of legislative powers. But, the power delegated
delinquency, or twenty-four percent (24%) per to the executive branch, in this case the
annum, as the case may be, shall continue to Ministry of Finance, to lay down implementing
be imposed on the unpaid tax from the time rules must, nevertheless, be germane to the
the delinquency was incurred up to the time general law it seeks to apply. The
that it is paid for in full. implementing rules cannot add to or detract
97
from the provisions of the law it is designed to The Benguet Corp. appealed the decision to
implement Administrative regulations adopted the LBAA of Benguet. The LBAA, however,
under legislative authority by a particular affirmed the taxability of the bunkhouses. The
department must be in harmony with the CBAA held the exemption was withdrawn so
provisions of the law they are intended to petitioner should have applied for restoration
carry into effect, which in this case is merely of the exemption with the Fiscal Incentives
to antedate the effectivity of the 1984 Real Review Board.
Property Tax values inasmuch as this is the
raison d’être of E.O. No. 73. Benguet Corp., now argues that LGUs don’t
have any authority to levy realty taxes on
In a last-ditch effort to salvage the impugned mines pursuant to Sec. 52 of PD 463 and Sec.
Regulations, petitioner pushes on that Joint 5 (m) of the Local Tax Code. The Solicitor
Local Assessment/Treasury Regulations No. 2- General counters that Benguet Corp. is
86, or the so-called implementing rules of E.O. estopped from raising the question of lack of
No. 73, is not contrary to Section 66 of P.D. No. authority as it was never raised before.
464 inasmuch as the latter applies merely to
simple delinquency in the payment of real WON provincial assessors may validly
property taxes while the former covers cases assess real property tax on the
wherein there was failure to promptly pay the properties of petitioner considering the
real property tax due, including the increase in proscription in the Local Tax Code and
tax due and demandable for the tax year as a the Mineral Resources Development
result of the application of the 1984 New or Decree of 1974 against imposition of
Revised Assessment of the value of the subject taxes on mines by local governments
property.
YES. The provisions of Sec. 52 of the Mineral
Such rationalization lacks legal traction. P.D. Resources Dev’t Decree of 1974 (PD 463) and
No. 464 makes no distinction as to whether it Sec. 5 (m) of the Local Tax Code are mere
is simple delinquency or other forms thereof. limitations on the taxing power of LGUs; they
The Real Property Tax Code covers the wide ilk are not pertinent to the issue before the SC.
of failure to promptly pay the real property They cannot affect the imposition of the real
taxes due and demandable for a particular property tax by the national government.
period. Ubi lex non distinguit nec nos
distinguere debemus. When the law does not Realty taxes are national taxes collected by
distinguish, we must not distinguish. Further, LGUs. While LGU’s are charged with fixing the
P.D. No. 464 covers all real property titled to rate of real property taxes, it does not
individuals who become delinquents in paying necessarily follow from that authority the
real estate tax. P.D. No. 464 is a law of determination of whether or not to impose the
general application. tax. In fact, LGU’s have no alternative but to
collect taxes as mandated in Sec. 38 of the
Benguet Corporation vs. Central Board of Real Property Tax Code. It is thus clear that it
Assessment Appeals is the national government, expressing itself
(1992) through the legislative branch, that levies the
real property tax.
FACTS: The Benguet Provincial Assessor
assessed real property tax on the bunkhouses It is the national government that levies real
of petitioner Benguet Corporation occupied for property tax. Consequently, when LGU’s are
residential purposes by its rank and file required to fix the rates, they are merely
employees under Tax Declaration Nos. 8471 constituted as agents of the national
(1985) and 10454 (1986). The tax exemptions government in the enforcement of the Real
of bunkhouses under Sec. 3 of PD 745 was Property Tax Code. The delegation of taxing
withdrawn by PD 1955. power is not even involved here because the
national government has already imposed
98
realty tax in Sec. 38 leaving only the the law applies to all government properties
enforcement to be done LGU’s. whether held in a proprietary or governmental
capacity.”
Also, the real tax exemption granted under PD
745 was withdrawn by PD 1955. If the SC were WON the NDC is exempt from paying the
to sanction the interpretation of Benguet, then imposed taxes.
necessarily all real properties exempt by any
law would be covered, and there would be no NDC is exempt from the payment of real
need for congress to specify “Real Property estate taxes on the land.
Tax Code, as amended” instead of stating
clearly realty tax exemption laws. The To come within the ambit of the exemption, it
intention is to limit the application of the is important to establish that the property is
“exception clause” only to those given by the owned by the government or by its
Real Property Tax Code. unincorporated agency. Once government
ownership is determined, the nature of the use
National Development Corp. vs. Cebu City of the property, whether for proprietary or
(1992) sovereign purposes, becomes immaterial.
FACTS: The NDC is authorized to engage in However in CAB, what appears to have been
commercial, industrial, mining, agricultural ceded to NDC is merely the administration of
and other enterprises needed for economic the property while the government retains
development. In 1939, the President issued ownership of what has been declared reserved
Proclamation No. 430 which reserved Block for warehousing purposes under the
No. 4, Reclamation Area No. 4, of Cebu City, proclamation.
consisting of 4,599 square meters, for
warehousing purposes under the As reserved land (public land that has been
administration of NWC. NWC was succeeded withheld and kept back from sale or
by NDC. In 1940, a warehouse with a floor area disposition), it remains absolute property of
of 1,940 square meters was constructed on it. the government, because the government
does not part with its title by reserving them,
In 1948, Cebu City assessed and collected but simply gives notice to all that it desires
from NDC real estate taxes on the land and them for a certain purpose. As its title remains
the warehouse. NDC paid under protest. with the Republic, the reserved land is covered
by the tax exemption provision.
Cebu City argues that the land and warehouse
are taxable since no law grants NDC NDC is NOT EXEMPT from the payment of
exemption from real estate taxes. NDC, as real estate taxes on the warehouse.
recipient of the land reserved by the President,
is liable for payment of ordinary taxes. They A different rule applies because “the
have ceased to be exempt under the exemption of public property from taxation
Assessment Law when the government does not extend to improvements on the
disposed of them in favor of NDC. The SC has public lands made by preemptioners,
also used the standard of “use” of property homesteaders and other claimants at their
rather than “ownership” as basis for real own expense, and these are taxable by the
estate taxability. state…(CJS)”. Consequently, the warehouse
constructed on the reserved land by NDC
The NDC argues that the Assessment Law should properly be assessed real estate tax as
exempts properties owned by the Republic such improvement does not appear to belong
from real estate tax, relying on the case of to the Republic.
Board of Assessment Appeals v. CTA & NWSA,
where it was held that “properties of NWSA, a Province of Tarlac vs. Judge Alcantara
GOCC, are exempt from real estate tax since (1992)
99
FACTS: Tarlac Enterprises Inc is the owner of Private respondent contends that the "other
a parcel of land in Mabini, Tarlac, an ice drop laws" referred to in this Section is P.D. No. 551
factory in said land, machinery shed and other (Lowering the Cost to Consumers of Electricity
machinery. These properties were declared for by Reducing the Franchise Tax Payable by
purposes of Taxation in the Provincial Electric Franchise Holders and the Tariff on
Assessor’s Office. The Provincial Treasurer Fuel Oils for the Generation of Electric Power
found that real estate taxes for the years 1974 by Public Utilities). Its pertinent provisions
until 1992 in the amount of P532,435.55 state: SECTION 1. Any provision of law or local
including penalties were not yet paid. ordinance to the contrary notwithstanding, the
Therefore, the Provincial Treasurer Jose Meru franchise tax payable by all grantees of
filed a complaint praying that the company franchises to generate, distribute and sell
pay the said sum as well as damages. electric current for light, heat and power shall
Tarlac Enterprises filed a motion to dismiss. be two (2%) of their gross receipts received
But the lower court denied the motion. from the sale of electric current and from
Thereafter, petitioner set the auction sale of transactions incident to the generation,
the private respondent's properties to satisfy distribution
the real estate taxes due. This prompted the
private respondent to file a motion praying The SC did not agree with the lower court that
that petitioner be directed to desist from the phrase “in lieu of all taxes and
proceeding with the public auction sale. The assessments of whatever nature” in the
lower court issued an order granting said second paragraph of Sec. 1 of PD 551
motion to prevent mootness of the case expressly exempts private respondent from
considering that the properties to be sold were paying real property taxes. Said proviso is
the, subjects of the complaint. modified and delimited by the phrase “on
earnings, receipts, income and privilege of
Tarlac Enterprises then filed an answer saying generation, distribution and sale” which
that under Section 40(g) of PD 46 in relation to specifies the kinds of taxes and assessments
PD 551, it was exempt from paying said tax. which shall not be collected in view of the
The court rendered the decision dismissing the imposition of the franchise tax. Said
complaint. It ruled that PD 551 expressly enumerated items have no relation to, and are
exempts private respondent from paying the entirely different from, real properties subject
real property taxes demanded, it being a to tax.
grantee of a franchise to generate, distribute If the intention of the law is to exempt electric
and sell electric current for light. The court franchise grantees from paying real property
held that in lieu of said taxes, private tax and to make the 2% franchise tax the only
respondent had been required to pay 2% imposable tax, then said enumerated items
franchise tax in line with the intent of the law would not have been added when PD 852 was
to give assistance to operators such as the enacted to amend P.D. No. 551. The legislative
private respondent to enable the consumers to authority would have simply stopped after the
enjoy cheaper rates. phrase "national or local authority" by putting
therein a period. On the contrary, it went on to
WON Tarlac Enterprises, Inc. is exempt enumerate what should not be subject to tax
from the payment of real property tax thereby delimiting the extent of the
under Sec. 40 (g) of P.D. No. 464 in exemption.
relation to P.D. No. 551, as amended.
There is also no merit in the respondent’s
HELD: NO. Sec. 40(g) of P.D. No. 464, the contention that the real properties being
Real Property Tax Code, provides: SEC. 40. taxed, the machinery for the generation and
Exemptions from Real Property Tax. - The distribution of electric power, the bldg housing
exemption shall be as follows: (g) Real said machinery, and the land on which said
property exempt under other laws. bldg is constructed, are necessary for the
100
operation of its business of generation, It has always been the rule that "exemptions
distribution and sale of electric current and from taxation are construed in strictissimi juris
should be exempt from taxation. The lower against the taxpayer and liberally in favor of
court erred in exempting the private the taxing authority" primarily because "taxes
respondents from paying real property tax on are the lifeblood of government and their
its properties enumerated in the complaint. prompt and certain availability is an imperious
need." Thus, to be exempted from payment of
The annexes attached to private respondent's taxes, it is the taxpayer's duty to justify the
comment on the petition to prove by exemption "by words too plain to be mistaken
contemporaneous interpretation its claimed and too categorical to be misinterpreted.;
tax exemption are not of much help to it. Private respondent has utterly failed to
Department Order No. 35-74 dated September discharge this duty.
16, 1974 11 regulating the implementation of
P.D. No. 551 merely reiterates the "in lieu of all 3. Shares of LGU’s in the Proceeds of
taxes" proviso. Local Tax Regulations No. 3-75 National Taxes
12 issued by then Secretary of Finance Cesar
Virata and addressed to all Provincial and City 1987 CONSTI, Art. X, Section 6. Local
Treasurers enjoins strict compliance with the government units shall have a just share, as
directive that "the franchise tax imposed determined by law, in the national taxes which
under Local Tax Ordinances pursuant to shall be automatically released to them.
Section 19 of the Local Tax Code, as amended,
shall be collected from business holding Pimentel vs. Aguirre
franchises but not from establishments whose (supra)
franchise contains the in lieu of all taxes'
proviso," thereby clearly indicating that said HELD: Under existing law, local government
proviso exempts taxpayers like private units, in addition to having administrative
respondent from paying the franchise tax autonomy in the exercise of their functions,
collected by the provinces under the Local Tax enjoy fiscal autonomy as well. Fiscal
Code. Lastly, the letter 13 of the then Bureau autonomy means that local governments have
of Internal Revenue Acting Commissioner the power to create their own sources of
addressed to the Matic Law Office granting revenue in addition to their equitable share in
exemption to the latter's client from paying the national taxes released by the national
the "privilege (fixed) tax which is an excise tax government, as well as the power to allocate
on the privilege of engaging in business" their resources in accordance with their own
clearly excludes realty tax from such priorities. It extends to the preparation of
exemption. their budgets, and local officials in turn have to
work within the constraints thereof. They are
The SC also find misplaced the lower court's not formulated at the national level and
and the private respondent's reliance on imposed on local governments, whether they
Butuan Sawmill. Inc. v. City of Butuan. In that are relevant to local needs and resources or
case, the questioned tax is a tax on the gross not. Hence, the necessity of a balancing of
sales or receipts of said sawmill while the tax viewpoints and the harmonization of proposals
involved herein is a real property tax. The City from both local and national officials, who in
of Butuan is categorically prohibited therein by any case are partners in the attainment of
Sec. 2(j) of the Local Autonomy Act from national goals.
imposing "taxes of any kind . . . on person
paying franchise tax." On the other hand, P.D. There are therefore several requisites before
No. 551 is not as all-encompassing as said the President may interfere in local fiscal
provision of the Local Autonomy Act for it matters: (1) an unmanaged public sector
enumerates the items which are not taxable deficit of the national government; (2)
by virtue of the payment of franchise tax. consultations with the presiding officers of the
Senate and the House of Representatives and
101
the presidents of the various local leagues; SEC. 284. Allotment of Internal Revenue
and (3) the corresponding recommendation of Taxes. - Local government units shall have a
the secretaries of the Department of Finance, share in the national internal revenue taxes
Interior and Local Government, and Budget based on the collection of the third fiscal year
and Management. Furthermore, any preceding the current fiscal year as follows:
adjustment in the allotment shall in no case be
less than thirty percent (30%) of the collection (a) On the first year of the effectivity of this
of national internal revenue taxes of the third Code, thirty percent (30%);
fiscal year preceding the current one.
(b) On the second year, thirty-five percent
A basic feature of local fiscal autonomy is the (35%); and
automatic release of the shares of LGUs in the
national internal revenue. This is mandated by (c) On the third year and thereafter, forty
no less than the Constitution. The Local percent (40%).
Government Code specifies further that the
release shall be made directly to the LGU Provided, That in the event that the national
concerned within five (5) days after every government incurs an unmanageable public
quarter of the year and "shall not be subject to sector deficit, the President of the Philippines
any lien or holdback that may be imposed by is hereby authorized, upon the
the national government for whatever recommendation of Secretary of Finance,
purpose." As a rule, the term "shall" is a word Secretary of Interior and Local Government
of command that must be given a compulsory and Secretary of Budget and Management,
meaning. The provision is, therefore, and subject to consultation with the presiding
imperative. officers of both Houses of Congress and the
presidents of the liga, to make the necessary
Section 4 of AO 372, however, orders the adjustments in the internal revenue allotment
withholding, effective January 1, 1998, of 10 of local government units but in no case shall
percent of the LGUs' IRA "pending the the allotment be less than thirty percent (30%)
assessment and evaluation by the of the collection of national internal revenue
Development Budget Coordinating Committee taxes of the third fiscal year preceding the
of the emerging fiscal situation" in the country. current fiscal year: Provided, further That in
Such withholding clearly contravenes the the first year of the effectivity of this Code, the
Constitution and the law. Although temporary, local government units shall, in addition to the
it is equivalent to a holdback, which means thirty percent (30%) internal revenue
"something held back or withheld, often allotment which shall include the cost of
temporarily”. Hence, the "temporary" nature devolved functions for essential public
of the retention by the national government services, be entitled to receive the amount
does not matter. Any retention is prohibited. equivalent to the cost of devolved personal
services.
ALSO REMEMBER: In Alvarez, the SC held
that IRA is part of an LGU’s income. SEC. 285. Allocation to Local Government
Units. - The share of local government units in
1987 CONSTI, Art. X, Section 7. Local the internal revenue allotment shall be
governments shall be entitled to an equitable allocated in the following manner:
share in the proceeds of the utilization and
development of the national wealth within (a) Provinces - Twenty-three percent (23%);
their respective areas, in the manner provided (b) Cities - Twenty-three percent (23%);
by law, including sharing the same with the (c) Municipalities - Thirty-four percent (34%);
inhabitants by way of direct benefits. and
(d) barangays - Twenty percent (20%)
LGC
102
Provided, however, That the share of each (b) Nothing in this Chapter shall be
province, city, and municipality shall be understood to diminish the share of local
determined on the basis of the following government units under existing laws.
formula:
SEC. 287. Local Development Projects. -
(a) Population - Fifty percent (50%); Each local government unit shall appropriate
(b) Land Area - Twenty-five percent (25%); in its annual budget no less than twenty
and percent (20%) of its annual internal revenue
(c) Equal sharing - Twenty-five percent (25%) allotment for development projects. Copies of
the development plans of local government
Provided, further, That the share of each units shall be furnished the Department of
barangay with a population of not less than Interior and Local Government.
one hundred (100) inhabitants shall not be less
than Eighty thousand pesos (P=80,000.00) per SEC. 288. Rules and Regulations. - The
annum chargeable against the twenty percent Secretary of Finance, in consultation with the
(20%) share of the barangay from the internal Secretary of Budget and Management, shall
revenue allotment, and the balance to be promulgate the necessary rules and
allocated on the basis of the following formula: regulations for a simplified disbursement
scheme designed for the speedy and effective
(a) On the first year of the effectivity of this enforcement of the provisions of this Chapter.
Code:
(1) Population - Forty percent (40%); and PIMENTEL:
(2) Equal Sharing - Sixty percent (60%) • The automatic release of these funds is not
subject to any condition. Hence, Congress
(b) On the second year: may not impose any undertaking or event
(1) Population - Fifty percent (50%); and (ex. Upon finding that the LGU has
(2) Equal Sharing - Fifty percent (50%) complied with any guideline; or upon the
realization of the original revenue targets
(c) On the third year and thereafter: submitted by the President to Congress)
(1) Population - Sixty percent (60%); and before it releases the LGU’s shares in the
(2) Equal Sharing - Forty percent (40%). national taxes. (Batangas vs. Romulo,
ACORD, Inc. vs. Zamora)
Provided, finally, That the financial
requirements of barangays created by local LGC, SEC. 289. Share in the Proceeds
government units after the effectivity of this from the Development and Utilization of
Code shall be the responsibility of the local the National Wealth. - Local government
government unit concerned. units shall have an equitable share in the
proceeds derived from the utilization and
development of the national wealth within
their respective areas, including sharing the
SEC. 286. Automatic Release of Shares. – same with the inhabitants by way of direct
(a) The share of each local government unit benefits.
shall be released, without need of any further
action, directly to the provincial, city,
PIMENTEL:
municipal or barangay treasurer, as the case
• “National wealth” means the natural
may be, on a quarterly basis within five (5)
resources of the nation (i.e., land, waters,
days after the end of each quarter, and which
forests, the fishes, the minerals, etc.)
shall not be subject to any lien or holdback
which are being utilized and developed
that may be imposed by the national
anywhere in the country.
government for whatever purpose.
103
(2) Component city/municipality - Forty-five
percent (45%); and
LGC
SEC. 290. Amount of Share of Local (3) barangay - Thirty-five percent (35%)
Government Units. - Local government units Provided, however, That where the natural
shall, in addition to the internal revenue resources are located in two (2) or more
allotment, have a share of forty percent (40%) provinces, or in two (2) or more component
of the gross collection derived by the national cities or municipalities or in two (2) or more
government from the preceding fiscal year barangays, their respective shares shall be
from mining taxes, royalties, forestry and computed on the basis of:
fishery charges, and such other taxes, fees, or
charges, including related surcharges, (1) Population - Seventy percent (70%); and
interests, or fines, and from its share in any
co-production, joint venture or production (2) Land area - Thirty percent (30%).
sharing agreement in the utilization and
development of the national wealth within (b) Where the natural resources are located in
their territorial jurisdiction. a highly urbanized or independent component
city:
SEC. 291. Share of the Local
Governments from any Government (1) city - Sixty-five percent (65%); and
Agency or -Owned and -Controlled
Corporation. - Local government units shall (2) barangay - Thirty-five percent (35%)
have a share based on the preceding fiscal Provided, however, That where the natural
year from the proceeds derived by any resources are located in such two (2) or more
government agency or government-owned or cities, the allocation of shares shall be based
-controlled corporation engaged in the on the formula on population and land area as
utilization and development of the national specified in paragraph (a) of this Section.
wealth based on the following formula
whichever will produce a higher share for the SEC. 293 Remittance of the Share of
local government unit: Local Government Units. - The share of
local government units from the utilization and
(a) One percent (1%) of the gross sales or development of national wealth shall be
receipts of the preceding calendar year; or remitted in accordance with Section 286 of
this Code: Provided, however, That in the case
(b) Forty percent (40%) of the mining taxes, of any government agency or government-
royalties, forestry and fishery charges and owned or -controlled corporation engaged in
such other taxes, fees or charges, including the utilization and development of the national
related surcharges, interests, or fines the wealth, such share shall be directly remitted to
government agency or government -owned or the provincial, city, municipal or barangay
-controlled corporation would have paid if it treasurer concerned within five (5) days after
were not otherwise exempt. the end of each quarter.
SEC. 292. Allocation of Shares. - The share SEC. 294. Development and Livelihood
in the preceding Section shall be distributed in Projects. - The proceeds from the share of
the following manner: local government units pursuant to this
chapter shall be appropriated by their
(a) Where the natural resources are located in respective sanggunian to finance local
the province development and livelihood projects: Provided,
however, That at least eighty percent (80%) of
(1) province - Twenty percent (20%); the proceeds derived from the development
and utilization of hydrothermal, geothermal,
and other sources of energy shall be applied
104
solely to lower the cost of electricity in the hospitals, build educational facilities for the
local government unit where such a source of handicapped, and provide seed capital for
energy is located. the livelihood projects of farmers, fisher
folks or the urban poor)
4. Credit Financing
LGC
LGC, SEC. 295. Scope. - This Title shall SEC. 297. Loans, Credits, and Other
govern the power of local government units to Forms of Indebted ness of Local
create indebtedness and to enter into credit Government Units. –
and other financial transactions.
(a) A local government unit may contract
PIMENTEL: loans, credits, and other forms of indebtedness
with any government or domestic private bank
• Under this provision, LGU’s have the power
and other lending institutions to finance the
to create indebtedness, like floating bonds
construction, installation, improvement,
or borrowing money from government
expansion, operation, or maintenance of public
financing institutions or domestic private
facilities, infrastructure facilities, housing
banks, to fund local infrastructure or other
projects, the acquisition of real property, and
socioeconomic development projects and
the implementation of other capital
to stabilize local finances.
investment projects, subject to such terms and
conditions as may be agreed upon by the local
• LGU’s may also secure funds from foreign
government unit and the lender. The proceeds
sources subject to the approval of the
from such transactions shall accrue directly to
proper central government agency.
the local government unit concerned.
(b) A local government unit may likewise

secure from any government bank and lending
LGC, SEC. 296. General Policy. - (a) It shall
institution short, medium and long-term loans
be the basic policy that any local government
and advances against security of real estate or
unit may create indebtedness, and avail of
other acceptable assets for the establishment,
credit facilities to finance local infrastructure
development, or expansion of agricultural,
and other socio-economic development
industrial, commercial, house financing
projects in accordance with the approved local
projects, livelihood projects, and other
development plan and public investment
economic enterprises.
program.
(c) Government financial and other lending
(b) A local government unit may avail of credit
institutions are hereby authorized to grant
lines from government or private banks and
loans, credits, and other forms of indebtedness
lending institutions for the purpose of
out of their loanable funds to local government
stabilizing local finances.
units for purposes specified above.
PIMENTEL: SEC. 298. Deferred-Payment and other

• “Local infrastructure” means roads, Financial Schemes. - Provincial, city and
bridges, canals, dikes, ports, airports, and municipal governments may likewise acquire
other public facilities mainly for the use of property, plant, machinery, equipment, and
the locality. such necessary accessories under a supplier's
credit, deferred payment plan, or other
• “Other socioeconomic development financial scheme.
projects” is borad enough to cover just
about any activity which LGU’s can LGC, SEC. 299. Bonds and Other Long-
propose (ex. social housing for the Term Securities. - Subject to the rules and
homeless, buy medical equipment for their
105
regulations of the Central Bank and the
Securities and Exchange Commission,
provinces, cities, and municipalities are hereby
authorized to issue bonds, debentures, LGC
securities, collaterals, notes and other SEC. 300. Inter-Local Government Loans,
obligations to finance self-liquidating, income- Grants, and Subsidies. - provinces, cities
producing development or livelihood projects and municipalities may, upon approval of the
pursuant to the priorities established in the majority of all members of the sanggunian
approved local development plan or the public concerned and in amounts not exceeding their
investment program. The sanggunian surplus funds, extend loans, grants, or
concerned shall, through an ordinance subsidies to other local government units
approved by a majority of all its members, under such terms and conditions as may be
declare and state the terms and conditions of agreed upon by the contracting parties. Local
the bonds and the purpose for which the government units may, upon approval of their
proposed indebtedness is to be incurred. respective sanggunian, jointly or severally
contract loans, credits, and other forms of
PIMENTEL: indebtedness for purposes mutually beneficial
• “Bonds” are evidences of indebtedness in to them.
the nature of promissory notes, usually
covering long periods of time and secured SEC. 301. Loans from Funds Secured by
by a mortgage on the property of the the National Government from Foreign
issuer. Sources. –
(a) The President, or his duly authorized

• “Debentures” are similar to bonds, except
representative, may, through any government
that they usually cover short periods of
financial or other lending institution, relend to
time and are not usually secured by a
any province, city, municipality, or barangay,
mortgage.
the proceeds of loans contracted with foreign
financial institutions or other international
• “Securities” are income-yielding
funding agencies for the purpose of financing
documents that can be traded, as on a
the construction, installation, improvement,
stock exchange. These may carry interest
expansion, operation, or maintenance of public
and may be redeemable or irredeemable.
utilities and facilities, infrastructure facilities,
or housing projects, the acquisition of real
• “Collaterals” are impersonal securities property, and the implementation of other
such as stocks and shares which are capital investment projects, subject to such
different from personal security (ex. terms and conditions as may be agreed upon
guaranty) by the President and the local government
unit. The proceeds from such loans shall
• “Notes” may include promissory notes, as accrue directly to the local government
evidences of indebtedness to another concerned.
party.
(b) The President may likewise authorize the
• GD-R: Remember that the vote required in relending to local government units the
this is a majority of ALL members of the proceeds of grants secured from foreign
sanggunian! sources, subject to the provisions of existing
laws and the applicable grant agreements.
(c) Repayment or amortization of loans

including accrued interest thereon, may be
financed partly from the income of the projects
106
or services and from the regular income of the (1) The provincial, city, or municipal engineer,
local government unit, which must be provided as the case may be, upon formal request in
for and appropriated regularly in its annual writing by the local chief executive, shall
budget until the loan and the interest thereon prepare the plans and specifications for the
shall have been fully paid. proposed project, which shall be submitted to
the sanggunian for approval.
PIMENTEL:
• Under the immediately preceding section, (2) Upon approval by the sanggunian of the
LGU’s, through the central government, project plans and specifications, the provincial,
are authorized to procure foreign loans. city, or municipal engineer shall, as the case
may be, cause to be published once every
week for two (2) consecutive weeks in at least
LGC, SEC. 302. Financing, Construction,
one (1) local newspaper which is circulated in
Maintenance, Operation, and
the region, province, city or municipality in
Management of Infrastructure Projects
which the project is to be implemented, a
by the Private Sector. –
notice inviting all duly qualified contractors to
participate in a public bidding for the projects
(a) Local government units may enter into
so approved. The conduct of public bidding
contracts with any duly prequalified individual
and award of contracts for local government
contractor, for the financing, construction,
projects under this Section shall be in
operation, and maintenance of any financially
accordance with this Code and other
viable infrastructure facilities, under the build-
applicable laws, rules and regulations.
operate-and-transfer agreement, subject to
the applicable provisions of Republic Act
In the case of a build-operate-and-transfer
Numbered Sixty-nine hundred fifty-seven (R.A.
agreement, the contract shall be awarded to
No. 6957) authorizing the financing,
the lowest complying bidder whose offer is
construction, operation and maintenance of
deemed most advantageous to the local
infrastructure projects by the private sector
government and based on the present value of
and the rules and regulations issued
its proposed tolls, fees, rentals, and charges
thereunder and such terms and conditions
over a fixed term for the facility to be
provided in this Section.
constructed, operated, and maintained
according to the prescribed minimum design
(b) Local government units shall include in
and performance standards, plans, and
their respective local development plans and
specifications. For this purpose, the winning
public investment programs priority projects
contractor shall be automatically granted by
that may be financed, constructed, operated
the local government unit concerned the
and maintained by the private sector under
franchise to operate and maintain the facility,
this Section. It shall be the duty of the local
including the collection of tolls, fees, rentals,
government unit concerned to disclose to the
and charges in accordance with subsection (c-
public all projects eligible for financing under
4) hereof.
this Section, including official notification of
duly registered contractors and publication in
In the case of a build-operate-and-transfer
newspapers of general or local circulation and
agreement, the contract shall be awarded to
in conspicuous and accessible public places.
the lowest complying bidder based on the
Local projects under the build-operate-and-
present value of its proposed schedule of
transfer agreement shall be confirmed by the
amortization payments for the facility to be
local development councils.
constructed according to the prescribed
minimum design and performance standards,
(c) Projects implemented under this Section
plans, and specifications.
shall be subject to the following terms and
conditions:
107
(3) Any contractor who shall undertake the under the technical supervision of the local
prosecution of any project under this Section government unit and in accordance with the
shall post the required bonds to protect the plans, specifications, standards, and costs
interest of the province, city, or municipality, approved by it.
in such amounts as may be fixed by the
sanggunian concerned and the provincial, city, (d) The provincial, city or municipal legal
or municipal engineer shall not, as the case officer shall, as the case may be, review the
may be, allow any contractor to initiate the contracts executed pursuant to this Section to
prosecution of projects under this Section determine their legality, validity, enforceability
unless such contractor presents proof or and correctness of form.
evidence that he has posted the required
bond. SEC. 303. Remedies and Sanctions. - Local
government units shall appropriate in their
(4) The contractor shall be entitled to a respective annual budgets such amounts as
reasonable return of its investment in are sufficient to pay the loans and other
accordance with its bid proposal as accepted indebtedness incurred or redeem or retire
by the local government unit concerned. In the bonds, debentures, securities, notes and other
case of a build-operate-and-transfer obligations issued under this Title: Provided,
agreement, the repayment shall be made by That failure to provide the appropriations
authorizing the contractor to charge and herein required shall render their annual
collect reasonable tolls, fees, rentals, and budgets inoperative.
charges for the use of the project facility not
exceeding those proposed in the bid and 5. Local Fiscal Administration
incorporated in the contract: Provided, That
the local government unit concerned shall, LGC, SEC. 305. Fundamental principles
based on reasonableness and equity, approve governing the financial affairs,
the tolls, fees, rentals and charges: Provided, transactions and operations of LGUs :
further, That the imposition and collection of
tolls, fees, rentals and charges shall be for a
fixed period as proposed in the bid and
incorporated in the contract which shall in no • No money shall be paid out of the local
case exceed fifty (50) years: Provided, finally, treasury except in pursuance of an
That during the lifetime of the contract, the appropriations ordinance or law;
contractor shall undertake the necessary
maintenance and repair of the facility in
accordance with standards prescribed in the
bidding documents and in the contract. In the • Local government funds and monies
case of a build-operate-and-transfer shall be spent solely for
agreement, the repayment shall be made
through amortization payments in accordance • public purposes;
with the schedule proposed in the bid and
incorporated in the contract. In case of land
reclamation or construction of industrial
estates, the repayment plan may consist of • Local revenue is generated only from
the grant of a portion or percentage of the sources expressly authorized by law or
reclaimed land or the industrial estate ordinance, and collection thereof shall at
constructed. all times be acknowledged properly;
(5) Every infrastructure project undertaken

under this Section shall be constructed,
operated, and maintained by the contractor
108
• All monies officially received by a local considered in the formulation of budgets of
government officer in any capacity or on national line agencies or offices;
any occasion shall be accounted for as
local funds, unless otherwise provided by
law;
• Fiscal responsibility shall be shared by
all those exercising authority over the
financial affairs, transactions, and
• Trust funds in the local treasury shall operations of the local government units;
not be paid out except in fulfillment of the and
purpose for which the trust was created or
the funds received;
• The LGU shall endeavor to have a

balanced budget in each fiscal year of
• Every officer of the LGU whose duties operation.
permit or require the possession or custody
of local funds shall be properly bonded, • Annual Budget
and such officer shall be accountable and
responsible for said funds and for the LGC
safekeeping thereof in conformity with the SEC. 319. Legislative Authorization of the
provisions of law; Budget. - On or before the end of the current
fiscal year, the sanggunian concerned shall
enact, through an ordinance, the annual
budget of the local government unit for the
• Local governments shall formulate ensuing fiscal year on the basis of the
sound financial plans, and the local estimates of income and expenditures
budgets shall be based on functions, submitted by the local chief executive.
activities, and projects, in terms of
expected results; SEC. 320. Effectivity of Budgets. - The
ordinance enacting the annual budget shall
take effect at the beginning of the ensuing
calendar year. An ordinance enacting a
• Local budgets shall operationalize supplemental budget, however, shall take
approved local development plans; effect upon its approval or on the date fixed
therein. The responsibility for the execution of
the annual and supplemental budgets and the
accountability therefor shall be vested
primarily in the local chief executive
• LGUs shall ensure that their respective
concerned.
budgets incorporate the requirements of
their component units and provide for
SEC. 321. Changes in the Annual Budget.
equitable allocation of resources among
- All budgetary proposals shall be included and
these component units;
considered in the budget preparation process.
After the local chief executive concerned shall
have submitted the executive budget to the
sanggunian, no ordinance providing for a
• National planning shall be based on
supplemental budget shall be enacted, except
local planning to ensure that the needs and
when supported by funds actually available as
aspirations of the people as articulated by
certified by the local treasurer or by new
the local government units in their
revenue sources.
respective local development plans are
109
supplemental appropriations shall be passed in
A supplemental budget may also be enacted place of the annual appropriations. In case the
in times of public calamity by way of revised income estimates be less than the
budgetary realignment to set aside aggregate reenacted appropriations, the local
appropriations for the purchase of supplies treasurer concerned shall accordingly advise
and materials or the payment of services the sanggunian concerned which shall, within
which are exceptionally urgent or absolutely ten (10) days from the receipt of such advice,
indispensable to prevent imminent danger to, make the necessary adjustments or
or loss of, life or property, in the jurisdiction of reductions. The revised appropriations
the local government unit or in other areas authorized by the sanggunian concerned shall
declared by the President in a state of then be the basis for disbursements.
calamity. Such ordinance shall clearly indicate
the sources of funds available for SEC. 324. Budgetary Requirements. - The
appropriations, as certified under oath by the budgets of local government units for any
local treasurer and local accountant and fiscal year shall comply with the following
attested by the local chief executive, and the requirements:
various items of appropriations affected and
the reasons for the change. (a) The aggregate amount appropriated shall
not exceed the estimates of income;
SEC. 323. Failure to Enact the Annual
Appropriations. - In case the sanggunian (b) Full provision shall be made for all
concerned fails to pass the ordinance statutory and contractual obligations of the
authorizing the annual appropriations at the local government unit concerned: Provided,
beginning of the ensuing fiscal year, it shall however, That the amount of appropriations
continue to hold sessions, without additional for debt servicing shall not exceed twenty
remuneration for its members, until such percent (20%) of the regular income of the
ordinance is approved, and no other business local government unit concerned;
may be taken up during such sessions. If the
sanggunian still fails to enact such ordinance (c) In the case of provinces, cities, and
after ninety (90) days from the beginning of municipalities, aid to component barangays
the fiscal year, the ordinance authorizing the shall be provided in amounts of not less than
appropriations of the preceding year shall be One thousand pesos (Php 1,000.00) per
deemed reenacted and shall remain in force barangay; and
and effect until the ordinance authorizing the
proposed appropriations is passed by the (d) Five percent (5%) of the estimated
sanggunian concerned. However, only the revenue from regular sources shall be set
annual appropriations for salaries and wages aside as an annual lump sum appropriation for
of existing positions, statutory and contractual unforeseen expenditures arising from the
obligations, and essential operating expenses occurrence of calamities: Provided, however,
authorized in the annual and supplemental That such appropriation shall be used only in
budgets for the preceding year shall be the area, or a portion thereof, of the local
deemed reenacted and disbursement of funds government unit or other areas declared by
shall be in accordance therewith. In the the President in a state of calamity.
implementation of such reenacted ordinance,
the local treasurer concerned shall exclude SEC. 325. General Limitations. - The use of
from the estimates of income for the the provincial, city, and municipal funds shall
preceding fiscal year those realized from be subject to the following limitations:
nonrecurring sources, like national aids,
proceeds from loans, sale of assets, prior year (a) The total appropriations, whether annual
adjustments, and other analogous sources of or supplemental, for personal services of a
income. No ordinance authorizing local government unit for one (1) fiscal year
110
shall not exceed forty-five percent (45%) in and salary increases or adjustments shall in no
the case of first to third class provinces, cities, case be made retroactive; and
and municipalities, and fifty-five percent (55%)
in the case of fourth class or lower, of the total (h) The annual appropriations for
annual income from regular sources realized in discretionary purposes of the local chief
the next preceding fiscal year. The executive shall not exceed two percent (2%) of
appropriations for salaries, wages, the actual receipts derived from basic real
representation and transportation allowances property tax in the next preceding calendar
of officials and employees of the public utilities year. Discretionary funds shall be disbursed
and economic enterprises owned, operated, only for public purposes to be supported by
and maintained by the local government unit appropriate vouchers and subject to such
concerned shall not be included in the annual guidelines as may be prescribed by law. No
budget or in the computation of the maximum amount shall be appropriated for the same
amount for personal services. The purpose except as authorized under this
appropriations for the personal services of Section.
such economic enterprises shall be charged to
their respective budgets; D. Local Legislation
(b) No official or employee shall be entitled to LGC, SEC. 48. Local Legislative Power. -
a salary rate higher than the maximum fixed Local legislative power shall be exercised by
for his position or other positions of equivalent the sangguniang panlalawigan for the
rank by applicable laws or rules and province; the sangguniang panlungsod for the
regulations issued thereunder; city; the sangguniang bayan for the
municipality; and the sangguniang barangay
(c) No local fund shall be appropriated to for the barangay.
increase or adjust salaries or wages of officials
and employees of the national government, PIMENTEL:
except as may be expressly authorized by law;
• Local political subdivisions are able to
legislate only by virtue of a valid
(d) In cases of abolition of positions and the
delegation of legislative power from the
creation of new ones resulting from the
national legislature (except WRT the
abolition of existing positions in the career
creation of their own sources of revenue
service, such abolition or creation shall be
and the levying of taxes, which are vested
made in accordance with pertinent provisions
by the CONSTI itself).
of this code and the civil service law, rules and
regulations;
• NOTE: They are mere agents vested with
(e) Positions in the official plantilla for career what is called the power of subordinate
positions which are occupied by incumbents legislation.
holding permanent appointments shall be
covered by adequate appropriations; Hence, as delegates of Congress, the LGU
cannot contravene but must obey at all
(f) No changes in designation or nomenclature times the will of their principal. (Sol. Gen.
of positions resulting in a promotion or vs. Metro Manila Authority)
demotion in rank or increase or decrease in
compensation shall be allowed, except when • Unlike the Senate and the HOR, LGU’s do
the position is actually vacant, and the filling not have the inherent power to cite anyone
of such positions shall be strictly made in for contempt. There being no provision in
accordance with the civil service law, rules and the Local Government Code explicitly
regulations; (g) The creation of new positions granting local legislative bodies, the power
to issue compulsory process and the power
to punish for contempt, the Sanggunian
111
Panlungsod of Dumaguete is devoid of from the passage of ordinances enacted
power to punish the petitioners… for and resolutions adopted by the sanggunian
contempt. Such act by the sanggunian is in the session over which he temporarily
ultra vires. (Negros Oriental II Electric presided.
Cooperative vs. Sangguniang Panlungsod
Of Dumaguete) PIMENTEL:
• The idea behind the said scheme of
• Ordinances enacted by local government presiding officers is to distribute powers
units enjoy the presumption of among the elective officials, so that the
constitutionality. To overthrow this legislative (the sanggunian), may properly
presumption, there must be a clear and check the executive and vice versa and
unequivocal breach of the Constitution, not exercise their respective functions without
merely a doubtful or argumentative undue interference from one by the other.
contradiction. In short, the conflict with the
Constitution must be shown beyond
reasonable doubt. (Tano vs. Socrates)
LGC, SEC. 50. Internal Rules of
• For an ordinance to be valid, it must not Procedure. –
only be within the corporate powers of the
city or municipality to enact but must also (a) On the first regular session following the
be passed according to the procedure election of its members and within ninety (90)
prescribed by law. It must be in accordance days thereafter, the sanggunian concerned
with certain well-established basic shall adopt or update its existing rules of
principles of a substantive nature. These procedure.
principles require that an ordinance (1)
must not contravene the Constitution or (b) The rules of procedure shall provide for
any statute (2) must not be unfair or the following:
oppressive (3) must not be partial or
discriminatory (4) must not prohibit but (1) The organization of the sanggunian and
may regulate trade (5) must be general the election of its officers as well as the
and consistent with public policy, and (6) creation of standing committees which shall
must not be unreasonable. (Lagcao vs. include, but shall not be limited to, the
Labra) committees on appropriations, women and
family, human rights, youth and sports
development, environmental protection, and
LGC, SEC. 49. Presiding Officer. – cooperatives; the general jurisdiction of each
committee; and the election of the chairman
(a) The vice-governor shall be the presiding and members of each committee;
officer of the sangguniang panlalawigan;
the city vice-mayor, of the sangguniang (2) The order and calendar of business for
panlungsod; the municipal vice-mayor, of each session;
the sangguniang bayan; and the punong
barangay, of the sangguniang barangay. (3) The legislative process;
The presiding officer shall vote only to
break a tie. (4) The parliamentary procedures which
include the conduct of members during
(b) In the event of the inability of the sessions;
regular Presiding officer to preside at a
sanggunian session, the members present (5) The discipline of members for disorderly
and constituting a quorum shall elect from behavior and absences without justifiable
among themselves a temporary presiding cause for four (4) consecutive sessions, for
officer. He shall certify within ten (10) days
112
which they may be censured, reprimanded, or disclose any business, financial, or professional
excluded from the session, suspended for not relationship or any relation by affinity or
more than sixty (60) days, or expelled: consanguinity within the fourth civil degree,
Provided, That the penalty of suspension or which he may have with any person, firm, or
expulsion shall require the concurrence of at entity affected by any ordinance or resolution
least two-thirds (2/3) vote of all the under consideration by the sanggunian of which
sanggunian members: Provided, further, That he is a member, which relationship may result in
conflict of interest. Such relationship shall
a member convicted by final judgment to
include:
imprisonment of at least one (1) year for any
crime involving moral turpitude shall be
(1) Ownership of stock or capital, or investment,
automatically expelled from the sanggunian;
in the entity or firm to which the ordinance or
and
resolution may apply; and
(6) Such other rules as the sanggunian may (2) Contracts or agreements with any person or
adopt. entity which the ordinance or resolution under
consideration may affect. In the absence of a
PIMENTEL: specific constitutional or statutory provision
• The LGC does not require the completion of applicable to this situation, "conflict of interest"
the updating or adoption of the internal refers in general to one where it may be
rules before the sanggunian could act on reasonably deduced that a member of a
any other matter like the enactment of an sanggunian may not act in the public interest
due to some private, pecuniary, or other personal
ordinance. It simply requires that the
considerations that may tend to affect his
matter of adopting or updating the internal
judgment to the prejudice of the service or the
rules of procedure be taken up during the
public.
first day of session. (Malonzo vs. Zamora)
(b) The disclosure required under this Act shall
• There is nothing in the law that prohibits be made in writing and submitted to the
the 3 readings of a proposed ordinance be secretary of the sanggunian or the secretary of
held in just one session day. the committee of which he is a member. The
disclosure shall, in all cases, form part of the
• While the sanggunian is allowd to create its record of the proceedings and shall be made in
standing committees, the LGC makes the the following manner:
ff. committees mandatory:
o Appropriations (1) Disclosure shall be made before the member
o Women and Family participates in the deliberations on the ordinance
or resolution under consideration: Provided, That,
o Youth and Sports Development
if the member did not participate during the
o Environmental Protection
deliberations, the disclosure shall be made
o Cooperatives before voting on the ordinance or resolution on
second and third readings; and
The inclusion of the last two committees
manifest the commitment of Congress to (2) Disclosure shall be made when a member
enhance the quality of life of the people takes a position or makes a privilege speech on a
and to upgrade their economic well-being. matter that may affect the business interest,
financial connection, or professional relationship
LGC, SEC. 51. Full Disclosure of Financial described herein.
and Business Interests of Sanggunian
Members. –
(a) Every sanggunian member shall, upon PIMENTEL:

assumption to office, make a full disclosure of his
• “Fourth Civil Degree of Relationship”
business and financial interests. He shall also
extends up to one’s (a) great, great,
113
grandparents in the ascending direct line; (e) Each sanggunian shall keep a journal and
(b) great, great, grandchildren in the record of its proceedings which may be
descending direct line; (c) first cousins; and published upon resolution of the sanggunian
(d) great grand uncles and aunts in the concerned.
collateral line.
PIMENTEL:
• Disclosure of the sanggunian member’s • “Public interest” is a phrase so broad
own business or financial interests is an that special sessions can theoretically be
absolute requirement WON the sanggunian called at any reasonable time.
member does anything at all during his
entire term. • The law is sufficiently complied with if the
written notices required in Sec. 52(d) is
LGC, SEC. 52. Sessions. – served at a different place where the
sanggunian member is found, and such
(a) On the first day of the session immediately notice is received by such member.
following the election of its members, the
sanggunian shall, by resolution, fix the day, LGC, SEC. 53. Quorum. –
time, and place of its regular sessions. The
minimum number of regular sessions shall be (a) A majority of all the members of the
once a week for the sangguniang
sanggunian who have been elected and
panlalawigan, sangguniang panlungsod, and qualified shall constitute a quorum to transact
sangguniang bayan, and twice a month for the
official business. Should a question of quorum
sangguniang barangay. be raised during a session, the presiding
officer shall immediately proceed to call the
(b) When public interest so demands, special roll of the members and thereafter announce
sessions may be called by the local chief
the results.
executive or by a majority of the members of
the sanggunian.
(b) Where there is no quorum, the presiding
officer may declare a recess until such time as
(c) All sanggunian sessions shall be open to
a quorum is constituted, or a majority of the
the public unless a closed-door session is members present may adjourn from day to
ordered by an affirmative vote of a majority of
day and may compel the immediate
the members present, there being a quorum, attendance of any member absent without
in the public interest or for reasons of security,
justifiable cause by designating a member of
decency, or morality. No two (2) sessions, the sanggunian, to be assisted by a member
regular or special, may be held in a single day.
or members of the police force assigned in the
territorial jurisdiction of the local government
(d) In the case of special sessions of the
unit concerned, to arrest the absent member
sanggunian, a written notice to the members and present him at the session.
shall be served personally at the member's
usual place of residence at least twenty- four (c) If there is still no quorum despite the
(24) hours before the special session is held.
enforcement of the immediately preceding
Unless otherwise concurred in by two-thirds subsection, no business shall be transacted.
(2/3) vote of the sanggunian members
The presiding officer, upon proper motion duly
present, there being a quorum, no other approved by the members present, shall then
matters may be considered at a special
declare the session adjourned for lack of
session except those stated in the notice. quorum.
PIMENTEL:
• “Quorum” is the fixed number of
members present at a session which is
114
considered legally sufficient to transact the
business of the sanggunian. (c) Ordinances enacted by the sangguniang
• Normally, a quorum is determined by barangay shall, upon approval by the majority
dividing the number of members into two of all its members, be signed by the punong
and adding one to the quotient. barangay.
• However, there are instances when a PIMENTEL:

special quorum is required: ordinance resolution
o A session intending to override a a law merely a declaration
veto of the local chief executive. of the sentiment or
(This session requires a quorum of opinion of a
not less than 2/3 of all members of lawmaking body on a
the sanggunian) specific matter
o When there is a majority of all possesses a general temporary in nature
members “elected and qualified” and permanent
present, there may be a quorum. character
(ex. When some of its members are a third reading is not for a resolution,
facing electoral protests and necessary for an unless decided
therefore not yet “elected and ordinance otherwise by a
qualified”) majority of all the
Sanggunian members
• Any business or transaction conducted
during a session with no quorum is void ab • Also, matters relating to the proprietary
initio. functions and private concerns shall be
acted upon by resolutions.
LGC, SEC. 54. Approval of Ordinances. – • While the first 2 sentences of this section
does not refer to resolutions as among the
(a) Every ordinance enacted by the acts of the sanggunian that must be
sangguniang panlalawigan, sangguniang approved and signed by the local chief
panlungsod, or sangguniang bayan shall be executive, the 3rd sentence thereof refer to
presented to the provincial governor or city or resolutions as among those that may be
municipal mayor, as the case may be. If the vetoed and such veto be overridden by the
local chief executive concerned approves the sanggunian concerned.
same, he shall affix his signature on each and
every page thereof; otherwise, he shall veto it Hence, resolutions, in practice are
and return the same with his objections to the submitted to the local chief executive for
sanggunian, which may proceed to reconsider his signature.
the same. The sanggunian concerned may
override the veto of the local chief executive • The approval of a Sanggunian resolution by
by two-thirds (2/3) vote of all its members, a mayor is NOT a ministerial duty. The
thereby making the ordinance or resolution grant of the veto power confers authority
effective for all legal intents and purposes. beyond the simple mechanical act of
signing an ordinance or resolution, as a
(b) The veto shall be communicated by the requisite to its enforceability. Such power
local chief executive concerned to the accords the local chief executive the
sanggunian within fifteen (15) days in the case discretion to sustain a resolution or
of a province, and ten (10) days in the case of ordinance in the first instance or to veto it
a city or a municipality; otherwise, the and return it with his objections to the
ordinance shall be deemed approved as if he Sanggunian, which may proceed to
had signed it. reconsider the same. The Sanggunian
concerned, however, may override the
115
veto by a two-thirds (2/3) vote of all its ordinance effective even without the approval of
members thereby making the ordinance or the local chief executive concerned.
resolution effective for all legal intents and
purposes. It is clear, therefore, that the
concurrence of a local chief executive in PIMENTEL:
the enactment of an ordinance or • The Punong Barangay has no veto power
resolution requires, not only a flourish of over the ordinances enacted by the
the pen, but the application of judgment Sangguniang Barangay.
after meticulous analysis and intelligence
as well. (De Los Reyes vs. Sandiganbayan,
• “ultra vires” means that the ordinance or
3rd Division)
parts thereof are beyond the power of the
sanggunian to enact.
• Trial courts should take judicial notice of
municipal ordinances within their • The veto may apply to: (a) entire
respective jurisdictions. This means that ordinances or (b) particular items of certain
the enactment of an ordinance and its ordinances and resolutions:
provisions are supposed to be known by o An appropriations ordinance;
the trial courts of the area where the
o An ordinance or resolution adopting
municipality concerned may be located
a local development plan and public
and therefore, it need not be proven at the
investment program; or
proceedings in such courts. (Gallego vs.
o An ordinance directing the payment
People of the Philippines)
of money or creating liability.
LGC, SEC. 55. Veto Power of the Local Chief

• Once overridden, the veto may not be
Executive. –
reimposed on the same ordinance or
(a) The local chief executive may veto any subject matter.
ordinance of the sangguniang panlalawigan,
sangguniang panlungsod, or sangguniang bayan LGC, SEC. 56. Review of Component City
on the ground that it is ultra vires or prejudicial and Municipal Ordinances or Resolutions by
to the public welfare, stating his reasons therefor the Sangguniang Panlalawigan. –
in writing.
(a) Within three (3) days after approval, the
(b) The local chief executive, except the punong secretary to the sanggunian panlungsod or
barangay, shall have the power to veto any sangguniang bayan shall forward to the
particular item or items of an appropriations sangguniang panlalawigan for review, copies of
ordinance, an ordinance or resolution adopting a approved ordinances and the resolutions
local development plan and public investment approving the local development plans and
program, or an ordinance directing the payment public investment programs formulated by the
of money or creating liability. In such a case, the local development councils.
veto shall not affect the item or items which are
not objected to. The vetoed item or items shall (b) Within thirty (30) days after receipt of copies
not take effect unless the sanggunian overrides of such ordinances and resolutions, the
the veto in the manner herein provided; sangguniang panlalawigan shall examine the
otherwise, the item or items in the appropriations documents or transmit them to the provincial
ordinance of the previous year corresponding to attorney, or if there be none, to the provincial
those vetoed, if any, shall be deemed reenacted. prosecutor for prompt examination. The
provincial attorney or provincial prosecutor shall,
(c) The local chief executive may veto an within a period of ten (10) days from receipt of
ordinance or resolution only once. The the documents, inform the sangguniang
sanggunian may override the veto of the local panlalawigan in writing of his comments or
chief executive concerned by two-thirds (2/3) recommendations, which may be considered by
vote of all its members, thereby making the
116
the sangguniang panlalawigan in making its or city or municipal ordinances, the
decision. sanggunian concerned shall, within thirty (30)
days from receipt thereof, return the same
(c) If the sangguniang panlalawigan finds that with its comments and recommendations to
such an ordinance or resolution is beyond the the sangguniang barangay concerned for
power conferred upon the sangguniang adjustment, amendment, or modification; in
panlungsod or sangguniang bayan concerned, it which case, the effectivity of the barangay
shall declare such ordinance or resolution invalid
ordinance is suspended until such time as the
in whole or in part. The sangguniang
revision called for is effected.
panlalawigan shall enter its action in the minutes
and shall advise the corresponding city or
municipal authorities of the action it has taken. LGC, SEC. 58. Enforcement of
Disapproved ordinances or Resolutions. -
(d) If no action has been taken by the Any attempt to enforce any ordinance or any
sangguniang panlalawigan within thirty (30) days resolution approving the local development
after submission of such an ordinance or plan and public investment program, after the
resolution, the same shall be presumed disapproval thereof, shall be sufficient ground
consistent with law and therefore valid. for the suspension or dismissal of the official or
employee concerned.
PIMENTEL:
• It is the Sangguniang Panlalawigan, not
the provincial governor, which has the LGC, SEC. 59. Effectivity of Ordinances or
power to review the certain ordinances of Resolutions.
its component cities and municipalities.
(a) Unless otherwise stated in the ordinance or
• The law grants the Sangguniang the resolution approving the local
Panlalawigan the power to declare a development plan and public investment
municipal resolution invalid on the sole program, the same shall take effect after ten
ground that it is beyond the power of the (10) days from the date a copy thereof is
Sangguniang Bayan or the Mayor to issue. posted in a bulletin board at the entrance of
the provincial capitol or city, municipal, or
barangay hall, as the case may be, and in at
LGC, SEC. 57. Review of Barangay
least two (2) other conspicuous places in the
Ordinances by the sangguniang
local government unit concerned.
panlungsod or sangguniang bayan. –
(b) The secretary to the sanggunian

(a) Within ten (10) days after its enactment,
concerned shall cause the posting of an
the sangguniang barangay shall furnish copies
ordinance or resolution in the bulletin board at
of all barangay ordinances to the sangguniang
the entrance of the provincial capitol and the
panlungsod or sangguniang bayan concerned
city, municipal, or barangay hall in at least two
for review as to whether the ordinance is
(2) conspicuous places in the local government
consistent with law and city or municipal
unit concerned not later than five (5) days
ordinances.
after approval thereof.
(b) If the sangguniang panlungsod or
The text of the ordinance or resolution shall be
sangguniang bayan, as the case may be, fails
disseminated and posted in Filipino or English
to take action on barangay ordinances within
and in the language or dialect understood by
thirty (30) days from receipt thereof, the same
the majority of the people in the local
shall be deemed approved.
government unit concerned, and the secretary
to the sanggunian shall record such fact in a
(c) If the sangguniang panlungsod or
book kept for the purpose, stating the dates of
sangguniang bayan, as the case may be, finds
approval and posting.
the barangay ordinances inconsistent with law
117
governance and not just a few wealthy
(c) The gist of all ordinances with penal hands.
sanctions shall be published in a newspaper of
general circulation within the province where Casiño vs. Court of Appeals
the local legislative body concerned belongs. (1991)
In the absence of any newspaper of general
circulation within the province, posting of such FACTS: Casiño was a licensee of a cockpit
ordinances shall be made in all municipalities under Sections 2285 to 2286 of the Revised
and cities of the province where the Administrative Code. Sometime in 1984, the
sanggunian of origin is situated. Sangguniang Panlungsod (SP) of Gingoog City
issued Resolution No. 49 classifying certain
(d) In the case of highly urbanized cities, the areas of the city as residential zones, including
main features of the ordinance or resolution the cockpit. The classification led to the
duly enacted or adopted shall, in addition to cancellation of petitioner's license to operate
being posted, be published once in a local the cockpit.
newspaper of general circulation within the
city: Provided, That in the absence thereof the In 1985 Resolution No. 378, the area was
ordinance or resolution shall be published in reclassified as within the recreational zone,
any newspaper of general circulation. allegedly amending Resolution No. 49. In the
session passing this resolution, 9 SP members
PIMENTEL: participated:
4 voting for the amendment, 4 voted against
• The ordinance or resolution mentioned in
it, while 1 abstained. The vice-mayor, as
Par. (a) takes effect on the 11th day from
presiding officer, broke the deadlock by voting
the date of posting.
for the amendment.
• Par. (d) Only the main features are
By virtue of said Resolution No. 378, the
required to be published.
succeeding city mayor issued to Casiño the
permit to operate a cockpit in 1986, which was
1987 CONSTI, Art. X, Section 9. Legislative
renewed by another permit issued in 1987.
bodies of local governments shall have
sectoral representation as may be prescribed
An action for prohibition and mandamus with
by law.
preliminary injunction was filed by Gallera
before the RTC, against petitioner, on the
PIMENTEL: ground that Resolution No. 378, purportedly
• Section 446 (b) and Section 457 (b) of the amending zoning Ordinance No. 49, is invalid
LGC provides that there shall be three (3) for failing to obtain the ¾ votes required by
sectoral representatives in the sanggunian: the zoning ordinance to be amended.
o one (1) from the women; and, as
shall be determined by the
sanggunian concerned within ninety WON there was a valid amendment of the
(90) days prior to the holding of zoning ordinance by Resolution No. 378.
local elections;
o one (1) from the agricultural or HELD: NONE. Although the charter of the City
industrial workers; and of Gingoog and the Local Government Code
o one (1) from the other sectors, require only a majority for the enactment of an
including the urban poor, ordinance, Resolution No. 49 cannot be validly
indigenous cultural communities, or amended by the resolution in question without
disabled persons. complying with the categorical requirement of
a three-fourths vote incorporated in the very
• RATIO: So that, all sectors of the same ordinance sought to be amended. The
community can participate in the system of pertinent provisions in the aforesaid city
118
charter and the Local Government Code HELD: NO. Sections 49(a) and 466(a)(1) of RA
obviously are of general application and 7160 provide that the Vice Governor shall be
embrace a wider scope or subject matter. In the presiding officer of the SP. In addition to
the enactment of ordinances in general, the that, he becomes the Governor and assumes
application of the aforementioned laws cannot the higher office for the unexpired term of his
be disputed. Undeniably, however, Section predecessor, in case of “permanent vacancy”
6.44 of said ordinance regarding amendments therein. In case of a temporary vacancy, he
thereto is a specific and particular provision for shall automatically exercise the powers and
said ordinance and explicitly provides for a perform the duties and functions of the
different number of votes. Governor. It is true that in this case, the Vice
Governor only “acts” and does not “become”
Where there is in the same statute a particular the governor.
enactment and also a general one which in its
most comprehensive sense would include what A Vice-Governor who is concurrently an Acting
is embraced in the former, the particular Governor is actually a quasi-Governor. This
enactment must be operative, and the general means, that for the purposes of exercising his
statement must be taken to affect only such legislative prerogatives and powers, he is
cases within its language as are not within the deemed as a non-member of the SP for the
provisions of the particular enactment. time being. Unlike the old Code where the
Governor is not only the provincial Chief
Moreover, the Sanggunian is in a better Executive but also the presiding officer of the
position to know how to best amend the law local executive body, the new Code delineated
that it enacted. the union of the executive-legislative powers
in the provincial, city and municipal levels
Gamboa vs. Aguirre except in the Barangay. The Governor is no
(1999) longer a member of the SP. Not being included
in the enumeration, the Governor is deemed
FACTS: In August 1995, the Governor of excluded. Being the Acting Governor, the Vice
Negros Occidental designated Vice-Governor Governor cannot continue to simultaneously
Gamboa as Acting Governor for the duration of exercise the duties of the latter office since the
the former’s trip abroad. When the nature of the duties of the provincial Governor
Sangguniang Panlalawigan held its regular call for a full-time occupant to discharge them.
session, Aguirre et. al questioned the authority
of Gamboa to preside in the said session on Being the Acting Governor, the Vice-Governor
the ground of his designation as the Acting cannot continue to simultaneously exercise
Governor and asked him to vacate the Chair.. the duties of the latter office, since the nature
Seven members of the SP voted to allow the of the duties of the provincial Governor call for
petitioner to continue presiding, four voted a full-time occupant to discharge them. Such is
against it and one abstained. not only consistent with but also appears to be
the clear rationale of the new Code wherein
Respondents filed a petition for declaratory the policy of performing dual functions in both
relief and prohibition. The TC rendered a offices has already been abandoned. To
decision and declared petitioner as repeat, the creation of a temporary vacancy in
"temporarily legally incapacitated to preside the office of the Governor creates a
over the sessions of the SP during the period corresponding temporary vacancy in the office
that he is the Acting Governor." of the Vice-Governor whenever the latter acts
as Governor by virtue of such temporary
WON an incumbent Vice-Governor, while vacancy. This event constitutes an "inability"
concurrently the Acting Governor, may on the part of the regular presiding officer
continue to preside over the sessions of (Vice Governor) to preside during the SP
the Sangguniang Panlalawigan. sessions, which thus calls for the operation of
the remedy set in Article 49(b) of the Local
119
Government Code — concerning the election
of a temporary presiding officer. The continuity • All matters which are within the
of the Acting Governor's (Vice Governor) competence of the sanggunian to legislate
powers as presiding officer of the SP is on are proper subjects of the initiative
suspended so long as he is in such capacity. process.
Under Section 49(b), "(i)n the event of the
inability of the regular presiding officer to • NOTE: These provisions on initiative and
preside at the sanggunian session, the referendum do not apply to the ARMM.
members present and constituting a quorum
shall elect from among themselves a • RA 6735 also provides for a system of
temporary presiding officer." indirect initiative, the process by which a
proposal to enact, amend, or repeal a law
1. Local Initiative and Referendum or an ordinance is submitted by a required
number of voters for the national
LGC, SEC. 120. Local Initiative Defined. - legislature or the local council to act upon.
Local initiative is the legal process whereby The voters course their action through their
the registered voters of a local government elected representatives.
unit may directly propose, enact, or amend
any ordinance. The procedure to be followed for the
enactment of the indirect initiative
PIMENTEL: measure is the same as the enactment of
• Section 32 of Article VI of the CONSTI any legislative measure before the HOR
provides that “Congress shall, as early as except that the said initiative bill shall have
possible, provide for a system of initiative precedence over the pending legislative
and referendum, and the exceptions measures on the committee. (It does not
therefrom, whereby the people can directly mean that the proponents of the measure
propose and enact laws or approve or are allowed to participate in the debates)
reject any act or law or part thereof passed
by the Congress or local legislative body…” Garcia vs. COMELEC
(1994)
• This section fleshes out the constitutional
mandate which is in Section 3 of Art. X FACTS: The Sangguniang Bayan (SB) of
which provides that “the LGC shall provide Morong, Bataan in its Resolution 10 agreed to
for a more responsive and accountable the inclusion of the municipality as part of the
local government structure instituted Subic Special Economic Zone. Garcia, et al
through a system of decentralization with filed a petition before the SB, seeking to annul
effective mechanisms of recall, initiative, the said resolution.
and referendum”
When the municipality did not take action on
• A direct initiative is envisioned in this the petition of Garcia and others to annul the
section. Hence, no positive act of the resolution, the latter resorted to their power of
sanggunian is required before the initiative initiative under the LGC and started soliciting
process is commenced by the voters. the signatures. The Vice Mayor and Presiding
Officer of the SB,wrote the COMELEC
requesting a denial of the petition for local
• A direct initiative is a good means of
initiative as the exercise “will just promote
arousing civic consciousness and training
divisiveness, counter productive and futility.”
in popular, direct and democratic action. It
is also a good device to check sanggunian
The COMELEC denied the petition for local
indifference or apathy towards measures
initiative on the ground that the subject was
which the people may wish enacted for the
merely a resolution and not an ordinance.
advancement of their welfare.
120
WON Resolution 10 is the proper subject provinces, cities, municipalities, and
of an initiative. barangays.
HELD: YES. The Constitution clearly includes

not only ordinances but resolutions as
appropriate subjects of a local initiative. An
act includes a resolution (Black’s Law
Dictionary). In enacting RA 6735, Congress
implemented the constitutional command to SEC. 122. Procedure in Local Initiative. –
include acts (resolutions) as appropriate
subjects of initiative. (Sec. 32, Art. VI of the (a) Not less than one thousand (1,000)
1987 CONSTI) registered voters in case of provinces and
cities, one hundred (100) in case of
The 1991 LGC did not change the scope of municipalities, and fifty (50) in case of
coverage of local initiative as limiting the barangays, may file a petition with the
coverage to ordinances alone. Sec. 120 sanggunian concerned proposing the adoption,
merely defines the concept of local initiative enactment, repeal, or amendment of an
as the legal process whereby registered voters ordinance.
of a LGU may directly propose, enact or
amend any ordinance. It does not deal with (b) If no favorable action thereon is taken by
subjects or matters that can be taken up in a the sanggunian concerned within thirty (30)
local initiative. days from its presentation, the proponents,
through their duly authorized and registered
Sec. 124 (which deals with local initiative representatives, may invoke their power of
subjects or matters) clearly does not limit its initiative, giving notice thereof to the
application to ordinances, but to all “subjects sanggunian concerned.
or matters which are within the legal powers of
the Sanggunians to enact” which undoubtedly (c) The proposition shall be numbered serially
includes resolutions. starting from Roman numeral I. The COMELEC
or its designated representative shall extend
Sec. 125 providing for limitations upon assistance in the formulation of the
Sanggunians supports the interpretation, proposition.
where inclusion of the word proposition is
inconsistent with respondents’ thesis that only (d) Two (2) or more propositions may be
ordinances can be the subject of local submitted in an initiative.
initiatives.
(e) Proponents shall have ninety (90) days in
Moreover, the subject matter of the resolution case of provinces and cities, sixty (60) days in
in CAB does not merely temporarily affect the case of municipalities, and thirty (30) days in
people of Morong for it directs a permanent case of barangays, from notice mentioned in
rule of conduct or government. Its inclusion as subsection (b) hereof to collect the required
part of SSEZ has far reaching implications in number of signatures.
the governance of its people. It is not material
that the decision of the municipality came in (f) The petition shall be signed before the
the form of a resolution for what matters is its election registrar, or his designated
enduring effect on the welfare of the people of representatives, in the presence of a
Morong. representative of the proponent, and a
representative of the sanggunian concerned in
LGC, SEC. 121. Who May Exercise. - The a public place in the local government unit, as
power of local initiative and referendum may the case may be. Stations for collecting
be exercised by all registered voters of the
121
signatures may be established in as many
places as may be warranted. LGC, SEC. 123. Effectivity of Local
Propositions. - If the proposition is approved
(g) Upon the lapse of the period herein by a majority of the votes cast, it shall take
provided, the COMELEC, through its office in effect fifteen (15) days after certification by
the local government unit concerned, shall the COMELEC as if affirmative action thereon
certify as to whether or not the required had been made by the sanggunian and local
number of signatures has been obtained. chief executive concerned. If it fails to obtain
Failure to obtain the required number defeats said number of votes, the proposition is
the proposition. considered defeated.
(h) If the required number of signatures is SEC. 124. Limitations on Local Initiatives.
obtained, the COMELEC shall then set a date –
for the initiative during which the proposition
shall be submitted to the registered voters in (a) The power of local initiative shall not be
the local government unit concerned for their exercised more than once a year.
approval within sixty (60) days from the date
of certification by the COMELEC, as provided in (b) Initiative shall extend only to subjects or
subsection (g) hereof, in case of provinces and matters which are within the legal powers of
cities, forty-five (45) days in case of the sanggunians to enact.
municipalities, and thirty (30) days in case of
barangays. The initiative shall then be held on (c) If at any time before the initiative is held,
the date set, after which the results thereof the sanggunian concerned adopts in toto the
shall be certified and proclaimed by the proposition presented and the local chief
COMELEC. executive approves the same, the initiative
PIMENTEL: shall be canceled. However, those against
• The original expenses to formulate the such action may, if they so desire, apply for
proposal and gather the required number initiative in the manner herein provided.
of votes are necessarily charged to the
proponents while the official costs are
borne by the government.
• The petition shall state the following:

− contents or text of the proposed law
sought to be enacted, approved or
rejected, amended or repealed, as
the case may be; SEC. 125. Limitations upon Sanggunians.
− the proposition; - Any proposition or ordinance approved
− reason or reasons therefor; through the system of initiative and
− that it is not one of the exceptions referendum as herein provided shall not be
provided under Sec. 124 of the LGC repealed, modified or amended by the
or Art. 149 of its IRR; sanggunian concerned within six (6) months
from the date of the approval thereof, and
− signatures of the petitioners or
may be amended, modified or repealed by the
registered voters;
sanggunian within three (3) years thereafter
− a formal designation of the duly
by a vote of three-fourths (3/4) of all its
authorized representatives of the
members: Provided, That in case of barangays,
petitioners; and
the period shall be eighteen (18) months after
− an abstract or summary in not more
the approval thereof.
than 100 words which shall be
legibly written or printed at the top PIMENTEL:
of every page of the petition.
122
Comelec labeled the exercise as a
Period Status Vote Required "Referendum"; the counting of votes was
(To repeal, amend entrusted to a "Referendum Committee"; the
or modify) documents were called "referendum returns";
From Day 1 up to 6 Absolute protection; the canvassers, "Referendum Board of
mos. of adoption no changes allowed Canvassers" and the ballots themselves bore
From the end of 6 Qualified protection; the description "referendum". To repeat, not
mos. plus 3 years ¾ vote of all once was the word "initiative" used in said
(municipalities, cities, sanggunian members body of Resolution No. 2848. And yet, this
provinces) or plus 1 exercise is unquestionably an INITIATIVE.
year (barangays)
After 3 years (or 1 No more protection; In enacting the "Initiative and Referendum Act,
year) and 6 mos. from simple majority Congress differentiated one term from the
the adoption of the other, thus:
initiative.
(a) "Initiative" is the power of the people to
• RATIO: To ensure that due respect is propose amendments to the Constitution or to
accorded to the will of the electorate of a propose and enact legislations through an
locality so that it is not easily substituted election called for the purpose.
by the will of only a few members of the
Sanggunian. There are three (3) systems of initiative,
namely:
• REMEMBER: The initiative proposal passed
by the direct vote of the people is not 1. Initiative on the Constitution which
subject to the veto of the local chief refers to a petition proposing
executive. amendments to the Constitution;
SBMA vs. COMELEC 2. Initiative on statutes which refers to

(1996) a petition proposing to enact a
national legislation; and
FACTS: This is the continuation of the Garcia
vs. COMELEC case. During the pendency of the 3. Initiative on local legislation which
said case in the SC, the COMELEC issued refers to a petition proposing to
Resolution No. 2848 providing for "the rules enact a regional, provincial, city,
and guidelines to govern the conduct of the municipal, or barangay law,
referendum proposing to annul or repeal resolution or ordinance.
Resolution No. 10.
(b) "Indirect initiative" is exercise of initiative
SBMA instituted the present petition for by the people through a proposition sent to
certiorari and prohibition contesting the Congress or the local legislative body for
validity of Resolution No. 2848 and alleging, action.
inter alia, that public respondent "is intent on
proceeding with a local initiative that proposes (c) "Referendum" is the power of the
an amendment of a national law. . .” electorate to approve or reject a legislation
through an election called for the purpose. It
WON the COMELEC erred in scheduling a may be of two classes, namely:
“referendum” which seeks the
amendment of a national law. 1. Referendum on statutes which
refers to a petition to approve or
HELD: YES. The process started by Garcia et. reject an act or law, or part thereof,
al was an initiative but COMELEC made passed by Congress; and
preparations for a referendum only. The
123
2. Referendum on local law which • This system originated in Switzerland.
refers to a petition to approve or Bouvier’s Law Dictionary adds that a
reject a law, resolution or ordinance referendum is “the referring of legislative
enacted by regional assemblies and acts to the electorate for their final
local legislative bodies. acceptance or rejection.”
Prescinding from these definitions, we gather • In RA 6735, referendum on a local law

that initiative is resorted to (or initiated) by the refers to “a petition to approve or reject a
people directly either because the law-making law, resolution or ordinance enacted by
body fails or refuses to enact the law, regional assemblies and local legislative
ordinance, resolution or act that they desire or bodies.”
because they want to amend or modify one
already existing. On the other hand, in a local • The expenses are borne by the LGU
referendum, the law-making body submits to although the COMELEC may set aside
the registered voters of its territorial funds for this purpose.
jurisdiction, for approval or rejection, any
ordinance or resolution which is duly enacted
• GD-R: The petitioners asking for a
or approved by such law-making authority.
referendum are usually oppositors of the
ordinance.
In sum, the differences between an initiative
and referendum are as follows:
Initiative Referendum
- entirely the work of - begun and
LGC, SEC. 127. Authority of Courts. -
the electorate consented to by the
Nothing in this Chapter shall prevent or
law-making body.
- process of law- - drawn up or enacted preclude the proper courts from declaring null
making by the people by a legislative body. and void any proposition approved pursuant to
themselves without this Chapter for violation of the Constitution or
the participation and want of capacity of the sanggunian concerned
against the wishes of to enact the said measure.
their elected reps.
- process and voting - voters simply write Compare LGC with RA 6735 (wrt
more complex either “yes” or “no” in Initiative)
the ballot
LGC RA 6735
Who may all registered Same.
LGC, SEC. 126. Local Referendum exercise voters of the However,
Defined. - Local referendum is the legal LGU’s however, it
process whereby the registered voters of the concerned. also
local government units may approve, amend recognizes the
or reject any ordinance enacted by the right of any
sanggunian. The local referendum shall be duly
held under the control and direction of the accredited
COMELEC within sixty (60) days in case of people’s
provinces and cities, forty-five (45) days in organization,
case of municipalities and thirty (30) days in to file a
case of barangays. The COMELEC shall certify petition for
and proclaim the results of the said indirect
referendum. initiative with
the
PIMENTEL: appropriate
124
legislative votes is met, set a date for
bodies the initiative from the date
Number of • Not less than 1,000 of the certification
Voters registered voters (provinces abovementioned: 60 days
required and cities) (provinces and cities) 45
• Not less than 100 days (municipalities) and 30
(municipalities) days (barangays)
• Not less than 50 • Submit the initiative to the
(barangays) people for approval
Subject Ordinance (in Ordinance and • Proclaim and certify the
matter of the letter of resolutions (in results
initiative the law) but the letter of Effectivity of If the proposition is approved
resolutions the law) local by a majority of the votes cast,
are not propositions it shall take effect fifteen (15)
prohibited. days after certification by the
Numbering The petition The petition COMELEC.
of petition shall be shall be Limitations • shall not be exercised more
numbered numbered on local than once a year.
serially serially initiatives. • shall extend only to
starting from starting from subjects or matters which
Roman one (1). Two are within the legal powers
numeral I. or more of the sanggunians to
Two or more propositions enact.
propositions are allowed in • if at any time before the
are allowed in one petition. initiative is held, the
one petition. sanggunian concerned
Assisting COMELEC DILG adopts in toto the
agency Secretary proposition presented and
Condition If no favorable action on the
the local chief executive
precedent petition is taken by the
approves the same, the
before sanggunian concerned within
initiative shall be canceled.
exercise of thirty (30) days from its
However, those against
power presentation
such action may, if they so
Notice to the
desire, apply for initiative in
sanggunian
YES the manner herein
before
provided.
exercise
Period to From the date of notice to the
2. Acts of Sanggunian
Gather sanggunian:
a. Ordinance and Resolution
signatures • 90 days (provinces and
b. Formalities
cities)
i. Vote
• 60 days (municipalities)
• 30 days (barangays) Ortiz vs. Posadas
COMELEC • In a public place, witness (1931)
duties the signing of the petition.
regarding • Establish stations for the FACTS: Seven of the thirteen members
local collection of signatures. present, including the president, of the
initiative • Certify as to whether or not municipal council of Tabaco, Albay, voted in
the required number of favor of Ordinance No. 25, concerning
signatures has been cockpits, and six members voted against the
obtained. ordinance, with three members absent.
• If the required number of
125
WON Ordinance is valid Manila, Hon. Mayor Lim, and the members of
the City Council of Manila (City Council). MTDC
HELD: NO. Section 2224 of the Administrative prayed that the Ordinance, insofar as it
Code is clear. It needs only application, not includes motels and inns as among its
interpretation. The ayes and noes are taken prohibited establishments, be declared invalid
upon (1) the passage of all ordinances, (2) all and unconstitutional on the following gorunds:
propositions to create any liability against the
municipality, and (3) any other proposition, (1) The City Council has no power to prohibit
upon the request of any member. The same the operation of motels as Section 458 (a) 4
idea is carried into the succeeding sentence. (iv) of the Local Government Code of 1991 (the
For the passage of (1) any ordinance or (2) any Code) grants to the City Council only the
proposition creating indebtedness, the power to regulate the establishment, operation
affirmative vote of a majority of all the and maintenance of hotels, motels, inns,
members of the municipal council shall be pension houses, lodging houses and other
necessary. Other measures prevail upon the similar establishments;
majority vote of the members present.
"Creating indebtedness" refers to "proposition" (2) The Ordinance is void as it is violative of
and not to "ordinance." The contention that Presidential Decree (P.D.) No. 499 which
only ordinances creating indebtedness require specifically declared portions of the Ermita-
the approval of a majority of all the members Malate area as a commercial zone with certain
of the municipal council, is devoid of merit. restrictions;
The basic idea of the legislative body to make
impossible the approval of ordinances or of (3) The Ordinance does not constitute a proper
propositions creating indebtedness by minority exercise of police power as the compulsory
votes of municipal councils, at meetings closure of the motel business has no
hastily called is wise. Legislative intention reasonable relation to the legitimate municipal
should be effectuated. interests sought to be protected;
Section 2224 of the Administrative Code, (4) The Ordinance constitutes an ex post facto
requiring in mandatory language the law by punishing the operation of Victoria
affirmative vote of a majority of all the Court which was a legitimate business prior to
members of the municipal council for the its enactment;
passage of any ordinance, whether or not an
ordinance creating indebtedness, an ordinance (5) The Ordinance violates MTDC's
passed by less than that majority is invalid. constitutional rights in that: (a) it is
confiscatory and constitutes an invasion of
ii. Essential Requisites of plaintiff's property rights; (b) the City Council
a Valid Ordinance has no power to find as a fact that a particular
thing is a nuisance per se nor does it have the
City of Manila vs. Laguio power to extrajudicially destroy it; and
(2005)
(6) The Ordinance constitutes a denial of equal
FACTS: MTDC is a corporation engaged in the protection under the law as no reasonable
business of operating hotels, motels, hostels basis exists for prohibiting the operation of
and lodging houses. It built and opened motels and inns, but not pension houses,
Victoria Court in Malate which was licensed as hotels, lodging houses or other similar
a motel although duly accredited with the establishments, and for prohibiting said
Department of Tourism as a hotel. MTDC filed business in the Ermita-Malate area but not
a Petition for Declaratory Relief with Prayer for outside of this area.
a Writ of Preliminary Injunction and/or
Temporary Restraining Order with the lower WON the ordinance is valid
court impleading as defendants, the City of
126
HELD: NO. The Ordinance is so replete with there is a clear invasion of personal or
constitutional infirmities that almost every property rights, personal in the case of those
sentence thereof violates a constitutional individuals desirous of owning, operating and
provision. The prohibitions and sanctions patronizing those motels and property in terms
therein transgress the cardinal rights of of the investments made and the salaries to
persons enshrined by the Constitution. The be paid to those therein employed. If the City
Court is called upon to shelter these rights of Manila so desires to put an end to
from attempts at rendering them worthless. prostitution, fornication and other social ills, it
can instead impose reasonable regulations
The tests of a valid ordinance are well such as daily inspections of the establishments
established. A long line of decisions has held for any violation of the conditions of their
that for an ordinance to be valid, it must not licenses or permits; it may exercise its
only be within the corporate powers of the authority to suspend or revoke their licenses
local government unit to enact and must be for these violations; and it may even impose
passed according to the procedure prescribed increased license fees. In other words, there
by law, it must also conform to the following are other means to reasonably accomplish the
substantive requirements: (1) must not desired end.
contravene the Constitution or any statute; (2)
must not be unfair or oppressive; (3) must not The Ordinance is in contravention of the Code
be partial or discriminatory; (4) must not as the latter merely empowers local
prohibit but may regulate trade; (5) must be government units to regulate, and not prohibit,
general and consistent with public policy; and the establishments enumerated in Section 1
(6) must not be unreasonable. thereof. Clearly, with respect to cafes,
restaurants, beerhouses, hotels, motels, inns,
The requirement that the enactment must not pension houses, lodging houses, and other
violate existing law gives stress to the precept similar establishments, the only power of the
that local government units are able to City Council to legislate relative thereto is to
legislate only by virtue of their derivative regulate them to promote the general welfare.
legislative power, a delegation of legislative The Code still withholds from cities the power
power from the national legislature. The to suppress and prohibit altogether the
delegate cannot be superior to the principal or establishment, operation and maintenance of
exercise powers higher than those of the latter such establishments.
There are no "pure" places where there are iii. Judicial Intervention
impure men.
ROC, Rule 64, Sec. 4. Local government
The Ordinance seeks to legislate morality but ordinances. — In any action involving the
fails to address the core issues of morality. Try validity of a local ordinance, the corresponding
as the Ordinance may to shape morality, it prosecutor or attorney of the local
should not foster the illusion that it can make a governmental unit involved shall be similarly
moral man out of it because immorality is not notified and entitled to be heard. If such
a thing, a building or establishment; it is in the ordinance is alleged to be unconstitutional, the
hearts of men. The City Council instead should Solicitor General shall be notified and entitled
regulate human conduct that occurs inside the to be heard. (4a)
establishments, but not to the detriment of
liberty and privacy which are covenants, Perez vs. Dela Cruz
premiums and blessings of democracy. (1969)
While petitioners' earnestness at curbing
clearly objectionable social ills is FACTS: Vice Mayor Perez (Naga City), who
commendable, they unwittingly punish even was presiding a private conference with 7 city
the proprietors and operators of "wholesome," councilors in the matter of selecting the
"innocent" establishments. In the instant case, secretary of the municipal board and the
127
chairman of various standing committees of not even designated as “Acting Mayor” in case
the board, expressed her intention to join the of temporary incapacity of the Mayor.
vote on these matters – to create a tie vote
and thereafter to exercise her power as The Vice-Mayor is allowed to vote only in case
presiding officer to break the deadlock after it of a tie. He is not allowed to vote twice (to
was made known that 4 Nacionalista Party create a tie and break the deadlock). Since
councilors desire to vote for a particular there are 7 councilors, a tie is not possible.
person as secretary of the board and to hold The Vice Mayor’s vote in case of a tie is no
the chairmanship of the committee on markets longer necessary.
for one of them.
Doctrine in Vera vs. Avelino that prohibition
The four Nacionalistas sought to prevent the refers only to proceedings of any tribunal,
Vice Mayor by filing with CFI of Camarines Sur corporation, board or person not exercising
contending that the vice mayor is not a legislative functions is based on the principle
member of the board but only its presiding of separation of powers and checks and
officer, that as such, he cannot vote except in balances which is not applicable to local
case of a tie. governments. The case is irrelevant to the
issue in CAB in addition to the actuality that
Meanwhile, the Liberal Party councilors passed executives at the local or municipal level are
an amendment to the Rules of Procedure of vested with both legislative and sometimes
the Naga municipal board granting the judicial functions, in addition to their purely
chairman thereof the right to vote as a executive duties.
member, and as presiding officer the right to
vote again in case of a tie. By explicit statutory command, courts are
given authority to determine the validity of
WON the vice mayor, besides being a municipal proceedings. And in CAB, the
presiding officer of a municipal board, is petitioner, in insisting to exercise the right to
also a member thereof. vote twice in the municipal board, acted
without jurisdiction and power to do so, and
HELD: NO. The Vice Mayor of Naga City as may be validly prevented and restrained by a
presiding officer of the Municipal Board cannot writ of prohibition.
be a member of the same board. In the
absence of any statutory authority constituting In reply to petitioner’s assertion that the acts
the vice-mayor as a member of the municipal sought to be restrained are mere “probable
board, in addition to being the presiding officer individual actuations” beyond the reach of a
thereof, it cannot be read into the law prohibitory writ, suffice it to state that
something that is not there. Differences in law prohibition is essentially a preventive remedy
beget differences in legal effects. and is not intended to provide for remedy for
acts already accomplished.
The mere fact that the vice-mayor was made Petitioner’s threat of voting twice was not an
the “presiding officer” of the board did not empty or meaningless gesture for record
ipso jure make him a member thereof; and shows that she voted twice for the approval of
even if he “is an integral part of the Municipal the alleged amendment to the rules of
board” such fact does not necessarily confer procedure.
on him” either the status of a regular member
of its municipal board or the powers and Homeowner’s Association of the
attributes of a municipal councilor. Philippines, Inc. vs. Municipal Board of
Manila
There is nothing in the Charter of Naga City (1968)
which provides that the vice-mayor of said city
is a member of the municipal board. He was FACTS: Homeowner’s Association brought
action for declaratory relief to nullify Manila
128
Municipal Ordinance 4841 declaring that a Appellant assails the validity of the
state of emergency existed in the matter of proceedings in the lower court upon the round
housing accommodations in Manila, in view of that, although petitioners herein had assailed
prevailing scarcity of land and buildings for Municipal Ordinance No. 4841, not merely as
residential purposes there. ultra vires, but, also, as unconstitutional, the
Solicitor General had been neither heard nor
Sections 1 and 2 of the assailed ordinance notified in connection therewith, in violation of
provides that lessors and sublessors of land Section 4 of Rule 64 of the Rules of Court.
and buildings primarily devoted to residential
purposes cannot increase their rentals beyond The determination of the question whether or
certain conditions. not the Solicitor General should be required to
appear "in any action involving the validity of
The CFI declared it void, arguing that the any treaty, law, ordinance or executive order,
power to declare a state of emergency rules or regulation" is a matter left to the
exclusively pertains to Congress. Moreover, "discretion" of the Court, pursuant to Section
there is no longer a state of emergency which 23 of Rule 3 of the Rules of Court. Inasmuch as
justifies the regulation of house rentals. And said requirement is not mandatory, but
the ordinance also illegally limits the use of discretionary, non-compliance therewith and
private properties. with Section 4 of Rule 64 — the interpretation
of which should be harmonized with said
WON the ordinance is valid and may be Section 23 of Rule 3 — affected neither the
made effective permanently. jurisdiction of the trial court nor the validity of
the proceedings therein, in connection with
NO. Assuming that the City had such powers the present case.
and assuming the existence of the emergency,
ordinance is illegal and unconstitutional (Note: The requirement regarding notification to the
Court did not decide if the city has power to Provincial Fiscal of the pendency of an action
declare a state of emergency and if such involving the validity of a municipal ordinance,
emergency existed) as provided in Sec. 4, Rule 64 of ROC, is not
jurisdictional; and failure on the part of
The police power of municipal corporations is petitioner to notify the Provincial Fiscal will not
subject to constitutional limitations. Individual be a sufficient ground to throw the case out of
rights may be adversely affected by the court. We believe the purpose of the above-
exercise of police power only to the extent quoted rule is simply to give the Provincial
that may be fairly required by the legitimate Fiscal, who is the legal officer of the local
demands of public interest or public welfare. governments, a chance to participate in the
deliberation to determine the validity of a
When the demands of public interest are questioned municipal ordinance before the
brought about by a state of emergency, the competent court. If it appears, however, that
interference upon individual rights must be co- the ordinance in question is patently illegal, as
terminus with the existence of the state of in the present case, and the matter had
emergency. The statute passed to meet a already been passed upon by a competent
given emergency, should limit the period of its court, the requirements of Sec. 4 of Rule 64 of
effectivity. the Revised Rules of Court may be dispensed
with.
Otherwise, that which was intended to meet a
temporary emergency may become a
permanent law. Hence, when the cause for the
grant of power was temporary, so should the
grant be, for the effect cannot remain in
existence upon the removal of its cause.
129
130

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A REVIEWER IN LOCAL GOVERNMENT LAW PROF.

“History and Evolution of “The Evolution of Local

The pueblo was headed by a The pueblo was headed by a

A system of indirect elections Even the smallest item of local

(5) determination of their

While the Malolos Constitution

The organization of provinces The province is headed by the

Under Pres. Quezon, central

Exercising its constitutional (1) RA 2370, amended by RA

Added functions to the DLGCD

Barrios were renamed into

As chief legislator, Marcos The Sangguniang Bayan of the

Several organizations of these

The Kabataang Barangay was

New Republic The Batasang Pambansa Among the significant

The Code’s most important

Other important features

II. NATURE AND STATUS highly centralized in Manila, is thereby

2. Local Government - is a political Local government interchangeable with

Basco vs. PAGCOR

1. The City of Manila, being a mere B. Nature and Status of Municipal

Elements of a municipal corporation: Art. 47. Upon the dissolution of corporations,

4. A territory within which local civil MARTIN:

1. Dual nature and functions of

1987 CONSTI, Art. X, Section 3. The

− Genuine and meaningful local

(g) The capabilities of local government units,

• Every LGU shall exercise the powers

• Tradition – an inherited principle, Art. X, Section 2. The territorial and political

WON the province of Negros del Norte

In treading their chosen path of development, Devolution, on the other hand,

Section 15. There shall be created

The funds generated from local taxes, IRAs

SEC. 460. Manner of Creation. - A province Cawaling vs. COMELEC

It is obvious, however, that the power to fix MARTIN:

According to Sec. 442 (d) of the LGC, PIMENTEL:

• REMEMBER: Sec. 68 of the old LGC

c) Unless otherwise provided by the MARTIN:

1. Non-user or surrender of charter Municipal laws that regulate private and

The SC also considered the new province as

HELD: YES. The mayor can deny application

1) must not contravene the Constitution or

Tano vs. Socrates Since the Constitution does not specifically

Sangalang vs. IAC BAVA, on the other hand, contended:

• Theoretically, barangays can exercise A mere letter of intent to acquire property

After the rendition of such an order, the

However, in 1983, the Municipal Council of FACTS: QC passed an Ordinance regulating

There is also a complete disregard by WON the condemnation is proper.

LGC (e) Each local government unit shall, as far as

Examination of Books – The local

• the professional libraries of doctors, CLAIM FOR REFUND OR TAX CREDIT

1. the ordinance shall only be enacted if

2. within 10 days after the approval of the

Hagonoy Market Vendor Association vs.

FACTS: In 1996, the Sangguniang Bayan (SB)

MCIAA is a GOCC. It necessarily follows that its

2. Real Property Taxation

NOTE: Real property tax is a fixed Real properties subject to tax

→ It is a direct tax on the ownership or use

Q: What is the scope of the exemption?