CORRUPTION

and

THE LOCAL GOVERNMENT

CODE

Professor Rosa Maria T. Juan-Bautista

Law 115

Rachel Ann M. Castro

2010-20246
1-B

I.

Local Government System in the Philippines during the PreColonial Era

Historians say that had it not been for the entry of the Spanish colonizers,
Islam would have been deeply embedded on Philippine history even more
than what is manifested by both culture and tradition today. Needless to say,
before the historic landing of Magellans ship in the island of Cebu, there had
been a system of living among the citizens of the land. This system of life is
composed of different aspects, one of which is relationship between man and
man within a community. Life in the community would have been disorderly
and chaotic had they not adopted a system of governance. However, at this
point, it would be fundamental to define the limits of the local government
system referred to in this study.
What is a local government? According to the Local Government Code of
1991, local governments are institutions more commonly seen in relation to
the national government and non-governmental organizations. For the
purpose of this study, then, a local government shall be understood as that
institution which is a product of decentralization of not only powers but also
responsibilities of the national government tasked to provide the needs of
the members of its community and to share in the achievement of national
goals through the use of adequate resources from the local community itself
and its share in the states resources. From this definition, then, a local
government system is the structure of different local governments
interconnected by their role in the achievement of the national goals, their
responsibilities as assigned by the national government and their powers as
entrusted by the same national government.
It is safe to say that before the western colonizers came, there was actually
no local government system. Yes, there were localized forms of governance
as executed by the communities chosen leaders, but there was no overhead
government from which power, function and responsibilities devolved from.
To say that there was a system because of the existence of local units of
governments all over the Philippines at that time even if there was no
centralized government above them all is to contradict the set definition of
local government system by which this study will stand.
For the purpose of presenting a transition from the kind of governance
Filipinos who lived throughout the history experienced, this study will include
a discussion on barangay, the fundamental entity best known to have
governed communities before the western colonizers came. Historians
provide us with a glimpse of the local governance in the Philippines during
the pre-colonial era through the coming of Islam into the archipelago.
In Pacifico A. Agabins Mestizo: The Story of the Philippine Legal System, he
told the story of the how Islam entered the Philippines and helped form the
country in ways which are still very evident today. The Sultanate in Sulu was
the first Muslim community to establish a centralized government in 1450. It
was established by Harim Abubakar who came from a long sharif1 lineage.
Meanwhile, the sultanate of Maguindanao was established by Sharif

1 Sharif is a title of nobility.

2

Kabungsuan who came to the Philippines around 1511 after the fall of
Malacca and other nearby places to the Dutch colonists.2
The sultanates took the form of a centralized government in the regions
they considered their territory. Note that, this does not contradict the
authors position that there was no local government system in the
Philippines before the western colonizers came. Subordinate to the Sultans
who ruled the sultanates were the rajahs and datus who headed the
barangays.
In the pre-conquest Philippines, barangay3 was a political entity that was the
closest thing that the country had to a government. It was a distinct
community which represented a separate jurisdiction that had its own rules
and interests. Each barangay had an independent system of law. The
barangay is constituted by autonomous households who are related to each
other by consanguinity. The barangay is dominated by the household of the
datu.
A datu was considered the chief of the barangay. As the chief, he executed
the laws received by him. This means that the laws were created within the
community and passed on from generation to generation. This is contrary to
the belief that the datus themselves created the law within the barangay.
Most, if not all laws, are custom laws which are preserved in songs and
chants taught by the elders to the younger generations. They were deemed
to have been given by an all-knowing one or being and so also deemed to
be complete. The members of the barangay, particularly the elders, found no
need to modify or add to them.
The relationship between barangays is akin to the relationship of nationstates in modern day. As a support to this studys theory that there was no
local government system during pre-colonial times, there was no central
authority that supervised over inter-barangay relations. The barangays are
motivated to keep relations with each other to preserve security from
external forces and to enable trade growth.
Barangays, in essence, may be compared to local government units (LGUs)
since they operate to cater to the needs of a smaller scale of community.
However, it is different in the modern conception of a local government since
LGUs powers are devolved from a national authority which was non-existent
during the pre-conquest era.

2 Majul, C.A. Muslim Mindanao. (www.muslimmindanao.ph)

3 See Fernandez, P. (1976) Custom Law in Pre-Conquest Philippines. Quezon City,
Philippines: UP Law Center for an extensive discussion on barangay as it existed
during the Pre-Conquest Philippines
3

II.

Spanish Colonization of the Philippines

In 1521, Ferdinand Magellan came into the island of Mactan, Cebu. This
momentous landing marked the beginning of the interweaving of Spanish
and Filipino culture and customs in all aspects of life. Be it in labor, everyday
life or governance, there was and is Spanish influence.
From barangays consisting of thirty to fifty families, communities were
rearranged into towns or pueblos consisting of an average for five hundred
families. Each pueblo would contain an average of ten barangays. This new
arrangement helped to facilitate tribute collection and administration.
The pueblo families were required to bring their produce to the regime during
the annual compras4. The purchase was known to be far from equitable due
to fraudulent weighing scales and arbitrary pricing. The men from the
pueblos were also required to contribute forty unpaid labor days which were
spent away from their homes and were even stretched to months.5
The Philippines, being a colony of Spain, received situado or operating
subsidy from Mexico, the Philippines enjoyed autonomous dependency until
19216. This, along with taxes collected from both Manila and Acapulco
constituted the fund used for the infrastructure of the colonial government
established by the Spaniards7.
According to investigation conducted by Schurmann Commission of 1899,
the Spanish colonial government was characterized by excessive
centralization.8 However, this is a controversial view since evidence shows
that local governments during this period, particularly provincial
governments, enjoyed autonomy in the same way the colonial government
enjoyed this autonomy from Madrid and Acapulco 9. The central government
which was headquartered in Manila was so understaffed that they had to rely
on Church figures to help them in governance. The affairs of local
governments during this time were highly influenced by friars. This part of
history was most popularly reflected in Jose Rizals novels. They themselves
4 Government buys their products and other goods.
5 The discussion on pueblos can be found in Corpuz, O.D. (1992) Land and
Agriculture in the Philippines: An Economic History Perspective. Philippine Review of
Business and Economics, XXIX(2), pp. 138-139
6 Skowronek, R. K. (1998) The Spanish Philippines: Archaeological Perspectives on
Colonial Economics and Society. International Journal of Historical Archaeology, 2(1),
p. 48.
7 Ibid.
8 Hutchcroft, P. D. (2000) Colonial Masters, National Politicos, and Provincial Lords: Central
Authority and Local Autonomy in the American Philippines, 1900-1913. Journal of Asian
Studies, 59(2), p. 283.Hutchcroft gave an overview of the Spanish colonial governments
form by presentation of evidence of the autonomy of local governments and the influence of
both Church figures and landed elites who held power over the citizens.

9 Ibid.
4

were beyond the reach of the secular superiors and even their ecclesiastical
superiors from Spain.10
The Spanish period is characterized by the strengthening of local autonomies
and identities both in governance and trade11. Local elites continued to
garner power over their communities as this autonomy in trade, most
especially agriculture, grew and developed into a form of economic isolation.
These elites constituted the provincial governors who established
autonomous fiefdoms which were beyond the reach of the central
government in Manila. Despite the attempt at breaking down this dangerous
form of autonomy experienced today, it is indeed dangerous however
ordinary it might seem to present citizens the autonomy was never fully
demolished.
The dynamics among pueblo families was mostly characterized by how the
prominent families where the heads of the pueblos and barangays came
from interacted with the provincial governors who were Spanish. In reality,
and in the eyes of the other Filipinos, they acted like servants or dummies to
these Spanish. It came to the point that they tried so hard to please them
that they celebrated Catholic fiestas and festivals extravagantly which made
them have to pawn their lands to these governors or even to the friars in
their towns.12
Central authority was made evident by their power to appoint persons who
will hold provincial posts. As aforementioned, however, the central
government was understaffed and so this power to appoint was not its
strongest feature and did not add much to its legitimacy.

10 Ibid.
11 Ibid.
12 Corpuz, op. cit., p. 141
5

III.

American Colonization of the Philippines

The Government of the United States of America took control of the

Philippines upon cession by Spain on December 10, 1898. The Philippines
was the largest and most important colony of the US at that time 13. The
conquest was not at all filled with sunshine and smiles. It was brutal, violent
and there were a lot of horrifying experiences. However, after a few years,
the Americans decided that they have done enough as initial action and
finally established a civil government. As Hutchcroft narrated14,
By July 4, 1901, a civil government was
established with President William McKinley's
instructions to promote the happiness, peace,
and prosperity of the people of the Philippine
Islands ... [conforming] to their customs, their
habits, and even their prejudices, to the fullest
extent consistent with the accomplishment of
the indispensable requisites of just and
effective government.
By 1899, after the conduct of the Schurmann Commissions investigation,
the Americans noted that decentralization was the cry of the Filipino
people.15 As mentioned above, this view is contrary to the autonomy shown
by the local governments during the Spanish period. Nevertheless, the
Americans stood by its findings and acted in the manner they deemed to suit
the needs of the Filipino people best.
One of the most outstanding strategies employed was in the form
administrative structuring: the drafting of administrative reforms by William
H. Taft and his associates in order to create strong local governments and the
formation of a National Assembly of Representatives which was formalized
in the Organic Act of 1902 which would convene regularly. They envisioned
implanting in the Philippines a form local governance throughout the
archipelago thus mirroring the spirit of local self-rule in the United States.
Their strategies consisted of creating close ties with the Filipino elites which
resulted to the ever-opposed colonialism. Decentralization was very apparent
in most, if not every, respect of governance in the country. Power-holders
were prominent in their own localities and they were very influential in all
aspects of governance. This relationship created among the power-holders
and the citizens, and the provincial officials if they were not the powerholders themselves, grew and became stronger at the expense of the central
authority. The Americans expanded the political opportunities of the elites
who were part of the reason behind the strengthening of the economic base
towards the end of the Spanish era.16
13 Ibid., p. 277.
14 Ibid.
15 Ibid.
16 Ibid., p.278.
6

The foregoing presents a background of how the Americans gradually put

into legal framework a system of local governance that they envisioned to
help the Filipinos become capacitated to represent themselves during that
period. They held municipal elections which in essence expanded the
opportunity of Filipinos to enter into the government:
In the municipalities, a sharply circumscribed
electorate was given the right to elect a president
(mayor), vice-president, and council. The president
appointed a municipal treasurer and secretary, and
the council was given considerable latitude for
planning projects and appropriating town funds.
Provinces were to be governed by a three-member
board, headed by a governor (indirectly elected by
municipal officials in his province) and also
comprising a treasurer and supervisor (of public
works) appointed by Manila. The provincial
governments were charged with three major
functions: collection of taxes (by the office of the
treasurer), construction and maintenance of local
infrastructure (by the office of the supervisor), and
supervision of municipal governments (by both the
governor and the treasurer).17
These three major functions were fulfilled through the help of allocation of
insular revenues and also by poll taxes which are unpopular and
unproductive land taxes, and other sources.18
The Executive bureau, headed by its top official the Executive Secretary who
became known as one of the most outstanding men in the government of the
archipelago, was tasked with the function of oversight for all the local
governments. However, despite the existence of the Executive bureau and
the fulfillment of its responsibility to check whether or not statutes have a
showing of abuse of authority, there was little effect on how the provincial
officials ruled their localities. There was a huge difference between the
formal rules as they are written in the statutes and the actual
implementation by the provincial and municipal officials.
Needless to say, the Americans succeeded in achieving their goal of
decentralization but soon, these provincial governments tied up with each
other and formed blocks that we now recognize as political parties.

17 Ibid., p. 286.
18 Ibid.
7

IV.

Effects of Colonization Periods on the Local Government

System of the Philippines

From all the foregoing discussions on the different colonization periods and
the forms of local governance in each of them, it is just right to analyze and
put into writing the impressions left on the country by the Westerners.
First, what is most evident is the retention of the barangay system. This
political entity has been institutionalized and continues to play an important
role in different aspects of life. For example, in many special penal laws, the
first level of negotiation between the two conflicting parties happens at the
barangay level. In implementation, barangay officials are designated to
facilitate small-scale programs in order to achieve the objectives of the
State.
Second, and perhaps the most talked-about effect, is the rise of the local
elites. Beginning in the Spanish period, local elites have been given
expanded opportunities to accumulate both wealth and power. This
translated into prominence, first, in their towns, and eventually their
provinces. When the provinces began to form ties with each other, these
powerful families extended their influence on a much broader scale. Today,
they are seen not only in the political arena but also in business where they
exert great sway over local officials.
In connection with the second effect, the constituents in towns, provinces
and regions, look up to the officials with a mixture of mandatory respect,
obedience and slight indifference. This is mostly evident in how people
tolerate the acts of the public officials but at the same time criticize them
about their decisions and action. Yes, there is obedience but there is also an
idea of distrust and so they obey without really caring how it will project into
the future of their communities.
This is not to say that every citizen, or the local officials for that matter, acts
and feels the same way. It is the authors opinion that there is indeed
obedience among constituents but there is also animosity towards the local
officials considering the entrenched idea of how power is concentrated
among them elites, plus the fact that these elites undoubtedly hold power
over the local officials. It is like putting the burden of proof that this
particular administration can be trusted and is wholly devoted to the good of
the community before the constituents may trust and revere said
administration.
Fourth, the Church has more influence on provincial governments than the
national government. It can be traced back to the days when the Spanish
local governments were understaffed and therefore the ecclesiastical men
exercised powers over the localities. Nowadays, although they are unable to
hold public office due to the Constitutional provision on the separation of
Church and State, they still exert influence over statutes and events in the
localities. This happens by way of holding over the heads of local officials and
their constituents religion as a reminder whenever they are about to decide
on a particular issue.

V.

Martial Law and Its Effects on the Local Government System

of the Philippines

That Martial Law was declared more than to perpetuate the tenure of
Ferdinand Marcos as President of the country is supported by Chester L.
Hunts article entitled Philippine Values and Martial Law. According to Hunt,
though the Philippines had not been at war, it had been racked by internal
dissention and disruption which affected negatively business, education and
government. Hunt stated that though the opposition continued to argue that
he was simply exaggerating the circumstances, it was clear that there was
anarchy, that Marcos was only taking the necessary steps to protect and
safeguard the general welfare as his position as President calls for.
There was an allegation that his re-election was primarily caused by his act
of ensuring the votes of different localities by purchasing the votes through
government funds. It was at this point when there were massive allocations
for government projects at the local level. In addition to that, Marcos kept his
belief that the real participatory democracy was existent more at the
barangay level which enabled the citizens to commune their needs, interests
and various other utterances.19 Hunt, however, concluded that at that
moment he wrote this article, there was still no concrete evidence that
Marcos belief regarding the importance of barangays in participatory
democracy had begun to materialize.20
To reiterate, the abovementioned article puts in history a glance at how
Marcos seemed to have acknowledged the importance of local units. But this
is not consistent with the history of nongovernmental organizations during
this period. Nongovernmental organizations whose purpose was to extend
the much-needed help to the people emerged and grew because
government was unable to reach many areas in the country. It has been said
that during the Martial Law, even if advocacy groups were not encouraged by
the government, organizations that aimed to provide for the needs of the
Filipinos were very much welcomed by the people but not necessarily
recognized by the government.
For this author, there is a lack of writings and documentations on how local
government units worked during this period. The most can be said centered
on how the wealth was accumulated by Marcos cronies in different parts of
the country. Another outstanding example is the construction of the San
Juanico bridge between the provinces of Leyte and Samar. However, as much
as this author would like to see it as the national governments help to the

19 Hunt, C.L. (1980) Philippine Values and Martial Law. Journal of Southeast Asian
Studies, 11(1), pp. 113.
20 Ibid., p. 121.
9

provinces, it is widely known that this construction was pursuant to the

wishes of former first lady Imelda Marcos.
Needless to say, with the Martial Law in place, there was more centralization
than devolution of powers. Then President Ferdinand Marcos exercised both
legislative and executive power and so had much more power than anyone
else in the country. Also, considering the fear of the people of the threat of
pain and punishment if they happen to act contrary to the Presidents wishes
and statutes enacted by him, there is great inclination to believe that local
government officials did not have as much authority or hold over their
constituents compared to today.

VI.

The Local Government Code of 1991

Through the Local Government Code, the
decentralization of power in the Philippines has been
formalized. While the country remains a unitary
system, local governments already have the
authority to manage their resources according to
their priorities. It is necessary to know how effective
decentralization is because the standard of living in
an area is dependent on the local government units
capacity.21

The Local Government Code (LGC) was signed into law in 1991 by President
Corazon Aquino and it took effect on January 1, 1992. The entities
responsible for the implementation of this Code are the provincial and
municipal governments and the thousands of barangays in the Philippines.
The Congress is mandated by the Constitution to enact a local government
code that shall provide for a more responsive and accountable local
government system. Through this Code, the Congress expanded the
responsibilities and powers of the local governments over their localities. The
primary goals of this Code is to enable the local governments to realize their
maximum potential, to encourage participation of ordinary citizens, to
participate in national decision-making and hasten the decision-making in
their units and to deliver basic needs of the citizens more efficiently.22
The Local Government Code of 1991 covers all
aspects of local governance. It addresses the
decades-old problem of over-centralized political and
administrative system that concentrated most
significant decisions and development in the
Metropolitan Manila Area. The Code consists of five
hundred thirty-six (536) sections divided into four (4)
21 Castro, R.A.M.C. (2014) Creating the World of a Happy Child: A study on NGOs
and local governments mission of youth development, unpublished.
22 Local Government Academy of the Department of Interior and Local
Government. Unpacking the Local Government Code of 1991 (www.dilg.org)
10

books. Book I contains policy statements, principles,

processes, and mechanisms for effective local
governance. Book II covers the taxing powers and
other revenue raising powers and the corresponding
administrative structures and processes necessary in
the exercise of such powers. Book III details the local
government structure and powers and duties of
elective officials. Book IV contains the transitory
provisions that will effect the smooth implementation
of the Code.23
In the Philippine form of government which is unitary, a local government is
autonomous political subdivision created by law. It acts as an agent of the
government and of the community in overseeing its transactions and
providing the needs of the community. At the same time, it acts as a
corporate entity which exercises functions not purely political.
This study focuses on the devolution of particular powers to the local
governments which are, in the opinion of this author, enabling the local
government officials to exercise seemingly unlimited powers and thus
contribute to the increase in corruption in the country.
Under the LGC of 1991, the local government units are given responsibilities
over certain basic services such as health, agriculture, public works, social
welfare and even the environment and tourism. The breadth of their power is
close but not still not like the federal States in the United States. However,
considering that the Philippines is an archipelago, it is not entirely easy to
keep track of everyones activities. Especially if the local officials in a
particular area are so strong that very little, or close to none, would dare
oppose them.
In addition to this, certain provisions of the LGC are commonly defended by
the legislators and the local officials themselves as a grant of autonomy.
When this happens, it is in the interest of the public to be able to draw a line
between the proper exercise of autonomy and a grave abuse of discretion. It
is necessary to know and, perhaps, be able to express dissent when they
believe that the actions of the local officials are not beneficial to the greater
number but only to their own personal mercenary interests.

23 Ibid., p. 5
11

VII.

Controversies Involving Local Government Officials Before

199124

This portion of the study contains controversies which involve local

government officials regarding acts or omissions that constitute a violation of
the Constitution and other laws. They are examples selected by this author
to show how discretion enabled them to violate said laws but at the same
time provide a still-picture of pre-Local Government Code conduct of local
officials.
1. Simplicio Amper v Sandiganbayan
G.R. No. 120391
This case is part of the example although it was decided in 1997 by the
Supreme Court, the Assistant City Engineer of the City Government of Davao,
Simplicio Amper, was charged for violating section 3(e) of Republic Act No.
3019 otherwise known as the Anti-Graft and Corrupt Practices Act which
provides:
Sec. 3. Corrupt practices of public officers.- In
addition to acts or omissions of public officers
already penalized by existing law, the following shall
constitute corrupt practices of any public officer and
are hereby declared to be unlawful:
x x x
xxx

x x x

(e) Causing any undue injury to any party, including

the Government, or giving advantage or preference
in the discharge of his official administrative or
judicial functions through manifest partiality, evident
bad faith, or gross inexcusable negligence. This
provision shall apply to officers and employees of
offices or government corporations charged with the
grant of licenses or permits or other concessions.
It was alleged that he used one backhoe unit belonging to the City of Davao
for purposes of treasure hunting without the knowledge and permission of
the local government which caused wear on the said backhoe unit. He used
the help of some of his staff from the Engineering Department in the local
government. Unfortunately for him, he was caught in the act by none other
than Mayor Duterte himself. Then and there, he was arrested.
The Supreme Court, in this case, affirmed the decision of the Sandiganbayan
with the following part of the decision:
By taking advantage of his official position as
Assistant City Engineer of Davao City, the petitioner
was able to use for his personal gain, a city
government owned Allis Backhoe without any
consideration and without any authority from the city
24 The following cases were taken from the Supreme Court website:
www.sc.judiciary.gov.ph
12

government, thereby causing undue injury to the

Davao City government consisting in the undue wear
and tear caused to the said equipment and its use
without consideration.
2. Demetrio Tecson v Sandiganbayan
G.R. No. 123045
This case was decided in 1999 by the Supreme Court but the act was
committed in 1989. The petitioner, Demetrio Tecson, was charged with
violation of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act:
That on or about September 23, 1989, in the
Municipality of Prosperidad, Province of Agusan del
Sur, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused, a public
officer, being then the Municipal Mayor of
Prosperidad, Agusan del Sur, while in the
performance of his administrative and official
functions and committing the offense in relation to
his office, did then and there willfully, unlawfully, and
criminally request and receive for his benefit the
amount of P4,000.00, for and in consideration of the
issuance of a permit to operate an investment
business, in favor of one Salvacion Luzana, a person
for whom the accused has in fact received and
obtained a mayor's permit or license.
Contrary to law.
The Supreme Court here affirmed the decision of the Sandiganbayan finding
him guilty of said violation. In this case, he took advantage of his position
and function to grant permit or license. After the offended party filed and
received said permit and after having given the cash advance requested by
Mayor Tecson even if it was not due yet, the Mayor himself revoked the
license.
3. Jaime Ponce De Leon et al. v Sandiganbayan
G. R. No. 89785
The information against the petitioners is as follows:
The information against them alleged that they
conspired and connived with their co-defendants to
defraud the Government in amounts totaling
P627,239.88, through the falsification of fourteen
(14) general vouchers, checks, and other documents

... making it appear that Regional Office No. VII of

the Ministry of Public Highways regularly issued an
advice of cash disbursement ceiling (ACDC) and the
corresponding letters of Advice of Allotment to cover
the purchase of construction materials for use in the
improvement and/or repair of roads within the
District when in truth and in fact, as all the accused
13

well knew, the same were not true, and correct; by

making it appear in the voucher that funds were
available and that there-were appropriate request[s]
for allotments to pay the aforesaid purchase; that a
requisition for the said item was made and
approved; that a regular bidding was held; that a
corresponding purchase order was issued in favor of
the winning bidder; that the roads construction
materials were delivered, inspected and used in the
supposed project and that the alleged supplier was
entitled to payment when in truth and in fact, as all
the accused know, all the foregoing were false and
incorrect and because of the foregoing falsifications,
the above-named accused were able to collect from
the Bais City Highways Engineering District the total
amount of ... Philippine Currency, in payment of the
non-existing deliveries; that the aforesaid amount
was not reflected in the monthly trial balance
submitted to the Central Office showing its financial
condition as the same was negated thru the journal
vouchers as a designed means to cover-up the fraud;
and then the accused, once in possession of the said
amount, [did] misappropriate, convert, and misapply
the same to their personal needs, causing injury,
damage and prejudice to the Philippine Government
in the total amount of ... Philippine Currency.
The Supreme Court affirmed in toto the decision of the Sandiganbayan
finding them guilty as charged. The Sandiganbayand decision states that:
In the cases at bar, all the above-cited requisite
elements are present. When accused Bagasao and
Mangubat, as Asst. Regional Director and Regional
Accountant, respectively, issued the fake LAAs and
corresponding SACDCs to the BCHED, knowing fully
well that the allotments and/or allocation thereunder
were not properly authorized by the Ministries of the
Budget and the Public Highways and neither have
they been programmed for release in accordance
with standard operating procedure, they thus acted
with evident bad faith. Accused Renacia and
Delostrico likewise acted with evident bad faith in
receiving and implementing the fake LAAs and
SACDCA since they should have known and noticed
that the allotments released thereunder were not for
"regular maintenance," especially so when the
district had just received its first quarter allocations
for 1978; that they had not requested formally for
such extra allocations; that the LAAs and SACDCs
were fake or spurious on their faces and signed by
unauthorized officials, and that they had not
prepared any program of work to justify such extra
allocations.

14

All the accused officials from the BCHED, namely,

Renacia, Salva, Camarra, Ramirez, Posadas and
Mananquil, who were all engineers, and their
subordinates in the prosecution of projects in the
district, namely, Babao and Altura, together with
those involved in administrative, accounting and
auditing functions, namely, Mier, Delostrico, Racho,
Pascualdo and Sevilla, likewise acted with evident
bad faith and manifest partiality in participating in
the preparation, processing and approval of the GVs
and supporting documents, such as RSES. Requests
for Obligation of Allotment (ROAs), Abstracts of Bids,
POs, Delivery Receipts (DRs), Summary of Deliveries,
Reports of Inspection (ROIS) and Checks in payment
of "ghost projects" to a fake or spurious contractorsupplier, Jaime Ponce de Leon. They not only
connived and confederated in the hasty and mass
production and such ante-dated documents,
including programs of work, but also allowed their
names, positions and signatures to be used in
completing the cycle which would lend a semblance
of legality or regularity to the questioned
transactions and illegal disbursements [of public
funds to a fake contractor-supplier], thus causing
undue injury to the Government in the total amount
of P627,230.99. ...
... He also knew for a fact that the district had no
prior year's unliquidated obligations in the amount of
P650,000.00, hence, any and all LAAs with
corresponding SACDCO would be questionable, if not
fake, spurious or irregular. He and accused
Delostrico, the district accountant, were fully aware
of the standard operating procedure in the release of
quarterly allotments and should not have accepted,
much less, utilized the fake LAAs and SACDCA for
alleged "ghost projects" which were not supported
by approved programs of work and RSEs approved in
the Regional Office. ...
xxxxxx

xxx

Finally, Mangubat cannot escape or be absolved from

liability in the sordid mess. He initiated the entire
scheme, together with accused Asst. Regional
Director Jose Bagasao, when they issued fake LAAs
and which he followed up by issuing fake SACDCA.
He later tried to cover-up the illegal and improper
disbursement of public funds by certifying to the
correctness of the Journal Vouchers at the end of the
year through the utilization of "negative entries"
which enabled the region's financial records to
reflect what he only wanted to reflect, which is, the
disbursements of funds thru regular LAAs and
15

SACDCs for 1978 but negating the amounts of the

disbursements thru the fake LAAs and SACDCS.

16

VIII. Controversies Involving Local Government Officials After the

Effectivity of the Local Government Code of 199125
This portion contains examples of controversies which involve officials in the
local government. While the previous section showed a still-picture of the
events prior to the effectivity of the LGC 1991, this section will provide some
events which transpired after the effectivity of the LGC 1991.
1. Rios v Sandiganbayan
G.R. No. 129913
The petitioner in this case, Dindo Rios, is the Mayor of the Municipality of San
Fernando in Romblon. He was charged as follows:
That on or about May 16, 1994, in San Fernando,
Romblon, and within the jurisdiction of this
Honorable Court, the above named accused, a public
officer, x x x while in the performance and taking
advantage of his official functions, and with evident
bad faith, did then and there willfully, unlawfully and
criminally cause the disposition of confiscated,
assorted and sawn tanguile lumber consisting of
1,319 pieces without proper authority therefor, thus,
causing undue injury to the Government.
The LGC provides for enabling the local officials to decide for revenue
generating activities. The Mayor here argues that he acted in this manner in
order to earn money for the local government and that the proceeds went to
the treasury of the local government anyway. However, the Sandiganbayan
did not give merit to his argument. Thus, he was found guilty of said
violation:
WHEREFORE, accused Dindo C. Rios is ordered
suspended from his position as Mayor of the
Municipality of San Fernando, Romblon and from any
other public position he may be holding for a period
of ninety (90) days counted from receipt of this
Resolution.
The Honorable Secretary of the
Department of Interior and Local Government,
Quezon City, and the Provincial Governor of
Romblon, Romblon are ordered furnished with copies
of this Resolution so that they may implement the
same and report on their actions thereon.
SO ORDERED.
The Supreme Court upheld the decision of the Sandiganbayan but declared
that the Sandiganbayan erred in suspending him for ninety days because
under the law, suspension for a single violation is not to extend sixty days.
2. Berona v Sandiganbayan
G.R. No. 142456
25 The following cases were taken from the Supreme Court website:
www.sc.judiciary.gov.ph
17

This case is used as an example in this study because it involves public

officials, not necessarily elective officials but rather those appointed and
designated to particular functions which form part of the responsibility of the
local government. In this case, they are in charge of the delivery of the basic
service of public health to the citizens.
The facts, according to the citation of the Supreme Court are as follows:
Petitioners were public officers and employees of
the Provincial Health Office of Bangued, Abra
(Health Office).
Dr. Demetrio Beroa (Dr.
Beroa) was Provincial Health Officer II, Dr. Romulo
Gaerlan
(Dr. Gaerlan) was Provincial Health
Officer I, Aurie Viado-Adriano (Viado-Adriano) was
resident auditor and Vida Labios (Labios) was an
accountant. Petitioners were among the seven[3]
charged for violation of Section 3(e) of Republic Act
No. 3019 or the Anti-Graft and Corrupt Practices Act
(RA 3019) before the Sandiganbayan in Criminal
Case No. 23521. The accusatory portion of the
Information reads in part:
x x x, committing the crime herein charged in
relation to and taking advantage of their official
functions, and through bad faith, conspiring and
confederating with each other did then and there
willfully, unlawfully and feloniously release to
Alexander Siddayao, the total amount of P99,987.77
representing payment for the improvement of the
Main Health Center in Malibcong, Abra when in fact,
said Alexander Siddayao is not the labor contractor
for the project, resulting to the non-payment of the
salaries due the laborers who worked for the
completion of the above-said project, causing them
undue injury.
In this case, the Sandiganbayan found them guilty and sentenced them to
suspension pendent lite. Herein petitioner Berona argues that he had
resigned already from the position and so cannot be suspended. However,
the Supreme Court held that said suspension applies to whatever public
position the person charged with is holding at the moment of sentence. The
Supreme Court added that this was to prevent the official from committing
other acts of malfeasance while in office:
Section 13 reinforces the principle that a public
office is a public trust. Its purpose is to prevent the
accused public officer from hampering his
prosecution by intimidating or influencing witnesses,
tampering
with
documentary
evidence,
or
committing further acts of malfeasance while in
office.
3. Luciano Veloso v Commission on Audit
G.R. No. 193677

18

This case involves the granting retirement pays and gratuity remunerations
by the local government which the petitioners argue to be a valid exercise of
the power of the Sangguniang Panglungsod. This case emphasizes that the
local government, though granted with fiscal autonomy, is not beyond the
post-transaction audit of the Commission on Audit.
The Supreme Court explained in summary why the petitioners argument is
bereft of merit:
Indeed, Section 458 of RA 7160 defines the power,
duties, functions and compensation of the
Sangguniang Panlungsod, to wit:
SEC.
458.
Powers,
Duties,
Functions
and
Compensation. - (a) The Sangguniang Panlungsod, as
the legislative body of the city, shall enact
ordinances, approve resolutions and appropriate
funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and
in the proper exercise of the corporate powers of the
city as provided for under Section 22 of this Code,
and shall:
xxxx
(viii)
Determine the positions and salaries,
wages, allowances and other emoluments and
benefits of officials and employees paid wholly or
mainly from city funds and provide for expenditures
necessary for the proper conduct of programs,
projects, services, and activities of the city
government.
In the exercise of the above power, the City Council
of Manila enacted on December 7, 2000 Ordinance
No. 8040, but the same was deemed approved on
August 23, 2002. The ordinance authorized the
conferment of the EPSA to the former three-term
councilors and, as part of the award, the qualified
city officials were to be given retirement and
gratuity pay remuneration. We believe that the
award is a gratuity which is a free gift, a present, or
benefit of pecuniary value bestowed without claim or
demand, or without consideration.
However, as correctly held by the COA, the above
power is not without limitations. These limitations are
embodied in Section 81 of RA 7160, to wit:
SEC. 81. Compensation of Local Officials and
Employees. The compensation of local officials and
personnel shall be determined by the sanggunian
concerned:
Provided,
That
the
increase
in
compensation of elective local officials shall take
effect only after the terms of office of those
19

approving such increase shall have expired:

Provided, further, That the increase in compensation
of the appointive officials and employees shall take
effect as provided in the ordinance authorizing such
increase; Provided however, That said increases shall
not exceed the limitations on budgetary allocations
for personal services provided under Title Five, Book
II of this Code: Provided finally, That such
compensation may be based upon the pertinent
provisions of Republic Act Numbered Sixty-seven
fifty-eight (R.A. No. 6758), otherwise known as the
Compensation and Position Classification Act of
1989.
Moreover, the IRR of RA 7160 reproduced the
Constitutional provision that no elective or
appointive local official or employee shall receive
additional, double, or indirect compensation, unless
specifically authorized by law, nor accept without the
consent of the Congress, any present, emoluments,
office, or title of any kind from any foreign
government. Section 325 of the law limit the total
appropriations for personal services of a local
government unit to not more than 45% of its total
annual income from regular sources realized in the
next preceding fiscal year.

20

IX.

Critical Analysis

The past two sections provided the images to set side-by-side in analyzing
the effects of the Local Government Code on the conduct of the public
officials, both elective and appointive. This author would like to start this
portion of the discussion by emphasizing the position that the Local
Government Code of 1991 institutionalized the culture of local governance in
the country. It centers on devolution of powers but essentially puts
prominence in broadening even more what the Filipinos already see as an
entirely wide discretion exercised within the localities.
In the cases prior to the LGC 1991, it can be gathered from the provided
excerpts of the Supreme Court decisions that the public officials acted with
the expectation that they can get away with their acts because they may
argue that they were only acting in the exercise of their powers. Prior to the
LGC, there was Batas Pambansa Blg. 337 which was the Martial Laws form of
Local Government Code. However, the dictatorship smothered local
initiatives and thus limited the autonomy, if not demolished, of the local
government units.26 So, when the Martial Law was struck down and
democracy brought back to life, the public officials immediately and, for
some, brazenly, embraced the newfound freedom to enjoy autonomy which
the Constitution of 1987 mandated for the local governments. However,
there was still the Anti-Graft and Corruptions Act which limited their actions
and caused others to be incriminated for the violation thereof.
Comparing the first set of cases to the second set, which are cases brought
before the Supreme Court consisting of acts committed after the LGC 1991
took effect, it will be seen that the acts show attempts at even greater
discretion of both appointive and elective officials. In the opinion of the
author, this is primarily because there is a law, the Local Government Code,
which grants these devolved powers upon them and gives them these
responsibilities which they have to complete, and this is used more as an
offensive legal basis for all their actions. As pointed out earlier, the LGC
institutionalized what the Filipinos have been used to seeing and
experiencing from their local officials which is that they are empowered to do
what they may consider best for their constituency. With the LGC, they even
have basis for exercising certain governmental and corporate functions.
The Sangguniang Panlungsod and Pambayan are both granted regulatory
powers. They have the power to enact statutes applicable in their areas and
even grant permits to establishments, not excluding those like cockpits.
Furthermore, the LGC grants the local government the power to generate
revenue which will enable them to fulfill their localities objectives like
construction of infrastructure for the public, funding of welfare programs and
many others. This revenue generating ability may happen in two ways:
through efforts within the community and external grants.
The discretion given to them to act according to what they may consider to
benefit the public drives them to doing acts beyond their power. In the
example of Rios v Sandiganbayan, this author opines that the line or
boundary between good faith and bad faith is blurred which is why in other
peoples opinion, Rios act was neither injurious to the DENR nor the public
26 Local Government Academy of the DILG, op. cit., p. 8
21

because, as he said, the proceeds were given back to the local government
treasury. However, had the Supreme Court reversed the Sandiganbayan
decision, it would create problems in the future. There will be no concrete
limitation on the action that the public official might take if in his opinion it
will benefit the constituency. But by charging Rios, the Supreme Court has
set a precedent for future cases which is that they shall apply stringent
measures to assure that the public officials will not abuse their power and
use it to benefit themselves.
In the case of Berona, it is evident in his actions that he took advantage of
his position and power in the local government. Even if he was not elected,
he was appointed in his position in the public health service. He used the
discretion granted upon him (or them, as the case involved other doctors and
officials) to ensure the efficiency of delivery of basic service to the people in
order to benefit a private contractor and cause economic injury to the
laborers. This is another point which the author wishes to point out.
In the cases given as examples, the cases involved not only public elective
officials but also city engineers and doctors. This shows that the discretion
granted upon local officials extend to those they appoint as members of their
departments. The author strongly believes that the lack of stringent
guidelines or qualifications for the membership in the local government of
those who are not elected is detrimental to the system and only allows for
more instances of abuse of power.

22

X.

Proposed Changes in the Local Government Code

The author wishes to make a substantial contribution to Philippine legal

history by recommending changes or alterations in the Local Government
Code of 1991. The Code contains provisions which are in themselves
beneficial to the constituency and the participation of the local government
in the achievement of national goals. However, there are also parts of the
Code which grant powers to the local governments that need to be curtailed
in order to ensure that there shall be no abuse of power or, at least, limit the
cases of corruption committed.
The Local Government Code of 1991 should be revisited by the legislature in
order to enhance the following powers granted by the Code:
a. The Sanggunians should be allowed to make it mandatory for staff
members of different departments engaged in the delivery of basic
services to attend training programs. There shall be a record of their
attendance and performance. There shall be a rotation and distribution
of chores or responsibilities in order to make sure that everyone is
contributing to the growth and efficiency of their respective
departments.
b. There should be a department within the local government unit which
shall act as a checker against misuse of public funds. The members of
said department shall be government employees who will all take their
turn in sitting as a member with a term of three years. It will be headed
by a representative of the Commission on Audit. The composition of
this department is akin to that of a jury in the United States to ensure
that there are no appointments and therefore no indebtedness to any
public official.
c. The power of the local government to tax business should also be
strengthened. Taxes are the lifeblood of the nation, as they say.
Therefore, laws regarding exemptions should be strictly construed
against those claiming it. In light of this recommended provision, the
author believes that there should also be a strict accounting of said
taxes. By becoming stringent in collection, the tendency for businessowners to bribe public officials should be decreased or avoided.
Through a rise in collected taxes, public officials will also be prevented
from committing acts which are beyond the powers granted by the LGC
in pursuit of greater resources for their city, municipality or province.
d. Participation of barangays should also be enhanced. There should be
incentives which are not against the principles of the Commission on
Audit regarding avoidance from extravagant expenses in order to
motivate the barangays to become part of a larger scale of decisionmaking. This will also help in ensuring accountability.
e. The power granted to officials of barangays to issue business permits
or licenses upon completing requirements should be enhanced. There
is greater tendency for bribery and fixers in the municipal, city and
provincial levels than in the barangay level.
On the other hand, the legislature should curtail the following powers:
a. Common Revenue-Raising Powers In the authors opinion, there is too
much leeway in this provision. There should be stringent guidelines
even in the Implementing Rules and Regulations of the Code to ensure
23

b.

c.

d.

e.

that the proceeds and the manner of revenue-raising shall all be in

accordance to what will benefit the local government and not the
public officials.
Authority to Grant Tax Exemptions Taxes being the lifeblood of the
State, there should be limitations which are explicit as to the
exemptions to be granted. There should be an annual report to the
citizens on which establishments in their community are exempted
from paying taxes.
Local Development Projects Twenty per centum of the budget is
allocated for this purpose so copies should be given not only to the
Department of Interior and Local Government but also to the
barangays. This grant of discretion is dangerous for the interest of the
public and therefore should be curtailed.
Financing, Construction, Maintenance, Operation and Management of
Infrastructure Projects by the Private Sector This power to enter into
contracts with private sector has been the root of many invisible
projects. In the authors opinion, this power should be kept with a
national government agency either the Department of Public Works
and Highways or the Department of Interior and Local Government,
perhaps a regional division of it, but not solely to the local government.
The power to appoint members of departments should also be
curtailed. It is common knowledge that some of the richest people in
the provinces are the provincial engineers because of many
transactions, both good and bad, that are done in the name of the local
government whose information are kept from the people. This should
be given stringent guidelines and qualifications to the point that
appointments will be merit-based and not by friendship or affinity.
Meritocracy should prevail over flimsy recommendations from friends
or influential elites.

24

CONCLUSION
Local autonomy is not bad in itself. It is beneficial to the people in a sense
that there is faster response and possibly greater accountability at this level.
The people are also able to forward their needs because the local
government officials are much closer to them. Furthermore, these public
officials have narrower paths to tackle and therefore their interests must be
closer to that of their people.
However, just like in all things in life, there are bad points too. But these bad
points do not need to be retained. If the legislature chooses to study and
revisit the Code, they will very well see what the previous Congress missed
in creating this law. The powers the author recommends to be enhanced are
those that will advance the welfare of the community and at the same time
enhance

transparency

and

accountability

in

the

local

government.

Meanwhile, those to be curtailed are powers which only broaden the

authority of the public officials without setting firm limits that will keep them
from abusing their power.
Corruption has long been the cause of decay of public trust and the
government itself. With laws that enable officials to pursue their own needs
instead of those of the public, the government itself is contributing to its
downfall. It is time to reevaluate actions and instruments. Before it is too
late, there has to be a concrete move towards change and this author trusts
that a step in that direction is to make sure that the Local Government Code
will not facilitate corruption but rather prevent it from happening, or if this
State is fortunate, abolish it completely.

25

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Law Center
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Unpacking the Local Government Code of
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26